Retirement of Public Service Officers on the Grounds of Ill Health

Guidance
For public service employers
Last updated:

Public service employers are responsible for managing and supporting their employees to perform the duties of their role.

Part of this responsibility is to support the health and wellbeing of employees, including those who experience illness and injury. Due care should be given to determine whether the employee may pose a risk to themselves or other employees attributed to ill health.

Introduction

It is appropriate for employers to consider retirement on the grounds of ill health where it is reasonably suspected an employee’s ill health renders them incapable of performing their full and regular range of duties in the reasonably foreseeable future, and management options to address this have not been successful or are not reasonable. This power is provided in section 39 of the Public Sector Management Act 1994 (PSM Act).

These guidelines include relevant considerations and processes in connection to the power in section 39 of the PSM Act and help public service employers:

  • prepare policies and procedures for retirement on the grounds of ill health
  • consider whether to call on an employee to retire on the grounds of ill health
  • manage situations where an employee is called on to retire because of ill health.

They are provided to assist but are not mandatory or intended to constitute a binding practice.

Definitions

Agency

Department or SES organisation as defined in section 3 of PSM Act.

Employee

Public service officer as defined in section 3 of PSM Act to mean executive officer, permanent officer or term officer employed in the public service under Part 3 of PSM Act.

Employer

Employing authority or delegate of a public service officer as defined in section 5 of PSM Act and includes, but is not limited to, chief executive officer, or board or committee with the power to appoint or employ staff.

Medical specialist

Medical specialist qualified to make an assessment of an employee’s ill health and impact of any ill health on the employee’s ability to perform the full and regular range of their duties. Depending on the circumstances, this may include a doctor, psychiatrist, psychologist, occupational therapist or other practitioner who is so qualified.

Treating medical specialist

Medical specialist involved in treatment of an employee’s medical incapacity.

Industrial fairness

These guidelines consider principles which might be applied when an employer’s decision to enforce a call on an employee to retire due to ill health is reviewed.

Procedural fairness

These guidelines are intended to help employers meet their obligation of procedural fairness in decision making.

Discrimination laws

Employers have a legal responsibility not to discriminate and to take all reasonable steps to prevent discrimination in the workplace. These guidelines help employers consider principles of disability/impairment discrimination law when assessing an employee's ability to carry out the full and regular range of their duties, and requests for reasonable workplace adjustments.

Further advice

Employers should obtain advice from their industrial relations advisor and/or State Solicitor’s Office on a case by case basis where required.

Applicable legislation and instruments

Retirement on the grounds of ill health needs to comply with relevant legislation and instruments including:

Employer initiated process

This guide is to assist employers manage retirement on the grounds of ill health processes – it is not intended to cover fitness for work processes. Employers may assess an employee’s fitness for work or use options other than retirement to manage the known impact of the employee's ill health on their ability to perform the duties.

Forming a reasonable belief

An employer may seek an assessment from a medical specialist of the employee’s medical capacity to perform the inherent duties of their position if the employer forms a reasonable belief that:

  • the employee’s inability to perform the inherent duties of their position may be attributable to ill health and/or
  • there is evidence to suggest that the employee’s actual or suspected ill health poses an unreasonable risk to the welfare of the employee and/or others.

When forming a reasonable belief, it is appropriate for the employer to rely on evidence of poor performance, poor attendance, unsafe practices, observations, complaints and/or existing medical evidence.

Poor performance may be a foundation of a reasonable belief if the employer suspects that poor performance is related to health issues.

A reasonable belief is capable of being formed whether or not the employer and employee might have worked together to address these matters through other management options.

Before seeking an assessment from a medical specialist, the employer may seek consent from the employee to obtain information from the employee's treating medical specialist(s) about the employee's fitness for work. If that step is taken, and information is received from the treating specialist(s), the employer should consider that information before deciding whether to direct the employee to attend an independent medical assessment.

Seeking advice from a medical specialist

When seeking an assessment from a medical specialist, the employer may:

  • discuss the reasons for referral with the employee, and the information to be provided to the medical specialist
  • explain to the employee that the employer is arranging and paying for a medical examination with a medical specialist nominated by the employer; if the employee fails to attend the examination, the employee may be liable to pay any expense incurred
  • inform the employee that they may have a support person or representative attend any meetings about the process and the medical examination
  • provide the employee with information about the employer’s employee assistance program.

In setting the date and time for the appointment with the medical specialist, the employer should try to accommodate the needs of the employee. The employer should direct the employee in writing to attend the appointment with the medical specialist for examination and provide the medical specialist’s name, position title, date, time, duration and location of the examination.

The employer may include the following information (and any other information the employer considers to be reasonable) in the referral to the medical specialist:

  • A statement that the purpose of the assessment is to help the employer determine: 
    • if the employee is medically capable of performing the inherent duties of their position (including whether they pose a risk to themselves or others) for the foreseeable future
    • if any further reasonable adjustments are required to assist the employee
    • the extent of any medical incapacity
    • the employee’s prospects of recovery and the timing of any such recovery
    • any workplace adjustments that would assist the employee continue their duties
    • any treatment options available to the employee to help their recovery and/or help them perform the duties of their position without an unreasonable risk to themselves or others.
       
  • A copy of any relevant factual information such as:
    • the employee’s role and duties (these may be in a job description/statement)
    • any adjustments currently in place
    • existing records of the employee’s illness or injury including copy of any reports from their treating medical specialist
    • relevant employment history which may include any action taken to address poor performance of their duties, workplace accommodations or adjustments that have been made to date, personal leave taken and relevant professional appraisal results.

Medical specialist’s report

Following the examination, the medical specialist provides an assessment report to the employer.

The report and all other information obtained during this process should be kept confidential to only those employees in the agency who reasonably need to know.

The employer should generally provide the employee with a copy of the report. Due care should be taken where the release of the information may have the potential to injure or harm the employee. In these circumstances the employer can:

  • provide the report to the employee’s treating medical specialist with instructions to discuss its findings with the employee
  • advise the employee to contact their treating medical specialist to discuss the report, and that the employee can contact the employer if they would like the report to be provided to them directly.  

Employer’s consideration of report and other information

In consideration of the medical specialist’s report and other available information, the employer forms a view about whether:

  • the employee is capable of performing the duties of their position for the foreseeable future or
  • the employee is not capable of performing the duties of their position for the foreseeable future due to their ill health or because they pose an unreasonable risk to themselves or others or
  • further medical advice is required or recommended.

The employer also considers whether the available information identifies or supports the employer taking actions or adjustments to help the employee including:

  • directing the employee to return to work or remain away from work subject to certain conditions or otherwise
  • workplace adjustments that are requested by the employee and/or medical specialist and that can reasonably be made (may include consideration of alternative work arrangements to the employee's current position including but not limited to a variation in working hours or duties, or transfer at level to a suitable alternative position in the agency in accordance with PSM Act [section 65], Employment Standard and Commissioner’s Instruction 2)
  • consideration or further consideration of performance management or disciplinary options
  • other management action appropriate in the circumstances.

Any actions or adjustments need to be reasonable for the employer in terms of cost, time and impact on the agency’s business.

Before calling on the employee to retire

After considering the medical specialist’s report and other available information, the employer should only consider calling on the employee to retire on the grounds of ill health if they have formed an evidence based view that:

  • the employee is unable to perform the inherent duties of their role for the reasonably foreseeable future and
  • there are no workplace adjustments that can be reasonably accommodated by the employer that would enable the employee to perform the inherent requirements of the position.

Adjustments may be unable to be accommodated for reasons that include, and are not limited to, expense, difficulty in implementation, time consuming, impact on others or cause some other hardship.  

Before making a decision, the employer advises the employee in writing that they are proposing to call on the employee to retire on the grounds of ill health in accordance with section 39 of the PSM Act and based on the medical specialist's assessment and any other information on which the proposed call to retire is reasonably based. The advice in writing should also include a reasonable timeframe by when the employee is expected to respond to this call.

The employee’s response may include any additional material they consider relevant including an assessment from their treating medical specialist or other medical specialist obtained at the employee's own cost.

After considering the employee’s response, the employer may:

  • consider other management options (as above)
  • seek further medical evidence
  • allow the employee to return to work
  • decide to call on the employee to retire.

Decision to call on the employee to retire

If an employer decides to call on an employee to retire, they are required to advise the employee of the decision in writing. The letter may include:

  • a decision has been made to call on the employee to retire on the grounds of ill health in accordance with section 39 of the PSM Act
  • reasons for the decision including consideration of the matters raised in the employee’s response to the proposal (if applicable)
  • date by which the employee is directed to provide their response accepting the call to retire
  • the fact that non-compliance with this call to retire may be dealt with as a breach of discipline under Part 5 of the PSM Act for which, if proven, a penalty may be imposed up to and including dismissal
  • the employee receiving payment for any accrued or pro rata leave and entitlements (see ‘Further considerations’ below for when an employee is eligible for pro rata long service leave)
  • the employee may consider contacting their superannuation fund to seek information about potential superannuation entitlements
  • the employee can access support through the employee assistance program (or equivalent).

Refusal to retire

Section 39 of the PSM Act does not specify what happens if an employee is called on to retire on the grounds of ill health and refuses to do so.

Depending on the circumstances, an employee’s refusal to retire may be treated as a breach of discipline under section 80 of the PSM Act on the grounds of the employee disobeying or disregarding a lawful order and contravening the statutory requirement contained in section 39(2). This may then be dealt with through the disciplinary and appeal processes provided for in Part 5 of the PSM Act.

An employee who is aggrieved by an employer’s disciplinary action (such as dismissal) has an avenue of appeal to the Public Service Appeal Board under section 78 of the PSM Act.  

Further considerations

Redeployment and redundancy

Parts 2 to 6 of the Public Sector Management (Redeployment and Redundancy) Regulations 2014 do not apply to an employee who is to retire or is called on to retire from employment on the grounds of ill health under section 39 of the PSM Act.

As such, an employee’s ill health should not be used as the primary reason for providing a severance to an employee or for registering an employee for redeployment. An offer of severance should only be considered when an employee’s office, post or position is (or is to be) abolished or the employee is to become surplus to the employer’s requirements.

Superannuation and other financial advice

On receiving a request from an employee to retire on the grounds of ill health, the employer should advise the employee to seek advice from their superannuation fund, Australian Taxation Office and other relevant financial advice. The employee should be given appropriate time to obtain that advice.

An employee can apply for early access to their superannuation for various reasons. These may include compassionate grounds, the employee having a terminal medical condition, or temporary or permanent incapacity.

Lump sum payment equivalent to long service leave entitlement

Under Regulation 5(1)(c)(i) of the Public Service Regulations 1988, a public service employee who is retired by the employer on the grounds of ill health is entitled to a lump sum payment for the money equivalent of any pro rata long service leave entitlement if they have completed at least 12 months’ continuous service before retirement.

Workers’ compensation

Where an employer has accepted liability that the employee’s condition has been caused through a work related injury and is subject to a claim for workers’ compensation, retirement on the grounds of ill health may proceed if appropriate in the circumstances.

The employer should ensure they are not exposed to unnecessary or increased liability arising under workers’ compensation legislation or common law in relation to an illness or injury as a result of the employer calling on an employee to retire due to ill health.

Employers should consider seeking advice from WorkCover and the State Solicitor’s Office.

Existing substandard performance or disciplinary process

The employer should consider how to proceed in relation to an existing substandard performance or disciplinary matter concerning an employee.

In determining whether to proceed with a substandard performance or disciplinary matter, the employer needs to consider the circumstances on a case by case basis. Generally, the substandard performance or disciplinary process should proceed unless the employer is unable to fairly conclude the process without the employee’s further participation.

Employers can seek advice from the State Solicitor’s Office.

Published

8 March 2023
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