Public Service (Terms and Conditions of Employment) (Defence and Veterans’ Services Commission) Determination 2025

The instrument introduces several key concepts that define its operation.

Covered Employee is defined in section 4 as a non-SES employee employed in the Defence and Veterans’ Services Commission to whom the instrument applies by virtue of section 5. Section 5 states the instrument applies to all non-SES employees employed in the Commission pursuant to the PS Act. This is the entire population of employees below the Senior Executive Service within the Commission. SES employees are not covered.

Commissioner means the Commissioner of the Defence and Veterans’ Services Commission. The instrument vests in the Commissioner various authorities that the enterprise agreement originally vested in the Secretary of PM&C. For example, references to “Secretary” in the enterprise agreement are read as references to the Commissioner (sections 7(2)(b) and (c)). The Commissioner becomes the decision-maker under the adopted terms, such as approving leave, determining classification, and handling disputes.

Enterprise Agreement is defined specifically as the Department of the Prime Minister and Cabinet Enterprise Agreement 2024-2027, as in operation immediately before the commencement of this instrument. The definition is static: it is the agreement as it stood at that moment, not as it might be varied later. The instrument then applies that agreement with the amendments listed in section 7(2). This means the terms and conditions of the enterprise agreement are frozen as at the commencement date, subject to the instrument’s modifications.

Amendment by substitution is a central feature. Instead of reproducing the enterprise agreement, the instrument operates by deeming references to PM&C, its Secretary, its employees, and its internal processes to be references to the Commission, the Commissioner, and covered employees. This is a legislative shortcut: it avoids drafting an entirely new set of clauses but creates interpretative complexity. For instance, a clause that refers to “the Department” may now mean the Commission, but section 7(2)(e) adds the caveat “unless context provides otherwise”. That caveat may require careful reading when a clause is obviously PM&C-specific (e.g., travel policies linked to PM&C’s finance system).

APS Award is the Australian Public Service Enterprise Award 2015. The instrument expressly excludes it for covered employees while the instrument is in force (section 10(2)). This is analogous to the effect of an enterprise agreement under section 57 of the FW Act. However, this instrument is a determination under the PS Act, not a FW Act enterprise agreement, so the exclusion operates by force of the instrument rather than by the FW Act’s award coverage provisions.

Interaction with other determinations is governed by section 9. The instrument is to operate concurrently with any determination made under subsection 24(1) of the PS Act (broad determinations about terms and conditions for APS employees). Moreover, subsection 24(1) determinations can increase salaries, allowances, or other monetary entitlements provided under this instrument. This is significant: it means the base salaries in the adopted enterprise agreement can be topped up by a separate PS Act determination, possibly to align with broader APS pay policies. The instrument does not prevent such increases but also does not mandate them.

Dispute resolution procedure is confirmed in section 8. The enterprise agreement’s dispute resolution clauses (406-415) are adopted as a term of employment and as a term that qualifies for the purposes of paragraph 738(d) of the FW Act. That paragraph deals with disputes under a term of an enterprise agreement or a “fair work instrument” that provides for a dispute resolution procedure. By expressly stating the term is for that purpose, the instrument ensures that disputes can be referred to the Fair Work Commission under the FW Act’s dispute resolution provisions.

The primary class of persons affected is non-SES employees employed in the Defence and Veterans’ Services Commission. This includes APS employees at classifications from APS 1 through to Executive Level 2, but excludes SES band employees (who are likely covered by their own determinations or individual employment arrangements). The Commission itself is a statutory agency established under the Defence Act 1903, so its employees are APS employees under the PS Act. The instrument applies to all such non-SES employees, regardless of their role or location, unless and until an enterprise agreement or workplace determination takes effect for them (section 6).

The Commissioner is also directly affected, as the instrument transfers the decision-making powers that the PM&C Secretary held under the enterprise agreement. The Commissioner must now discharge functions such as approving flexible working arrangements, determining classification, managing performance, and hearing disputes under the dispute resolution procedure. The Commissioner may rely on the instrument to make decisions that previously required reference to PM&C.

The Fair Work Commission may become involved if disputes arise. Section 8(1)(b) expressly designates the dispute resolution procedure as a term for the purposes of paragraph 738(d) of the FW Act. That paragraph allows the Fair Work Commission to deal with disputes under a term of a “fair work instrument” (which includes a determination under the PS Act that provides for such a term). So the Fair Work Commission has jurisdiction to arbitrate disputes that cannot be resolved internally.

The instrument also indirectly affects the Department of the Prime Minister and Cabinet, because the adopted enterprise agreement was originally PM&C’s. The instrument severs the link between the agreement and PM&C for the Commission’s employees. PM&C retains its own enterprise agreement for its own staff, but the Commission is now a separate employing entity. The instrument terminates the application of the PM&C enterprise agreement to Commission employees (by operation of the new determination). No transitional arrangements are provided for employees moving between the Commission and PM&C, except that former disputes under clause 414 of the enterprise agreement are not maintained.

The Australian Public Service Commissioner and the Minister for Defence may be indirectly affected, because the instrument creates a separate employment framework for a new agency, diverging from the unified APS enterprise agreement structure. If other new agencies adopt similar determinations, the pattern of fragmented terms could spread, increasing administrative costs.

Finally, the instrument affects the Fair Work Ombudsman and the Fair Work Commission only if they need to investigate or adjudicate disputes. Since the instrument excludes the APS Award, the normal award compliance framework does not apply; instead, compliance is with the adopted enterprise agreement as modified.

The instrument does not itself create extensive new duties or rights beyond those already in the adopted enterprise agreement. Its key function is to recognise and apply the existing duties and rights from that agreement, with modifications.

The employer (the Commission, through the Commissioner) has the duty to apply the terms of the enterprise agreement as modified. This includes paying salaries in accordance with Attachment A of the enterprise agreement, but with the important caveat that the scheduled salary increases (4% from March 2024 and 3.8% from March 2025) have been omitted. Clause 18(a) and (b) are struck out. This means the base salaries in Attachment A are to be read without those increases. The instrument does not specify whether the salaries are frozen at the amounts that applied before those increases were due, or whether the Attachment A amounts already incorporate past increases. The definition of “Enterprise Agreement” says it is the agreement “as in operation immediately before the commencement of this Instrument”. That suggests the Attachment A amounts as at that date are the starting point. But the omission of the clauses that described those increases being built into base salaries creates ambiguity. It may be that the salaries in the attachment already included the 4% from March 2024, but the 3.8% from March 2025 is omitted, meaning that increase does not happen. This is a significant duty on the employer: to determine the correct base salary for each employee at commencement.

The right of employees to individual flexibility arrangements under the enterprise agreement (clauses 11-16) has been removed. The instrument omits those clauses entirely. This means that, unlike PM&C employees under the enterprise agreement, Commission employees cannot enter into individual flexibility arrangements to vary their terms. This could affect ability to trade off conditions for different benefits. The NES does not provide for IFAs, so no alternative mechanism exists unless the Commissioner makes a separate determination under section 24(1) of the PS Act.

The right to dispute resolution under clauses 406-415 is preserved. Employees can raise disputes under the procedure, and if not resolved, can refer them to the Fair Work Commission. The Commissioner must comply with the dispute resolution steps.

The duty to consult is altered. The adopted enterprise agreement had a Consultative Committee for PM&C. The instrument replaces references to “PM&C Consultative Committee” with “Defence and Veterans’ Services Commission Consultative Committee, where one is in place” (section 7(2)(l)). This means the duty to consult only arises if such a committee exists. The employer is not required to establish one; the committee is only “where one is in place”. This could reduce consultation obligations.

The right to have disputes from the previous PM&C Enterprise Agreement 2021-2024 maintained (clause 414) is removed. Any disputes that were notified under that earlier agreement are not carried over. Employees with ongoing disputes from before the instrument’s commencement must start fresh under the new procedure.

The duty to pay the 4.0% increase from March 2024 is ambiguous. The clause that referenced it is omitted, but if the base salaries in Attachment A already included that increase, the employee may have already received it. The omission means no future increase tied to a date. The employer should clarify salary schedules.

The instrument itself does not create any criminal or civil penalties. It is a determination under the PS Act, and contraventions of its terms are not directly penalised under that Act. However, enforcement may occur through the dispute resolution procedure set out in clauses 406-415 of the enterprise agreement (as modified and adopted). That procedure typically involves escalating a dispute through management levels, and if unresolved, referring it to the Fair Work Commission for conciliation or arbitration. The Fair Work Commission may make orders to resolve the dispute, which can then be enforced under section 50 of the FW Act (contravening a term of an order is a civil remedy provision). So while the instrument does not list penalties, a breach of its terms could ultimately lead to a Fair Work Commission order and then to penalties for non-compliance with that order.

In addition, the Public Service Act 1999 and the Public Service Regulations provide for breaches of the APS Code of Conduct. If an employee fails to comply with a lawful direction related to the terms and conditions set by this instrument, that could be a breach of the Code, leading to sanctions under the PS Act, including termination of employment. The instrument does not refer to the Code, but the PS Act applies generally to Commission employees as APS employees.

For the employer (the Commissioner), failure to apply the terms correctly could lead to a dispute being raised by an employee or a union. The instrument does not impose any criminal liability on the Commissioner for non-compliance. However, if the Commissioner fails to pay correct salaries or denies entitlements, the employee may bring a claim for underpayment under the FW Act if the terms are taken to be a “fair work instrument” entitlements. The FW Act’s National Employment Standards would also apply (section 10(1) preserves the NES). Underpayment of NES entitlements (e.g., annual leave, personal leave) is a civil remedy under the FW Act. So employees may enforce NES rights separately.

The instrument also excludes the APS Award, so there is no award-based enforcement for Commission employees. This removes the ability to bring claims under the award, but the adopted enterprise agreement terms are likely more generous.

The removal of individual flexibility arrangements means employees cannot vary their terms individually. If they attempt to do so, the instrument provides no mechanism; any purported IFA would be void. This could create unintended non-compliance if employees and managers agree to variations without legal authority.

The instrument explicitly addresses its interaction with three key statutory frameworks: the Public Service Act 1999 (under which it is made), the Fair Work Act 2009 (via the NES, the APS Award, and the dispute resolution provisions), and the Defence Act 1903 (which establishes the Commission). It also interacts with the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 and possibly the Public Service Regulations.

With the PS Act, the instrument is a determination under subsection 24(3), which allows the Minister or a delegate to determine terms and conditions for a particular agency. Section 9(1) says this instrument is to operate concurrently with any determination made under subsection 24(1) (which covers broader APS-wide terms and conditions). Subsection 24(1) determinations could cover matters like salary ranges, classification rules, and allowances. The instrument does not override those; it allows them to apply alongside. Moreover, subsection 9(2) permits a section 24(1) determination to increase salaries, allowances, or other monetary entitlements provided under this instrument. This means the Commission could receive a pay rise through a separate instrument without amending this determination. However, it also means that if a section 24(1) determination reduces salaries or allowances, that reduction might not apply because section 9(2) only explicitly allows increases. The instrument is silent on reductions; the phrase “does not prevent” may imply that other determinations could also reduce, but the better view is that the instrument sets a floor that can only be raised by other instruments.

With the FW Act, section 10(1) preserves the NES: the instrument has no effect to the extent it would exclude an NES provision. So annual leave, personal leave, maximum weekly hours, parental leave, and other NES entitlements remain enforceable under the FW Act. Section 10(2) excludes the APS Award while the instrument is in force, with a note explaining the interaction is the same as that between an enterprise agreement and an award. This means during the instrument’s life, the APS Award does not apply to covered employees. If the instrument is later replaced by an enterprise agreement, the enterprise agreement would then displace the award under FW Act rules.

Section 8(1)(b) declares the dispute resolution procedure to be a term for the purposes of paragraph 738(d) of the FW Act. That paragraph is in Part 5-3 of the FW Act, which deals with dealing with disputes. It allows the Fair Work Commission to deal with disputes under a term of a “fair work instrument” (defined to include a determination under the PS Act that provides for dispute resolution). So the Fair Work Commission has jurisdiction to arbitrate disputes arising under this instrument, not just under enterprise agreements. This is an important interaction: it brings the dispute resolution process under the FW Act’s framework, giving employees access to the Fair Work Commission’s powers of conciliation and arbitration.

With the Defence Act 1903, the instrument assumes the existence of the Defence and Veterans’ Services Commission as a statutory agency. It does not amend the Defence Act; it merely references it in the definition of the Commission. Any interaction with the Defence Act is indirect: the Commission’s functions under the Defence Act may influence the work conditions of its employees (e.g., security clearances, deployment requirements) but the instrument does not address those.

With other Commonwealth instruments, the instrument does not mention the Public Service Regulations 2023 or the APS Employment Principles. Those regulations would still apply to the Commission as an APS agency, so terms like probation, mobility, and redeployment are governed by the Regulations, not by this instrument. The instrument is silent on those matters, meaning they continue under the PS Act and Regulations.

The instrument also does not reference state or territory laws, but as a Commonwealth instrument it would prevail over inconsistent state industrial laws by operation of section 109 of the Constitution, to the extent of any inconsistency.

The instrument is registered as a single instrument with no amendment history visible. It appears to be the original version as made. Section 2 provides for commencement on the day after registration. There are no notes indicating any previous amending instruments, variations, or revocations. The instrument is likely a new determination created to establish terms for the Defence and Veterans’ Services Commission upon its establishment. Since the Commission was created by the Defence Act 1903 (section 110ZKA), the instrument was probably drafted and registered shortly after the Commission came into existence. No amendments have been made at the time of this analysis.

However, the instrument itself contemplates amendments to the adopted enterprise agreement: section 7(2) lists 13 amendments. Those amendments are not amendments to the instrument itself but to the incorporated enterprise agreement text. They take effect upon commencement. So the instrument has effectively amended the enterprise agreement for the purposes of Commission employees. The enterprise agreement itself remains unamended for PM&C employees.

The instrument’s clause 6 provides for its own cessation if an enterprise agreement or workplace determination applies to a covered employee. This is a future amendment or cessation mechanism: when a new enterprise agreement is made for Commission employees, this instrument will cease to apply to those employees. That future event will effectively amend the instrument’s scope, but will not create an amendment history in the legislative sense.

Given the instrument is made under the PS Act, any future amendments to it would likely be made by a new determination under subsection 24(3), which may expressly revoke or amend this instrument. The instrument does not contain an express power to amend itself; it can be amended by a later determination with the same authority.

In practice, practitioners should monitor the Federal Register of Legislation for any subsequent instruments that amend, replace, or revoke this determination. As at the date of registration, there are none.

There is no litigation history associated with this instrument, as it is newly made and has not yet been tested in courts or tribunals. No reported decisions of the Fair Work Commission, the Federal Court, or the Federal Circuit and Family Court reference this determination. Since the instrument came into force from 24 January 2025 (the day after registration), it is too new to have generated case law.

However, there is potential for future litigation based on several ambiguities. The omission of the scheduled salary increases (clause 18(a) and (b)) may lead to disputes about correct salary levels. If employees had expectations of receiving the 3.8% increase from March 2025, they may argue that the instrument improperly removes an accrued entitlement. The instrument’s definition of “Enterprise Agreement” says it is the agreement “as in operation immediately before the commencement of this Instrument”. That suggests the agreement’s terms at that date - including those that promised future increases - must be read. But section 7(2)(j) expressly omits those clauses. The interaction between the static adoption and the omission is a legal question: does the adoption include the promise, and the omission remove it, or does the omission mean the promise never forms part of the adopted terms? The note in the instrument that the enterprise agreement could be viewed on the Fair Work Commission’s website suggests the original text is the reference point, but the instrument overrides it.

Another potential litigation point is the removal of individual flexibility arrangements. Employees might argue that the instrument’s failure to include an IFA term breaches the FW Act requirement for enterprise agreements to contain a flexibility term. However, the instrument is not an enterprise agreement; it is a PS Act determination. The FW Act does not require such determinations to have IFA terms. But employees accustomed to IFAs may seek to argue that the instrument is missing a mechanism and that the NES or the FW Act should imply one. This is unlikely to succeed because the FW Act’s IFA provisions only apply to enterprise agreements.

The dispute resolution procedure may be tested if the Fair Work Commission is asked to exercise jurisdiction under section 738(d) of the FW Act. The Commission will need to determine whether the instrument’s term qualifies as a “fair work instrument” under that subsection. The instrument expressly says it does (section 8(1)(b)), but that may be contested if the Fair Work Commission takes a narrow view of its jurisdiction.

There is no litigation from the making of the instrument itself, as it was made by a delegate of the Minister under the PS Act and is a legislative instrument subject to disallowance by Parliament. Disallowance motions could occur but have not been recorded.

Several pitfalls exist in this instrument that may catch employers, employees, and advisors off guard.

First, the removal of the scheduled salary increases (clause 18(a) and (b)) is ambiguous. The base salaries in Attachment A of the enterprise agreement likely reflect the 4.0% increase from March 2024, but the 3.8% increase from March 2025 is expressly omitted. However, the definition of “Enterprise Agreement” refers to the agreement “as in operation immediately before the commencement of this Instrument”. At that point, the agreement was still in operation and arguably the entitlement to the March 2025 increase had already crystallised as a future right. The omission removes that clause, but does it remove the accrued right? If the increase was due on 13 March 2025 and the instrument commences in January 2025, employees might have had a reasonable expectation. The instrument appears to extinguish that expectation, but an employee could challenge whether the omission is valid under the PS Act. The Commissioner must decide whether to pay the increase voluntarily.

Second, the removal of the individual flexibility arrangement procedures (clauses 11-16) means there is no legal mechanism for an employee and the Commission to vary the terms of employment individually. If an employee needs to change their hours temporarily, reduce salary for leave, or trade off an allowance for extra leave, there is no IFA pathway. The only option would be to seek a variation through the dispute resolution procedure or for the Commissioner to make a separate determination under section 24(1) of the PS Act covering such variations. This is a significant compliance burden and restricts flexibility for both the employer and employees.

Third, the reference to “Defence and Veterans’ Services Commission Consultative Committee, where one is in place” (section 7(2)(l)) is conditional. If the Commissioner chooses not to establish such a committee, the consultation obligations that existed in the enterprise agreement may be ineffective. Clauses 128, 342, and 369 of the enterprise agreement referred to the PM&C Consultative Committee. Now they refer to a committee that may not exist. This could defeat the purpose of consultation over major change or workplace health and safety matters. Employees or unions may argue that the Commissioner is obliged to establish a committee, but the instrument does not require it.

Fourth, the omission of clause 414 (maintenance of disputes) means any dispute that was notified under the previous PM&C enterprise agreement (2021-2024) is not carried over. If a Commission employee had a dispute pending when the instrument commenced, that dispute has no ongoing status. The employee must raise a new dispute under the new procedure. This could cause loss of continuity and delay resolution.

Fifth, the interaction with other determinations under section 24(1) of the PS Act is open-ended. Section 9(2) says this instrument does not prevent those determinations from increasing salaries, allowances, or other monetary entitlements. But it does not prevent them from decreasing non-monetary entitlements (e.g., leave loading, flexible working conditions). A future section 24(1) determination could reduce benefits not linked to money, and it might override the instrument’s terms. The instrument provides no protection against reduction of non-monetary terms.

Sixth, the express exclusion of the APS Award (section 10(2)) means that if the instrument is later found to be invalid or ceases to apply, the award would not automatically revive for those employees? The note says it interacts like an enterprise agreement, so if the determination is replaced by an enterprise agreement, the award stays excluded. But if the determination is simply revoked without replacement, the award would apply again. This is a gotcha if the determination is inadvertently revoked.

Seventh, the dispute resolution procedure refers to clauses 406-415 of the enterprise agreement as modified. Those clauses may contain time limits, escalation steps, and exclusions for certain decisions. The Commissioner must comply strictly, or a dispute may be validly escalated to the Fair Work Commission prematurely.

Compliance with this instrument requires the Defence and Veterans’ Services Commission to implement the adopted enterprise agreement as modified by section 7. The key steps are:

1. Adopt the enterprise agreement text. Obtain the official version of the Department of the Prime Minister and Cabinet Enterprise Agreement 2024-2027 as it stood immediately before the commencement of this instrument. Apply the amendments in section 7(2) to that text. Create a consolidated document for internal use that shows the modified terms. Ensure all references to PM&C, its Secretary, its employees, and its consultative committee are replaced with the Commission, the Commissioner, covered employees, and the Commission Consultative Committee (if established).

2. Determine base salaries. Since clause 18(a) and (b) are omitted, the scheduled increases do not apply. Check Attachment A of the enterprise agreement for the salary amounts. Determine whether the base salaries already include the 4.0% increase from March 2024. If so, that is the starting salary. Do not apply the 3.8% increase from March 2025 unless the Commissioner decides to do so via a separate determination under section 24(1) of the PS Act (which section 9(2) permits). Communicate clearly to employees what their base salary is and whether any future increases will occur.

3. Remove individual flexibility arrangements. Do not enter into any new IFAs with covered employees. Existing IFAs that were in place before the instrument commenced may continue if they were made under the PM&C enterprise agreement, but the instrument omits the IFA clauses, so no new ones can be made. The Commissioner should review any existing IFAs to determine if they remain valid after the instrument’s commencement; it is arguable that they cease because the term under which they were made is no longer part of the employment terms.

4. Update administrative procedures. Change all forms, policies, and systems that reference PM&C to the Commission. Ensure payroll systems reflect the correct salary amounts without the March 2025 increase. Remove references to airline lounge membership discounts (clause 82). Update consultative committee arrangements: if a committee exists, ensure clause references are updated; if not, decide whether to establish one to enable consultation.

5. Implement the dispute resolution procedure. Train managers and HR staff on clauses 406-415 of the enterprise agreement as modified. Ensure disputes are dealt with through the agreed steps, including escalation to the Commissioner. Note that clause 414 (old disputes) is omitted, so any disputes from the previous 2021-2024 agreement must be re-notified. Establish a register of disputes.

6. Maintain compliance with the NES. Despite the instrument, all NES entitlements must be provided. Do not rely solely on the enterprise agreement terms if they are less favourable than the NES. For example, the NES maximum weekly hours, parental leave, and notice of termination must be observed.

7. Monitor future instruments. Check for any new determinations under section 24(1) of the PS Act that may increase salaries or allowances. Those must be applied in addition to the instrument’s terms. Also watch for any amending instruments to this determination. If an enterprise agreement is later made for Commission employees, this instrument will cease to apply; prepare for that transition.

8. Seek legal advice on ambiguous terms. The omission of salary increase dates, the conditional consultative committee, and the removal of IFAs all create risks. Obtain legal advice on whether the March 2025 increase is properly extinguished, and whether employees have any accrued rights. Document decisions.

9. Educate employees. Issue a summary of changes, especially the removal of the scheduled pay increase and IFAs. Explain the new dispute resolution process and the fact that the APS Award does not apply. This reduces confusion and potential disputes.

10. Lodge copies with Fair Work Commission? The instrument is a legislative instrument, not an enterprise agreement, so lodging it under the FW Act is not required. However, the dispute resolution term may be considered a “fair work instrument” for the purposes of section 738(d), so the Commission should have a copy available for reference.