Chapter 4. A Revised Legislative Framework for Australian Public Service Employment: The Successive Impacts of the Workplace Relations Act 1996 (Cth) and The Public Service Act 1999 (Cth)

By 1996, the laws governing APS employment were sourced from an interaction of:

It is important to note that the working relationship between the Commonwealth and its public servants may be characterised as an employer/employee relationship. This was the case even when, under the Public Service Act 1922 (Cth), there was a distinction between ‘officers’ permanently appointed to the service and ‘employees’ (who were usually engaged for short or fixed terms).^[4]

At common law, there were historical distinctions between a person who held an office and a person who was an employee. For example, salary may be payable to a person on the basis of holding an office for a particular period of time, whereas wages are payable to an employee on the basis of work performed (and may be withheld if work is not performed).

McCarry has discussed the difficulties of distinguishing between an ‘officer’ and an ‘employee’ in the public sector context. Given that the manner of the performance of work by officers was subject to control by the APS hierarchy, this meant the major indicium of the common law employment relationship was present.^[5] McCarry notes the possibility of a ‘pure’ officer who has a lawfully imposed independent function which is not the subject of control by an employer.^[6] In the public sector context however, there were very few ‘pure’ officers, so described, who had such an independence of function. Therefore, McCarry concludes that the common law criteria for the existence of an employment relationship would exist regardless of whether a statute referred to public servants as ‘officers’ or ‘employees’,^[7] and early High Court observations seem to confirm the contractual nature of the relationship.^[8]

Hence, public servants are engaged under a contract of employment. This contract of employment will therefore be a source of conditions of service, including terms implied by the common law. However, in the context of the APS, the overwhelming source of employment obligations has been legislation of the following types:

Although it has been noted that the Commonwealth could establish a public service without a general legislative framework,^[9] the Public Service Acts have in fact provided one since 1902.^[10] These Acts provide a common framework for public service employment and allow for the Parliament to express the values and culture it wishes to see in the public service. Moreover, legislation means that the Parliament can entrench principles and bestow rights and obligations which would be unavailable at common law (eg impartiality, appointment and promotion on merit, disciplinary and appeals processes).^[11]

The general industrial relations framework has become an increasingly important source of employment rights and obligations in the public sector. For some time, industrial relations matters were dealt with by a public service arbitrator.^[12] With the repeal of the relevant legislation,^[13] Commonwealth public servants were brought under the then Conciliation and Arbitration Act 1904 (Cth). With some express exceptions, awards made under general industrial relations legislation could prevail over conditions otherwise deriving from the general public service legislation.^[14]

Awards historically applied across industries, and the APS was regarded as an industry for this purpose. However, since the early 1980s the APS has undergone a series of reforms, both in terms of its internal structure and because of other changes within the industrial relations system (see below from 1.2).

The final and important source of APS employment rights and obligations has been the various statutes directed to specific aspects of the employment relationship and which includes:

The focus of the following discussion, however, will be on changes to the employment conditions which have resulted from changes to the general APS and industrial relations legislative frameworks since 1996. The above specific legislation has undergone relatively little change and is in fact ‘quarantined’ from the effect of workplace agreements made under the Workplace Relations Act 1996 (Cth) (‘WRA’).^[15]

The legal framework governing APS employment had been undergoing significant changes since the early 1980s. The reform agenda involved both the revision of public service legislation as well as the application of industrial relations reform to the APS.

In 1983, the then Government produced a White Paper entitled Reforming the Australian Public Service.^[16] The White Paper proposed a number of changes to management arrangements, including:

Key elements of the White Paper were implemented by the Public Service Reform Act 1984 (Cth).

In 1986, there was further devolution of personnel functions to departmental heads and streamlining of appeals processes.^[18] This was followed in 1987 by the replacement of the Board by the Public Service Commission and machinery of government changes that provided for so called ‘mega-Departments’.^[19]

In the late 1980s and early 1990s, enterprise bargaining came to be adopted in the Australian industrial relations system. International economic pressures were forcing the private and public sectors to examine their international competitiveness. Fundamental changes in the community wage-fixing and the industrial relations environment were a response to these pressures, linking future pay rises to improvements in productivity at the enterprise level.

Enterprise bargaining was embraced as a micro-economic reform, aimed at achieving increases in productivity and efficiency in individual workplaces.^[20] Wages outcomes were increasingly based upon structural adjustments and efficiency gains.^[21] In the APS context, the Second Tier Agreement of 1987 provides an early example of a wages/productivity bargain which provided for workplace restructuring.^[22]

Enterprise bargaining was adopted as a general wage-fixing principle in the 1991 ‘National Wage Case’. In 1992, the Industrial Relations Act 1988 (Cth) was amended to provide for certified agreements, with compulsory union involvement, at the workplace (rather than industry) level.^[23] These certified agreements prevailed over inconsistent provisions in industrial awards. In March 1994, the Industrial Relations Reform Act 1993 (Cth) moved the emphasis further in favour of enterprise bargaining by including provisions for enterprise flexibility agreements which could be negotiated without union involvement. The policy approach was that a major certified agreement would cover the APS as a single workplace, but with provision for further agreements of some matters to be negotiated at agency level.^[24]

In 1994, the McLeod Report recommended a new and simplified Public Service Act which emphasised the role, standards and values of the APS and with agency heads being primarily responsible for employment matters within their agencies.

Aside from the legal changes, there were also changes being implemented in APS management policy. In particular, there were changes being implemented to financial management practices. Managers were being expected to manage for results or ‘outcomes’. There was devolution of management and financial accountability to line management, which was also accompanied by a concomitant accountability for the outcomes actually achieved.

Therefore, by 1996, the APS had undergone a number of cultural changes, both of a legal and policy character. This chapter however has its focus on the changes to the legal framework affecting APS employment, and so it would be appropriate to have a more detailed regard to the legislative framework as it had come to exist in 1996.

Prior to the advent of the Workplace Relations Act 1996 (Cth), employment rights and obligations in the APS were generally determined within the framework provided by the PSA 1922 and the Industrial Relations Act 1988 (Cth), although this framework had itself undergone recent reforms.

By 1996 the PSA 1922, with a large number of amendments over the years, had come to represent a patchwork of provisions rather than a structured framework for regulating APS employment arrangements. Indeed, as will be seen, a significant amount of the rights and obligations in APS employment derived from the industrial relations legislative framework. Nevertheless, the PSA 1922 contained important provisions in the areas set out below.

The PSA 1922 provided for the creation and abolition of offices, for appointment to and transfer and promotion within the APS, and for the application of the merit principle in relation to appointments, transfers and promotions.^[25]

The PSA 1922 also provided for appeals against promotion decisions on the grounds of superior efficiency. However, by 1996, such appeals were limited to promotions below the senior officer grades. Persons who unsuccessfully applied for promotions at or above the senior officer grades could apply to the Merit Protection and Review Agency (‘MPRA’) on the grounds that there had been a breach of the merit principle (including by some form of discrimination).^[26]

Joint Selection Committees that included a union representative were also provided for and the decisions of such committees were not subject to appeal or review by the MPRA.^[27] The PSA 1922 also provided for employment equity issues through a requirement for agency equal employment opportunity plans and industrial democracy plans.^[28] It allowed for permanent part-time work^[29] and for the engagement of temporary and fixed term employees.^[30]

The PSA 1922 provided the framework for making inquiries into misconduct and for taking disciplinary action, including fines, reductions in salary, demotions and dismissals. Recent reforms had meant that these powers were generally exercisable by the Secretary of a department.^[31]

The PSA 1922 contained relatively complex provisions dealing with retirement and redeployment of officers who had been declared excess to requirements.^[32] For officers below the Senior Executive Service (‘SES’) level, the Australian Public Service General Employment Conditions Award 1995 (see below) operated to require certain procedures to be followed before a Secretary could take action to retire or redeploy excess staff.^[33]

The terms of the PSA 1922 allowed for appeals against redundancy decisions to be taken to the MPRA, however this avenue of review was blocked from 1995 because of the operation of the APS Enterprise Agreement (discussed below). By 1996, the sole avenue of review had come to be the unfair dismissal provisions of the Industrial Relations Act 1988 (Cth).

Complex mobility provisions dealt with the situation of former officers whose functions had recently been transferred outside the service. These provisions were the product of structural reforms in the public sector whereby some functions had been transferred (or outsourced) to either a public authority or private concern. The mobility provisions gave former officers certain rights to return to the service or to apply for jobs back in the service, and preserved long service leave rights.^[34]

One of the most important provisions of the PSA 1922, in terms of the employment framework, was s 82D. It provided for the Public Service Commissioner to issue written determinations in relation to terms and conditions of employment for officers and employees. These determinations dealt in detail with a large variety of terms and conditions of employment including allowances, leave and other benefits. Such conditions were often settled as a result of the industrial process, either in settlement of disputes or as an outcome of consultative processes.

GECA was a relatively recently made award which resulted from award restructuring and rationalisation efforts in the early 1990s. It represented the consolidation of a number of awards covering APS employment and dealt with matters such as:

GECA included award flexibility provisions to allow for variation of the award by an agency agreement (ie an agreement at department level rather than at service wide level). However, GECA provided that agency agreements could not affect base rates of pay and essential standards of employment conditions, namely hours of work, public holidays, recreation leave, sick and long service leave, maternity leave, parental leave, redeployment and redundancy arrangements.^[40]

In terms of its interaction with the PSA 1922, perhaps the key provisions of GECA were the redeployment, retirement and redundancy provisions which effectively controlled the manner in which the relevant provisions of the PSA 1922 actually operated.^[41] It provided for union involvement, processes for voluntary retrenchment, income maintenance, and retention periods for those being considered for involuntary retrenchment.^[42]

The APS Enterprise Agreement was the latest in a series of service-wide certified agreements under the IRA framework. It was a certified agreement under the then s 170MC of the IRA. As such, its provisions prevailed over both GECA and the PSA 1922.^[43]

Among other things, it provided for:

The APS Enterprise Agreement also provided for a continuing commitment to workplace reform and improved productivity and flexibility in the public service.^[45] It provided that agencies ‘may agree to reflect improved productivity outcomes from workplace reforms in benefits to staff and clients, but excluding pay increases and alterations to service-wide classification structures and the formal framework of the Public Service Act and Regulations.’^[46] This was an important departure (and reversal) from the immediately preceding certified agreements covering the APS, which had allowed for base rates of pay to be supplemented by agency agreements.^[47]

Since 1992, certified agreements under the IRA had also provided a limited opportunity for agency bargaining. A typical example was the then Department of Human Services and Health Agency Bargaining Agreement 1994, which provided for such things as flexible leave arrangements, selection procedures and supplementary pay.^[48]