The great public service redundancy rip-off

Public servants taking redundancies are being short-changed by up to tens of thousands of dollars on their payouts because their departments lack enough qualified payroll specialists, according to a HR specialist.

It pays: to make sure calculations have been correctly done before signing for redundancy.
It pays: to make sure calculations have been correctly done before signing for redundancy. Photo: Tanya Lake

One key Canberra department – the Prime Minister and cabinet - has had to apologise and intends to repay dozens of its former staffers after mistakes by payroll officers left them out of pocket with one man threatening legal action when he was left $17,000 short.

But PM&C has said it will rectify all the mistakes without the need for legal action.

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Canberra human resources consultants White Pillar say they have crunched the numbers on 10 recent golden handshakes from various departments and found not one of them had been calculated correctly.


With the total bill for public service redundancies expected to top $1 billion in the next four years, payments of hundreds of millions of dollars are dependent on departmental payroll units getting it right. 

But Susan O'Neil, of White Pillar, says the shortage of qualified and experienced payroll staffers had reached crisis point in federal departments around Canberra and they were struggling to cope with the workloads imposed by thousands of redundancies.

Ms O'Neil, a former high-ranking public service human resources executive, said one of her clients was left $17,000 short by PM&C when his former colleagues failed to include in his redundancy payment what was owed to him for waiving his right to a redeployment period.

The situation was compounded, Ms O'Neil said, when the retiring public servant signed a waiver on his way out of the department.

"What they didn't disclose to him is that by signing this waiver, he would be waiving his redeployment period and giving up a substantial sum of money," Ms O'Neil said.

The private sector consultant said her firm was seeing more and more departing public servants whose payouts had been botched by simple errors in payroll units.

"I've seen this across a number of government departments," she said.

"They use a spreadsheet that nobody knows how to use to calculate a redundancy, but they don't have the skills to be able to calculate a redundancy, so sometimes they make lots of errors.

"We will do employees' checks [on redundancy packages] and we haven't seen one that doesn't contain mistakes."

A spokesman for PM&C told The Canberra Times that the mistakes affected 37 worker who had moved into the department during the "machinery of government" upheavals in late 2013 and early 2014.

But the department pledged the mistakes would be fixed this week and that no worker would be left out of pocket.

"While systems were in place to quality check all VR payments, human error resulted in a small number of former employees being underpaid," the spokesman said.

"The department has emailed, or where not possible, written, to the affected people to notify them of the situation and apologise for the error.

"The department is rechecking the VR payments made to everyone affected as a matter of priority. "No one will be left out of pocket as a result of the calculation error."

Ms O'Neil that private sector recruitment firms are desperately scouring Canberra for qualified payroll officers on behalf of departments struggling to cope with the wave of public service redundancies.

 "We get phone calls every other day because government departments cannot find adequately skilled payroll people to handle all these redundancies," she said.


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