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Department of Premier and Cabinet

Targeted and Negotiated Voluntary Redundancies (TNVR)

Overview

Targeted and Negotiated Voluntary Redundancy (TNVR) is a tool that is available to assist Heads of Agencies to manage their workforce to meet business operational requirements and reduce future employee related expenses.

A TNVR payment may be used to assist “Identified employees” to voluntarily leave their State Service employment provided the specified criteria can be met.

TVNRs may also be used where a major restructure is required. In these cases expressions of interests are called from those employees who will be directly affected, without individual employees having to be specifically identified.

General expressions of interest are not to be generally advertised in an agency, except in cases where a major restructure is required in which case expressions of interest may be called from those affected employees.

TNVRs negotiated or offered to employees under other circumstances require a strong demonstrated business case supported by the Head of Agency.

TNVR Business Case

Heads of Agencies may approve a TNVR payment to an “Identified employee” if a business case has been completed using the provided template that fully justifies, to the Head of Agency’s satisfaction, the reasons for the payment, including:

  • why the position has been identified for abolition;
  • details of action that has been taken to consider the employee for re-assignment or transfer to other duties and/or why it is unlikely that this will be possible within a reasonable period of time;
  • details of advice that has been sought from the Office of the Director for Public Prosecutions in relation to any workers compensation or other relevant matters relating to the employee;
  • that any multiple employment arrangements have been identified and addressed;
  • that the employee has indicated their interest in being considered for a TNVR;
  • the employee has been in the position that is being abolished for at least six months; and
  • the recurrent savings and payback period.

There is no requirement for:

  • A Head of Agency to offer an “Identified employee” a TNVR where the Head of Agency considers that it is likely that the employee can be assigned or transferred to other duties and/or there is no cost benefit to the agency.
  • A Head of Agency to offer an “Identified employee” a TNVR payment if there is a record that the employee has previously declined the offer.

TNVR payments are to be funded within the agency’s budget allocation, unless alternative arrangements have been agreed by the Secretary, Department of Treasury and Finance.

Major Restructures

Agencies are not to call for general expressions of interest from employees in targeted or negotiated voluntary redundancies. However, where an agency, or part of that agency, is undergoing a major restructure, Heads of Agencies may call for expressions of interest from employees who are immediately and directly affected by the restructure.

Prior to calling for expressions of interest, agencies must be clear about the scope and intent of the restructure, identify specific groups of employees who will be directly affected by the restructure and likely to be left without duties to undertake, and have commenced consultation with employees about the proposed restructure.

When calling for expressions of interest agencies must clearly communicate:

  • which employees are affected and how;
  • the anticipated number of FTEs that will be offered TNVRs;
  • the criteria to be used when assessing expressions of interest; and
  • time frame for responding to all expressions of interest.

In assessing expressions of interest, the Head of Agency is to take into account:

  • the cost benefit for paying the TNVR;
  • the capacity of the agency to abolish the position held by that employee;
  • the employee has been in the position that is being abolished for at least six months;
  • the capacity of the agency to pay for the TNVR; and
  • the probability of redeployment of that employee.

Any restructure must comply with the consultation requirements under the State Service Act 2000and relevant awards.

Negotiated Redundancies

In special and exceptional circumstances, Heads of Agencies may negotiate a TNVR payment with an employee who is not an “Identified employee” providing:

  • the employee approaches the agency to be considered for a negotiated TNVR payment and the employee is able to provide justifiable reasons as to why the position they occupy could be abolished and provide a cost saving to the agency;
  • the employee has occupied the position that is to be abolished for a period greater than six months;
  • the Head of Agency determines that the position could justifiably be abolished;
  • the amount of the TNVR payment is less than what the employee would have ordinarily been entitled to receive;
  • there is a business operational and cost benefit to the agency in providing the employee with a negotiated TNVR payment; and
  • a business case has been approved by the Head of Agency before any TNVR payment is provided to the employee.

Workers’ compensation and other employee related matters

An employee who is incapacitated due to an injury or illness and it is unlikely that the employee will be able to return to their pre-injury hours or duties, depending on the circumstances of the incapacity, is to be managed in accordance with the provisions of applicable legislation such as Workers Rehabilitation and Compensation Act 1988, State Service Act 2000and/or Retirement Benefits Act 1993.

A Head of Agency must arrange for advice to be obtained from the Office of the Director of Public Prosecutions before offering a TNVR payment to an employee if the employee:

  • is incapacitated due to a workers compensation injury and it is likely that the employee will be able to return to their pre-injury hours and duties;
  • has an active unresolved workers compensation injury; or
  • has an outstanding work related matter that is or is likely to cause a liability issue for the Crown.

The purpose of obtaining advice from the Office of the Director of Public Prosecutions prior to offering a TNVR payment to the employee is to include seeking advice in relation to:

  • resolving any workers compensation and employee related matters;
  • any common law action that may be taken by the employee; and
  • mitigating any liability issues for the Crown.TNVR Payment Value and Calculations

TNVR payments are based on an employee’s total continuous full-time equivalent employment, “years of service” as defined. The value of the TNVR is:

  1. 4 weeks salary (pro-rata calculation for part-time employees) plus 2 weeks salary for each “year of service” up to a maximum total TNVR payment of 48 weeks salary.
  2. The minimum total TNVR payment for a full-time employee is 16 weeks’ salary. The minimum total TNVR payment for a part-time employee is the greater of the calculation specified in “1” above or a payment based on 16 weeks at the employee’s part-time weekly salary.

Four week TNVR component

  1. Full-time employees are to receive the full four week salary component. 
  2. Part-time employees are to receive a payment based on four weeks salary x by the greater of the following:
    • the employee’s full-time equivalent percentage based on the employee’s contracted hours of employment as at the date of separation; or
    • the employee’s full-time equivalent percentage based on the average hours worked in the 12 months period immediately prior to the date of separation.

Employees who are offered a TNVR payment must be provided with both gross and net amounts to assist them in their decision making.

Years of Service” means continuous full-time equivalent permanent or fixed term employment with the Crown subject to the following:

  1. Permanent employment includes full-time and part-time employment. Fixed term employment includes full-time, part-time and casual employment.
  2. Any break in service less than three months and/or any period of leave without pay in excess of twenty working days during the period of service is not deemed to affect continuity of service however it does not count towards calculating full-time equivalent years of service.
  3. Periods of secondment outside the Tasmanian State Service greater than three months in duration (except with a public sector union under the provisions of a registered award or agreement) is not deemed to affect continuity of service but does not count towards calculating full-time equivalent years of service.
  4. Any periods of employment with the Crown for which a previous redundancy, termination, severance or WRIP payment has been made does not count towards calculating the employee’s continuous full-time equivalent years of service.
  5. In the case of a female employee who, as a requirement under State legislation prevailing at that time, was obliged to resign her employment with the Employing Authority due to marriage or childbirth, such previous continuous service shall be counted toward calculating full-time equivalent service. It is the responsibility of the employee to provide satisfactory evidence of their previous service.

The Director, SSMO may deem that ineligible service is to be counted towards calculating full-time equivalent service on receipt of documentation from a Head of Agency substantiating that exceptional circumstances exist or that a legal arrangement relevant to that service applied to the transfer of services or staff.

Full-time equivalent years of service means:

  1. The employee’s hours of work during the period of continuous employment (including any periods of paid leave, leave without pay of less than 20 working days and additional hours but excluding any payment for hours worked as overtime or leave without pay exceeding 20 working days).
  2. Divided by the ordinary full-time hours of work for the same period.

The Crown means the Crown in the Right of Tasmania as specified below:

  • A Government department or a State authority or other organisation specified in Column 1 of Schedule 1 of the State Service Act 2000.
  • The Tasmanian Police Service.
  • Any member of the Tasmanian House of Assembly or Tasmanian Legislative Council.
  • The Excellency the Governor.

Example TNVR calculation:
Full-time employee who has always worked full-time

Years of Service commencement date: 20/1/1990

Cessation date: 30/6/2015

Years of Service: 25 years and 162 days (25.44 years)

Full-time Equivalent Award Salary: $62 000

Four week component: 4 weeks + (25.44 x 2 weeks) = 54.88 weeks

Total TNVR payment will be 48 weeks which is the maximum.

$62 000 ÷ 52 weeks x 48 weeks = Total TNVR payment of $57 230.77

Example TNVR calculation:
Part-time employee who has full-time and part-time employment

Employee was full-time and commenced part-time employment at 0.6 FTE on 1 June 2015

Years of service commencement date: 1/10/2012

Cessation date: 30/10/2015

Years of Service: 2.91

Full-time Equivalent Award Salary: $62 000.

4 week component – As the employee has had a combination of full-time and part-time employment in the 12 month period immediately prior to the cessation date it is necessary to determine the average FTE during this time.

31/10/2014 – 31/5/2015 – FTE 100% - worked 1 109.85 hours

1/6/2015 – 30/10/15 – FTE 60% - worked 485.10

Total hours worked = 1 594.95 = FTE of 83.14%          (1 594.95 ÷Full-time hours 1 918.35)

Therefore the employee would be entitled to 4 weeks x 83.14% = 3.33 weeks

As the employee is part-time, the employee is entitled to the greater of the two following calculations.

Calculation 1

3.33 weeks + (2.91 x 2 weeks) = 9.15 weeks

$62 000 ÷ 52 x 9.15 = $10 909.62

Calculation 2

$62 000 ÷ 52 x 60% (employees current FTE) x 16 weeks (minimum TNVR payment) = $11 446.15

Therefore the employee would be entitled to receive a TNVR payment based on calculation 2 as it is the greater of the two calculations.

Definition of Salary

For the purposes of calculating TNVR payments salary is defined as:

  1. The classification salary point applicable to the employee’s permanent appointment at the time of separation.
  2. Any higher duties allowance or more responsible duties allowance as at the date of separation providing the employee has been in receipt of that allowance for a continuous period of at least 12 months.
  3. Any other award related allowances not provided above which the employee would receive if they were absent on recreation leave.

If further information is required in respect to the definition of salary and the inclusion of specific allowances the matter is to be referred to the Director, SSMO by emailing managing.positions@dpac.tas.gov.au

Salary Divisor

For the purposes of calculating TNVR payments the employee’s salary as defined is to be divided by 52.

Notification arrangements

Although a TNVR is a voluntary payment to assist “Identified employees” in specific circumstances, to leave their State Service employment it is important that employees are provided with an appropriate period of time to consider the offer, seek superannuation, taxation and financial advice and separate from their employment. Unless otherwise agreed between the employee and the Agency, employees are to be provided with a minimum of 21 calendar days to enable them to consider the offer and seek appropriate advice. 

At a minimum the written notification to the employee must specify:

  • the separation date;
  • TNVR payment amount (gross and net amounts);
  • leave payment amounts (gross and net amounts);
  • the employment exclusion period;
  • recommendation for the employee to obtain their own financial, superannuation, taxation advice;
  • date on which the employee is to advise the employer of their decision;
  • a deed of release for the employee’s signature indicating their acceptance of the offer; and
  • the name and contact details of the person the employee can contact if they have any queries regarding the offer. This person must have a thorough understanding of the TNVR.

Agencies must not provide employees with superannuation, taxation and financial advice or provide information or comment on the suitability or effectiveness of any arrangement, scheme or provider. 

Accrued Leave Entitlements

An employee who accepts a TNVR payment is entitled to receive payment for any accrued and unused recreation leave, purchased leave and long service to which the employee may be entitled under the provisions of the relevant award and long service leave legislation.  Subject to award provisions, employees may also be entitled to leave loading.  The payment of these leave entitlements do not form part of the TNVR payment.

Employment Exclusion Period

Employees who accept a TNVR payment must agree to not seek or accept any employment in any capacity or seek or accept to directly provide consultancy services to the Crown, as defined, from the date of their cessation of employment for the period equivalent to the number of weeks applicable to their TNVR payment rounded up to the nearest whole number of weeks.

Example: Employment Exclusion period

An employee receives 22.98 weeks TNVR payment. The employment exclusion period is rounded up to 23 weeks.

An employee receives 34.25 weeks total TNVR payment. The employment exclusion period is rounded up to 35 weeks.

 “Employment Exclusion period” means that the employee agrees not to seek or accept:

  • any employment in any capacity with the Crown; or
  • any appointment as a consultant providing consultancy services to the Crown.

The Crown means the Crown in the Right of Tasmania and includes for the purposes of a TNVR Deed of Release to include employment or appointment as outlined above for:

  • A Government department or a State authority or other organisation specified in Column 1 of Schedule 1 of the State Service Act 2000.
  • The Tasmanian Police Service.
  • Any member of the Tasmanian House of Assembly or Tasmanian Legislative Council.
  • The Excellency the Governor.

In respect to undertaking consultancy services the following information is provided:

  • The engagement of a company or organisation from the private sector to undertake consultancy or contract work for the Crown is not prohibited, even though that company or organisation may employ former State Service employees who have separated under a TNVR. This arrangement is considered to be within the provisions of the Deed of Release as it does not relate to a direct contractual relationship with the former employee and the Crown.
  • The engagement would however be prohibited if a former State Service employee is the owner, either solely or jointly, of the company or organisation or where it is considered that the former employee has entered into a business arrangement in order to circumvent the provisions of the Deed of Release, for example by placing the company ownership in the control of another person.

In exceptional circumstances the Director, SSMO may provide approval to waive, reduce or vary the exclusion period where special or extraordinary circumstances exist. The Head of Agency in which the re-employment, consultancy or contract work is to be undertaken is to submit a request in writing to the Director, SSMO outlining:

  • the specialist nature of the work to the undertaken;
  • the reasons why it is necessary for the former employee to undertake the work;
  • what action has been taken to determine if there is any cost effective alternative to the re-employment or engagement of the former employee; and
  • the duration of the proposed arrangement.

A former employee who, without approval from the Director, SSMO, undertakes employment or consultancy work for the Crown prior to the expiry of the exclusion period is to be terminated and incur a penalty in accordance with the provisions of the Deed of Release. The penalty may only be waived or varied by the Director, SSMO.

Deed of Release

The offer and acceptance of a TNVR payment is not deemed to be binding until a Deed of Release (Deed) which is a legal document is signed by the employee and the Head of Agency (on behalf of the Crown) and the signatures are witnessed. The Deed of Release template is maintained and issued to agencies by the Director, SSMO. The Deed of Release must not be varied unless approved by the Director, SSMO.

In summary the Deed specifies that the employee’s employment is terminated by reason of redundancy and sets out the terms and conditions of the agreement including the:

  • amount of the TNVR payment;
  • cessation of employment date; and
  • employment exclusion period;

The Deed of Release does not include:

  • superannuation entitlements;
  • payment for any recreation and long service leave; or
  • payment for leave loading - where applicable.

TNVR Funding, recurrent savings and payback period

Heads of Agency must:

  • fund all TNVR separation costs or make the necessary arrangements with Department of Treasury and Finance for such funding;
  • ensure that there is a cost benefit to the agency in providing TNVR payments; and
  • determine an appropriate length of time for the payback period which is in accordance with the agency’s capacity to manage the TNVR cost within its existing budget and forward estimates.

The recurrent savings are calculated by multiplying the employee’s full-time award salary by their FTE percentage.

Example: Recurrent savings

If a full-time employee’s award salary is $70 555 per annum, this is the recurrent savings for the 12 months commencing from the employee’s cessation date ie ($70 555 x 100%)

If a part-time employee is working 0.6 FTE, and the full-time award salary is $70 555 per annum, the recurrent savings for 12 months will be $42 333 ie ($70 555 x 60%).

The payback period is calculated by dividing the total amount of the TNVR by the recurrent savings.

Example: Payback period

If the employee’s total TNVR payment is $65 127.69 and the recurrent saving is $70 555 the payback period will be 0.92 of a year ie ($65 127.69 ÷$70 555).

Position Abolition

Heads of Agencies are to have processes in place for positions to be abolished from the agencies Pay/Personnel systems and establishment at the time the employee’s TNVR payment is processed or no later than fourteen calendar days from that date.

Heads of Agencies must also ensure that a position at the same or similar classification level is not created or an existing vacant position is not re-profiled for the purpose of assigning the duties of an abolished position to that position. 

Processing of TNVR, leave and superannuation payments

Heads of Agencies are to have in place arrangements for employees to be paid their TNVR payment and relevant leave payments on the next available normal pay day following their cessation of employment. This provision is specified in the Deed of Release. 

The payment of superannuation benefits is a matter for the employee’s superannuation fund. Any superannuation benefits to which the employee may be entitled will be provided to the employee in accordance with applicable superannuation legislation and the requirements of their superannuation provider.

Documentation and Provision of Information

Heads of Agencies are to ensure that documentation is retained in accordance with legislative requirements and their agency’s approved records management system.  Documentation is to be made available to the Director, SSMO for examination or review if requested.

Crown employees must not release any information to a third party in relation to employees who have accepted a TNVR payment without the employee’s written consent unless the information:

  • is required to be released by law;
  • relates to an official request from another Crown agency in respect to an employment exclusion period; or
  • has direct relevance to the employee undertaking the duties for which they are employed.