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Part 4: Senior Leadership and Management Capability in Public Service

275 Part 4 of the SSA covers senior leadership and management capability in the Public Service. The provisions have been modified several times in an attempt to put in place a suitable, workable statutory regime for senior leadership and management development and capability.

276 When SSC commenced its review of the SSA in 2009, the provisions in Part 4 were not yet 'right': there was still a need to design and implement a statutory regime that was pitched at the right level for the Commissioner and chief executives, and that would meet present and future needs.

Revised Legislative Scheme

Background

Senior Executive Service

277 With the passage of the State Sector Act in 1988, the Commissioner ceased to be the employer of all public servants, as departmental chief executives became the employers of staff in their departments. The Commissioner's main functions in relation to Public Service employees were to negotiate conditions of employment, issue a code of conduct, carry out certain responsibilities relating to equal employment opportunities, and to "be responsible, in consultation with chief executives, for developing the senior executive service" [SSA s47(1)]. Accordingly, the Commissioner's responsibility in relation to capability development was pitched at the level of senior employees and was limited to the Public Service.

278 For a variety of reasons, the provisions relating to the senior executive service (SES) stagnated and the SES was effectively moribund within a few years. When the SSA came into force in April 1988, it included a raft of detailed provisions relating to the employment and training of SES members to the effect that:

  • the SSC may designate senior positions in departments as forming a part of the SES (appointments were to be made by the chief executive of the department, who was required to consult the SSC before making an appointment; it was an explicit requirement to give preference to the best suited person)
  • the number of positions forming part of the SES was not to exceed 500
  • no awards or agreements applying to any position in the SES were registered under the Labour Relations Act 1987
  • appointments to SES positions were for fixed terms of no more than 5 years; a person could be reappointed
  • the chief executive was required to consult the SSC before finalising the conditions of employment of persons in the SES
  • subject to any contract of service, the departmental chief executive could remove an SES employee from office for just cause or excuse, after consulting the SSC
  • if an SES member was not reappointed, or if the appointment was terminated before the expiry of the term, the departmental chief executive had to notify the SSC of the decision and the reasons for it. In these cases, the SSC had to either:
    • employ the person in the SSC for a period determined by the SSC, but not for less than 2 years (the person was not entitled to receive any payment in respect of the completion of the preceding term of office); or
    • terminate the person's employment (in accordance with provisions in that person's contract); in the case of termination, the SSC determined the provisions that were to apply upon the termination
  • the SSC was responsible for arranging for training of SES members and other people who, in SSC's opinion, had potential to be appointed to SES positions
  • departmental chief executives had a duty to comply with all reasonable requests by the SSC to make their employees available for training purposes for up to 15 days in any 12 month period.

Management Development Centre

279 A number of amendments were made to the original provisions by the State Sector Amendment Act (No. 2) 1989. But, with the virtual stagnation in practice of the legislative provisions for the SES, in 1994 the Commissioner, Don Hunn, and Public Service chief executives obtained the Government's authorisation to establish the Management Development Centre (MDC) Trust.

280 The purpose of the Trust was to establish a Management Development Centre to promote excellence in the education, training and the development of Public Service leaders and senior managers; to carry out research and disseminate related information; and to carry out relevant education, training and development projects. The Trust was to serve as a co-operative arrangement between the Commissioner and chief executives to deliver senior leadership and management development for the Public Service.

281 The MDC Trust was formally categorised as a Crown entity as from 24 November 1994. With the subsequent coming into force of the Crown Entities Act on 25 January 2005, the MDC Trust and five other Trusts ceased to be Crown entities and were listed instead in a new Schedule 4 to the PFA thereby retaining them within the State services and as part of the government reporting entity under the PFA. At the same time, the Trust was renamed as the Leadership Development Centre (LDC) Trust.

State Sector Amendment Act 2004

282 In parallel with the development of the CEA, a number of significant amendments to the SSA were also developed. They included the total substitution of part 4 of the SSA to remove all the provisions relating to the SES and replace them with a new statutory regime for senior leadership and management capability in the Public Service. The amendments, via s9 of the State Sector Amendment Act (No 2) 2004, came into force on 25 January 2005.

283 The main policy intentions underlying the amendments in 2005 were to:

  • establish shared responsibility for the Commissioner and departmental chief executives for developing senior leadership and management capability (in contrast to the previous regime under which the Commissioner was responsible for arranging for training); this would play out through -
    • the Commissioner being responsible for developing the overall strategy for developing senior leaders and managers in the Public Service, and issuing related guidance to chief executives
    • chief executives being responsible for senior leadership and management development within their respective departments, having regard to any such guidance issued by the Commissioner
  • replace the SES (a defined group of persons subject to detailed employment provisions) with an executive leadership programme (ELP). The ELP would provide training and development for people in the programme
  • enable the Commissioner to use his or her influence to assist the development of people in the ELP in a number of ways, mainly by requesting chief executives to make them available for training and development, and by arranging secondments for those people to assist their development (subject to their agreement and that of the respective chief executives)
  • enable the Commissioner to use his or her influence to assist senior leadership and management development elsewhere in the State services by sharing his or her strategy and related guidance with other agencies, and also by inviting employees in the State services to participate in development activities being provided for public servants; the Commissioner would need to consult the employee's chief executive. The policy understanding was that participation by state servants who were not part of the Public Service would be on a user-pays basis (it was not considered necessary to include this detail in the SSA).

Commentary

284 Despite the intention underpinning the 2005 amendments to remove detailed provisions such as those relating to the former SES, some aspects of the new provisions were still too detailed to be placed in statute and proved unworkable in practice. In particular, in relation to the ELP, the Commissioner in consultation with chief executives would:

  • set standards for entry to the ELP by Public Service employees
  • approve the entry of Public Service employees to the ELP
  • approve the development programme for each participant in the ELP, in consultation with that person
  • arrange for any employee in the ELP to be seconded to a Public Service department or other agency in the State services, subject to the agreement of the employee and chief executives concerned (this was a discretionary provision for the Commissioner).

285 Further, and importantly, in the context of the BPS reform agenda –

  • the shared responsibility of the Commissioner and chief executives, as provided for in s46, did not sufficiently identify the Commissioner's leadership role and responsibilities in this area
  • chief executives were responsible for leadership development in their departments and for co-operating with the Commissioner in relation to the ELP, whereas there was a need for a broader requirement to assist the Commissioner to fulfil his or her responsibilities more generally and to actively support and participate in the development of senior leadership across the Public Service.

286 The report of the BPSAG had major implications for the SSA. As indicated in the discussion about the role of the Commissioner in part 1 of the SSA, the report considered that the Commissioner "needs greater influence over the development of leaders and more active management levers to make the system more responsive" (paragraph 5.18). The report also considered the Commissioner should be supported by greater powers and authorities, including to:

  • "proactively deploy chief executives and specified second and third tier staff to anywhere within the State services in response to system needs, and
  • designate some positions as fixed-term developmental roles and jointly agree appointments with chief executives".

Recommendations to Cabinet

287 BPS Cabinet paper two, on better system leadership, supported the aims of flexible deployment but fell short of implementing the BPS report's recommendations in full. The paper noted that research shows 70% of development comes from on-the-job experiences, indicating the desirability of being able to offer flexible professional development pathways to people who want experience across a wide range of roles and agencies. The thrust of the proposals was to facilitate flexible deployment by establishing in statute the Commissioner's leadership role in relation to:

  • identifying and developing members of the leadership talent 'pool' across the Public Service
  • working with chief executives to fill senior positions in departments
  • transferring existing departmental chief executives between departments. This proposal is discussed above in relation to part 3 of the SSA dealing with chief executives.

Developing the leadership talent 'pool'

288 In relation to identifying and developing members of the leadership talent 'pool' across the Public Service, the Cabinet paper proposed replacing the existing provisions in ss46-48 with new provisions to the effect:

  • to establish the Commissioner's leadership role
  • to define the Commissioner's responsibility for developing and implementing a strategy for developing senior leaders
  • as part of the strategy, one of the prospective development mechanisms would be the ability to deploy individuals to developmental roles in departments, subject to their agreement and in consultation with appropriate chief executives
  • at some point, the Commissioner could invite other departments and agencies in the wider State services to participate in these initiatives.

289 Though not explicit in the Cabinet paper (and apart from cases where a person is a successful applicant through a merit-based appointment process to a different position as part of a career development pathway), the policy thinking included that flexible deployment would normally occur by way of relocation (eg as part of a joint agency project team or taskforce, possibly on a part-time basis) or collocation (eg as part of a joint agency hub) or secondment to a different agency. It was desirable to continue the Commissioner's ability to arrange for secondments (with the agreement of all relevant parties) for the purpose of senior leadership development. The Commissioner's ability to do so would:

  • be part of the Commissioner's implementation of the strategy for the development of senior leadership and management capability
  • continue to involve the State services where relevant
  • continue to be exempt, as already provided for in s49(2), from the requirements in ss60, 61 and 65 of the SSA (relating to merit appointments; notification of vacancies; review of appointments).

290 It was also part of the policy thinking that the Commissioner's ability to arrange for secondments as part of the implementation of the strategy would in no way affect or diminish the ability of chief executives to agree on secondments for their employees without reference to the Commissioner. Chief executives retain their rights and powers as employers, including their duty to act independently in relation to decisions on individual employees.

Filling senior positions in departments

291 In addition to ensuring that the Commissioner is able to secure the on-ongoing assistance of all Public Service chief executives in systems to facilitate the identification and development of leadership talent in the Public Service, there was also a need to ensure that the Commissioner is able to deploy senior leaders appropriately to areas of critical need in the Public Service. To this end, the Cabinet paper proposed that the SSA be amended to enable the Commissioner to designate certain positions in the Public Service as key positions which must be filled only by agreement between the relevant chief executive and the Commissioner, and that the SSA include an appropriate appointment process for such positions.

292 The policy intention for this proposal was to provide the Commissioner with an ability to influence the filling of senior positions with the aim of ensuring that:

  • appropriate consideration is given to system-wide leadership development in the filling of positions
  • positions in areas of critical risk are identified and the widest range of suitable candidates for appointment are considered.

293 The Cabinet paper specified that a position would constitute a key position by virtue of its developmental potential for senior leaders, or by virtue of the critical nature of the position in terms of the operation of the department.

294 It is important to note that, while secondments arranged by the Commissioner under the senior leadership development strategy (as well as any other secondments agreed between chief executives without involving the Commissioner) are exempt from the requirements in ss60, 61 and 65, these requirements do apply to appointments to key positions, ie: appointment on merit; notification of the vacancy; ensuring the appointment is subject to review.

Legislation drafting process

295 With reference to the appointment process for key positions, cl40 of the Bill:

  • enabled the Commissioner to designate a position as a key position after consulting the chief executive of the department or departmental agency
  • set out the criteria that a position had to meet in order to be designated as a key position
  • required the Commissioner to publish a list of key positions on an Internet site maintained by or on behalf of the Commissioner
  • enabled chief executives to appoint employees to key positions only with the Commissioner's agreement.

296 Cabinet specifically agreed, as part of the proposals pertaining to the flexible deployment of senior leaders across the system, that s33 be amended to clarify that the independence of chief executives in employment matters is subject to the new provisions [CAB Min (12) 16/10, paragraph 111]. This was reflected in cl26 of the Bill providing that the independence of chief executives is subject to the requirement that a chief executive may only appoint an employee to a key position with the Commissioner's agreement.

Select Committee process

297 Very few submissions commented on the amendments to the provisions relating in Part 4 of the SSA, and no changes were made to the Bill during the Select Committee process.

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