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Last updated: 4 July 2003

The Australian experience of public sector reform

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Chapter 2 — Legislating for the public service

Prior to Federation, each of the six self-governing colonies in Australia had moved to establish and systematise their individual public services.

As with the systems of government generally, many of the fundamental principles of the colonial public services owed much to Australia’s inheritance from Britain, and the latter’s civil service reforms in the 19th century. In particular the Northcote-Trevelyan Report, with its clear rejection of patronage served to underpin the perceived necessity for establishing permanent career public services. In Australia, combating corruption was also an early goal of administrative reform.

The Australian colonies, unlike Britain itself, embodied their structures for public service management in legislation from a very early stage. Civil Service Acts in 1862 and 1863, in Victoria and Queensland respectively, went beyond those of the other colonies in attempting to limit political patronage by means of competitive examination entry. Subsequent reform legislation in Victoria provided for appointment of a Public Service Board of three members, to exercise strict control over appointment of outsiders to vacancies. It also defined the qualifications required for lower and higher grades, with promotion dependent on qualifying by examination.

Similar legislation was progressively enacted in the other colonies. In New South Wales, a Public Service Board of three Commissioners was also established, with control over both the staffing and management of the public service. By the date of Federation, public service legislation operated in all the colonies, although with varying content.

The Federal Public Service Act

The basic laws regulating the structure, responsibilities and management of the Australian Public Service (APS) have been the three successive Public Service Acts of 1902, 1922, and 1999.

As mentioned below, other legislation also impacts on the employment of federal public servants in various ways, but the Public Service Acts have set out the central framework.

The 1902 foundations

The British Civil Service Commission and the New South Wales and Victorian Public Service Board systems were used as the principal models, for purposes of drafting legislation to govern the newly established federal Public Service.

The 1902 Commonwealth Public Service Act set out the essential elements of a career public service. These constituted merit-based competitive staffing of positions from the point of initial entry to the public service, subsequent progression by way of promotion on the basis of merit, security of tenure to retirement, and protection against arbitrary termination of services (i.e. termination only for cause by due process).

Control of the Public Service was highly centralised under the 1902 Act, administered by a Public Service Commissioner.

The first Commissioner (DC McLachlan) had initial responsibility for bringing together a number of departments formerly administered by the states, into a federal public service, and providing for the systematic introduction of a new system of classification and grading. His work strongly influenced the management and control of the public service well beyond his own term of office.

A significant change occurred in public service management structures in 1911 when public servants were allowed access to the Commonwealth Court of Conciliation and Arbitration for resolution of disputes about classification, pay and employment conditions. This acknowledged, for the first time among national public services, the principle of third party arbitration of disputes between employer and employee.

The 1922 Act

Reactions against strong central control, and the impact of the First World War on public service administration, led to pressures for change. The recommendations of two postwar Royal Commission reports (one chaired by McLachlan) brought about the passage of new public service legislation, namely the 1922 Public Service Act.

Administered by a three-member Public Service Board, the new Act distinguished more clearly the powers of the heads of public service departments, and of the Board itself. Under the Act, the ‘permanent heads’ (so designated) were responsible for the department’s ‘general working and…all the business thereof’ and for advising the Minister in relation to all departmental matters.

The Act provided a charter for the Board to review and promote public service efficiency and economy—responsibilities that became increasingly significant after World War II in the post-war reconstruction environment. The charter also provided a basis for the Board’s operational functions associated with recruitment to a career public service in accordance with merit principle provisions.

The fundamental structure and coverage of the 1922 Act remained in place for more than 70 years. In the intervening period, particular areas of APS administration such as recruitment, promotion, discipline, and redeployment-retirement were subject to major legislative reform. The legal framework was also enhanced during the 1980s through insertion of equal employment opportunity provisions and further development of merit and anti-discrimination provisions.

As a consequence of these changes, the Act (along with the Public Service Regulations and associated instructions and guidelines), increased in size and complexity, resulting in growing pressure for fundamental review and simplification of the legislation.

The 1970s Royal Commission on Australian Government Administration (the Coombs Commission) contributed significantly to this pressure, and was a major influence on APS reforms over the remainder of the 20th century. (The Coombs Commission is discussed in more detail in the next chapter)

Some of the Coombs proposals were implemented progressively by the then Public Service Board. In particular, the Board, and from 1987 its successor the Public Service Commission, delegated to departments many of the detailed staff management powers assigned to the central personnel agency under the 1922 Act. Full devolution of these powers required major legislative change. This did not occur until 1999.

The Public Service Act 1999

In 1996, the government decided that much more needed to be done to enable the Service to operate efficiently and competitively, and in line with best practice in overseas public services and in the private sector. This reflected recognition that the APS needed to be responsive to significant diversification of the workforce in the 1970s and 1980s and to changes occurring in the Australian community.

By this time the 1922 Act was more than 75 years old, had been amended on a piecemeal basis more than 100 times, was highly complex and technical, was almost 250 pages long, and promoted a legalistic approach to managing people.

Following an extensive review and consultation process, a new legislative framework was developed, with ultimate passage in the form of the 1999 Public Service Act (the PS Act). That Act represented a culmination of the reform measures pursued in the preceding two decades.

While retaining the essentials of a career public service, and the focus on merit selection in the 1902 and 1922 Acts, the new Act differs significantly in a number of key areas:

For the first time it contains a declaration of APS values, reflecting public expectations of the relationship between the public service and the government, the Parliament and the Australian community, with specific reference to politicalimpartiality, maintenance of the highest ethical standards, accountability for actions, and responsibilities to the government of the day. The 15 APS Values are available from this site.
A legally enforceable code of conduct is articulated, setting out the standards of behaviour expected of those working in the public service.
Specific provisions are included affirming the merit principle, prohibiting patronage and favouritism, and affording protection for public interest whistleblowing by APS staff.
Staffing powers previously assigned to the Public Service Commissioner and delegated to the heads of public service agencies, are fully devolved to them. They are thus afforded all the rights, duties and powers of an employer in respect of their APS employees, with authority to engage, terminate and determine their employment terms and conditions.
An APS employee is entitled to seek a review of any action affecting their employment.
An office of Merit Protection Commissioner has been established with independent review and inquiry powers.

The 1999 Act also brought about changes in language.

Departments and public (or statutory) authorities are now referred to as ‘agencies’.
The heads of public service organisations, once called permanent heads, then departmental secretaries, have become ‘agency heads’, and this term also applies to the variously designated heads of statutory agencies, which have APS employees.
Career staff who were commonly described as ‘permanent’ are now referred to as ‘ongoing’ staff, and represent the usual basis for engagement.
Employees recruited for shorter periods or specific tasks are called ‘non-ongoing’ employees.

Administering the Act

Overall administration of the PS Act is the responsibility of the Public Service Commissioner. Specific functions of that office include:

developing, promoting, reviewing and evaluating APS employment policies and practices
facilitating continuous improvement in people management throughout the Service
coordinating and supporting APS-wide training and career development opportunities for staff of the Service
contributing to and fostering leadership in the APS.

A key function of the APS Commission is to promote the APS Values and code of conduct, and to evaluate the extent to which they are incorporated and upheld through the management practice of APS agencies. Public Service Commissioner Directions have been issued to agency heads and APS employees on minimum requirements for meeting each of the values. Directions have also been issued both on whether an APS employee has breached the code of conduct, and in relation to Senior Executive Service employment matters.

While the Values are generic throughout the Service, and the Act requires the heads of agencies to uphold and promote them in their organisations, they are encouraged to do this in ways that most suit their business and the culture of their particular workplace.

The APS Values and accountability

The Commissioner’s Directions constitute one element of the accountability characteristics of the PS Act. The legislation has been framed to provide an inter-locking system of powers and responsibilities, integrated within a departmental management framework. It provides a model of accountability in which the public interest is clearly articulated. A further key element is the requirement for the Commissioner to report annually to Parliament on ‘the state of the APS’.

The APS Values make specific reference to the broader accountability obligations of the Service. Thus, section 10(1) (e) of the Act states the APS is openly accountable for its actions, within the framework of ministerial responsibility to the Government, the Parliament and the Australian public.

The Values also underline the requirement for the Service to be responsive to the government-of-the-day in providing frank, honest, comprehensive, accurate and timely advice and in implementing the government’s policies.

These provisions recognise that the government and its Ministers determine the public interest in terms of policies and program priorities, and public servants, within the requirements of the legal framework, advise on and implement their decisions. The public service has particular responsibility for the public interest in upholding the law and ensuring due process.

The Act provides for a Management Advisory Committee, whose functions are to advise the government on significant issues relating to the management of the Service, and to be a forum for considering major management activities with APS-wide effect. This Committee is discussed in more detail in Chapter 5.

A STATE GOVERNMENT PERSPECTIVE
Commissioner for Public Sector Standards, Western Australia The Western Australian Commissioner for Public Sector Standards was established under the Public Sector Management Act 1994 as an independent statutory officer appointed by the state’s Governor, and reporting directly to State Parliament. The Commissioner advises Parliament on merit, equity, and probity in the state’s public sector. The Commissioner monitors and reports annually to Parliament on how well agencies comply with the Western Australian public sector code of ethics, which was introduced in 1996 and revised in 2002; and assists agencies to comply with the Code and to develop and monitor their own codes of conduct. The WA code of ethics is a public statement of the principles, values and behaviour expected of all public sector bodies and employees, with a few exclusions, such as elected officials, local government employees, police officers, and universities. Each agency is expected to develop its own code of conduct to reflect the values of the agency and set out guidelines for its employees. Responsibility for implementing agency codes of conduct rests with agency chief executive officers. The Commissioner is responsible for nominating chief executive officers and advising on their reappointment or removal from office.

A STATE GOVERNMENT PERSPECTIVE

Commissioner for Public Sector Standards, Western Australia

The Western Australian Commissioner for Public Sector Standards was established under the Public Sector Management Act 1994 as an independent statutory officer appointed by the state’s Governor, and reporting directly to State Parliament.

The Commissioner advises Parliament on merit, equity, and probity in the state’s public sector. The Commissioner monitors and reports annually to Parliament on how well agencies comply with the Western Australian public sector code of ethics, which was introduced in 1996 and revised in 2002; and assists agencies to comply with the Code and to develop and monitor their own codes of conduct.

The WA code of ethics is a public statement of the principles, values and behaviour expected of all public sector bodies and employees, with a few exclusions, such as elected officials, local government employees, police officers, and universities.

Each agency is expected to develop its own code of conduct to reflect the values of the agency and set out guidelines for its employees. Responsibility for implementing agency codes of conduct rests with agency chief executive officers.

The Commissioner is responsible for nominating chief executive officers and advising on their reappointment or removal from office.

A STATE GOVERNMENT PERSPECTIVE
Queensland’s ethics legislative framework Queensland has a well developed legislative framework to administer ethical standards in the state public sector A Public Sector Ethics Act 1994 covers all public sector organisations, including universities and local government employees, and identifies five fundamental ethical obligations of state public employees. They are: respect of the law and the system of government; respect for persons; integrity; diligence; and economy and efficiency. The Public Service Act 1996 outlines public service employee rights and obligations and the Whistleblowers Protection Act 1994 protects those who appropriately report knowledge of maladministration or corruption. Further strengthening this ethics framework was the appointment, in 2000, of Australia’s first Integrity Commissioner to advise senior public officials on conflicts of interest and public integrity standards.

A STATE GOVERNMENT PERSPECTIVE

Queensland’s ethics legislative framework

Queensland has a well developed legislative framework to administer ethical standards in the state public sector

A Public Sector Ethics Act 1994 covers all public sector organisations, including universities and local government employees, and identifies five fundamental ethical obligations of state public employees. They are: respect of the law and the system of government; respect for persons; integrity; diligence; and economy and efficiency.

The Public Service Act 1996 outlines public service employee rights and obligations and the Whistleblowers Protection Act 1994 protects those who appropriately report knowledge of maladministration or corruption.

Further strengthening this ethics framework was the appointment, in 2000, of Australia’s first Integrity Commissioner to advise senior public officials on conflicts of interest and public integrity standards. QLD

Evolutionary change

The 1999 Act provided for the most significant and extensive deregulation of public service employment in the history of the APS. Attention to simple, clear and direct legislative expression substantially reduced the size and complexity of the Act, compared with its 1902 and 1922 predecessors.

The legislative framework for the current APS serves to underline the fact that the three Public Service Acts since federation have been characterised by some fundamental common principles, and recurrent provisions for the performance of particular functions. At the same time, there has been progressive evolution of the interpretation of those functions, along with the introduction of significant new provisions.

Changes through the 20th century, and increasingly over the last 25 years, have been characterised by a progressive move away from substantial, centralised control of the APS administration by a central agency, to an environment in which individual departments and agencies have prime responsibility for their own management decisions and actions. For example, earlier central agency management of the size of the APS had been replaced by direct control of staff numbers by individual agency heads, with closer integration into financial budgeting processes. The 1999 PS Act, together with the Workplace Relations Act, has represented a culmination of reforms of public sector management, with agency heads now responsible for managing their staff in order to maximise agency performance.

At the central personnel agency level, the strong directive and interventionist powers have now been replaced by a Public Service Commissioner with a quality assurance role. This role includes evaluation and annual reporting on the state of the Service, and providing management advice and assistance to APS departments and agencies. As with devolution of financial authority, the devolution of employment powers was in the context of substantial strengthening of accountability for performance in terms of program efficiency and effectiveness.

The Workplace Relations Act

One of the underlying principles of the 1999 PS Act was to adopt the same overall approach to APS staffing as that applying in the workforce generally. The Service would therefore operate as far as possible, consistent with its public responsibilities, under the same industrial relations and employment arrangements as applying generally. The legislation embodying this framework, within which the heads of agencies would exercise their staffing powers, was enacted in 1996.

The Workplace Relations Act 1996 (WR Act), applies to employment arrangements across the Australian workforce. One of the main features of the legislation has been a shift to an individual organisation focus for the setting of wages and employment conditions.

As outlined in Chapter 4, Australian Workplace Agreements and Certified Agreements, negotiated under the WR Act, provide the mechanisms through which this is achieved.

The WR Act has modernised Australia’s industrial relations system and has been an important element in achieving wider economic reform through a more flexible labour market based on realities faced by each business organisation. It represents a fundamental change from Australia’s previously unique system of conciliation and arbitration.

Reflecting these industrial relations reforms, the PS Act gives agency heads direct power over engagement of staff, as well as authority to determine their remuneration and terms of conditions of employment. This authority must be exercised within the government’s (July 2002), which provide agencies with flexibility to develop innovative collective or individual workplace agreements, which are tailored, under the WR Act, to their particular needs and circumstances, and benefit both employees and clients. The policy parameters promote the government’s interests as the ultimate employer of APS employees, for example, by requiring productivity gains and performance management while continuing to devolve responsibility for agreement making to agencies.

The WR Act established the framework relating to termination of employment, discussed further in Chapter 4.

The WR Act is administered by the Department of Employment and Workplace Relations in consultation, as necessary, with the Australian Public Service Commission.

Financial management legislation

Legislative reforms and substantial devolution of employment powers to agency heads under the PS and WR Acts has been accompanied by major comparable reforms of financial management legislation.

Legislation effective from 1 January 1998 introduced a modernised financial management framework emphasising performance, propriety and accountability. It comprised the Financial Management and Accountability Act 1997, the Commonwealth Authorities and Companies Act 1997, and Auditor-General Act 1997.

The impact of these enactments is discussed in Chapter 6.

Other relevant legislation

While the Public Service and Workplace Relations Acts provide the basic framework for APS employment, some employee entitlements, rights and obligations are set out in other legislation. These include: long service leave and maternity leave; employee superannuation; compensation for work-related injury and employee rehabilitation; and occupational health and safety provisions. In most cases, the relevant provisions apply not only to the core public service but also to a wide range of other Commonwealth public sector employment.

More broadly, APS employees have rights in relation to their employment under administrative and anti-discrimination law. They may seek access to, and amendment of, their personnel records under the Privacy Act 1988, and Freedom of Information Act 1982. They may seek judicial review of employment decisions made under statutory powers, under the Administrative Decisions (Judicial Review) Act 1977. Public sector agencies are subject to human rights legislation applicable generally to the Australian community, under the Racial Discrimination Act 1975, Sex Discrimination Act 1984, Discrimination Act 1992 and Human Rights and Equal Opportunity Act 1986.

Public servants are subject to a range of other statutory obligations, in areas such as disclosure of information and the handling of public monies. Common law obligations may also apply in particular situations, such as a duty of care in giving advice that may be relied upon by members of the public.

Similarity and change

The public service has been governed by legislation for more than 150 years. Despite the great changes that have occurred at both Commonwealth and state levels during that period, the key characteristics of the non-political, merit-based public service have been maintained consistently.

There have been other significant similarities in the directions of reform amongst the Australian jurisdictions. Public Service Boards and Commissions have devolved many of their powers to departments and agencies generally. Public Service legislation has become less prescriptive in nature, and has placed increased emphasis on stating values and standards applicable to public service and wider public sector employment.

There are differences in emphasis between the jurisdictions however. For example, some have retained a central employing authority which delegates specific powers to agency heads, and some have limited or even abolished the role of an independent Public Service Commissioner, and retained relevant roles within the Premiers’ Department. At this stage, Commonwealth reforms have been the most extensive, and are having substantial influence in other jurisdictions.

A STATE GOVERNMENT PERSPECTIVE
Tasmania—Legislative framework In recent years, the State Service Act 2000 has provided the basis for significant public sector reform in Tasmania. Like its 1999 Commonwealth counterpart, the Act is less prescriptive and offers greater flexibility than its predecessors. It applies to the staff of all public service departments, and to some state authorities, such as the Tasmanian Audit Office and the Rivers and Water Supply Commission. It does not apply generally across the wider state public sector. The Act includes 13 State Service Principles, providing an overarching statement as to both the nature and operation of the Service and what is expected of those who work in it. Heads of agencies must uphold, promote and comply with the Principles and all employees are required to uphold the principles. The Principles affirm the apolitical nature of the Service, along with its accountability to the government, the Parliament, and the community. They require responsiveness to government in providing honest, comprehensive, accurate and timely advice, and in implementing the government’s policies and programs. They affirm the merit principle as the basis for employment decisions, and provide for a workplace that is free from discrimination, recognises diversity of the community it serves, and promotes equity in employment. The Act sets out a code of conduct, applicable to all Service employees, including senior executives, which provides for investigation and imposition of sanctions on any employee who breaches the code. Whistleblower protection is provided for those who notify an alleged breach of the code. The State Service Commissioner, an independent statutory office established under the Act, is responsible for upholding, promoting, and ensuring adherence to the principles, and for determining management and employment practices, procedures, and standards in the Service. Other responsibilities include providing advice to the Minister as the State Service employer, developing and coordinating training and education programs, implementing recruitment programs and determining qualifications and other requirements for Service employment. Ultimate responsibility for State Service employment is vested in the Minister administering the State Service Act 2000, currently the Premier. Employment powers are delegated to agency heads, who must comply with any directions issued by the Minister or State Service Commissioner on matters relating to the administration of the Service.

A STATE GOVERNMENT PERSPECTIVE

Tasmania—Legislative framework

In recent years, the State Service Act 2000 has provided the basis for significant public sector reform in Tasmania.

Like its 1999 Commonwealth counterpart, the Act is less prescriptive and offers greater flexibility than its predecessors. It applies to the staff of all public service departments, and to some state authorities, such as the Tasmanian Audit Office and the Rivers and Water Supply Commission. It does not apply generally across the wider state public sector.

The Act includes 13 State Service Principles, providing an overarching statement as to both the nature and operation of the Service and what is expected of those who work in it. Heads of agencies must uphold, promote and comply with the Principles and all employees are required to uphold the principles.

The Principles affirm the apolitical nature of the Service, along with its accountability to the government, the Parliament, and the community. They require responsiveness to government in providing honest, comprehensive, accurate and timely advice, and in implementing the government’s policies and programs. They affirm the merit principle as the basis for employment decisions, and provide for a workplace that is free from discrimination, recognises diversity of the community it serves, and promotes equity in employment.

The Act sets out a code of conduct, applicable to all Service employees, including senior executives, which provides for investigation and imposition of sanctions on any employee who breaches the code. Whistleblower protection is provided for those who notify an alleged breach of the code.

The State Service Commissioner, an independent statutory office established under the Act, is responsible for upholding, promoting, and ensuring adherence to the principles, and for determining management and employment practices, procedures, and standards in the Service. Other responsibilities include providing advice to the Minister as the State Service employer, developing and coordinating training and education programs, implementing recruitment programs and determining qualifications and other requirements for Service employment.

Ultimate responsibility for State Service employment is vested in the Minister administering the State Service Act 2000, currently the Premier. Employment powers are delegated to agency heads, who must comply with any directions issued by the Minister or State Service Commissioner on matters relating to the administration of the Service. TAS

Further information:

The Public Service Act 1999 and all other Commonwealth enactments may be accessed on-line at http://scaleplus.law.gov.au

APS Values http://www.apsc.gov.au/values

Management Advisory Committee http://www.apsc.gov.au/mac

Information on workplace relations is on a Department of Employment and Workplace Relations web site at http://www.workplace.gov.au/ and the legislation is at http://www.workplace.gov.au/legislation

Office of the Public Sector Standards Commissioner, Western Australia http://www.wa.gov.au/opssc

Office of Public Service Merit and Equity, Queensland http://www.opsme.qld.gov.au/

Office of the State Service Commissioner, Tasmania http://www.ossc.tas.gov.au/