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Public Service Bill 1997 [No.2]
Date Introduced: 5 March 1998
House: House of Representatives
Portfolio: Prime Minister
Commencement: On proclamation, but no later
than 6 months after receiving Royal Assent.
Note: For further commentary on the Bill as
first presented in 1997, readers are referred to Bills Digest No.74
This is one of a number of bills that may
trigger a double dissolution election.
Section 57 of the Australian Constitution
provides, in part, that:
If the House of Representatives passes any
proposed law, and the Senate rejects or fails to pass it, or passes
it with amendments to which the House of Representatives will not
agree, and if after an interval of three months the House of
Representatives in the same or the next session, again passes the
proposed law with or without any amendments which have been made,
suggested, or agreed to by the Senate, and the Senate rejects or
fails to pass it, or passes it with amendments to which the House
of Representatives will not agree, the Governor-General may
dissolve the Senate and the House of Representatives
simultaneously. But such dissolution shall not take place within
six months before the date of the expiry of the House of
Representatives by effluxion of time.
The Public Service Bill 1997 was introduced into
the House of Representatives on 26 June 1997. The House, having
incorporated 16 Government sponsored amendments made in response to
the Joint Committee of Public Accounts (JCPA) report on the Bill
and the Public Employment (Consequential and Transitional)
Amendment Bill 1997, passed the Bill on 30 October 1997.
The Bill was introduced into the Senate on 10
November 1997 and was passed with a total of 52 non-Government
amendments on 19 November 1997. A message was reported in the House
on 20 November 1997 which, on 5 December 1997, formally disagreed
to the Senate's amendments and laid the Bill aside.
The present Bill was introduced in the House on
5 March 1998 and passed by it on 11 March 1998.(1) The Bill was
introduced into the Senate on 12 March 1998 with the Second Reading
Speech delivered by Senator Newman.(2)
In closing the
debate on the present Bill, the responsible Minister, Dr David
Kemp, summarised the Government's position in the following
A new Bill is essential because there are a
number of key areas in the current legislation that are not
amenable to simplification by administrative action. For
- giving employment powers direct to Agency Heads;
- ensuring a secure Parliament-endorsed legislative framework for
APS values, the new code of conduct and protection of
- removing complex appeals arrangements;
- removal of inflexible employment categories; [and]
- removal of compulsory age retirement.
Therefore, it will be impossible to build a
fully coherent, reformed, management structure without legislative
The Bill proposes significant changes to the
legislative framework governing employment in the Australian Public
Service (APS) and will affect approximately one in three persons
employed by the Commonwealth.
The Bill replaces the 300 pages of dense,
complex and poorly organised drafting in the Public Service Act
1922 with an 'admirably direct and succinct statement of the
essential characteristics of public service'(4) totalling a mere 41
Much of the present Act's detail is not
replicated in the new legislative framework. Other matters are to
be dealt with by way of regulation or in binding directions issued
by the Public Service Commissioner.
The new Act will also operate in tandem with the
Workplace Relations Act 1996 (WR Act) and other employment
The APS Departments are subject to the new
financial accounting and reporting measures for the Commonwealth
public sector that were agreed by the Parliament on 29 September
1997 and are now operative.(6)
As at 31 December 1996, the number of staff in
the APS totalled 134 617. This is projected to reduce to about 115
000 by June 1998.(7)
Of these, 112 766 were paid permanent staff
(down 7.4% since December 1995). The number of temporary staff
decreased by 1 600 or 10.3% in the twelve months to December
Commonwealth employment not covered by the
Public Service Act includes about 58 000 defence force personnel,
33 000 employees of non APS authorities and 123 000 employees of
Government Business Enterprises.(9)
The APS has been undergoing a process of
continuous change and downsizing since the major legislative
reforms enacted by the Hawke Government in 1984 and the adoption of
the mega department model and abolition of the Public Service Board
In key respects the present proposals seek to
adapt the legislative framework to changed operations and
priorities, characterised by a greater focus on outcomes instead of
process, that have applied in the APS for many years.(11)
Many of the proposals also reflect what is now
current practice in the States and Territories. Legislation in the
form introduced by the current Government has been 'on the drawing
board' since the time of the Machinery of Government Changes in
1987. A Bill, (no doubt) not entirely dissimilar to the present,
was being prepared by the previous Government in response to the
Report of the Public Service Act Review Group (the McLeod
Report)(12) but was not introduced before the March 1996 Federal
Some aspects of the Bill have attracted a degree
of criticism, others - even those promoting largely symbolic change
- have been the subject of heated debate.
The legislation covers a broad and disparate
canvass and the following discussion necessarily focuses on those
issues which have attained prominence in the public discussion to
Developing the Bill
The present impasse comes at the end of a
lengthy, continuous and generally bipartisan reform process that
can be traced back at least as far as the Public Service Reform
Act 1984 which created the Senior Executive Service (SES) and
formally gave Ministers greater control over the operations of
A Review of the Public Service Act 1922
was announced by the then Assistant Minister for Industrial
Relations, Hon Gary Johns, on 30 June 1994.
The Report of the Review headed by Mr Ron McLeod
was presented to Minister Johns on 22 December 1994.
In August 1995, the Keating Government announced
its response to the McLeod Review, accepting the overwhelming
majority of the Report's 118 recommendations.
In November 1996, Minister for Industrial
Relations, Peter Reith, issued a Discussion Paper,
entitled 'Towards a Best Practice Australian Public Service'.
Between December 1996 and February 1997, there
was an extensive consultation program within the APS and involving
major interested parties, on Minister Reith's Discussion
On 7 February 1997, the Senate Finance and
Public Administration References Committee conducted a Round Table
to consider the Minister's Discussion Paper.(13)
In May 1997, the Public Service and Merit
Protection Commission (PSMPC) and the Department of Industrial
Relations published an action plan for the new Public Service Act.
The paper was entitled, 'Accountability in a Devolved Management
On 26 June 1996, the Public Service Bill 1997
and the accompanying Consequential Provisions Bill were introduced
in the House of Representatives.
After the Second Reading, both Bills were
referred to the JCPA for Report by 4 September 1997 (later extended
to 29 September 1997). The JCPA commenced hearings with a Round
Table on 6 August 1997.
The JCPA reported on 29 September 1997.
Both Bills were also referred to the Senate
Finance and Public Administration Legislation Committee on 4
September 1997. The Committee reported on 2 October 1997 but made
The Parliamentary Service Bill 1997 and
associated measures were introduced on 23 October 1997 in the House
As noted above, the two Houses have been
deadlocked since 5 December 1997 when the House of Representatives
indicated that it would not agree to the Senate's amendments and
laid aside the Bill.
Minister Kemp announced on 25 February 1998 that
the Government would bypass the Senate and implement many of the
reforms proposed in its Bill by administrative and other means.
These administrative changes came into effect on
15 March 1998 and provide for:
- Departmental Secretaries to have more extensive powers in
relation to the management of staff;
- new Public Service Values and a Code of Conduct for staff;
- the protection of whistleblowers who allege breaches of the
Code of Conduct.(15)
The Minister has also indicated that the
Government will use the provisions of the WR Act 1996 to secure
further changes in employment relations in the APS.(16)
The Senate amendments to the initial Bill were
extensively debated in that Chamber(17) but have not received
detailed attention in the House.
The Opposition Spokesperson on Industrial
Relations, Mr McMullan, has indicated that the ALP will be moving
those amendments agreed by the Senate in 1997 when the Bill is
again debated in that Chamber. He has further indicated, however,
that the ALP does not intend pursuing the Opposition amendments
that did not receive Senate support during last year's
Detailed discussion of the less contentious
provisions of the Bill is available from other sources including:
Hansard, JCPA Report No.353 and other Parliamentary
Library publications including previous Digests. What
follows is a brief outline of the main areas of disagreement
between the two Houses.
Restriction on Australian Workplace
An Australian Workplace Agreement (AWA) is a
form of federal industrial agreement which may be made between
specified types of employer and one or more of their employees.(19)
AWAs may displace the terms of federal awards and certain
Commonwealth and State industrial laws. AWAs do not, however,
prevail over existing or future certified agreements unless such a
certified agreement contains a clause allowing it to be overridden
by an AWA.(20)
Clause 20 provides that Agency
Heads (these include Departmental Secretaries, Heads of Executive
Agencies and Heads of Statutory Agencies) exercise the powers of
the employer in relation to persons employed in the respective
Agency. Their powers, as employer, are to be prescribed by
The Senate amendment to clause 20
(and the consequential amendment to clause
8) limit the employment powers of Agency Heads by
preventing them entering into Australian Workplace Agreements with
APS employees. The making of such agreements would only be possible
where specifically permitted by a regulation made under the
One argument for limiting the powers of Agency
Heads in relation to AWAs is that the terms of such individual
agreements would be secret and thereby contrary to established
principles of accountability in spending public money.
The Government argues that the amendment is
unnecessarily restrictive; that such agreements have already been
negotiated; and that accountability concerns are met by agencies
having to report in their annual reports on the numbers of
employees whose remuneration packages exceed $100 000.(21)
Remuneration of Senior Officials
Clause 46 provides that the
remuneration of the Public Service Commissioner is to be set by the
Clause 53 provides that the
remuneration of the Merit Protection Commissioner is to be set by
the Public Service Minister.
Clause 61 provides that the
remuneration of Departmental Secretaries is to be set by the Prime
Clause 68 provides that the
remuneration of the Heads of Executive Agencies is to be set by the
Senate amendments to each of these provisions
included the rider that the remuneration and conditions for these
positions must be set 'on the advice of the Remuneration Tribunal
and are to be published in the Gazette'.
The Opposition argues that the amendments are
required for transparency and that to maintain independence, it
should be obligatory to seek the advice of the Remuneration
Tribunal. The Government argued that the amendments were
unnecessary and that it would as a matter of course seek advice
from the Remuneration Tribunal.(22)
The Bill as introduced excluded access of more
senior officials to Division 3 of Part VIA of the Workplace
Relations Act 1996. Division 3 provides remedies for employees
whose dismissal from employment is held either harsh, unjust or
unreasonable or who are dismissed for some prohibited cause such as
union membership, their age or their religious beliefs.
The WR Act remedies for wrongful dismissal would
otherwise be available to senior public servants covered by federal
awards, as they are not subject to the statutory income limit of $
66 250 per annum which prevents federal non award workers from
gaining access to remedies under the WR Act.
Heads of Executive Agencies
Subclause 67(5) prevents Agency
Heads seeking relief for unfair or unlawful dismissal under the
provisions of the WR Act.
This subclause was deleted by the Senate
amendment that also replaces the preceding subclause
[67(4)] with a provision requiring that the Agency
Minister receive a report about the proposed termination from the
Public Service Commissioner and the Secretary of the Prime
Minister's Department before dismissing an Agency Head.(23)
Secretaries of Departments
Subclause 59(4) prevents
Departmental Secretaries seeking relief for unfair or unlawful
dismissal under the provisions of the WR Act.
A Senate amendment removed this
Senior Executive Service (SES)
Clause 38 prevents SES
employees from seeking relief for unfair or unlawful dismissal
under the provisions of the WR Act.
A Senate amendment repealed this clause. Further
the amendment provided that in the case of termination of the
employment of an SES employee, the Public Service Commissioner must
certify that the termination meets the minimum requirements
specified in a direction issued under proposed section
36 (see below). The termination must also be certified as
being in 'the best interests of the APS'.
Clause 36, which provides that
the Public Service Commissioner must issue written directions in
relation to SES employment, was amended in the Senate to make it
mandatory for the Commissioner to issue such directions in relation
to engagement, promotion, redeployment, mobility and
The Government had proposed that SES employment
rights be guaranteed by other means. To quote Senator Ian
The Bill retains the concept of the Senior
Executive Service (SES) and includes for the first time a clear
statement of the Service-wide role of the SES. While Agency Heads
will have enhanced responsibilities in relation to the SES, the
Public Service Commissioner will be required to issue Directions
about employment matters relating to SES employees. These will
cover appropriate selection processes, in order to ensure that
decisions are made on the basis of merit, and termination
processes, including a requirement to certify that a termination is
in the best interests of the Service. This will address JCPA
concerns that SES employees should be free from any apprehension
that they may be dismissed for providing robust advice to their
Agency Head. I emphasise that the Directions, just as the
regulations, are legislative instruments which Parliament can
The Opposition's position on the termination of
SES staff was summarised at the Committee Stage by Senator Faulkner
who stated that:
In relation to Opposition amendment No. 38 to
clause 38, termination subject to the Workplace Relations Act,
given the increased powers of agency heads to set salary and
conditions, as well as hire and fire, there is a very strong
argument that SES officers should have at least some protection
from capricious or arbitrary dismissal. Of course, further
protection will be afforded by the certification proposed in the
new section 38.(26)
Clause 29 deals with the powers
of an Agency Head to terminate staff subject to the provisions of
the WR Act.
The Senate amended this provision to specify
grounds for taking such action (eg unsatisfactory work) and removed
subclause 29(3) which would have prevented a
termination being challenged on the ground that a statement of
reasons had not been provided to the dismissed worker.
The Opposition's rationale for specifying the
grounds for termination in the legislation is that these are
important matters and that notice and reasons for dismissal should
be given in writing. Senator Faulkner also noted that the grounds
specified in the amended provision were the same as those
identified by the Government for SES employees.(27)
The Government's position is, in the broad, that
similar remedies exist under the WR Act and that creating a second
similar (but not identical) set of grounds for relief would be
confusing and generally unproductive.(28)
In relation to subclause 29(3),
the Senate accepted that the subclause could entirely undermine
substantive protections provided by clause
Review of Actions
Clause 33 provides for the
creation by regulation of mechanisms for reviewing staffing
The Senate amendment creates these mechanisms
under the Act and retains the present system of tripartite appeals
The Opposition argued that the Government's
draft regulations failed to provide the Merit Protection
Commissioner with sufficient power and sufficient
The Government does not agree that the Merit
Protection Commissioner needs to be an independent statutory
authority and opposes the retention of the tripartite appeals
Clauses 44, 51, 63 and 70 all
require certain office holders to prepare annual reports for
ministers and the Parliament.
The Senate amended these provisions to require
these reports be prepared in accordance with guidelines approved by
the Joint Committee on Public Accounts and Audit.(32)
- The present Bill retains the 16 amendments made in the House on
30 October 1997.
- Senate, Parliamentary Debates, 12 March 1998,
- House of Representatives, Parliamentary Debates, 11
March 1998, 661.
- Phillipa Weeks, Submission to Joint Committee of Public
Accounts, Review of Public Service Bill 1997, Submissions,
volume 4, 424.
- For example, Maternity Leave (Commonwealth Employees) Act
1973 and the Long Service Leave (Commonwealth Employees)
- Auditor-General Bill 1996; Audit (Transitional and
Miscellaneous) Amendment Bill 1996; Financial Management and
Accountability Bill 1996; and Commonwealth Authorities and
Companies Bill 1996. These Bills received the Royal Assent on 24
October 1997 and came into effect on 1 January 1998.
- PSMPC, APS Staffing Statistics Report 1996: 12 and
Budget Paper No.1, 1997-98: 4-5.
- Ibid., 25.
- See Geoff Winter, 'Wither Public Sector Employment?', IRS,
Research Note, No. 17 of 1997-98 for more detail on the
extent of staff reductions and comparisons with other OECD
- An observation made in slightly different terms by the JCPA at
paragraph 2.24 of Report No.353.
- 22 December 1994.
- The Committee subsequently published a full transcript of these
- The Minority Report of Senator Allison recommended that the
Bill be withdrawn and redrafted taking into account concerns raised
in JCPA Report No.353. Senator Allison also recommended
that the Bill not be debated until all the subordinate legislation
is available in final draft form.
- See Commonwealth of Australia, Statutory Rules 1998,
No. 23. These regulations are, of course, subject to possible
- House of Representatives, Parliamentary Debates, 11
March 1998, 661.
- Senate, Parliamentary Debates 17, 18 and 20 November
- House of Representatives, Parliamentary Debates, 11
March 1998, 716.
- The constitutional basis of AWAs rests on range of
constitutional powers other than the industrial power. Hence
employers, who are trading, financial or foreign corporations or
whose employee's principal place of work is in a Territory, or
where the employer is the Commonwealth or where the employer is a
private sector employer in Victoria, may all make AWAs with their
employees. Relying on the trade and commerce power, waterside
workers, most maritime employment and airline crews may also be
covered by AWAs.
- Refer WR Act 1996, section 170VQ.
- Senate, Parliamentary Debates, 17 November 1997,
- Ibid., 19 November 1997, 9069-71.
- Ibid., 19 November 1997, 9088-9090.
- Ibid., 9085-9086.
- Senate, Parliamentary Debates, 10 November 1997,
- Senate, Parliamentary Debates, 18 November 1997,
- Ibid., 9008.
- Ibid., 9008-10.
- Ibid., 9011.
- Ibid., 9015.
- Ibid., 9016.
- Ibid., 19 November 1997, 9067-69.
23 March 1998
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