As you will be aware, compulsory retirement on the basis of age was abolished in the New South Wales public sector from 1 January 1991. The Anti-Discrimination (Compulsory Retirement) Amendment Act was passed in November 1990 during the last session of Parliament.

The decision to introduce legislation to abolish compulsory retirement ages in the NSW public sector means that experienced employees can continue their skills and knowledge to their department or authority beyond previously existing retirement ages.

The legislation amended the Anti-Discrimination Act to make it unlawful for a person to be compulsorily retired or threatened with compulsory retirement on the ground of age. This took effect for public sector employees from 1 January 1991, except Elcom coal mine employees and fire fighters who will have the benefit of the new provisions from 1 January 1993. The legislation does not apply to judicial officers and, at this stage, police officers.

The Act also amended a number of sections of the Public Sector Management Act which applies to public servants and to SES officers. In particular, these amendments:

• remove provisions which require an officer to retire at a specified age
• remove provisions which enable the Governor to retire an officer after the officer has reached a specified age
• enable a retired officer or SES officer to be appointed to a vacant position regardless of age
• enable SES officers who have no right of return to public sector employment to receive compensation where applicable regardless of age

(A full list of the amendments to the Public Sector Management Act is provided in Attachment 1.)

The principal amendments were the repeal of section 35 and section 42P which had previously provided for the retirement of officers or SES officers at specified ages.

The changes to the Public Sector Management Act mean, principally, that public servants and SES officers are not required to retire at a specified age but may elect to resign from

the public sector whenever they wish. Also, there is no longer any bar on the basis of age to retired officers returning to public sector employment. It also means, effectively, that there is no bar to the hiring of staff who are over the age of 60 years.

Effective implementation of these changes relies on the skills of agency managers in assessing the work performance of all employees, including those who wish to remain in employment after the traditional retirement ages. These decisions must be based on the need or the work to be done and an employee's demonstrated ability to perform that work. An effective system for managing performance is, therefore, essential as this will provide for regular assessment of all existing employees. Decisions in cases where retired employees are seeking re-employment need to be based on an assessment of the capabilities of that person in relation to the requirements of the job. All selection decisions should be based on work-related criteria aimed at getting the best person for the job.

Guidelines on retention and retirement of older workers are provided at Attachment 2 of this circular.

Should you have any further inquiries on these matters please refer them to Ms Linda Lee, Personnel Policy Division, Office of Public Management, on 228 5512.

Changes to superannuation legislation will assist those employees wishing to prepare for their retirement by moving to a lower paid position with reduced responsibility. The Anti-Discrimination (Compulsory Retirement) Amendment Act introduced new superannuation arrangements for certain employees who are at least 55 years of age and take a drop in salary of 20 per cent or more.

The guidelines at Attachment 2 contain details of these superannuation arrangements.

Further information on superannuation matters can be obtained from the Advisory Section of the State Authorities Superannuation Board on 238 5666.

R. G. Humphry,
Director-General.

ATTACHMENT 1

Amendments to Public Sector Management Act by Anti-Discrimination (Compulsory Retirement) Amendment Act 1990

Section 30 Appointment of retired officers

• Omit section 30(4).

The section is amended so that an officer retired from the public service or whose services have been dispensed with may be appointed to a vacant position despite the officer having reached 65 years of age.

Section 35 Retirement of officers

• Omit section 35.

With the repeal of this section there is now no compulsory retirement on the basis of age for officers in the NSW public service.

Section 42O Vocation of executive positions

• Omit from section 420(1)(c) 'or is retired'.

This amendment deletes reference to an executive officer being retired from office.

Section 42P Retirement of executive officers

• Omit section 42P.

With the repeal of this section there is now no compulsory retirement on the basis of age for executive officers in the NSW public sector.

Section 42R Right of return to public sector for certain executive officers

• Omit section 42R(5) and insert instead:

'(5) A person is not entitled to an engagement in the public sector under this section if the person ceased to be an executive officer because the person resigned or was (after due inquiry) removed from office for misbehaviour.'

The section is amended so that the right of an executive officer to return to employment in the public sector is not barred because the officer is over 60 years of age.

Section 42S Compensation etc where executive officer has no right to return to public sector

• Omit Section 42S(1)(c).
• From section 42S(1)(d) omit ',who has not reached the age of 60 years'.
• Omit section 42S(4) and insert instead:

'(4) The maximum compensation payable is an amount equal to the person's remuneration package for the period of one year.'

This provision, which deals with the payment of compensation to an executive officer who is removed or retired from office and has no right of return to the public sector, was amended to omit references to an executive officer's being retired. The maximum compensation payable to such an officer is not to exceed one year's remuneration.

Section 91 Reappointment to public sector following removal of term appointee

• Omit from section 91(1) 'and who has not reached the age of 60 years'.

The section is amended so that the right of a term appointee to reappointment in the public sector is not barred because the person is over 60 years of age.

Section 92 Compensation for office holder following removal

• Omit section 92(1) and insert instead:

'(1) This section applies to a person who (being a term appointee):

(a) is removed from an office under section 90; and

(b) is not entitled to be engaged in the public sector under section 91,

but does not apply to a person who held the office concerned on a part-time basis.'

• Omit from section 92(3) 'or retirement' wherever occurring except in paragraph (c).
• Omit from section 92(3)(b) 'expired; or' and insert instead 'expired'.
• Omit section 92(3)(c).
• Omit from section 92(5) 'or retirement'.

This provision, which deals with the payment of compensation to a term appointee who is removed or retired from office and has no right of return to the public sector, was amended to omit references to an office holder's being retired. The maximum compensation payable to such an office holder is not to exceed one year's remuneration or remuneration for a period beginning with the person's removal from office and ending when the person's term would have expired had the person not been removed, whichever is the shorter.

Schedule 7 Savings and transitional and other provisions

• In Part 1, clause 2 (Savings and transitional regulations), at the end of clause 2(1) insert:

Anti-Discrimination (Compulsory Retirement) Amendment Act 1990

This amendment enables regulations to be made of a savings or transitional nature.

• At the end of the Schedule insert:

'Anti-Discrimination (Compulsory Retirement) Amendment Act 1990

25. The amendments made by Schedule 2 to the Anti-Discrimination (Compulsory Retirement) Amendment Act 1990 do not apply to a person referred to in section 49ZU(1)(c) of that Act before January 1993.'

This is a transitional provision which provides that the amendments to the Public Sector Management Act 1988 do not apply to fire fighters or employees of State coal mines before 1 January 1993.

ATTACHMENT 2

Guidelines on retention and retirement of older workers

1. Introduction

With the abolition of compulsory retirement on the basis of age in the New South Wales public sector, staff now have a greater choice as to how long they remain in the public sector workforce.

The Anti-Discrimination (Compulsory Retirement) Act 1990 inserted a new part into the Anti-Discrimination Act, 'Part 4ACompulsory Retirement From Employment on the Ground of Age', making it unlawful to:

• retire an employee from employment
• require an employee to retire from employment
• threaten to retire an employee from employment
• engage in conduct with a view to causing an employee to retire from employment on the grounds of age.

This legislation applied to all public sector employees from 1 January 1991 except firefighters and employees in Electricity Commission coal mines who will be covered from 1 January 1993. Judicial officers and police officers are exempt.

All employees, and particularly older workers, should be advised of these legislative changes and the options available to them for planning their working lives.

All managers should be aware of these changes and the need to carefully consider the issues of performance management and retention of staff, options for flexible working arrangements, reappointment of retired officers or the hiring of older workers, and redundancy issues.

2. Performance management and staffing needs

The effective management of the work performance of all staff is integral to overall workplace management and contributes to the achievement of an agency's objective. With the elimination of compulsory retirement ages as a limiting factor on an employee's term of employment, this need is reinforced.

Issues to be considered in assessing the need for retention of all staff include:

• Overall objectives and targets of the organisation and the work unit
• the need for a particular job to be done
• the capability of the person in the position to do the work
• for staff on limited term contracts, the terms and conditions of the contract

A performance management system which provides a continuous assessment of individual and/or team performance is the most effective mechanism to tackle this issue.

Such a system can provide management with a firm basis to assess and plan for current and future needs for skills and positions in the workplace.

A performance management system will also provide feedback to all employees on their work performance which will assist them not only in performing more effectively but also planning their working lives. This will be of particular benefit to older workers who may be considering their options regarding continuing in employment or permanently retiring from the paid workforce.

Managers need to ensure that the work performance of all employees is evaluated against work-related criteria only. No other extraneous criteria, including age, sex, race, etc, should be used and the process should be as free as possible of any bias or stereotyping.

In particular, agencies should ensure that older workers are not specifically targeted by performance management systems and they are not subjected to more stringent evaluations than other staff. To do so would be inequitable and would risk contravening the Anti-Discrimination Act provisions.

The combination of good performance evaluation processes plus provisions for retirement of any member of staff due to ill health or incapacity (eg. section 36, Public Sector Management Act) provide managers with a wide range of options for maintaining and promoting an efficient and effective workforce.

3. Options for flexible working arrangements

A number of options currently available in the public sector for flexible working arrangements will assist employees who are considering continuing or retiring from the workforce. They include part-time work, and moving to lower paid positions with reduced responsibility.

Part-time work

Part-time work provides flexibility for managers to make better use of staff and allows staff to choose preferred work patterns. New guidelines on part-time work have recently been issued in Premier's Memorandum 90-62. These guidelines provide greater flexibility for both management and staff to use part-time work and streamline administration of part-time work arrangements.

For further advice and assistance on these guidelines please contact Mr Kent Broadhead of the Personnel Policy Division, Office of Public Management on 228 5516 or Ms Libby Goggin of the Public Employment Industrial Relations Authority on 266 8227.

Moving to lower paid positions

Changes to superannuation legislation will assist those employees wishing to prepare for their retirement by moving to a lower paid position with reduced responsibility. The Anti-Discrimination (Compulsory Retirement) Amendment Act introduced new superannuation arrangements for certain employees who are at least 55 years of age and take a drop in salary of 20 per cent or more. The superannuation schemes which have been amended are the State Superannuation Scheme, the State Authorities Superannuation Scheme, and the State Authorities Non-Contributory Superannuation Scheme. The Police Superannuation Scheme has not been amended.

The changes allow members in this situation to retain their entitlement to the benefit accrued before their salary was reduced. The benefit is then indexed, or earns interest, until it is paid on retirement from the public sector. These employees have the option of joining or rejoining the State Authorities Superannuation Scheme as a contributing member. Non-contributory superannuation coverage will automatically recommence.

The amendments are not intended to replace the coverage already provided in the superannuation Acts for part-time employees but will apply where full or part-time employment is taken up in a position of a lower (full-time equivalent) annual salary.

Further information on superannuation matters can be obtained from the Advisory Section of the State Authorities Superannuation Board on 238 5666.

4. Resignation and retirement

It is now up to an individual staff member to decide at which age they wish to retire. Employees considering options for retirement who are members of State Government superannuation schemes should seek advice from the State Authorities Superannuation Board on 238 5666 regarding the superannuation aspects of a decision to retire. The Board also runs regular seminars on financial planning for retirement.

Those who decide to retire should give notice of their intention to do so in the same manner as they would notify their intention to resign. 'Reasonable' notice should be given as decided by each agency head unless there is provision elsewhere in legislation or an industrial award or agreement. Generally 'reasonable notice' is aligned to the frequency with which a person is paid.

Section 37 of the Public Sector Management Act requires all public servants to provide written notice of their intention to resign to their department head.

In all cases where a contributor to a state superannuation fund resigns agencies are required to notify the appropriate superannuation authority on the relevant form.

5. Appointment of older workers and reappointment of retired staff

Officers who have been retired from the public service may be appointed to a vacant position under section 30 of the Public Sector Management Act. The Anti-Discrimination (Compulsory Retirement) Act amended this section to remove any age bar to reappointment.

All people seeking appointment or reappointment to public sector positions are to be assessed solely on the basis of job-related criteria, ie. merit. The aim of merit-based selection processes is to get the best person for the job. A person's age should not be a barrier to their appointment or reappointment to a public sector position.

All new employees in the public sector are entitled, if they wish, to join the State Authorities Superannuation Scheme (SASS). This also applies to those who were previously employed in the public sector and have retired and received benefits from their previous membership of a state government superannuation fund. Any past benefits received were provided in relation to their previous service.

It should be noted, however, that current Federal legislation bars people from joining or continuing to contribute to a superannuation scheme over the age of 65 years. Full-time employees who are members of state government schemes are paid out when they retire. Part-time employees who are members of such schemes must be paid out by age 70.

The decision to join SASS is voluntary. Older people entering or re-entering public sector employment should be encouraged to discuss the cost effectiveness of various superannuation options with the State Authorities Superannuation Board or with their own financial adviser.

6. Redundancy

Decisions about redundancy in the NSW public sector should be made in accordance with the current guidelines set out in Premier's Memorandum 88-40. The Public Employment Industrial Relations Authority can provide further advice on the application of these guidelines and assist in redundancy and redeployment issues. All agencies will be notified of any changes to these guidelines as they occur.

Redundancy should not be used as a de facto means of enforcing retirement on the basis of age or of providing a de facto retirement benefit. Redundancy packages should not be offered to any staff (regardless of age) unless they are genuinely excess to the organisation's requirements and are unable to be redeployed.

Under current policy, redundancy packages will be made available to all genuinely redundant workers regardless of an individual's age or entitlement to any superannuation retirement benefit or the age pension.

Care should be exercised when people previously made redundant offer themselves for re-employment in the public sector. Workers who have been made redundant should not normally be re-employed to do the same or similar work unless the needs of an agency have changed to make these particular skills required again.