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Last updated: 27 October 2004

Circular No 2004/5: Administrative re-arrangements

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Note: This circular has been replaced by Implementing Machinery of Government Changes effective 30 January 2007

Background

On 22 October 2004, the Prime Minister announced the composition of the Fourth Howard Ministry and the changes to the administrative arrangements that he will recommend to the Governor-General. A copy of the Prime Minister's Press Releases are at http://www.pm.gov.au/news/media_Releases/media_Release1134.html and http://www.pm.gov.au/news/media_Releases/media_Release1135.html.

2. There are changes to the functions of a number of Australian Public Service (APS) departments and agencies (agencies). The major changes include:

the establishment of the Department of Human Services which will have responsibility for the development, delivery and co-ordination of a number of government services;
the abolition of the Australian Greenhouse Office and the National Oceans Office with their functions being absorbed into the Department of the Environment and Heritage; and
the abolition of the Australian Government Information Management Office with its functions being absorbed into the Department of Finance and Administration.

Introduction

3. The Public Service Act 1999 (PS Act) provides a head of power for the movement of staff whose duties are affected by an administrative re-arrangement. Under section 72 of the PS Act, the Public Service Commissioner may, if satisfied that it is necessary or desirable in order to give effect to an administrative re-arrangement:

move APS employees to another agency-s.72(1)(a);
determine that persons cease being APS employees and become employees of a specified Commonwealth authority-s.72(1)(b);
determine that persons cease to be employed as non-APS employees and become engaged as APS employees in a specified agency-s.72(1)(c); and
engage any person as an APS employee in a specified agency-s.72(1)(d).

4. This circular is concerned with the movement of employees between APS agencies as a result of administrative re-arrangement under s.72(1)(a) of the PS Act. If, as a result of the changes that have been announced, there is a need to move staff into, or out of the APS, the Australian Public Service Commission (APS Commission) and the Department of Employment and Workplace Relations (DEWR) will discuss these moves separately with the agencies concerned.

5. The Public Service Regulations (PS Regulations) provide that any action taken, or not taken, under s.72 of the PS Act is not a 'reviewable action' for the purposes of s.33 of the PS Act—see r.5.23 and Item 5 of Schedule 1 of the PS Regulations.

6. This circular has been prepared in consultation with the DEWR, which has primary responsibility for issues concerning the remuneration and other conditions of employment of persons affected by an administrative re-arrangement. The Department of Finance and Administration's publication Guidelines on Implementation of Administrative Arrangements Orders and Other Machinery of Government Changes Finance Management Guidance No.5, September 2003 provides advice on financial and related issues arising out of an administrative re-arrangement. This publication is available at http://www.finance.gov.au/finframework/docs/AAO_Guidelines_rtf.rtf

Staffing arrangements

7. As noted above, s.72(1)(a) of the PS Act is the head of power to move APS employees from one APS agency (the losing agency) to another APS agency (the gaining agency) as a result of an administrative re-arrangement. The general principle of 'staff-follow-function' will apply to any such administrative re-arrangements. Under this principle, affected employees are moved with their function and their employment status (i.e. ongoing or non-ongoing) remains the same.

8. In practice, the APS Commission consults with the losing and gaining agencies to identify the employees who are affected by the move and the Public Service Commissioner then makes a determination under s.72(1)(a) of the PS Act to move the affected staff. The names and other relevant details of persons to be moved are set out in schedules to the determination. Generally, the losing agency will need to identify separately the ongoing and non-ongoing employees who are to be moved and provide the APS Commission with the name, AGS number and APS classification of these employees.

In relation to non-ongoing employees, the determination under s.72(1)(a) of the PS Act will move identified employees to the gaining agency for a period equal to the unexpired part of their existing term of engagement, or for the remainder of the duration of the task for which they were originally engaged, or on the same irregular or intermittent basis as that on which they were originally engaged.

9. In most cases, the identification of the employees to be moved is likely to be a reasonably straightforward exercise. Complexities can arise, however, where there is a split-up of functional or program areas. This more commonly affects support functions (e.g. corporate services areas). There may need to be detailed negotiations between the losing and gaining agencies to identify the staff who are to be moved.

10. In identifying the employees who are to be moved, the losing agency will need to include the details of any employees who normally perform work associated with the function that is to be moved but who are on paid or unpaid leave (including employees granted mandatory leave without pay to take up statutory appointments, or employment under the Members of Parliament (Staff) Act 1984 or the Governor-General Act 1974), and/or any employees who are seconded to another agency or employer. All these employees are moved to the gaining agency with effect from the date specified in the determination made under s.72(1)(a) of the PS Act but will not normally commence working there until their period of leave has expired.

11. The losing agency will also need to identify and provide details of any employees who normally perform work associated with the function that is to be moved but who, at the time of the administrative re-arrangement, are performing duties in another part of the losing agency on temporary assignment. Persons in this situation are also moved to the gaining agency with effect from the date specified in the determination made under s.72(1)(a) of the PS Act and will commence work in the gaining agency on that date. In these circumstances, however, it is possible for the employee and the two agencies concerned to enter into a temporary movement agreement under s.26 of the PS Act, which would allow the employee to continue to perform duties in the area they were working in prior to the administrative re-arrangement coming into effect.

12. However, an arrangement to temporarily assign duties to an employee at a higher level within the employee's agency under s.25 of the PS Act is not automatically preserved when an employee is moved to another agency as a result of an administrative re-arrangement—the Commissioner's determination under s.72 of the PS Act will move employees at their APS classification. (Note: an ongoing employee temporarily assigned duties at a higher classification is not allocated a temporary higher APS classification – see Rule 6(2) of the Public Service Classification Rules (Classification Rules)).

13. Where there is an operational need, however, a gaining agency can continue any such arrangements by making a fresh assignment of duties under s.25 of the PS Act to an affected employee on or after the date of the move, although there is no obligation to do so.

14. Below is information on the effect an administrative re-arrangement will have on:

unresolved staffing action, including where an employee has been declared excess, or is being investigated for a suspected breach of the Code of Conduct, or where the employee is still subject to a condition of engagement imposed under s.22(6) of the PS Act;
recruitment action in train, including where an agency has requested the establishment of an Independent Selection Advisory Committee (ISAC);
conditions of engagement;
employees who are on temporary movement to another APS agency;
an unresolved application for a review of action;
employees' duties and classification;
the engagement of non-ongoing employees;
delegations and authorisations and
employees' remuneration and other conditions of employment.

Unresolved staffing action

15. Agencies should liaise with the APS Commission on individual cases that may arise where an APS employee who is likely to be affected by an administrative re-arrangement is subject to formal action under either the PS Act or agency procedures which involve the employee being:

dealt with under the redeployment, reduction and retrenchment provisions applying in the agency;
the subject of an investigation into a suspected breach of the Code of Conduct;
assessed as to whether agreed performance standards are being met;
dealt with in relation to non-performance of duties or a loss of an essential qualification; or
assessed as to their fitness for continued duty.

16. There are a number of possible outcomes in such cases, depending on the effect of the administrative re-arrangement, the type of action that is being undertaken and the stage reached in the process. While the general principle of 'staff-follow-function' will continue to apply, there may be circumstances where it is in the interests of the efficient administration of the APS, or in an employee's interests, that the action be completed in the losing agency. Losing agencies should identify employees who might be affected by unresolved staffing action and consult with the APS Commission as necessary.

Recruitment action in train (non ISAC)

17. At the time of an administrative re-arrangement, agencies may have Senior Executive Service (SES) and non-SES recruitment processes underway which have not been completed.

18. The arrangements for handling such processes will depend on the stage reached in the process and the nature of the administrative re-arrangement.

Prior to a decision to exercise employment powers

19. In circumstances where:

an employment opportunity has been notified but no decision has been taken by the Agency Head under the relevant provisions of the PS Act to engage or to assign duties (including promotion) to the preferred applicant; and
the employment opportunity now exists in the gaining agency;

the gaining Agency Head can decide either to discontinue the process or proceed with the recruitment action in relation to the particular employment opportunity.

20. In cases where the gaining Agency Head decides to proceed with the recruitment action, he/she may decide either to continue with the current process on the basis of the action taken in the agency in which the opportunity was notified, or to renotify the employment opportunity in the Gazette and restart the recruitment process.

21. Where the gaining Agency Head decides to continue with the current process, then any decision that is ultimately taken by the gaining Agency Head to promote or engage a person will need to satisfy the requirements of ss.10(1)(b) and 10(1)(m) of the PS Act (in relation to employment decisions being made on merit and persons being given a reasonable opportunity to apply for employment). To do this, the gaining Agency Head will have to be satisfied that the action taken in the losing agency prior to the administrative re-arrangement, and any subsequent action taken in the gaining agency, meets the minimum requirements of Chapter 4 (and, in relation to an SES vacancy, Chapter 6) of the Public Service Commissioner's Directions 1999 (the Directions).

After decision to exercise employment powers and before taking effect

22. Except in situations involving the abolition of an APS agency (see below), where a decision has been taken by the losing Agency Head under the relevant provisions of the PS Act either to engage or to assign duties to the preferred applicant (including promotion), but:

at the time of an administrative re-arrangement, the decision had not come into effect; and
as a result of the administrative re-arrangement, the function associated with the employment opportunity now exists in the gaining agency;

the recruitment process continues to finality, including any reviews of promotion decisions undertaken in accordance with Division 5.2 of the PS Regulations.

23. Until the process is complete, the employment opportunity remains in the losing agency. Once the relevant decision to engage, assign duties (including promotion), or move a person comes into effect, the person will, in accordance with the determination made under s.72(1)(a) of the PS Act, be immediately moved to the gaining agency:

for example, if a decision to promote a person has been made and not come into effect when the part of the agency in which the person will perform the duties is moved to the gaining agency, the promotion will take effect in the losing agency. Once the promotion takes effect, the promotee will be moved to the gaining agency by the s.72 determination.

24. A generic clause will be included in the determination made under s.72(1)(a) of the PS Act to address this issue.

25. In relation to the engagement of persons in this situation, the losing and gaining agencies may need to liaise on any outstanding action that needs to be taken in relation to any conditions of engagement that need to be satisfied prior to the engagement coming into effect—see paragraphs 35 and 36 below.

26. If, for any reason, a gaining agency head does not wish the recruitment action to come into effect, he or she will need to consult with the losing agency head and request cancellation of the recruitment action before it takes effect.

Abolition of agency

27. In circumstances where all the functions of an agency are moved to one or more gaining APS agencies and the losing agency is abolished, any decision taken by the losing agency head under the relevant provisions of the PS Act to engage or assign duties to the preferred applicant (including promotion) that has not yet taken effect at the time of the administrative re-arrangement will lapse:

for example, where a decision to promote an employee has been notified in the Gazette but the decision has not yet taken effect, the promotion will lapse.

28. If, however, a gaining agency head wants to proceed with the recruitment action, he/she can decide to continue with the current process on the basis of the action taken in the agency in which the employment opportunity was notified. A gaining agency head may exercise powers under the relevant sections of the PS Act to promote or engage a person but will need to be satisfied that any action taken in the losing and gaining agencies meets the minimum requirements of Chapter 4 (and, where relevant, chapter 6) of the Directions:

Where an engagement or promotion decision has lapsed, and the gaining agency head decides to continue with the process and engage/promote the preferred applicant on the basis of the selection process undertaken in the losing agency, the engagement/ promotion should be notified again in the Gazette.
– This will be a new engagement/promotion with a new date of effect and may be subject to different remuneration and other terms and conditions of employment, depending on the arrangements that apply in the gaining agency.
In other cases, the applicant should be notified that the engagement or promotion has lapsed.

Subsequent and recurring opportunities

29. A gaining agency head should not use an order of merit which was finalised in the losing agency to fill a subsequent or recurring employment opportunity in the gaining agency, even if it is within 12 months from the date of the Gazette notification.

Non-ongoing employment

30. A gaining agency should not use a register or panel arrangement created by a losing agency to select non-ongoing employees for employment in the gaining agency. The gaining agency may, however, wish to encourage people on the losing agency's list to apply for non-ongoing employment opportunities in line with the procedures or arrangements that apply in the gaining agency.

Independent Selection Advisory Committees (ISACs)

31. Where there has been a request for an ISAC in relation to employment opportunities in an agency that is subject to an administrative re-arrangement, but the ISAC has not been established, the Merit Protection Commissioner will consider the request in consultation with the relevant agency heads.

32. Where:

an ISAC has been established to make recommendations to an agency head about the suitability of candidates for engagement, promotion, or assignment to duties in connection with employment in the agency; and
that ISAC has not yet made a recommendation to the agency head as to which candidate(s) is considered to be most suitable for the relevant employment; and
as a result of an administrative re-arrangement, some or all of the employment opportunities in relation to which the ISAC was established to recommend candidates now exist in the gaining agency;

the ISAC may continue its function in relation to the employment opportunities which still exist in the losing agency. If the gaining agency head wishes to take any further action in relation to the particular employment opportunities that now exist in the gaining agency, he/she will need to restart the selection process, and may ask the Merit Protection Commissioner to establish a new ISAC.

33. Where:

an ISAC has made recommendations to an agency head about the suitability of candidates for engagement, promotion, or assignment to duties in connection with employment in the agency; and
as a result of an administrative re-arrangement, some or all of the employment opportunities in relation to which the ISAC has made its recommendations now exist in a gaining agency;

the losing agency head may choose to use the recommendation of the ISAC in deciding the most suitable candidates for the employment opportunities which still exist in the losing agency. The gaining agency head is unable to use the original ISAC in relation to employment opportunities that now exist in the gaining agency.

34. In circumstances where all functions of an agency are moved to one or more gaining APS agencies and the losing agency is abolished, an ISAC established to make recommendations to the losing agency head will lapse.

Conditions of engagement

35. In circumstances where an employee who is to be moved to a gaining APS agency is still subject to a condition of engagement that was imposed under s.22(6) of the PS Act at the time of the employee's original engagement in the APS, that condition will continue to apply to the employee's employment in the gaining agency.

36. It will then be up to the gaining agency head to be satisfied whether the condition has been met. A gaining agency head can decide that an employee has met a condition within the period specified in the original condition of engagement e.g. end a probationary period before the date specified, or that the condition no longer needs to be met. The gaining agency head may not, however, vary a s.22(6) condition that was originally imposed in the losing agency or impose a new condition of engagement under s.22(6) of the PS Act, on an employee moved to the agency under s.72(1)(a) of the PS Act.

Temporary movements

37. A determination made by the Public Service Commissioner under s.72(1)(a) of the PS Act will deal, among other things, with the situation of persons who are on temporary movement from their home agency (the pre-temporary move agency) to another APS agency (the post-temporary move agency) at the time of an administrative re-arrangement.

Changes in the post-temporary move agency

38. The following arrangement applies where an APS employee has temporarily moved to an agency under s.26 of the PS Act and the part of the agency in which the employee is working temporarily is moved to another APS agency (the gaining agency) as a result of an administrative re-arrangement.

39. The determination under s.72(1)(a) of the PS Act will provide that the employee will move with the function to the gaining agency for the remainder of the temporary movement agreement. The temporary movement agreement will continue in accordance with its original terms as if it had been made with the agency head of the gaining agency. At the expiration of the temporary movement agreement, the employee will, in accordance with the terms of the temporary movement agreement, return to their pre-temporary move agency, except in the circumstances outlined below, or unless alternative arrangements are agreed between the parties (e.g. early termination of the arrangement, a further extension of the temporary movement, or an ongoing move).

40. If the employee's pre-temporary move agency is also affected by the administrative re-arrangement, and the part of the pre-temporary move agency where the employee worked prior to entering into the temporary movement agreement is moved to another APS agency (the successor agency), the Commissioner's determination under s.72(1)(a) of the PS Act will move the employee to the successor agency with effect from the next working day following the expiry of the temporary movement agreement.

41. If, however, the function being performed by the APS employee in the post-temporary move agency is moved to the employee's pre-temporary move agency, the temporary movement agreement lapses.

42. A losing agency will need to establish if there are any employees who are on temporary movement from another APS agency and are working in parts of the losing agency affected by the administrative re-arrangement. If so, the determination to be made by the Commissioner will move these employees in accordance with the arrangements outlined above. The APS Commission will liaise with the losing agency on an appropriate set of words for inclusion in the determination to cover these employees.

Changes in the pre-temporary move agency

43. The following arrangement applies where an APS employee has temporarily moved from their agency to another agency under s.26 of the PS Act and the part of the pre-temporary move agency that the person was working in prior to entering into the temporary movement agreement is affected by an administrative re-arrangement which involves the functions being moved to a to a successor agency.

44. In these circumstances the temporary movement is not affected by the administrative re-arrangement. The Commissioner's determination under s.72(1)(a) of the PS Act will provide that the employee will become employed in the successor agency with effect from the next working day following the expiry of the temporary movement agreement unless alternative arrangements are agreed between the parties (e.g. early termination of the arrangement, a further extension of the temporary movement, or an ongoing move).

45. Where the part of the pre-temporary move agency a person was working in prior to entering into the temporary movement agreement is moved to the same agency as the employee is working in as a result of the temporary movement agreement, then the temporary movement agreement lapses.

46. A losing agency will need to establish if there are any employees who are on temporary movement to another APS agency but who, prior to entering into the temporary movement agreement, were performing duties in the part of the losing agency affected by the administrative re-arrangement. If so, the determination to be made by the Commissioner will move these employees with effect from the end of the temporary movement agreement. The APS Commission will liaise with the losing agency on an appropriate set of words for inclusion in the determination to cover these employees.

Review of actions

47. The PS Regulations do not provide for the transfer between agencies of applications for reviews of actions made under Division 5.3 of the Regulations. Where such an issue arises in relation to an APS employee, agencies are encouraged to contact the APS Commission to seek further advice about whether the review may be continued with, or whether the employee should be advised to lodge a new application with the gaining agency.

Classification, duties and the place duties are to be performed

48. Under rule 6(1) of the Classification Rules, an agency head must allocate an approved classification (as set out in schedule 1 to the Classification Rules) to each employee in the agency. Under s.25 of the PS Act, an agency head may, from time to time, determine the duties of an APS employee and the place at which those duties are to be performed.

49.A gaining agency head will need to take action under the Classification Rules to allocate an approved classification and to assign duties under s.25 of the PS Act to any employee who is moved to the agency under s.72(1)(a) of the PS Act.

50. It will be sufficient for a gaining agency head to execute a global instrument allocating to all employees who are moved under s.72(1)(a) of the PS Act to the agency the same approved classification as applied to them in their previous agency or a corresponding approved classification in the same group. Pending any action by the gaining agency head, the previous classification and duties should be regarded as continuing.

Where a person's approved classification is part of a broadband in a losing agency, the employee should be allocated the same approved classification in the gaining agency. A losing agency should ensure that, before any movements to a gaining agency occur, the approved classifications required under Classification Rule 6 have been identified for all employees, including those within broadbands.

51. Section 23(4) of the PS Act does not allow an agency head to reduce the classification of an APS employee without their consent, except in specified circumstances. An employee cannot be assigned duties at a higher classification except in accordance with clause 4.6 of the Directions.

Engagement of non-ongoing employees

52. Where non-ongoing employees are moved between APS agencies as a result of an administrative re-arrangement, the circumstances relating to the engagement of a person as a non-ongoing SES employee (as set out in PS Regulation 3.4), or as a non-ongoing non-SES employee (as set out in PS Regulation 3.5) are taken to be the circumstances under which the person is employed in the gaining agency.

53. The engagement of a non-ongoing employee who is moved as part of an administrative re-arrangement may be extended by the gaining agency head provided that the extension is made in accordance with the provisions of PS Regulation 3.4 (for non-ongoing SES employees) or PS Regulation 3.6 (for specified term non-SES employees) and clause 4.5 of the Directions. However, any provision of the PS Regulations relating to the extension of an engagement of a SES or non-SES non-ongoing employee applies to any extension of the engagement by the gaining agency head as if the total period of engagement was in the gaining agency.

Delegations and authorisations

54. The Australian Government Solicitor (AGS) addresses the issue of delegations and authorisations after a General Election in its Legal Briefing No. 61 of 14 November 2001 entitled 'After a General Election – Some Legal Issues' A copy of the Legal Briefing available at: http://ags.gov.au/publications/agspubs/legalpubs/legalbriefings/index.htm. It is expected that AGS will issue a revised Legal Briefing in the near future.

55. The Briefing advises that the changes in ministers, departments and secretaries which occur following an election make it essential that each agency review its instruments of delegation and authorisation.

56. The AGS advice notes that an instrument of delegation or a statutory authorisation made by a minister or secretary will continue to have effect following a general election if the only substantive administrative change is the person who holds the office of minister or secretary. Similarly, a delegation/statutory authorisation continues in effect where there has simply been a change in the designation of a minister, secretary or department. In both cases, however, it is clearly good administrative practice to provide new office-holders with the opportunity to reconsider these arrangements and issue new instruments of delegation/statutory authorisation.

57. In the case where functions and staff are moved between agencies, however, any delegations/statutory authorisations of power to persons within the losing agency will cease to have effect at the time the functions and staff are moved to the gaining agency and delegations/statutory authorisations will have to be remade. Delegations/statutory authorisations will also cease to have effect where an agency is abolished.

58. The AGS advice also indicates that the position is different in relation to instruments of authorisation that provide for specified persons to exercise relevant powers for and on behalf of an office-holder under the Carltona principle. All authorisations of that kind cease to have effect when the person holding the relevant office changes and all such instruments of authorisation should be re-made without delay. For example, an authorisation by an agency head for another person to enter into AWAs under s.170WK of the Workplace Relations Act 1996 (WR Act) on his or her behalf will need to be reviewed immediately if there is a change in the agency head of an agency.

Remuneration and other conditions of employment

59. The PS Act and PS Regulations describe the arrangements that apply in relation to the remuneration and other conditions of employment of persons moved within the APS as a result of an administrative re-arrangement (section 72(5) and regulation 8.1). These provisions apply in circumstances both where APS employees are moved to an existing APS agency and where employees are moved to a newly established APS agency.

60. PS Regulation 8.1(2) provides that the annual salary that applies to the APS employee on the day on which the move occurs is the greater of the annual salary that applied to that employee immediately before the move or the annual salary that would otherwise apply to the employee after the move (e.g. under any industrial instrument that applies to that employee in the new agency).

61. PS Regulation 8.1(3) enables the gaining agency head to preserve some or all of the previous conditions of employment of the employee through a determination under s.24(1) of the PS Act (a s.24(1) determination).

62. The following advice on the operation of these regulations provides broad guidance only and, especially if there is any uncertainty, it is recommended that agencies obtain their own legal advice.

Scenario 1 – Where APS employees are moved to an existing APS agency

63. Where an APS employee is moved to an existing APS agency, there are three steps in working out how PS Regulation 8.1 operates in a particular case.

Step 1: Identify what industrial instruments apply to the employee in the new situation.
Step 2: Apply PS Regulation 8.1(2) to determine the annual salary upon the date of the move.
Step 3: The gaining agency head decides whether it is necessary or appropriate to preserve particular conditions of employment from the losing agency, pending the entering into of a new CA or AWA under the WR Act, and, if so, makes an appropriate s.24(1) determination.

Step 1: Identify what industrial instruments apply to the 'moved' employee

64. The first task is to identify what industrial instruments, that is CAs, AWAs, awards and s.24(1) determinations, will apply to the employee following the administrative re-arrangement.

65. This involves looking both at the industrial instruments that applied to the employee in the losing agency, to see if they continue to apply, and at the terms of any industrial instruments of the gaining agency to see if they apply. In interpreting such instruments, it is important to note that where, as part of the administrative re-arrangement, there is a change to the name of a department, references in a CA or AWA to the old Department should be read as references to the renamed Department.

General approach

66. The provisions of the WR Act relating to transmission of awards, CAs and AWAs do not apply in the case of movements between APS agencies. This is because the employer remains the Commonwealth at all times where employment is under the PS Act.

67. The question of whether CAs, AWAs or awards would apply to employees moving from a losing to a gaining agency depends primarily upon the precise terms of the particular industrial instrument and on the intentions of the parties, usually as reflected in the 'parties bound', 'coverage' or 'application' clause of the relevant instrument.

68. Even if a CA or AWA continues to apply to an employee after a move, it may not always be possible to give effect to a particular provision in the new situation. For example, a CA may refer to consultative mechanisms or a staff development scheme that only existed in the losing agency.

Certified agreements

69. It is necessary to look both at whether any CA that applied to the employee before the move continues to apply, and at whether there is a CA in the gaining agency that applies to the employee.

70. In the most common cases:

if the losing agency's CA expressly refers to employees employed in a particular agency, that CA will cease to apply to employees who are moved under s.72(1)(a) of the PS Act to another APS agency; and/or
if the gaining APS agency has a CA expressed to apply to all non-SES employees of that agency, it will apply to any non-SES employees moved to that agency under s.72(1)(a) of the PS Act.

71. In other cases:

if the CA in the gaining agency does not apply to employees at a particular classification, it may exclude from coverage some employees previously covered by the losing agency's CA (e.g. Executive Level 2 employees); or
if a CA is expressed to apply to employees who are engaged to perform a particular function or employed in a specified operational unit, the CA will usually continue to apply to the relevant employee if that function or unit is moved from one APS agency to another.

72. However a situation may arise where an employee is covered both by the CA that applied in the losing agency and the gaining agency CA. In this circumstance, s.170LY(1) of the WR Act governs interaction between the two CAs. This has the effect that, if neither CA has reached its nominal expiry date, the CA that was certified first will prevail to the extent of any inconsistency.

Example

73. In 1998 the employment function of the then Department of Employment, Education and Training (DEETYA) was moved to the then Department of Workplace Relations and Small Business (DWRSB), which was at the same time renamed as the Department of Employment, Workplace Relations and Small Business (DEWRSB).

74. The effect of this was that:

the DEETYA agreement ceased to apply to the staff of the employment function who were transferred to DEWRSB as this was framed to apply to employees of DEETYA (subject to specified exceptions);
the Network Agreement, which was framed to apply to the staff of the then Commonwealth Employment Service and other named business units, continued to apply when these business units were moved intact to DEWRSB;
– the interaction of the Network and DWRSB agreements was governed by s170LY(1) of the WR Act;
where staff transferred to DEWRSB were not covered by the Network Agreement they became covered by the DWRSB agreement, as this was framed to apply to all employees of DWRSB (subject to specified exceptions); and
the DWRSB agreement continued to apply to the renamed DEWRSB;
– the agreement was subsequently varied to incorporate conditions of employment essential for the effective operation of the areas transferred from DEETYA.

AWAs

75. Generally, an AWA will continue to operate where an employee is moved under s.72(1)(a) of the PS Act to another APS agency as part of an administrative re-arrangement. This is because in such a case it is likely that the nature of their employment will not change. The employee's duties and responsibilities are likely to be the same as those which applied before the movement. The only major difference will be that the employee, although still employed by the Commonwealth, is employed in a different agency. Some AWAs, however, may have clauses that aim to limit the operation of the AWA to a specific agency. Whether this applies in an administrative re-arrangement will be affected by the precise wording of the AWA. Consequently any such clauses should be considered on a case by case basis. In cases of doubt, legal advice should be sought.

76. Where an AWA continues, PS Regulation 8.1 will have no work to do, as the salary and conditions under the AWA continue to apply.

77. Where an employee is covered both by an AWA entered into with the agency head of the losing agency and the CA of the gaining agency, s.170VQ(6) of the WR Act will govern the interaction between the two instruments. In most cases the AWA will operate to the exclusion of the gaining agency's CA, but this depends on the wording of the relevant CA and the dates of operation and expiry of the two instruments. One case where a CA will prevail (to the exclusion of any inconsistency) is if the CA came into operation prior to the AWA and does not expressly allow for a subsequent AWA to operate to the exclusion of the CA.

78. An employee may have a non-comprehensive AWA which is drafted by reference to the losing agency's CA or relies on references to other documents e.g. the losing agency's HR procedures or manuals. In such a case, the AWA should be interpreted to give effect as far as possible to the intentions of the parties. If this is impractical, consideration may need to be given to varying the AWA, terminating it and/or entering a replacement AWA.

Awards

79. The Australian Public Service Award 1998 (APS Award) binds all Ministers of the Crown for the Commonwealth in respect of APS employees employed under the PS Act. The APS Award, apart from various agency-specific provisions, applies to all APS employees (except where it has been specifically displaced (see below). The movement of APS employees from one agency to another does not therefore affect its application.

80. Most APS employees are covered by comprehensive CAs or AWAs, which displace the APS Award in its entirety. Situations could arise, however, where as a result of an administrative re-arrangement, an employee is no longer covered by a comprehensive agreement and so the APS Award applies for some purposes. Agencies should consult their client contact in DEWR if they have any enquiries.

Determinations under section 24(1) of the PS Act

81. In rare cases, the terms and conditions of employees in the losing or gaining agency may be governed by s.24(1) determinations e.g. where a newly created agency has not yet entered a CA or AWAs. Agencies may be required to seek legal advice and should consult DEWR if such a situation arises.

Step 2: Apply PS Regulation 8.1(2) to determine annual salary

82. PS Regulation 8.1(2) provides that, where an APS employee is moved between APS agencies, the annual salary that applies to the employee on the day when the move occurs will be the greater of:

the salary that the person was entitled to before the move; and
the annual salary that would, apart from PS Regulation 8.1, apply to the APS employee after the move.

83. The general policy approach that underpins this regulation is that, while employees should not suffer a loss in salary as the result of a move, they should move as quickly as possible to the salary regime of the gaining agency. In many cases, this simply means translating affected employees to the equivalent salary level or the nearest salary point specified in the gaining agency's CA as applying to their classification. However, if on the day of the move, the industrial instruments that now apply would result in the employee receiving a lower annual salary, PS Regulation 8.1(2) preserves the previous salary.

84. At a later date the employee may become entitled under the gaining agency's CA to a higher salary (for example under a salary advancement provision or as a result of an across-the-board salary increase). At that point, PS Regulation 8.1(2) ceases to apply.

85. It should be noted that PS Regulation 8.1(2) does not create an entitlement to any further increases that would have become available under a losing agency CA that has ceased to apply to the employee. Rather, the gaining agency's CA will, in so far as it applies to the employee, govern any future salary increases.

Step 3: Gaining agency head to make a section 24(1) determination, if necessary, to preserve some or all conditions of employment

86. PS Regulation 8.1(3) gives the gaining agency head the power to make a determination under s.24(1) of the PS Act so as to carry across some or all of the 'other conditions of employment' that applied to the APS employee immediately before the move. This is particularly relevant where the gaining agency's CA does not include conditions of employment essential for the operational requirements associated with the transferred functions (e.g. shift work or remote locality provisions).

87. A number of conditions apply to the making of a s.24(1) determination pursuant to PS Regulation 8.1(3), namely:

the agency head must consult affected employees before making such a determination;
the determination must be to the effect that some or all of the conditions of employment are to be the same as those that applied to the APS employee immediately before the move;
the determination cannot take effect any sooner than the date the employee(s) are moved to the new agency (although it can be made after the move, but retrospective to that date); and
as with all s.24(1) determinations, a determination is of no effect to the extent that it would reduce the benefit to an employee of any individual term or condition applicable to the employee under an award, CA or AWA. In particular, a s.24(1) determination cannot reduce the benefit to an employee of any individual term or condition in the gaining agency's CA.

88. It should be noted that the gaining agency head is not obliged to carry across any or all of the terms and conditions that previously applied where they are not considered appropriate to the needs of the gaining agency. In some cases, it may not be practicable to preserve particular conditions, e.g. access to work-based childcare may not be available in the gaining agency.

89. PS Regulation 8.1(4) provides that such a determination ceases to apply if a CA, AWA or award comes into effect after the move that applies to the relevant employee(s).

90. Government policy is that the terms and conditions of APS employees should be established through agreements under the WR Act. In line with this policy, gaining agencies should replace s.24(1) determinations as soon as practicable by varying existing agreements or by entering into replacement agreements. Varying or entering into new CAs or AWAs will also enable the gaining agency to integrate all of its employees into a common HR framework.

91. There are a number of points of detail relating to the making of s.24(1) determinations. Some are set out in DEWR Advice No 2000/9, others have arisen in advising on more recent cases. Agencies are thus encouraged to seek advice on the drafting of s.24(1) determinations from DEWR and/or obtain legal advice.

Scenario 2 – Creation of a new APS agency

92. Special issues arise where a new APS agency is created, whether it is a new Department, an Executive Agency or a Statutory Agency staffed under the PS Act.

93. The process for determining the terms and conditions of APS employees who are moved to the new agency is similar to that which applies where APS employees are moved to an existing APS agency. As any s.24(1) determination made in accordance with PS Regulation 8.1 only applies to existing APS employees moved to the new agency, it will generally also be necessary to make a separate s.24(1) determination creating interim remuneration and conditions for other employees who may be engaged by, or move to, the new agency at a later date (see Step 4 below).

Step 1: Identify what industrial instruments apply in the new situation

94. The position is as set out in Step 1 of Scenario 1, except in relation to CAs.

95. In some cases, where a separate business unit with its own CA has been given agency status, the existing CA continues to apply (this is not because of the transmission of business provisions of the WR Act but rather because of the terms of the CA).

96. The most usual situation, however, is that the newly created agency will not have a CA. In that case, unless an employee is covered by an AWA or a CA that carried across from the losing agency, the agency may need to seek legal advice on whether the Continuous Improvement in the APS Enterprise Agreement 1995- 96 (the APS Agreement) will apply. Agencies should contact DEWR is such a situation.

97. It should be noted that, even if it is known in advance that a new agency will be created and an employee will move to it, s.170WK of the WR Act does not authorise the gaining agency head to offer an AWA until the person is an employee of the gaining agency.

Step 2: Apply PS Regulation 8.1(2) to determine annual salary

98. In most cases, there will be no CA that applies to the new agency or a previous CA will continue to apply. The effect of PS Regulation 8.1(2), therefore, will almost always be to preserve the salary that the employee was entitled to before the move.

Step 3: Gaining agency head can make a section 24(1) determination to preserve some or all conditions of employment

99. The same principles as set out in Step 3 of Scenario 1 generally apply. The main difference is that it is likely that an agency may wish to preserve nearly all of the conditions of employment that previously applied.

100. The easiest way to do this will be to draft a simple determination providing that the conditions of employment of the transferred employees are the same as they enjoyed under the CA of the losing agency, subject to specified qualifications.

101. Such qualifications might include definitional changes so that particular references (e.g. as to the agency, agency head, minister and agreement) continue to work in the new context, or to exclude certain clauses that are not relevant to the new agency.

102. There may also be terms and conditions in the losing agency's CA that the gaining agency head does not wish to continue to apply. It is important to note that the s.24(1) determination will form part of the benchmark for the purpose of the 'no-disadvantage test' (NDT) when negotiating future agreements. Thus, any terms and conditions that the gaining agency head does not want to form part of the benchmark for the NDT should be specifically excluded from the operation of the determination.

103. There is a proviso in s.24(1) of the PS Act that a s.24(1) determination is of no effect to the extent that it would reduce the benefit to an employee of any individual term or condition applicable to the employee under an award or an agreement. If the salary in the losing agency's CA included a component in lieu of annual leave loading or other allowances in the APS Award or the APS Agreement, it is desirable that the s.24(1) determination include a recital that it provides an equivalent benefit in lieu of such conditions. Otherwise such conditions may be held to apply alongside the salary provided in the determination, with both forming part of the benchmark for the purpose of the NDT when negotiating future agreements.

104. Agencies should note that s.24(1) determinations made pursuant to PS Regulation 8.1(3) can only preserve some or all of the previous terms and conditions of an employee – they cannot be used to introduce a new regime. Thus, where employees have been moved to the gaining agency from several different APS agencies, the gaining agency will generally be required to preserve separate terms and conditions for the employees from each losing agency. It will only be at the point that the gaining agency negotiates a new CA and/or enters AWAs with the transferred employees that it will be in a position to harmonise the terms and conditions of all its employees into a single conditions framework.

Step 4: Gaining agency head makes a section 24(1) determination to set remuneration and other conditions for employees who are engaged by, or move to, the agency at a later date

105. Where no CA applies to the newly created agency, it may also be necessary to determine interim remuneration and other conditions of employment under s.24(1) of the PS Act for persons who are engaged by, or who move voluntarily to, that agency at a later date.

106. In these circumstances, when determining interim remuneration and conditions, it is important to have regard to the fact that such a determination will form part of the NDT test for future agreements under the WR Act. Accordingly, it is desirable:

not to compromise the ability to negotiate future agreements under the WR Act that comply with the Government's Policy Parameters for Agreement Making in the APS, by including inconsistent provisions in a s.24(1) determination; and
to include a recital that the base salary includes a benefit in lieu of any conditions in the APS Award or APS Agreement that have been rolled into base pay.

107. Further, agencies should note that there are some minor technical differences that apply to the making of such a determination under s.24(1) of the PS Act, due to the fact that it is not made in accordance with the process requirements of PS Regulation 8.1(3). In this situation, the following applies:

it is necessary to determine the employee's remuneration as well as other conditions of employment;
it is not necessary to consult the employee(s) before the making of such a determination; and
as PS Regulation 8.1(4) does not apply, it will generally be desirable to state that the determination will cease once it is displaced by a CA or AWAs.

108. Where staff have been moved to a new APS agency from several different APS agencies, the new agency head will face a more difficult practical choice as to what is the most appropriate interim conditions framework for employees who are later engaged by the new agency, pending the negotiation of new CAs and/or AWAs.

109. PS Regulation 8.1 is only intended to provide interim arrangements and it is important to move as quickly as possible to enter into agreements under the WR Act as well as to develop new HR policies and procedures. This will also overcome any unforseen difficulties in interpreting interim s.24(1) determinations that were drafted by reference to the CA of a different agency as well as to harmonise the terms and conditions of employees who came to the new agency from different agencies.

110. Once all the employees of a new agency are covered either by a CA or an AWA, it is desirable to formally revoke any s.24(1) determinations made.

Scenario 3 – Abolition of an APS agency

111. Where an APS agency is abolished, its staff and any residual functions could be transferred to another APS agency, which would manage the windup of the functions and any associated excess staffing situations. The situation would therefore be as described in Scenario 1.

Contacts

112. The general contact officer in the APS Commission for administrative re-arrangements is Richard Collis, telephone (02) 6202 3809, e-mail address richard.collis@apsc.gov.au. Enquiries on the following specific issues should be directed to the nominated contact:

recruitment action in train and temporary movement agreements—, telephone (02) 6202 3859;
SES recruitment issues and possible displaced SES employees—Peter Labrum, APS Commission, telephone (02) 6202 3815;
review of actions and ISACs—Patrick Palmer, APS Commission, telephone (02) 6202 3846;
effect of administrative re-arrangements on excess employees—Richard Collis, APS Commission, telephone (02) 6202 3809;
effect of administrative re-arrangements on other unresolved staffing action (suspected breaches of code of Conduct, assessment of performance etc)— telephone (02) 6202 3859 and
terms and conditions of employment including CAs and AWAs—Tulip Chaudhury, DEWR, telephone (02) 6121 7310, or Craig Johnson, DEWR, telephone (02) 6121 6970.

Lynne Tacy
Acting Public Service Commissioner
26 October 2004