What the budget means for public sector employment and managing
The budget has an important focus on cuts to the Australian
Public Service (APS) as part of the
economic/political strategy of achieving a budget surplus.
Significant public sector cuts in the budget
The budget forecasts that the APS will be reduced from around
182,000 public servants to around 178,000 public servants
– a reduction of over 4,000 jobs.
The Canberra Times has estimated that the total job cuts will
increase to more than 17,000 over the three-year forward estimates
period. The reductions will come from across government, including
the Department of Defence, the ATO, Department of Education,
Employment and Workplace Relations, CSIRO, Department of
Parliamentary Services and the Australian Bureau of Statistics. It
is reported by unions that about 30 government agencies have
already announced staff cuts.
The cuts to public servant numbers follow the announcement on 29
November 2011 by the Minister for Finance and Deregulation of a
one-off increased efficiency dividend as part of the Mid Year
Economic Forecast and Outlook An efficiency dividend is essentially
a cut to an agency's operating budget. The efficiency
dividend increased from 1.5 per cent to 4 per cent in the 2012-2013
year. The Minister stated that the "Government's
strong expectation is that agencies will continue to meet the
efficiency dividend without resorting to forced redundancies, or
reduced services to regional Australia".
Tips for managing legal risks
The impact of the budget on public servant numbers will mean
that there will be significant workplace change in the APS. How
well an organisation manages change will largely depend on its
engagement with employees and union representatives and compliance
with legal obligations.
Some of the key industrial and legal considerations for planning
and implementing change in the APS will include:
compliance with enterprise agreement requirements, including in
relation to consultation and redundancy and redeployment
ensuring that if there are redundancies, they are genuine
redundancies for the purposes of the Fair Work Act's unfair
minimising the risk that selection processes for those
employees affected by change give rise to adverse action or
Compliance with enterprise agreement provisions is critical as a
failure to do so may result in a dispute at Fair Work Australia
under the agreement's dispute resolution clause, or a claim
for breach under section 50 of the Fair Work Act, which is a civil
remedy provision dealt with by the courts.
APS agencies must take steps to ensure that they meet the
genuine redundancy provisions under the Fair Work Act to avoid
being subject to its unfair dismissal provisions, which require
that a termination of employment is not harsh, unjust or
To reduce risks of adverse action and discrimination claims
during a change process, it is important that agencies have clearly
articulated – and legitimate - reasons for making changes
that impact on employees.
Some of the other risks that APS agencies should consider as
they undertake organisational change include:
an increase in workplace bullying and stress complaints that
can arise if employees feel under pressure in their roles as a
result of change and uncertainty
an increase in workers' compensation claims.
APS agencies should also consider whether casual and contract
employees impacted by change may have entitlements that do not form
part of written terms and conditions, such as long service leave
and notice of termination rights, if the person is likely to be
considered at law to be an on-going employee. For example, a casual
employee who has been engaged on a regular and systematic basis
with a reasonable expectation of continuing employment by the
department or agency is likely to have unfair dismissal and notice
of termination rights.
Consultation and engagement
Any process dealing with workplace change should incorporate a
transparent and considered consultation process that engages
employees and the relevant unions as soon as possible.
Consultation that includes one-on-one discussion about the
possible impacts of change on employees, as well as an opportunity
to receive feedback from impacted employees, can make a significant
difference to how successfully a change process is implemented and
whether claims or grievances will eventuate.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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Long experience representing many of Australia's leading employers has taught us that in employment litigation the identity of an employee's representative is a major factor in how employee litigation runs.
Australian employees receive certain entitlements (such as annual leave and superannuation) where contractors do not.
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