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Part 5: Government Workforce Policy and Personnel Provisions

298 Part 5 of the SSA was restructured by:

  • expanding the heading to part 5 from "Personnel provisions" to "Government workforce policy and personnel provisions"
  • inserting a new subpart 1 - Government workforce policy. The existing personnel provisions formed a new subpart 2.

299 There were three main issues relating to part 5 of the SSA:

  • inserting new provisions relating to the development and application of government workforce policy
  • expanding the Commissioner's ability to apply a code of conduct with variations to meet differing circumstances
  • streamlining and bringing consistency to the provisions relating to redeployment and technical redundancy.

Government Workforce Policy

Background

300 The provisions relating to government workforce policy originated in discussions within the SSC in relation to part 6 of the SSA. Initially, the issue for part 6 was to define the Commissioner's contemporary role in relation to the Employment Relations Act 2000. Those considerations soon broadened to the Commissioner's mandate concerning workforce matters more generally, as part of the Commissioner's system leadership role.

301 It would be beneficial for readers to refer first to the background to these matters, as set out in relation to part 6 of the SSA. The discussion includes SSC's initial thinking about potential amendments to part 6. In the end, no proposal was put forward to change the existing provisions concerning employment relations.

302 Other aspects of the proposal advanced and developed into the government workforce policy provisions that are now located in part 5 of the SSA.

Recommendations to Cabinet

303 As part of the shift in focus from responsibilities for negotiating collective employment agreements to a broader, strategic level concerning responsibilities for workforce matters, BPS Cabinet paper 6 proposed that:

  • to assist employers to make informed and prudent decisions on employment matters, the Commissioner's role would be to prepare standards on workforce matters for approval by the government. Of note reference to:
    • "standards" was preferred to the preparation of "guidelines" as a term that would add some 'starch', so that the standards were seen unequivocally as government policy and therefore must be followed
    • "workforce" matters was explicitly intended to be broader than negotiations about collective bargaining. Broadly speaking, workforce matters would cover things such as workforce strategies and the Government's Expectations for Pay and Conditions.
  • once approved, the standards would be issued as government policy by way of Order in Council
  • the OIC mechanism was intended to make the existing government workforce policy process more transparent, both procedurally and substantively, and provide a mechanism for how it would be applied: once issued by OIC, departments would be required to implement the policy (in the same vein as they must implement other government policy), Crown agents would be required to 'give effect' to the policy and autonomous Crown entities would be required to 'have regard' to the policy (similarly to their respective obligations under s103 and s104 of the CEA relating to government policy directions issued by their responsible Ministers).

Legislation drafting process

304 During the drafting of the Bill, the SSC and PCO agreed that the Bill should include a number of specifications and clarifications:

  • workforce policy must relate to workforce matters from a State sector system perspective
  • workforce matters include both employment and workplace matters, and could address things such as:
    • principles relating to pay or conditions; this specification was intended to lift focus and avoid perceptions of dictating bargaining limits or determining pay or conditions
    • workforce strategy guidance
  • the Governor-General, by OIC, would approve government workforce policy as a "Government Workforce Policy Order" (GWPO)
  • just as government policy can apply to groups of agencies or even individual departments or Crown entities, a GWPO would be able to be issued to groups of, or even individual, departments, Crown agents or ACEs; the GWPO itself would specify which agencies it applies to
  • as a matter of process and for the sake of consistency in relation to Crown Agents and ACEs, the Bill should include provisions equivalent to:
    • s115(1) in the CEA to the effect that the Commissioner must consult with affected Crown entities before recommending a standard for approval as government policy
    • s115(3) in the CEA to specify that a GWPO may be amended, revoked or replaced in the same way as it was given
  • a provision should require an OIC to be published on the Internet.

305 In terms of the nature and effect of a GWPO, the Bill clarified that:

  • a GWPO would not constitute a regulation
  • a GWPO would not override the independence of departmental chief executives in s33 of the SSA
  • and for the further avoidance of doubt, a GWPO would not override existing employment and other legal obligations.

Select Committee process

306 FEC discussed in depth the provisions in the Bill relating to government workforce policy. Twenty-three submissions as well as 1308 form submissions commented on GWPOs, all but three of them having a high degree of congruence in opposing the amendments.

307 Separately from the submissions, departmental advisers had already agreed to propose a number of amendments to the Bill as introduced to the House. The initial Briefing to FEC, February 2013, signalled that the Departmental Report would recommend:

  • a change in wording from "Government Workforce Policy Order" to "Government Workforce Policy Statement", to better reflect the intended purpose and effect of government policy on workforce and employment matters
  • a further change to clarify the content of government workforce policy by replacing "principles relating to pay and conditions" with "government's expectations about the negotiation of collective agreements and individual employment agreements in the State services (being expectations that do not determine pay or conditions)". It was never intended to interfere with the collective bargaining process or to override negotiated agreements about pay and conditions.

308 The Departmental Report also proposed a change in process such that Government Workforce Policy Statements would not be issued by the Governor-General by OIC, but would be approved by the Minister of State Services and be published on an Internet site maintained by the Commissioner, who must send any such Statement to all affected agencies. This process would align better with similar processes for the development and promulgation of government policy.

309 SSC also considered it would be beneficial to include a more specific avoidance of doubt clause about not overriding existing legal obligations (despite legal advice that the existing clause did not require any further clarification). Based on the test for legislative effect in s39(1) of the Legislation Act 2012, the Departmental Report proposed a provision to the effect that a Government Workforce Policy Statement may not:

  • "create, alter or remove employment or other legal rights or obligations, or
  • determine or alter the content of the law applying to employees or chief executives or the State Services Commissioner".

310 The provisions in the Bill [new section 33(3) and 55C(1)] that a Government Workforce Policy Statement would not override the independence of chief executives under s33 were superfluous. Decisions on individual employees would remain statutorily independent, unaffected by any policy statement about government's overarching policy position relating to approaches to employment relations and workforce capability across the State services. Accordingly, the Departmental Report recommended that the relevant references in the Bill be removed.

311 Departmental advisers agreed with certain points made in the submissions, some of which were addressed – at least in part – by the amendments summarised in the preceding paragraphs. In addition, advisers agreed with a further clarification recommended by the Law Society: to delete reference to workforce policy relating to workforce matters "from a State sector system perspective" (wording that was considered too wide and unclear) and replacing it with a more specific statement: "for the purpose of fostering a consistent and efficient approach to such matters across the State sector". This phrase would still reinforce the high level nature of the policy settings.

312 FEC discussed at length the provisions relating to Government Workforce Policy Statements and requested departmental advisers for written information on the following:

  • comment on FEC's concern that the emphasis on efficiency in s55B(2) - (that) sets out the purpose of government workforce policy in the following terms: Government workforce policy must relate to workforce (including employment and workplace) matters for the purpose of fostering a consistent and efficient approach to such matters across the State sector - placed the emphasis on efficiency and may shift the balance of considerations towards a focus on cost related matters
  • FEC asked for officials to consider a specific requirement to consult other interested parties in the drafting of a workforce policy (perhaps in s55B(1) to ensure avoidance of doubt about the process)
  • FEC queried how the practicalities play out for agencies that must "give effect to", and those that must "have regard to", government workforce policy statements.

313 The advisers' response is included in the document referred to in paragraph 252. The response indicates that a number of amendments were being prepared for the Revision Tracked version of the Bill:

  • the purpose of government workforce policy was expanded to "fostering a consistent, efficient, and effective approach to such matters across the State sector". As FEC commented in its Report to the House, this phrasing would represent a balance of impartial objectives, with each term carrying equal weight without bias; it would also set an enduring framework within which successive governments can set their workforce policies
  • in addition to consulting affected agencies during the drafting of government workforce policy, the Commissioner would also consult "any other parties that the Commissioner considers appropriate". Although the Introduction Bill did not impose limits on consultation, it was appropriate to amend the Bill to reflect the broader consultation that may occur.

Variations to Code of Conduct

The Act

314 Under s57 of the SSA, the Commissioner may set minimum standards of integrity and conduct and may do so by issuing a code or codes of conduct. Subsection (3) gave the Commissioner authority to vary a code for all or any Crown entities, the Parliamentary Counsel Office or the Parliamentary Service in specified circumstances, i.e. considering the legal or commercial context of the agency.

Commentary

315 The SSA did not authorise the Commissioner to vary a code for the Public Service or for particular groups or types of employees.

316 There are times when it might not be appropriate for a code of conduct to apply in its entirety to a Public Service department or to persons or groups of persons undertaking particular functions. Examples may include a person seconded to a role or having secondary employment where that person should be able to criticise government policy or not follow government policy, eg when a person undertakes part time lecturing at the Victoria University School of Government or secondment to the New Zealand Productivity Commission.

317 The issue was particularly pertinent for Ministerial Advisers. As explained more fully in relation to part 2 of the SSA, their roles and responsibilities are such that they cannot always be expected to act in a politically neutral way. But the standards issued by the Commissioner under s57 seek to build a unifying ethos across the State services: impartiality is one of the four elements, at the core of which is the principle of political neutrality. The Parliamentary Service, which is within the mandate of the Commissioner, is another area where major political neutrality issues also arise, for example regarding constituent secretaries. Already in late 2008, the Minister of State Services in the previous government was briefed on the issues and on SSC's proposal to develop a code of conduct for Ministerial Advisers. Soon after the change of government, the same issue was placed on the "Trust" agenda at a meeting on 5 February 2009 between the new Minister of State Services, Hon Tony Ryall, and the Commissioner.

318 In the current context of comprehensive amendments to the SSA, the SSC proposed that the Commissioner have more flexibility in applying a code of conduct, across two dimensions:

  • scope - by including Public Service departments among the agencies to which a variation or variations may apply, and also by enabling variations to apply to persons or groups of persons within an agency
  • basis - by allowing for variations to apply, not solely on grounds of the legal or commercial context of the agency as a whole, but also on grounds of the legal, commercial or operational context of the agency or of persons or groups of persons in the agency.

Recommendation to Cabinet

319 Cabinet agreed with the recommendation in BPS Cabinet paper six that the Commissioner's ability to vary a code of conduct may apply to any agency in s57 or to persons or groups of persons undertaking particular functions in the agency that the Commissioner thinks appropriate, taking into consideration the legal, commercial or administrative context of the agency or of the persons or groups of persons in the agency [CAB Min (12) 16/10, paragraph 104.2].

320 The Cabinet paper explained that the provision would be used sparingly and only in circumstances where it was unreasonable for a generic code to apply to individuals or groups of individuals.

Select Committee process

321 As recorded in the Departmental Report, a number of submissions commented negatively on this amendment; the majority of submissions demonstrated a misunderstanding either of the Commissioner's existing ability to alter the code or of the effect of the amendment in the Bill.

322 There was no amendment to cl44 in the Bill during the Select Committee process.

Redundancy Related Provisions

The Act

323 This part of the paper should be read in parallel with part two of this paper under the heading: "Reorganisation, redeployment, redundancy provisions".

Commentary

324 In accordance with the discussion in part two, the main proposals were concerned with rationalising and streamlining the dual sets of provisions that were in s30E/s61B and in s30F/s61A. Related, and more minor proposals, were to transfer s30D (with amendments) and s30G t0 part 5 of the SSA.

Recommendations to Cabinet

325 The main policy proposals in BPS Cabinet paper six were to rearrange part 5 of the SSA so that there would be one provision or an incremental series of provisions that:

  • provide for redundancies to occur in certain situations
  • continue existing provisions in the SSA that allow preferential treatment to affected employees, so as to encourage redeployment and minimise liability for redundancy compensation
  • prevent the payment of technical redundancy compensation when no real loss is suffered. The policy intent was to be fair to both employees and taxpayers by preventing double-dipping from public funds.

326 Legislatively, the first two policy proposals would be achieved by repealing s61A and s30F and replacing them with a new section to the effect that:

  • a chief executive may make one or more employees redundant if:
    • more persons are employed than the chief executive considers necessary for the efficient carrying out of the department's duties, or
    • their duties in their current department will no longer exist in a different department to which the functions of their existing department are to transfer
  • the existing provisions in the SSA that allow preferential treatment to affected employees would continue (ie, ss60, 61 and 65 would not apply if an employee is made redundant in either of those two situations and is offered another position in their existing department or any other department).

327 The third policy proposal would be achieved by replacing s61B and s30E with a new section to the effect that an employee will not be entitled to receive any redundancy payments if he or she is to be made redundant, and -

  • within the notice period and prior to their employment ceasing -
  • they are offered an alternate position -
  • in the State services -
  • on substantially similar conditions -
  • and on terms that treat service within the State services as if it were continuous service.

328 The concepts underlined above were discussed in depth during the Select Committee process, as indicated below.

Legislation drafting process

329 Relatively early during drafting discussions with PCO it was clarified that the Bill does not need to include specific provisions for a departmental chief executive to have the power to make employees redundant in the situations described above, on the basis that the provisions would have the effect of repeating what employment law already covers.

330 Making provision for the restriction of redundancy payments in certain situations was more complicated. Discussions centred on the two scenarios already covered in s30E, ie where an employee who is to be made redundant:

  • is offered equivalent employment, or
  • is offered, and accepts, other employment.

331 This table sets out the respective provisions that existed in s30E and those in the Introduction Bill.

  SSA s30E SSPFR Bill
Redundancy situation Position in Dept A ceases as a result of a transfer of functions from Dept A to Dept B. Notice of redundancy for any reason
 

Could apply also (by OIC) to transfer of functions from a Crown entity to Dept B

NB: "Dept" means a Public Service dept

Transfer of functions from a Crown entity to any Dept (ie Public Service)
Offer and acceptance Employee is offered, and accepts, other employment in Dept B Employee is offered and accepts another position in the State services
Offer Employee is offered equivalent employment in Dept B (whether or not the employee accepts) Employee is offered an alternative position in the State services
Tests Equivalent employment is - Alternative position is -
  (a) In substantially the same position (i) A position with comparable duties and responsibilities
  (b) In the same general locality (ii) In substantially the same general locality or a locality within reasonable commuting distance
  (c) On terms and conditions no less favourable than those that apply immediately before the offer of equivalent employment (including any service-related, redundancy, and superannuation conditions) (iii) On terms and conditions (including redundancy and superannuation conditions) that are no less favourable overall
  (d) On terms that treat the period of service with Dept A (and any other period of service recognised by Dept A as continuous service) as if it were continuous service with Dept B (iv) On terms that treat service within the State services as if it were continuous service
Timingof offer and acceptanceor offer In connection with that transfer of functions [s30E(1)(b)] Before the employee's employment has ended

Select Committee process

332 This set of amendments attracted considerable comment in the submissions to FEC and was discussed in depth by FEC. As the Departmental Report noted, all 24 submissions and 1309 form submissions opposed the proposed amendments. The general theme was that the provisions would substantially lessen the value of existing redundancy compensation clauses in collective agreements across the public sector.

333 Departmental advisers agreed with certain points made in the submissions and recommended changes to the Bill as introduced:

  • it was intended to retain the scope of the restriction on redundancy compensation to employees in the Public Service and to Crown entity employees where functions transfer to the Public Service. It was not intended to expand the scope to other employees in the State services, or to other situations affecting Crown entity employees. The Bill was amended to make this explicit in s61A(1).
  • the requirement for an offer to be on no less favourable overall terms and conditions, and on terms that treat service in the State services as continuous service, should also apply to the offer and acceptance of another position in the State services (not just to the offer of an alternative position).

334 Separately from the submissions, advisers recommended an amendment to block a potential 'gap' in case an offer might be made but the re-employment wouldn't be available immediately. The Bill was amended to clarify that the offer and acceptance of another position, and the offer of an alternative position, must relate to a position that begins before, on, or immediately after the date on which the employee's current employment ends.

335 FEC discussed the effect of the changes and the impact on collective agreements negotiated under the existing provisions. Specifically, FEC requested departmental advisers for written information on the following:

  • in relation to "comparable" duties and responsibilities:
    • whether alternatives to "comparable" were considered, and what options might be possible
    • whether there are legal definitions of "comparable" and "similar", including examples (e.g. different subject matter in apparently the same job)
  • the possibility of "staged" implementation and savings arrangements for the proposed changes to the redundancy provisions.

336 The advisers' response is included in the document referred to in paragraph 248. Rather than summarise the advice in this paper, it would be preferable for the reader to refer directly to the source material.

337 At a subsequent meeting in April 2013, FEC requested further written information on the following:

  • the meaning, including examples, of "no less favourable overall" ... relating to terms and conditions of employment
  • the meaning of "immediately after", in relation to the additional protection recommended by the Departmental Report for redundancy situations
  • further advice on how transitional scenarios would play out in relation to the commencement of the new redundancy provisions.

338 The advisers' response is included in the document referred to in paragraph 252.

339 In addition to accepting the recommendations in the Departmental Report, FEC recommended two further changes that were incorporated in the Bill:

  • the deletion of the test that an alternative position had to be on terms and conditions of employment that were no less favourable "overall". Whereas the policy intent had been to clarify that each term or condition did not necessarily have to be the same on a line by line comparison, but that the collective package of terms and conditions should be no less favourable, FEC was satisfied that existing law caters for that intention. FEC's Report recommended deleting the word "overall" on the basis that no change was intended to the existing law in respect of the interpretation of the "no less favourable" test.
  • the insertion of a transitional provision in the Bill (new s61AB) so that the existing law would continue to apply for 3 years from the Bill's enactment. As explained in FEC's Report, this would avoid any retrospective application of the Bill to agreements, whether individual or collective, already negotiated. The amendment would treat both collective and individual agreements equally by allowing either to be renewed or renegotiated until the end of the 3-year period.

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