House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Assistant Minister for Defence, the Hon Stuart Robert MP)

Schedule 2 - flexible service arrangements in the permanent forces

129. At present, Defence legislation provides for two types of service for members of the ADF - permanent and reserve service. All members of the permanent force serve on a continuous full-time basis. Reserve members are not bound to render continuous full-time service, other than when they voluntarily undertake to render continuous full-time service for a specified period of time and that undertaking is accepted.

130. These conditions of service are set out in the Defence Act 1903, the Naval Defence Act 1910 and the Air Force Act 1923.

131. Under current arrangements, which are limited by the provisions of the current DFRDB and MSBS superannuation arrangements, members of the permanent force who wish to work other than full-time are required to take part-time leave without pay. The period of part-time leave without pay cannot exceed 21 days for any particular period without having adverse superannuation consequences by creating a break in service. This constrains the flexibility available to permanent ADF members and the Chiefs of Service who are responsible for providing capability.

132. The following amendments to the Defence Act 1903, the Naval Defence Act 1910 and the Air Force Act 1923 introduce a new contemporary concept of Defence service, effectively, formalising the present arrangements, removing the need for any member of the permanent force to take part-time leave without pay if they wish to render flexible service. It is not necessary to provide similar arrangements for members of the Reserves who already have access to flexible service through the use of Reserve service days (in lieu of undertaking continuous full-time service).

133. This category of service will provide greater flexibility for permanent ADF members in line with contemporary community standards of employment. It will also give the Chiefs of Service greater flexibility in dealing with capability.

134. The new flexible service arrangements, will work in conjunction with the introduction of ADF Super to provide flexible, modern and equitable conditions of service for ADF members to assist in the delivery of Defence capability.

Air Force Act 1923

135. Item 1 inserts new section 4H after section 4G to provide for flexible service arrangements for members of the Permanent Air Force.

136. Subsection 4H(1) provides that the Chief of Air Force may determine a class of persons who may render flexible service instead of continuous full-time service. The determination does not mean that everyone in that class is required to participate in flexible service arrangements. In that determination, the Chief may determine a period or pattern of service that constitutes the flexible service.

137. A note to the subsection advises the reader that a person who is in a class of persons determined by the Chief does not have to participate in flexible service arrangements (that is, the person does not have to apply).

138. Subsection 4H(2) provides that any person who is a member of the Permanent Air Force may apply to the Chief of Air Force in writing to render flexible service, even if the person is not in the class of person's identified in the Chief's determination. A person who is in a class of persons approved for flexible service, must also apply to render flexible service.

139. Subsection 4H(3) sets out that the Chief may determine that a member who has applied may render flexible service and may determine the period or pattern of service that constitutes that flexible service and the period during which the determination is in force. A note to the subsection reminds the reader that a determination may be varied or revoked.

140. Subsection 4H(4) provides that even if a person is in a class of persons identified as able to undertake flexible service, the Chief may still:

a.

refuse an individual's application for flexible service; or

b.

determine a different period or pattern of flexible service to that set out in the determination made under subsection 4H(1).

141. A determination under subsections 4H(3) and 4H(4) is a decision under an enactment and would be subject to external merits review under the provisions of the Administrative Decisions (Judicial Review) Act 1977.

142. Subsection 4H(5) provides that a person rendering flexible service in accordance with a determination made under subsection 4H(3) is taken to be rendering continuous full time air-force service for the garnishee provisions of the Defence Act 1903 (section 120B), for all the purposes of the Defence Force Discipline Act 1982, the DFRDB Act, the MSB Act, for Ministerial determinations of non-salary related allowances for members of the ADF (section 58B of the Defence Act 1903), for determinations of the Defence Force Remuneration Tribunal of salary related allowances for members of the ADF (section 58H of the Defence Act 1903) for any instruments made for the purpose of the Defence Act 1903, the Defence Force Discipline Act 1982, the DFRDB Act and the MSB Act or any other Act, instrument or provision prescribed by regulation.

143. Subsection 4H(6) provides that, without limiting subsections 4H(1) and 4H(3), a flexible service determination may deal with:

a.

the treatment of flexible service, including how remuneration and allowances are to be treated, for a person or persons in a class; and

b.

whether the person or persons rendering flexible service under a determination are fulfilling their obligation to render continuous full time air-force service under section 4G.

144. Subsection 4H(7) provides that, at any time, the Chief may revoke or vary a flexible service determination made under subsections 4H(1) and 4H(3). Permanent members undertaking flexible service have the same service obligation as members of the permanent force not undertaking flexible service. This provision ensures that the Chief is able to require persons undertaking flexible service to meet their service obligation so that, at any time, the member can be required to render continuous full time service.

145. Subsection 4H(8) sets out conditions on which a flexible service determination made under subsection 4H(3) is automatically revoked.

146. Subsection 4H(9) provides that the Chief of the Defence Force may, at any time, direct the Chief to revoke a determination under subsection 4H(3). The Chief of the Defence Force may use this power if he or she is satisfied that it is appropriate to do so for operational or other requirements of the Defence Force.

147. The purpose of subsection 4H(9) is to provide the Chief of the Defence Force the power to manage overall Defence capability through directing the Service Chiefs.

148. Subsection 4H(10) provides that, to avoid doubt, the Chief must comply with the direction of the Chief of the Defence Force under subsection 4H(9).

149. Subsection 4H(11) provides that a determination or direction made under section 4H is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. The purpose of the determination making power is to create a class of persons who can access flexible service arrangements at a particular time in their career in the permanent force. It is an instrument that relates to the terms and conditions of those members' engagement with the ADF. As such, a determination for these purposes is an internal employment related matter for the ADF and is consistent with the exemption provided in the Legislative Instruments Regulations 2004.

150. Item 2 inserts subsection 8A(1AA) which ensures that the power to make flexible service determinations under section 4H may not be delegated to an officer of the Permanent Air Force below the rank of Air Commodore.

Defence Act 1903

151. Item 3 inserts new section 46 to provide for flexible service arrangements for members of the Regular Army.

152. Subsection 46(1) provides that the Chief of Army may determine a class of persons who may render flexible service instead of continuous full-time service. The determination does not mean that everyone in that class is required to participate in flexible service arrangements. In that determination, the Chief may determine a period or pattern of service that constitutes the flexible service.

153. A note to the subsection advises the reader that a person who is in a class of persons determined by the Chief does not have to participate in flexible service arrangements (that is, the person does not have to apply).

154. Subsection 46(2) provides that any person who is a member of the Regular Army may apply to the Chief in writing to render flexible service, even if the person is not in a class of persons identified in the Chief's determination. A person who is in a class of persons approved for flexible service, must also apply to render flexible service.

155. Subsection 46(3) sets out that the Chief may determine that a member who has applied may render flexible service and may determine the period or pattern of service that constitutes that flexible service and the period during which the determination is in force. A note to the subsection reminds the reader that a determination may be varied or revoked.

156. Subsection 46(4) provides that even if a person is in a class of persons identified as able to undertake flexible service, the Chief may still:

a.

refuse an individual person's application for flexible service; or

b.

determine a different period or pattern of flexible service to that set out in the determination made under subsection 46(1).

157. A determination under subsections 46(3) and 46(4) is a decision under an enactment and would be subject to external merits review under the provisions of the Administrative Decisions (Judicial Review) Act 1977.

158. Subsection 46(5) provides that a person rendering flexible service in accordance with a determination made under subsection 46(3) is taken to be rendering continuous full time Army service for the garnishee provisions of the Defence Act 1903 (section 120B), for all the purposes of the Defence Force Discipline Act 1982, the DFRDB Act, the MSB Act, for Ministerial determinations of non-salary related allowances for members of the ADF (section 58B of the Defence Act 1903), for determinations of the Defence Force Remuneration Tribunal of salary related allowances for members of the ADF (section 58H of the Defence Act 1903) for any instruments made for the purpose of the Defence Act 1903, the Defence Force Discipline Act 1982, the DFRDB Act and the MSB Act or any other Act, instrument or provision prescribed by regulation.

159. Subsection 46(6) provides that, without limiting subsections 46(1) and 46(3), a flexible service determination may deal with:

a.

the treatment of flexible service, including how remuneration and allowances are to be treated, for a person or persons in a class; and

b.

whether the person or persons rendering flexible service under a determination are fulfilling their obligation to render continuous full time Army service under section 45.

160. Subsection 46(7) provides that, at any time, the Chief may revoke or vary a flexible service determination made under subsections 46(1) and 46(3). Permanent members undertaking flexible service have the same service obligation as members of the permanent force not undertaking flexible service. This provision ensures that the Chief is able to require persons undertaking flexible service to meet their service obligation so that, at any time, the member can be required to render continuous full time service.

161. Subsection 46(8) sets out conditions on which a flexible service determination made under subsection 46(3) is automatically revoked.

162. Subsection 46(9) provides that the Chief of the Defence Force may, at any time, direct the Chief of Army to revoke a determination under subsection 46(3). The Chief of the Defence Force may use this power if he or she is satisfied that it is appropriate to do so for operational or other requirements of the Defence Force.

163. The purpose of subsection 46(9) is to provide the Chief of the Defence Force the power to manage overall Defence capability through directing the Service Chiefs.

164. Subsection 46(10) provides that, to avoid doubt, the Chief of Army must comply with the direction of the Chief of the Defence Force under subsection 46(9).

165. Subsection 46(11) provides that a determination or direction made under section 46 is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. The purpose of the determination making power is to create a class of persons who can access flexible service arrangements at a particular time in their career in the permanent force. It is an instrument that relates to the terms and conditions of those members' engagement with the ADF. As such a determination for these purposes is an internal employment related matter for the ADF and is consistent with the exemption provided in the Legislative Instruments Regulations 2004.

166. Item 4 amends subsection 120A(4AA) of the Defence Act 1903 to ensure that the power to make flexible service determinations under section 46 may not be delegated to an officer of the Regular Army below the rank of Brigadier.

Defence Force Retirement and Death Benefits Act 1973

167. Item 5 inserts subsection 19(3) to make it clear that the contributions of a DFRDB contributing member who is rendering flexible service are to be based on the rate of pay applicable to the member as if the member was not rendering flexible service (that is, the contributions will be 5.5% of the annual rate of salary at the highest increment for rank held within a pay grade applicable to the member and any service allowance being paid).

Naval Defence Act 1910

168. Item 6 inserts new section 32 to provide for flexible service arrangements for members of the Permanent Navy.

169. Subsection 32(1) provides that the Chief of Navy may determine a class of persons who may render flexible service instead of continuous full-time service. The determination does not mean that everyone in that class is required to participate in flexible service arrangements. In that determination, the Chief may determine a period or pattern of service that constitutes the flexible service.

170. A note to the subsection advises the reader that a person who is in a class of persons determined by the Chief does not have to participate in flexible service arrangements (that is, the person does not have to apply).

171. Subsection 32(2) provides that any person who is a member of the Permanent Navy may apply to the Chief in writing to render flexible service, even if the person is not in a class of persons identified in the Chief's determination. A person who is in a class of persons approved for flexible service, must also apply to render flexible service.

172. Subsection 32(3) sets out that the Chief may determine that a member who has applied may render flexible service and may determine the period or pattern of service that constitutes that flexible service and the period during which the determination is in force. A note to the subsection reminds the reader that a determination may be varied or revoked.

173. Subsection 32(4) provides that even if a person is in a class of persons identified as able to undertake flexible service, the Chief of Navy may still:

a.

refuse an individual person's application for flexible service; or

b.

determine a different period or pattern of flexible service to that set out in the determination made under subsection 32(1).

174. A determination under subsections 32(3) and 32(4) is a decision under an enactment and would be subject to external merits review under the provisions of the Administrative Decisions (Judicial Review) Act 1977.

175. Subsection 32(5) provides that a person rendering flexible service in accordance with a determination made under subsection 32(3) is taken to be rendering continuous full time Naval service for the garnishee provisions of the Defence Act 1903 (section 120B), for all the purposes of the Defence Force Discipline Act 1982, the DFRDB Act, the MSB Act, for Ministerial determinations of non-salary related allowances for members of the ADF (section 58B of the Defence Act 1903), for determinations of the Defence Force Remuneration Tribunal of salary related allowances for members of the ADF (section 58H of the Defence Act 1903) for any instruments made for the purpose of the Defence Act 1903, the Defence Force Discipline Act 1982, the DFRDB Act and the MSB Act or any other Act, instrument or provision prescribed by regulation.

176. Subsection 32(6) provides that, without limiting subsections 32(1) and 32(3), a flexible service determination may deal with:

a.

the treatment of flexible service, including how remuneration and allowances are to be treated, for a person or persons in a class; and

b.

whether the person or persons rendering flexible service under a determination are fulfilling their obligation to render continuous full time Naval service under section 31.

177. Subsection 32(7) provides that, at any time, the Chief may revoke a flexible service determination made under subsections 32(1) and 32(3). Persons undertaking flexible service still have the same service obligation as members of the permanent force not undertaking flexible service. This provision ensures that the Chief is able to require persons undertaking flexible service to meet their service obligation so that, at any time, the member can be required to render continuous full time service.

178. Subsection 32(8) sets out conditions on which a flexible service determination made under subsection 32(3) is automatically revoked.

179. Subsection 32(9) provides that the Chief of the Defence Force may, at any time, direct the Chief of Navy to revoke a determination under subsection 32(3). The Chief of the Defence Force may use this power if he or she is satisfied that it is appropriate to do so for operational or other requirements of the Defence Force.

180. The purpose of subsection 32(9) is to provide the Chief of the Defence Force the power to manage overall Defence capability through directing the Service Chiefs.

181. Subsection 32(10) provides that, to avoid doubt, the Chief of Navy must comply with the direction of the Chief of the Defence Force under subsection 32(9).

182. Subsection 32(11) provides that a determination or direction made under section 32 is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. The purpose of the determination making power is to create a class of persons who can access the flexible service arrangement at a particular time in their career in the permanent force. It is an instrument that relates to the terms and conditions of those members' engagement with the ADF. As such a determination for these purposes is an internal employment related matter for the ADF and is consistent with the exemption provided in the Legislative Instruments Regulations 2004.

183. Item 7 inserts subsection 44B(3AA) to ensure that the power to make flexible service determinations under section 32 may not be delegated to an officer of the Permanent Navy below the rank of Commodore.