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Division 9: Navy – Individuals critical to Navy capability

3.5.64 Purpose

The purpose of this Division is to offer a retention bonus that will achieve all of the following outcomes.

  1. Retain members in individual positions necessary to capability in a critical trade or work unit.

  2. Prevent the reduction of personnel numbers to levels below that required to sustain operational or supporting capability in the Navy.

  3. Retain members in other individual positions critical to Navy capability.

3.5.65 Some concepts used in this Division

  1. An agreed period of service is a period of up to two years which the member agrees to serve in a specified position, employment category or primary qualification in return for a bonus under this Division.

  2. A current capability shortage is critical when both the following conditions are met.

    1. A Navy position requirement cannot be met with fit, trained and available personnel, within respite rules.

    2. Failure to meet the position requirement impacts negatively on delivery of Navy capability.

  3. A workforce structure shortage is critical when some or all of the recruiting, retention, training throughput, strength and future health elements of the category or primary qualification combine so that the shortage in numbers is unlikely to recover within five years.

3.5.66 Member who is eligible for a retention bonus under this Division

  1. A member is eligible for a bonus under this Division if they meet all of the following conditions.

    1. The member is in the Permanent Navy or Navy Reserve.

    2. Note: In the total workforce model, the Permanent Navy may be described as a member in Service category 6 or 7. A member of the Navy Reserve may be described as a member in Service category 2, 3, 4 or 5.

    3. The Director General Navy People is satisfied that a bonus is required to assist in retaining the member or a class of members in an area of critical workforce shortage, having regard to the factors listed in subsection 2.

    4. The member is offered a retention bonus under subsection 5.

    5. The member agrees to provide a fixed period of up to two years of effective service in the position, employment category or primary qualification for which the bonus was offered (this is called the agreed period of service), using the form at Annex 3.5.G.

      See: Annex 3.5.G, Navy – Individuals critical to Navy capability.

  2. Director General Navy People must have regard to the following factors when deciding whether to offer a member or a class of members a bonus under this Division.

    1. Any evidence that there is a workforce structure shortage that is critical in the member's employment category or primary qualification.

    2. Any evidence that failure to retain the member in the position will result in a current capability shortage that is critical.

    3. Any evidence that the number of personnel in the member's employment category or primary qualification is falling.

    4. Whether the position that the member fills is essential to the delivery of Navy's capability.

    5. Whether the member holds qualifications and skills that are essential to the delivery of Navy's capability.

    6. Whether the member has applied to achieve qualifications and skills that are essential to the delivery of Navy's capability.

    7. Whether the position requires qualifications or skills that are in critical shortage in the Navy.

    8. Any market forces that are contributing to the shortage.

    9. Any other relevant matter.

  3. The amount of each bonus to be offered is to be determined by Director General Navy People, having regard to the list of factors at subsection 2, up to a maximum of $50,000 per year. The amount must be notified to the member as part of the offer.

  4. The period of service that must be performed in return for each bonus to be offered is to be determined by Director General Navy People, having regard to the list of factors at subsection 2, up to a maximum of two years. The amount must be notified to the member as part of the offer.

  5. After Director General Navy People has made the decisions under subsection 2, 3 and 4, the offer may be made by one of the following.

    1. Director Navy People Career Management Agency.

    2. Deputy Director Navy People Career Management Agency.

3.5.67 Transfer from another bonus scheme

  1. A member who is serving on another bonus scheme contained in Chapter 3 Part 5 of this Determination ('the other bonus scheme') may be offered a bonus under this Division.

  2. If the member accepts the offer of a bonus under this Division, the acceptance has the following effects on the member's liability to serve in return for a bonus under the other scheme.

    1. The member's period of service under the other scheme continues until the day that the member commences serving the period of service agreed under this scheme.

    2. If the other scheme has a completion bonus and the member chooses to commence the period of service agreed under this scheme, before they have reached the end of the completion bonus period of service, a pro rata amount of the bonus may be paid to the member for the period of service performed towards the completion bonus.

    3. If the other scheme had an obligation payment or other initial payment, no amount of the obligation or initial payment is repayable under that scheme.

3.5.68 Member who is not eligible for a bonus under this Division

A member is not eligible to accept the offer of a bonus under this Division if any of the following circumstances apply to them.

  1. The member has undertaken to perform a period of service for the purpose of another bonus under this Division and has not agreed to transfer to the scheme under this Division.

  2. The member will reach compulsory retirement age before the end of the period of service they must undertake in return for the bonus payment and the member has not applied to have their service extended to cover the period of service required for the bonus.

  3. The member's fixed period of service will end before the end of the period of service they must undertake in return for the bonus payment and the member has not applied to have their fixed period of service extended to cover the period of service required for the bonus.

3.5.69 How to accept the offer of a retention bonus

  1. An eligible member may accept a bonus under this Division any time after they receive an offer, until the latest of the following dates.

    1. Twenty-eight days after the day the offer is made.

    2. If the member was deployed when the offer under paragraph a. was made – the day 28 days after the day the member returns to Australia after a deployment.

    3. A longer period that the Director General Navy People decides is reasonable, having regard to the member's circumstances.

      Example: The Director General Navy People decides to extend a member's ability to accept the offer because the member is deployed for six months in an area where there is no ability to send an acceptance form.

  2. An acceptance made under this subsection must be on the application form at Annex 3.5.G.

    See: Annex 3.5.G, Navy – Individuals critical to Navy capability

  3. The member must also complete a bonus payment election using the form at Annex 3.5.J.

    See: Annex 3.5.J, Bonus payment election

  4. The acceptance must include an undertaking to serve for the same fixed period that is specified in the offer, up to a maximum of two years.

3.5.70 Service that counts towards a member's retention bonus

  1. The agreed period of service the member undertakes to perform in return for the retention bonus must be served as effective service.

    Note: It will take the member longer than the period they initially agreed to finish their agreed period of service, if they spend any time on ineffective service.

  2. For the purpose of a retention bonus under this Division, effective service means service that meets the following conditions.

    1. It is continuous full-time service in the Navy.

    2. Note: In the total workforce model, continuous full-time service may be described as service in Service category 6 or 7. A member who is in Service category 3, 4 or 5 who is also on Service option C is also on continuous full-time service.

    3. It is paid.

      Exception: Unpaid leave of less than 21 calendar days.

    4. If it is described in the table in subsection 3, it is counted as effective service in the table.

  3. The following table lists a range of leave types and activities and sets out how a period of that leave or activity counts towards a member's agreed period of effective service.

    Effect on service
    Item Activity Effect
    1. Part-time leave without pay. The unpaid component does not count as effective service.
    2. Leave at full pay.
    Examples: Recreation leave, long service leave taken at full pay.

    All of this leave counts as effective service.

    3. Unpaid leave for less than 21 calendar days.
    Exception: Leave without pay (flexible service determination)
    Examples: Leave without pay for less than 21 calendar days, maternity leave without pay for less than 21 calendar days
    4. Leave at half pay.
    Example: Long service leave at half pay.
    Half the period of the leave counts as effective service.
    4A. Leave without pay (flexible service determination). This leave does not count as effective service.
    5. Unpaid leave for 21 calendar days or more.
    Example: Leave without pay, maternity leave without pay.

    No time spent on these types of leave and activity counts as effective service.

    6. Absence without leave.
    7. Imprisonment, detention or suspension from duty without pay.
    8. An undertaking for further service under Part 8 of the Military Superannuation and Benefits Act 1991, as preserved by item 4 of Schedule 4 Defence Legislation Amendment Act (No. 1) 2005.
    9. A period when the member was discharging an initial minimum period of service, or another undertaking for further service.
    Exception: An undertaking for further service associated with a promotion.
    10.

    Return of service obligations

    A period when the member is discharging a return of service obligation associated ith the following.

    1. A period of initial category training.

    2. Any other return of service obligation not described in item 10 or 11 of this table.

    Examples:

    • A return of service obligation associated with a transfer between Services.
    • A return of service obligation associated with recruitment from another country.
    11.

    Return of service obligations

    A period when the member is discharging a return of service obligation associated with the following.

    1. An overseas posting.

    2. Professional or trade training that is directly relevant to the member's occupation, and not described in item 11.a of this table.

    Both of these periods are counted as effective service.

    1. The period of the overseas posting or the training.

    2. The period of the return of service obligation.

    See: Section 3.5.73, Calculating a pro rata repayment of the retention bonus

3.5.71 Payment of the retention bonus

  1. A retention bonus becomes payable to an eligible member when the member has submitted both the following forms.

    1. Annex 3.5.G, Navy – Individuals critical to Navy Capability form.

    2. Annex 3.5.J, Bonus payment election.

  2. The amount of the bonus is the amount offered to the member under section 3.5.66.

    See: Section 3.5.66, Member who is eligible for a retention bonus under this Division

  3. A member who joins the scheme must serve in the Navy until they complete the agreed period of effective service under this Division.

  4. The member's period of effective service commences from whichever of the following dates is relevant.

    1. If the member is offered a bonus for a period of service commencing on a day – that day.

    2. The day that any requirement in the following list ceases to apply to the member, if the requirement applied to the member when they accepted a bonus under this Division.

      1. An undertaking for further service under Part 8 of the Military Superannuation and Benefits Act 1991 (as preserved by item 4 of Schedule 4 Defence Legislation Amendment Act (No. 1) 2005).

      2. A return of service obligation.

      3. An initial minimum period of service.

      4. A period of service performed under another retention or completion bonus under this Part.

    3. If the member is offered a bonus because they have applied to achieve qualifications and skills that are essential to the delivery of Navy's capability – the day the member successfully completes the course or training and achieves the qualification or skill specified in the bonus offer.

      Note: This means that if the member does not achieve the qualification or skill specified in the offer then they do not receive the bonus payment under subsection 1. The member also does not have to provide the agreed period of service under this scheme because they cannot perform in the relevant position, employment category or primary qualification.

  5. The member is taken to have ceased serving in accordance with their undertaking to perform the agreed period of effective service if they cease serving in the position, employment category or primary qualification for which the bonus was offered.

  6. If the member fails to complete the agreed period of effective service for a reason not listed in section 3.5.72.1, then they must repay a part of the bonus, representing the portion of the agreed period of effective service that has not been performed, to the Commonwealth.

    Example: The member is paid a retention bonus of $25,000 for two years' service. The member leaves the Navy to work in the private sector after doing only 12 months' service in return for the retention bonus. The member has not done the last 12 months of service and so must repay a portion of the bonus.

    The member must repay $12,500 of the $25,000 originally paid. Note that the repayment is based on pre-tax amounts.

3.5.72 Repayment

  1. If a member fails to complete their required period of service under a bonus in this Division for any of the following reasons, they are not required to repay any part of the bonus.

    1. The member ceases to serve in the Navy for a reason that is beyond the member's control.

      Example: The member is terminated because of medical unfitness, or dies.

    2. The member transfers from the Permanent Forces to the Reserves at Navy's initiative.

      Authority: Chapter 8 Part 2 Division 2 or 3 of the Defence (Personnel) Regulations 2002.

      Example: A member reaches compulsory retirement age and leaves the Permanent Navy after their application to extend service is refused. The member is transferred to the Reserves. The member does not need to repay any of the bonus.

  2. The member is not required to repay any part of the bonus if they complete their agreed period of service in Navy but not in the agreed position, employment category or primary qualification because any of the following circumstances apply.

    1. The member transfers to another trade, employment category or primary qualification stream due to a restructure.

    2. Navy initiates the member's transfer to another trade, employment category or primary qualification stream.

    3. The member is promoted and so must leave the agreed position, employment category or primary qualification stream.

  3. A member will be required to repay the bonus on a pro rata basis if they fail to complete their required period of service for reasons including, but not limited to, any of the following.

    1. The member resigns from the Permanent Forces.

    2. The member's service is terminated for disciplinary reasons.

    3. The member voluntarily leaves the position, employment category or primary qualification for which the bonus was offered.

3.5.73 Calculating a pro rata repayment of the retention bonus

The following table shows how to calculate a pro rata amount of retention bonus repayable to the Commonwealth under subsection 3.5.71.6.

Pro rata calculation
Step Action

1.

Work out the number of calendar days in the following period.

  1. The period starts on the day the member is taken to start their undertaking to serve under this Division. (See: Section 3.5.71, Payment of the retention bonus)

  2. The period ends on the day the member ceases to serve under this Division, for a reason not listed in subsection 3.5.72.1.

2. Work out the number of days of ineffective service the member did in the period described in Step 1.
3. Subtract the outcome of Step 2 from the outcome of Step 1.
The outcome shows the number of days of effective service the member did for in return for the retention bonus.
4. Subtract the outcome of Step 3 from the total number of days in the period that the member agreed to serve under this Division.
The outcome shows the part of the service period that the member has not performed in return for the retention bonus.
5. Divide the outcome of Step 4 by the total number of days in the period that the member agreed to serve under this Division.
The outcome of this Step shows the size of the part of the bonus that the member must repay
6. Multiply the outcome of Step 5 by the total amount of the bonus.
7. The member must repay the outcome of Step 6.

Example: A member joins the bonus scheme for a two-year period on 1 March 2008 and gets a bonus of $25,000. On 1 February 2009 the member resigns. The member had 25 days of leave without pay in September 2008.

Pro rata calculation example
Step Action
1. There were 337 calendar days between 1 March 2008 and 31 January 2009.
2. The 25 days the member was on leave without pay was ineffective service.
3. 337 days minus 25 days = 312 days.
4. 730 days minus 312 days = 418 days (The number 730 represents the number of days in two calendar years).
5. 418 days divided by 730 days = 0.572603.
6. 0.572603 multiplied by $25,000 = $14,315.07.
7. The member must repay $14,315.07.