Termination by the executive
An executive may terminate their employment at any time by providing four weeks’ written notice. The employer may choose to pay out part or all of this notice period in lieu. Employers may elect to seek a longer notice period, where appropriate, with considerations to the nature of the role, operational requirements or existing industry practice.
Termination by the employer
An employer may terminate an executive’s employment under three main categories.
In enacting termination under any of these categories, the employer is required to act within their statutory obligations, including:
- the public sector values
- the applicable Codes
- the public sector employment principles (and the standards concerning their application)
- the Charter of Human Rights and Responsibilities Act 2006.
- Where the employer is required to give notice, they may elect to pay this out in part or in full.
- Termination of employment for executives is covered in section 34 of the PAA.
- A sample step-by-step guide is provided at Appendix B of this Handbook.
Termination on notice by the employer for performance or conduct reasons
The employer may terminate the contract under clause 13.2 with four weeks’ notice (and an additional week if the executive is aged over 45) if the executive has failed to fulfil their duties and responsibilities under clause 3 and Schedule A of the contract or otherwise engages in misconduct.
Misconduct is defined under the PAA as including situations when the executive:
- contravenes the PAA, associated regulations or the applicable Codes
- engages in improper conduct (e.g. bullying, harassment, discrimination or engaging in conduct that could compromise the organisation’s reputation)
- does not follow their employer’s reasonable and lawful directions
- refuses to perform duties reasonably assigned by their employer
- improperly use their position for personal benefit
- improperly uses official information.
Misconduct also includes wilful, deliberate or reckless acts or omissions that are inconsistent with an executive’s duties, responsibilities, standards of conduct, conflict of interest as detailed in clause 3 and Schedule A of the contract.
Misconduct includes serious misconduct, which provides the employer with flexibility to respond with termination provisions depending on the gravity of the conduct.
Summary termination by the employer
The employer may terminate the contract under clause 13.3 if the executive has committed any act of serious misconduct. This includes:
- a breach of the warranties in clause 4 of the contract
- serious, persistent or repeated misconduct
- wilful or deliberate behaviour inconsistent with the continuation of the contract
- conduct causing serious and imminent risk to the health or safety of a person, or the reputation, viability or operations of the State or the employer
- theft, fraud, assault or sexual harassment
- being intoxicated at work
- refusing to carry out a lawful and reasonable instruction that is consistent with the contract of employment
The definition of serious misconduct under the contract broadly reflects the Fair Work Regulations 2009, which otherwise do not apply to an executive’s employment.
Termination under this provision is effective immediately and the employer does not need to provide notice. No counselling or warning is required.
Termination on notice by the employer
The employer may terminate an executive’s employment under clause 13.1 of the contract at any time by giving four months’ written notice.
An employer should only enact termination under this provision if the other termination provisions are not appropriate in the circumstances.
An employer must offer reasonable outplacement support to an executive terminated under clause 13.1. This assistance provides the executive with support and enables them to search for a new job for up to 4 months.
Notice period when contract is ending
If the notice period is longer than the time left before the contract’s end date, the notice period is reduced so it only covers the remaining time until the contract ends.
Under the contract, employers and executives should hold discussions in advance of this four-month-period.
Right of return
An executive may be entitled to a right of return, if:
- they were a non-executive employee immediately before their first employment as an executive and
- since that first employment, they have been continuously employed as an executive.
- The right of return provides the executive with appointment to a non-executive role at the most senior non-executive level (currently the Senior Technical Specialist or STS-7 level). The appointment is subject to a maximum salary tied to the midpoint of the most senior classification and must not be higher than the previous position’s TRP.
This entitlement is provided under section 27 of the PAA. It is not a right under the contract.
A right of return may be available to an executive if their contract is terminated by the employer (except for reasons of misconduct) or if the contract lapses. The executive may waive in writing their right of return.
Upon exercising their right of return, an executive:
- will be entitled to salary calculated as the executive’s TRP minus compulsory superannuation contribution, subject to the maximum salary being the midpoint of the STS-7 classification (this ensures equitable outcomes for executives on defined benefits schemes).
- is not entitled to any payment in lieu of notice
- ceases to become an executive
- relinquishes any benefits that have been provided exclusively as part of their contract, such as a vehicle accessed under the Executive Motor Vehicle Scheme.
- The mid-point of the STS-7 classification is the middle progression step of the middle value range (currently 7.2.3). If there is an even number of steps or ranges, the difference of the middle two should be used.
- A former executive who exercised their right of return may be considered eligible to participate in change processes and redundancy packages set out in the PAA. An employer will determine an executive’s eligibility on a case-by-case basis, in accordance with the government’s relevant industrial relations policies.
Redeployment
An executive is not automatically entitled to redeployment under the contract. However, an employer may consider a vacancy at a similar level for an executive. This may occur during the executive’s outplacement period.
Other reasons employment may be terminated
There may be other reasons for ending the employment, which are not expressly dealt with by the contract.
Retirement
Under section 20(4) of the PAA, an executive may choose to retire at any time after reaching the age of 55. Some defined benefit superannuation funds may provide for a lower age for retirement benefits.
It is unlawful to discriminate against an employee on the basis of age or for the employer to compulsorily retire an employee due to age (refer to the Equal Opportunity Act 1995). An exemption from the Attorney-General can be sought for compulsory age retirement in certain circumstances.
Abandonment of employment
While there is no provision specifically covering abandonment in the contract, in practice an executive may abandon their employment by failing to attend work without a reasonable excuse or approved leave.
In this event, it will likely constitute a failure of the executive to perform their role or to comply with lawful and reasonable directions to do so, which may give rise to termination under the contract.
Death
In the unfortunate event of an executive’s death, the executive’s family or representative must be paid any outstanding remuneration, along with the payment of accrued annual and long service leave entitlements, provided that all legal requirements are satisfied.
It is important that employers have in place processes to deal with an executive’s family, friends and colleagues, should an executive die during their employment. The employer should provide such persons access to an Employee Assistance Program.
Payments upon termination of employment
Executives must be paid out any accrued entitlements (i.e. annual leave and long service leave) at the end of their employment, as appropriate. Any payments in lieu of accumulated annual leave and long service leave entitlements are not considered to be ordinary time earnings so the employer is not required to pay a superannuation contribution on them. Payments in lieu of these leave entitlements are calculated in accordance with the source of the entitlement (for example, the ‘base rate of pay’ as defined in the Fair Work Act 2009 (Cth) or the ‘ordinary time rate of pay’ as defined in the Long Service Leave Act 2018 (Vic)).
Under section 35 of the PAA, an executive is not entitled to any additional compensation. Executives are not entitled to have personal leave paid out under the contract.
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