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Ch 1. Beginnings: The 1902 Act

On 1 January 1901, when Federation became a fact, the departments then established were Attorney-General’s, Defence, External Affairs, Home Affairs, Trade and Customs, and The Treasury. The departments of Customs and Excise in each state were transferred into the new structure on the date of the establishment of the Commonwealth, but relevant state departments were not transferred to the Department of Defence until 1 March 1901.

All appointments to the public service were made under s. 67 of the Australian Constitution, and this arrangement continued until the commencement of the Commonwealth Public Service Act 1902.

Passage of Commonwealth Public Service Act 1902

The 1902 Act, for ‘the regulation of the Public Service’, received the Royal Assent on 5 May 1902 and came into force on 1 January 1903. At that date there were 11 374 officers under the Act. It was based largely on the public service legislation of the several colonies as existing prior to Federation, particularly Victoria and New South Wales, although moves for public service reform had occurred in all the colonies by the end of the 19th century. However, in the Second Reading Speech on the then Bill Sir William Lyne (Minister for Home Affairs and the Minister responsible for the public service) adverted to the need to legislate specifically for the new Commonwealth Public Service and expressed the view that the working of some of the state public service Acts had ‘not been as satisfactory as it might be’. The Minister went on to observe as follows:

The system [adopted] was instituted with a view if possible of removing the semblance of political influence. But I do not think that it is a good thing to substitute for that influence social influence, in regard to which neither Members of Parliament nor the public can exercise any control’. (CPD 13 June 1901, p. 1080)

Sir William Lyne, Minister responsible for the Public Service, 1901

Interestingly, he then observed that the proposed single Public Service Commissioner to be established for the Commonwealth would be better able to discharge the required responsibilities in these matters than had been the customary three-Commissioner Boards in most of the states (some of which had then been operating under difficulties and less effectively than had been envisaged). He expressed the hope that the Commonwealth Commissioner would be ‘a good man’ but professed to having ‘not the slightest idea as to where I am to obtain such a man’. Subsequently in the Senate, Senator Drake referred to expectations that the Commissioner would be ‘not only thoroughly efficient but superior to all influences political or social’ (Drake, CPD 1 August 1901, p. 3351).

Mr DC McLachlan (then Under Secretary of the NSW Department of Mines and Agriculture), who had served from September 1869 in the NSW Public Service, was subsequently appointed as the first Public Service Commissioner on 4 June 1902, with effect from 5 May 1902 (the date of Royal Assent for the new Act). The appointment was made to facilitate the subsequent commencement of the 1902 Act, under the authority of s. 4 of the Acts Interpretation Act 1901.

McLachlan seems to have been regarded as a capable and zealous officer in the state system and, in its 1980 annual report, the Public Service Board was to state that ‘his personality and character earned him a place of respect in Australia’s administrative history’. The Board also then observed that an insight into McLachlan’s direct style could be gained from the following extract from his first annual report:

The Commonwealth Public Service must not be looked upon as an asylum for the indolent or the incompetent. Each officer will be expected to show evidence of a strenuous official life, to work diligently and conscientiously and legitimately earn the salary he receives. Efficiency and economy must be the watchwords of this Service if public confidence is to be attained and maintained. (PSCr AR 1904, p. 65)

In that first report, McLachlan commented also in some detail on various provisions of the new Act, observing that there were ‘various instances wherein the Commonwealth Public Service Act displays a spirit of beneficence not exemplified in State legislation’. (PSCr AR 1904, p. 31)

Structure of 1902 Act

The Act is divided into 5 parts:

  • Part I—Administration
  • Part II—Divisions of Public Service and Appointments
  • Part III—Internal Administration
  • Part IV—Life Assurance
  • Part V—Miscellaneous.

The following paragraphs identify the principal or more significant elements in each of these parts, particularly to the extent that they can be seen as foreshadowing comparable provisions of the 1922 and 1999 Public Service Acts, and other matters bearing on the evolution of APS employment conditions.

Part I–Administration

Commissioner and Inspectors

This part (ss. 5–11) relates to the appointment, employment and independence of the Public Service Commissioner and the Inspectors (‘not exceeding six fit and proper persons’) who were to assist the Commissioner in the administration of the Service.

Enumerated powers of the Commissioner and Inspectors included:

  • inspection of departments and the economy and efficiency of their operations
  • identification of excess staff, for retirement or transfer by the Governor-General to other departments
  • power to summon witnesses and take evidence on oath, where considered material to a particular inspection, inquiry or investigation
  • an annual report by the Commissioner to the Minister for presentation to the Parliament on the ‘condition and efficiency of the Public Service’.

Permanent Heads

The Act established the officers specified in its Second Schedule as the permanent heads of their specified departments (in general, officers previously designated and recognised as Under Secretaries to Ministers in the state public services). Section 12(2) of the Act provided:

The Permanent Head of the Department shall be responsible for its general working, and for all the business thereof, and shall advise the Minister of such Department in all matters relating thereto.

Sir William Lyne commented on this provision as follows:

The clause does not mean that the permanent head is to be allowed to do exactly as he likes. The Minister must look to see that the work of the permanent head is properly done. I have inserted the clause after the experience I have had of the Public Service of New South Wales. We have sometimes had the head of the department fighting with the Commissioners, and feeling that he has been oppressed by them. We could not have the work done as it should be done under such conditions (CPD 13 June 1901,p. 1083).

Chief Officers

To facilitate the bringing together of former state public service powers and the officials who had previously administered them, the Act provided (s. 13) for the establishment of offices of chief officer. Sir William Lyne again:

…I propose that there shall be a chief officer in each of the States, because I recognise that we must depend to a large extent upon those who have been the permanent heads in the various states for carrying on the work in those States. The Chief Officer of each department will be in a special class, and will probably be the man who has been in the past the head of his particular department in his own State (CPD 13 June 1901, p. 1084)

Section 13(2) of the Act provided that the chief officer ‘shall have and may exercise and perform under this Act such powers authorities and duties as are prescribed or as are assigned to him by the Permanent Head of [the] Department’.

The intention was to throw ‘a great deal of responsibility’ on the chief officer, under the departmental permanent head including, for example, powers to deal with minor offences. In so doing, a degree of recognition was being given to the former status of these officers in the states. The role of chief officers became firmly entrenched, and was subsequently replicated in the 1922 Act. However, the chief officer functions became progressively less significant in the post Second World War period, probably associated with increasing delegation of the powers of permanent heads (who were able to exercise any of the chief officer powers). The separate chief officer provisions were ultimately repealed by the Public Service Reform Act 1984.

Officers of the Parliament

Section 14 of the Act established provisions for a separate structure and staffing of four parliamentary departments (Senate, House of Representatives, Parliamentary Library and Parliamentary Reporting Staff) and the then Joint House Committee, under the jurisdiction of the Presiding Officers, with the latter able to exercise Public Service Commissioner powers in relation to parliamentary staff. The Joint House Committee became a department in the 1922 Act. The same basic parliamentary department structure was retained in the Parliamentary Service Act 1999.

Exempt officers

Power to exempt from provisions of the Act (s. 3 of the Act) derived from similar arrangements applying in state legislation and served initially to protect existing, ‘nonstandard’ conditions of certain officers transferring to the Commonwealth. It applied also to ‘certain high officials, notably Judges, Government Auditors and others who, due to ‘the peculiarly responsible duties of their offices, [needed to] be free, unfettered and removed from the control of those charged with the administration of the ordinary Departments of the Public Service’.

Section 3 allowed additionally for the exemption of ‘a large number of minor officials whose time is not exclusively devoted to the Public Service’ and persons who, because of ‘the unskilled or peculiar nature of their duties’ were not seen as warranting the same security of tenure or rates of remuneration applicable to full-time career public servants (PSCr AR 1904, p. 28). In the same report, McLachlan described how the detail of the exempted categories evolved, and details of the so-called class exemptions were subsequently notified at intervals in the Commonwealth Gazette. (PSCr AR 1904, p. 29, 30)

Section 3 of the 1902 Act was essentially replicated by s. 8 of the 1922 Act (subsequently s. 8A) and remained in place until the latter Act was repealed in 1999, with continuing periodic gazettals (until recent years) of class exemptions, more commonly referred to as the Class Exemption List. Use of s. 8A in the latter stages, however, was essentially directed to notification of exemptions for specified individuals or particular categories of APS staff.

Part II—Divisions of Public Service and appointments

Divisional structure

Sections 15 and 16 of the Act established a public service constituted by four divisions and, in so doing, set firmly in place the concept of officers occupying public service offices, consistent with preceding state legislation. Specific provision for the creation, abolition and (re)classification of offices appears in s. 41 in Part III of the Act.

Section 16 sets out the make-up of the four divisions in the following terms:

16. (1) The Administrative Division shall include all Permanent Heads of Departments and all Chief Officers of Departments, and also all persons whose offices the Governor-General on the recommendation of the Commissioner directs to be included in such Division.

(2) The Professional Division shall include all officers whose duties require in the person performing them some special skill or technical knowledge usually acquired only in some profession or occupation different from the ordinary routine of the Public Service, and whose offices the Governor-General on the recommendation of the Commissioner directs to be included in such Division.

(3) The Clerical Division shall include all officers whose offices the Governor-General on the recommendation of the Commissioner directs to be included in such Division.

(4) The General Division shall include all persons in the Public Service not included in the Administrative, or Professional, or Clerical Division.

The intended composition of the Administrative Division is self-explanatory, although further research would be needed to establish the identity of additional ‘persons’ (if any) subsequently directed to be included in that Division, by way of Cabinet appointment.

In his Senate Second Reading Speech in the Upper House, Senator Drake had stated that the Professional Division would consist ‘probably of the representatives of two of the professions, the legal profession and civil engineers who perhaps may be required, and persons belonging to any other of the recognised professions’. Subsequently, Public Service regulation 112 provided that the Professional Division should include ‘Barristers, Solicitors, Medical Practitioners, Engineers, Architects, Actuaries, Land Surveyors, Draughtsmen, and others who, subject to the approval of the Governor-General on the recommendation of the Commissioner, are classified or admitted to the Service as such’.

The composition of the Clerical Division is not set out in any specific detail in the Hansard record, but the title was already in use (at least in the Victorian Public Service) and such references as were made to employment in that Division indicate that it covered occupations of the type included in the administrative/clerical categories in the later history of the Public Service. Likewise, the General Division was clearly intended to include lower-level clerical-type designations, clerical support staff, artisans and semiskilled and unskilled employees, to become later officers and employees of the Fourth Division under the 1922 Act.

Appointment to the Service

Broadly speaking, entry to the Service was to be by way of prescribed competitive examination (ss. 26 and 27 of the Act). Appointments were to be on six-month probation (s. 30). Except as authorised by the Governor-General, an appointee to the Service was required to be a ‘natural-born or naturalised subject of His Majesty’ (s. 26(1)) and was subject to a health check (para. 27(a)). In commenting on the need for the latter, Senator Drake observed:

I do not think it is desirable to take any weaklings into the civil service. It should not be looked on as a sort of asylum… I think that public or private charity should look after such persons and the public service for many reasons should not be used for their relief (CPD 1 August 1901, p. 3356).

Section 31 of the Act provided for ‘special case’ appointments without examination or probation, but with a requirement for tabling the appointment in parliament. Otherwise, s. 28 of the Act required entrance examinations to be held for the Professional, Clerical and General Divisions, designed to test the efficiency and aptitude of candidates for employment, but specified that the educational examination for the General Division was to be ‘of an elementary or rudimentary character’. Public Service regulation 119 subsequently provided that an examination for any of the specified categories in the Professional Division could be dispensed with, if the Commissioner reported such examination to be unnecessary. Section 43(4) of the Act made similar provision in relation to examinations for promotion or transfer.

The examination system introduced, as well as its origins in the previously existing state administrations, is described in some detail at pp. 15–24 of the first annual report of the Public Service Commissioner.

Commonwealth–state reciprocal service

Sections 35–39 of the Act made provision for reciprocal arrangements under which Commonwealth officers might undertake duties for a state administration or state officers undertake Commonwealth Public Service duties, apparently based on similar provisions in the NSW and Victorian public service legislation. These provisions were later incorporated, in essentially the same terms, in the 1922 Public Service Act, with later amendment to allow such arrangements to be made at Prime Minister/Premier level in place of Governor-General/State Governor agreements.

A much simplified version of the reciprocal service provisions is now contained in s. 71 of the 1999 Public Service Act.

Part III—Internaladministration

Apart from the previously mentioned s. 43 of the Act, providing for the creation, abolition and (re)classification of offices, Part III included significant provisions dealing with the following matters.

Promotion

Sections 42 and 44 of the Act provided that promotions were to be made by the Governor-General, on the recommendation of the Commissioner, on the basis of the relative efficiency of the officers of the department concerned or, in the event of an equality of efficiency, the relative seniority of those officers.

In his Second Reading Speech, Sir William Lyne had voiced his general expectation that officers would normally receive promotion in their own departments, as reflected above. However, s. 42 also allowed for promotion of an officer from another department, if it appeared that such a promotion would result in more efficient performance of the duties of the office concerned.

In s. 42, ‘efficiency’ was defined to mean ‘special qualifications and aptitude for the discharge of the duties of the office to be filled together with merit and good and diligent conduct’—a definition adopted virtually unchanged in the 1922 Public Service Act, but with addition of a ‘concessional’ assessment of the efficiency of an officer who had been absent on ‘active naval or military service’. An enhanced definition of efficiency was subsequently included in a new s. 50A of the Act in 1975.

Discipline

Sections 46–49 established a framework of disciplinary provisions, derived variously from state legislation, providing power for chief officers to deal with minor offences, to impose suspensions or to refer more serious offences for consideration by a three- person Board of Inquiry. The Commissioner was empowered to impose lower-order penalties (fines, deprivation of leave entitlements for a period, reduction in pay, classification or grading) or the Governor-General could dismiss the officer or require him to resign. In the case of Administrative Division officers, action had to be initiated by a minister, with any penalty to be imposed by the Governor-General, on the recommendation of the Commissioner.

Essentially the same framework was adopted, with some elaboration, in the 1922 Public Service Act (ss. 55 and 56), at which time also an Appeal Board mechanism was introduced for officers below the executive levels. That framework remained in place until it was revised substantially by the Public Service Act Amendment Act 1978.

Appeals

Section 50 provided for an officer to appeal to an Appeal Board (constituted by an Inspector, the departmental chief officer or his nominee, and a representative of the Division to which the officer belonged) on the basis that the officer had been ‘affected by any report recommendation made or action taken’ under the Act, but excluding a report or recommendation made in relation to a ‘special’ appointment from outside the Service, disciplinary action, incapacity for duties, forfeiture of office due to conviction or insolvency, or a requirement to retire after attaining 60 years of age. Appeals were determined by the Commissioner on the basis of the Board’s recommendation, or by the Governor-General on the recommendation of the Commissioner.

Part IV—Life assurance

In the absence of a Commonwealth superannuation scheme, ss. 51–58 of the Act required every appointed officer to take out life assurance with an approved company or society, or to have deductions made from his salary for like purpose. State officers transferred to the Commonwealth, who were previously contributing to a superannuation fund under a state law, were required to continue to contribute for the maintenance of that coverage.

In commenting on these provisions in the Second Reading Speech, Sir William Lyne made the following observations, which have a familiar ring from more recent times:

…there is a proposal to compel all officers to insure their lives, and that of course is a necessity where there is no provision for pensions. We have had an experience in the State of New South Wales with our superannuation fund that we do not want repeated in the Commonwealth. It seems to me that it was a mistake to commence the insurance in the way we did in that State because the system has practically broken down, and I do not know how much money the State will have to find to pay the public servants what is justly due to them. (CPD 13 June 1901, p. 1089).

In his first report, McLachlan expressed regret that, in accordance with s. 51 of the Act, the assurance provisions did not apply to every officer not entitled to a pension, foreseeing later problems in seeking to retire such officers at age 60, when many of them would have ‘outlived their usefulness’. It would be expected that those officers, having no pension rights, would become the subject of representations for them to remain on the public payroll and ‘not be turned adrift on the world unprovided for’—an entreaty ‘which might not unreasonably meet with an amount of public sympathy’ (PSCr AR 1904, p. 40–1).

Part V–Miscellaneous

A number of provisions in this Part are of interest principally because they were re-enacted in substantially the same form in the 1922 Public Service Act–for example:

  • s. 59 Performance of duties in absence (s. 88 of 1922 Act)
  • s. 76 Public notifications (s. 92)
  • s. 78 Payments (s. 90)
  • s. 79 Performance of work outside the Public Service (s. 91)

Other provisions of particular interest were as follows.

State officers

Section 60 of the Act preserved all ‘existing and accruing rights’, including retirement entitlements, of state officers transferred to the Commonwealth. In his first annual report, McLachlan discussed at some length the complexities occasioned by this provision, observing that they were ‘(p)erhaps the most embarrassing, intricate, and complicated questions that have confronted me in the administration of the Service’. These included ‘many unreasonable and untenable claims’ as to what were perceived to be ‘rights’, requiring legal advice from the Attorney-General (PSCr AR 1904, p. 12–14).

Naturalisation

Non-British subjects admitted to the Service prior to commencement of the Act were required under s. 63 to obtain a naturalisation certificate.

Forfeiture of office

Under s. 66, an officer convicted of any offence ‘on an indictment or presentment’ was deemed to have forfeited his office. Under the same provision, insolvency action in relation to an officer which involved ‘fraud dishonourable conduct or extravagance’ could result in dismissal.

Retirement

Section 73 allowed for voluntary retirement at age 60, a provision carried over into the 1922 Public Service Act, but removed as a consequence of the passage of the Superannuation Act 1976.

New Public Service regulations

From the time of his appointment to commencement of the new Act on 1 January 1903, McLachlan’s efforts were directed substantially to the preparation of the required Public Service Regulations, to come into operation on the same commencing date. In his first annual report, McLachlan commented on the difficulties experienced in seeking to bring together appropriately the different systems and practices which had governed the employment of staff transferred to the Commonwealth Public Service from the various states. The drafting of the regulations (300 in all) was completed in November 1902 and ratified the following month. McLachlan regarded them as comprehensive and ‘designed to meet every emergency that may arise in the working of the Service’, as far as this could be reasonably expected (PSCr AR 1904, p. 6).

Amendments to the Public Service Act 1902, related legislative changes and their context

Examination of the Public Service Commissioner’s annual reports indicates that little need was seen to seek amendment of the Act in its early years of operation. Eight years after its passage, McLachlan noted some relatively minor amendments which had been effected, and foreshadowed recommendations to the Government for other changes to improve departmental efficiency or to enable ‘the intention of the framers of the original Bill (to) be more readily applied’. However, he then went on to observe that:

… as a whole, the measure has stood the test of time and … the opinion expressed in my First Report as to its liberality and comprehensiveness still remains unaltered (PSCr AR 1910, p. 7).

As a note of encouragement, no doubt, to all would-be reformers, he also noted that ‘Public Service legislation is subject to a gradual process of evolution’.

General satisfaction with the 1902 Act and the manner of its implementation, however, enabled McLachlan to direct attention in his later reports to other significant contemporary issues.

Royal Commission on Postal Services

The 1910 report contains the first mention by McLachlan of the then ongoing Wilks Royal Commission on Postal Services, established by the government in July 1908, following frequent parliamentary and public criticism of alleged defects in the administration of the Postmaster-General’s Department, and disabilities considered to exist amongst staff of that department. Although not detailed in any of his reports, McLachlan appears to have had a significant involvement with the Wilks Royal Commission. His only further reference to that Commission appears in his 1911 report, as noted below.

McLachlan records that he had provided comments to the Government on the 1910 report of the Wilks Commission, which had expressed scathing criticism of the administration of both the Public Service Commissioner and the Postmaster-General’s Department.

The Report must be considered as one of the most condemning documents in Australian administrative history. It found the quality of the staff poor, particularly at senior levels where officers were bogged down in routine clerical work to the neglect of their supervisory and technical duties; the Department so starved of funds that it had been unable to meet the demands of the public or provide satisfactory working conditions for the staff and had had to resort to excessive overtime, the curtailment of leave and broken shifts and to employing large numbers of temporaries, many of them inefficient and disruptive, in permanent positions; methods of auditing and accounting that were quite archaic; insufficient inspection; failure to provide in-service technical training; salaries that were too low; faulty classification of officers; proportional grading a bar to efficiency, merit and promotion; post offices too elaborately classified; too many examinations, some of the papers serving no useful purpose; long delays in filling positions; an extreme difficulty in dismissing inefficient officers, and so on. The list of faults touched every conceivable aspect of the Department (Caiden 1965, p. 97).

The Royal Commission’s recommendations included, inter alia, the establishment of a Board of Management for the Department and its removal from the Public Service Commissioner’s jurisdiction. Predictably, McLachlan took strong exception to these recommendations, and his vigorous rebuttal comments to the government accused the Royal Commission of failure to provide evidence for its conclusions. For the public record, his own report comments that ‘… no sufficient evidence has been advanced to warrant departure from the basic principles governing the administration of the Service as defined by the Commonwealth Public Service Act 1902’. (PSCr AR 1911, p. 13).

Commonwealth employment outside Act

Any proposal for removal of an area of Commonwealth administration from Public Service Act coverage was anathema to McLachlan, and was to be also for his Public Service Board successors. By the time the Wilks Commission reported, both Commonwealth and state governments were paying increasing attention to possibilities for assigning government functions to independent statutory authorities. McLachlan, however, remained firmly committed to the objective of maintaining a unified government service. A combination of circumstances, including strong union opposition, disinclination of the then Labor Government to remove the Postmaster-General’s Department from the Public Service Commissioner’s jurisdiction, and the outbreak of the First World War, was to see McLachlan’s views prevail.

The ensuing five years from the Wilks report’s presentation, however, saw the emergence as statutory bodies of such significant government agencies as the Commonwealth Bank and the River Murray Commission. This new form of government agency was thenceforth to feature prominently in Commonwealth administration over the remainder of the century. As will be noted in Chapter 2 of this history, it was to become an ongoing issue for the Public Service Board.

Defence and returned soldier legislation

Although not mentioned in the 1910 report, an amendment of the Defence Act 1903–1910 in 1909 (Act No. 15 1909, s. 20) provided, in s. 136 of the Principal Act, that a person evading a personal service obligation under that Act would ‘remain ineligible for employment of any kind in the Public Service of the Commonwealth’, until the obligation was discharged.

In his reporting, McLachlan noted amendments to various legislation extending the administrative functions and staffing of departments, but not involving Public Service Act amendments. These included further amendments to the Defence Act, providing for a large proportion of positions in the Defence Department, then classified under the Public Service Act, to come in future under naval or military administration, as vacancies occurred, with further appointments being made under the Defence Act instead of the Public Service Act (PSCr AR 1911, p. 5–6).

McLachlan’s final report noted various amendments to the Public Service Act itself including, particularly, amendments designed to ensure that officers who had enlisted for war service would not have their normal public service conditions and entitlements prejudicially affected. Appointments and examinations for appointment to the Service were suspended for the duration of the war for males whose ages were within the limits of military age, subject to provision for exceptions in special cases. Provision was included also for preference to returned soldiers in the appointment of persons qualified by examination for entry to the Service, and for recognition of defence leave as part of the period of service of the officer concerned (PSCr AR 1915, p. 6–8).

McLachlan’s successor for the remaining duration of the 1902 Act (Acting Commissioner Edwards) reported that further concessions had been extended to returned soldiers by the Commonwealth Public Service Act 1917, bearing principally on service entry examinations and appointment conditions (PSCr AR 1918, p. 9). Of these, the most significant and enduring (by their subsequently being mirrored during much of the life of the 1922 Public Service Act) were the retention of appointment eligibility to the age of 51 years, and acceptance of external educational qualifications in substitution for qualifications obtained through public service examinations.

Employment under the Public Service Act itself was modified significantly for some five years by the Defence (Civil Employment) Act 1918 which provided that, for the duration of the war, and 12 months thereafter, public service officers in the Defence Department (including officers on loan to that department) ceased to be subject to the Public Service Act, other than for life assurance matters, and were deemed to be persons employed in a civil capacity in connection with the Defence Force, unless they objected in writing within a prescribed time. Prior to this legislation, significant numbers of the department’s civilian employees had already become employed under the Defence Act and been exempted from Public Service Act provisions. The legislated provisions were to remain in force until 1923.

One further defence-related amendment of the Public Service Act was to occur near the conclusion of the First World War. Edwards refers to inclusion of a provision, under which the Governor-General could dismiss an officer, in respect of whom a Royal Commission appointed to inquire into ‘the origin of birth and parentage of persons in the Public Service or employ’ had expressed the opinion that the continued service of that officer would be detrimental to the public safety or the defence of the Commonwealth (PSCr AR 1919, p. 11–12).

Departments and functions

The departmental structure of the public service was to undergo little change in the 20 years after Federation. The seven departments, newly created or transferred from the states in 1901, remained in place virtually unchanged throughout the period. The number increased to eight in 1911, with the creation of the small, separate Prime Minister’s Department, evolving from the Prime Minister’s Office, which had operated as a section of the then External Affairs Department. At the same time, the staff of the Public Service Commissioner, as well as staff of the Auditor-General and of the Executive Council, were brought within the jurisdiction of the new department.

The number of departments again reverted to seven in 1919 when, as previously mentioned, the civilian staff of the Defence Department ceased to be employed under the Public Service Act and became subject to the 1918 Defence (Civil Employment) Act. The department was consequently abolished and not re-established until 1923, the total number of departments then having increased to nine, as a consequence of the creation of the Commonwealth Health Department in 1921.

Although a separate Navy Department had been established in 1915, its staff were employed under the Naval Defence Act 1910–11. Accordingly, no officers of that department were subject to the Commonwealth Public Service Act, and the department itself was not recorded as a separate entity in the Public Service Commissioner’s reports.

While the number of departments remained largely unchanged during the McLachlan and Edwards periods, the public service which they administered more than doubled in size between January 1903 and June 1922, with numbers of permanent staff increasing from 11 374 to 24 759 over that period. The rapid expansion was a direct reflection of increased population, with attendant growth of postal, telegraphic and telephonic facilities. Additionally, departmental services were periodically transferred from the states to the Commonwealth under the provisions of the Constitution Act, or as a consequence of the establishment of new functions and branches in federal departments. Resultant new Commonwealth services and activities included those dealing with statistics, meteorology, lands and survey, arbitration in relation to general industry, patents, trade marks and copyright, planning for the establishment of a federal capital, taxation, pensions, note and stamp printing, quarantine, lighthouses, commerce and navigation.

Notwithstanding the increased number of Commonwealth functions, the PostmasterGeneral’s Department remained the dominant agency in staff numbers terms. At Federation, it made up 89 per cent of the public service. By June 1922, the proportion still remained in excess of 79 per cent. Its sheer size and the huge geographical dispersion of its functions almost inevitably produced ongoing management problems of the nature and scope addressed by the aforementioned Postal Services Royal Commission.

Public service arbitration

Determination of the pay and conditions of Commonwealth public servants remained solely within the Public Service Commissioner’s hands during the early years after Federation. Eventually, however, the 1910 Fisher Government moved to introduce legislation (to become the Arbitration (Public Service) Act 1911) to give public servants access to the Commonwealth Court of Conciliation and Arbitration, with associated rights of representation of the Commissioner and Ministers before the court.

Although not addressed specifically in his annual reports, the development was not welcomed by McLachlan. With the assistance of WJ Skewes (later, a member of the first Public Service Board), McLachlan vigorously contested every case brought before the court by the public service unions. In his reports, the Commissioner summarised the nature of the cases but, beyond this, essentially confined his comments to references to the increased costs to the Commonwealth of the court’s decisions and awards, and to the significant additional workload imposed on the Commissioner’s office by the various proceedings.

The powers of the court were wide-ranging and, as a consequence, capable of modifying significantly decisions taken or action proposed by the Commissioner, much to his annoyance. Notable aspects included the power of the court to include in an award or order ‘any matter which the Court thinks necessary in the interests of the public or the Public Service’, without restriction to the specific claim and its subject matter. Awards of the Court could not be appealed against or challenged in any other Court.

As discussed in Chapter 2, McLachlan was later to be uninhibited in his criticisms of the arbitration system in his Royal Commission report on the Public Service. Before the recommendations in that report had been addressed fully, however, the then government moved to enact new public service arbitration provisions in the form of the Arbitration (Public Service) Act 1920. That Act provided for appointment of the Public Service Arbitrator to deal with public service matters handled previously by the Court. Assent was given to the legislation on 15 December 1920. The Arbitrator’s separate jurisdiction was then to remain in place in its essentials until 1984, when it was transferred to the then Conciliation and Arbitration Commission.

McLachlan’s Royal Commission report was concerned with all aspects of the operation of the Commonwealth Public Service. Arbitration concerns, however, featured prominently, as illustrated by the following extracts from the summary of the report’s findings and recommendations:

(3) The operations of the Arbitration (Public Service) Act have greatly increased the work and responsibilities of the Public Service Commissioner and Inspectors, and rendered departmental working more difficult and complex.

(4) The Arbitration Court has found the greatest difficulty in following the intricacies of Public Service organization, with the result that awards have been productive of many anomalies and inconsistencies.

(9) The results of six years of Public Service arbitration have been disloyalty, extravagance, and reduced efficiency.

(10) Continuance of the Arbitration (Public Service) Act upon the statute-book will have serious and disastrous effects as regards discipline and efficiency of the Service, and inflict an unjustifiable and grievous burden upon the taxpaying community.

(13) The Commission should be constituted the sole authority for settlement of salaries and wages, hours of labour, and conditions of service of permanent, temporary, and exempted employees, and his decisions, subject to disallowance by Parliament, should be final and conclusive (McLachlan Report 1920, p. 90).

With the new public service arbitration legislation having been in place for some two and a half years, Acting Public Service Commissioner Edwards took the opportunity in his final report to add his own endorsement of the earlier McLachlan criticisms:

My considered opinion is that arbitration in the Public Service has failed to achieve any other end than to give some officers higher remuneration, much higher in some cases than the circumstances justify, and to embarrass Departments by imposing working conditions which are difficult to meet and which in many instances are not necessary (PSCr AR 1923, p. 46).

Almost four years earlier, Edwards had cited a particular example which would no doubt have had ringing endorsement by McLachlan—an award of the court in favour of the Professional Division Officers Association represented ‘the most startling instance of liberality as to rates of payment that has presented itself in the history of the Arbitration (Public Service) Act’ (PSCr AR 1919, p. 16). Edwards’s observations did not acknowledge any positive aspects of the new legislation but, along with those of his predecessor, clearly have not served to change significantly (other than in terms of mechanics) the course of public service arbitration history and practice.

Retirement of McLachlan

McLachlan retired as Public Service Commissioner in May 1916. He had served in the position since its inception, with prior experience at permanent head level in the NSW Colonial Service. Shortly before his appointment as Commissioner, the April 1902 edition of the journal of the NSW Public Service Association had attested to ‘his well-deserved popularity, his zealous administration, his unflagging industry, fairness, geniality, decisiveness and ability’ (Caiden 1965, p. 65).

In his new position, McLachlan had the pivotal role in 1902 in bringing together former state departments into a federal public service, and supervised the systematic salary classification of all officers in those departments. He likewise was significantly involved with addressing the findings and recommendations of the Royal Commission on Postal Services in 1908–09 (which had commented adversely on his own stewardship in that area), and had to deal with the immediate consequences for the Service of the commencement of the First World War in 1914. It could be asserted, in relation to the early years of his incumbency, that ‘he had established a new system of personnel administration which had so completely replaced the old that within the space of seven years political patronage, official nepotism and "work-shy" public servants had little relevance in the Commonwealth Public Service’ (Caiden 1965, p. 92).

McLachlan’s contributions as Commissioner were noted by Acting Commissioner Edwards in his twelfth report (PSCr AR 1917, p. 7–8) and reiterated by Minister Groom in his Second Reading Speech on the 1922 Public Service Bill, including the tribute that McLachlan had ‘laid the foundation of Federal administration’ (CPD 28 September 1922, p. 2841).

Likewise, in its first report, the Public Service Board observed that his ‘splendid pioneering work from 1902 onwards is today strongly reflected in the management and control of the Service (PSB AR 1924, p, 95).

As illustrated by the report of the Postal Services Royal Commission, however, McLachlan was not without his critics. By the end of the first decade of the 20th century, the Government had shown itself less inclined to give McLachlan free reign in administering the public service, and was prepared to overrule him. His vehement opposition to extension of arbitration rights to public servants, and his continued vigorous opposition to union claims (the objectives of which ran contrary to his own firmly held beliefs as to what was in the best interests of maintaining an efficient, effective and economical public service) had inevitably attracted criticisms of arrogance, insensitivity and disregard of the spirit of the 1902 Act.

Notwithstanding a progressive build-up of parliamentary and press criticisms and increasing sympathy and support for staff and union concerns, McLachlan continued to resist pressures for any significant change of approach, through to the end of his time as Commissioner. His subsequent Royal Commission report was then to give him further opportunity to seek to influence the course of future reforms. While not entirely successful in the latter regard, he was nonetheless to make a major contribution to the further evolution of the legislative framework for the federal public service.

The Edwards interregnum

On McLachlan’s retirement, Edwards was appointed as Acting Public Service Commissioner. As reflected in the preceding comments on public service arbitration, the period of acting was to extend for seven years, as a consequence of the circumstances of the First World War, the ensuing establishment of the McLachlan and Economies Royal Commissions (discussed in more detail in Chapter 2), and the prolonged period of parliamentary consideration of proposed legislation, which was to culminate in the 1922 Public Service Act.

McLachlan’s report was presented to the Government in January 1919. While Edwards clearly had sympathy with the thrust and proposals in that report, his own annual reports offered no detailed comment on its content, or on the associated Economies Commission report, provided finally to the Government in November 1920. The two reports, however, set the scene for enactment of legislation to replace the 1902 Act.

Edwards’s final report in May 1923 foreshadowed the then expected early commencement of the Commonwealth Public Service Act 1922 (which occurred on 19 July 1923, following a change of Government late in 1922) and the appointment of a Board of Commissioners, but makes no reference to the detailed content of the new Act.