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Last updated: November 2010
Machinery of Government changes
Machinery of Government (MoG) changes (or administrative re-arrangements) are terms that are commonly used to describe organisational or functional changes affecting the Commonwealth. Some common examples are:
- changes to the Administrative Arrangements Order (AAO) following a decision by the Prime Minister to abolish or create a department, or to move functions/responsibilities between Australian Public Service (APS) departments/agencies (these often occur after an election but can also happen at other times)
- the creation of a new statutory agency or executive agency, or the abolition of such agencies
- other movements of functions between agencies or into, or out of, the APS.
Movement of staff
Section 72 of the Public Service Act 1999 (the PS Act) provides for the movement of persons affected by an administrative re-arrangement (defined in the PS Act as ‘any increase, reduction or re-organisation in Commonwealth functions, including one that results from an order by the Governor-General’). Under this section the Public Service Commissioner may, if satisfied that it is necessary or desirable to give effect to an administrative re-arrangement:
- move APS employees to another APS agency – s.72(1)(a)
- move APS employees out of the APS to a non-APS Commonwealth authority - s.72(1)(b)
- move non-APS Commonwealth employees into the APS - s.72(1)(c), and
- engage any person as an APS employee in a specified agency - s.72(1)(d).
The ‘staff-follow-function’ principle generally applies to MoG changes involving moves within the APS and to moves between APS and non-APS Commonwealth employment (i.e. under ss.72(1)(a), (b) and (c) above). Under this principle affected employees are compulsorily moved with their function and, if the move is within the APS, their employment status (i.e. ongoing or non-ongoing) remains the same.
Section 72(1)(d) is a facilitative provision that enables persons to be engaged as APS employees (as a result of an administrative re-arrangement) without the need for normal merit competition.
Agencies should contact the Australian Public Service Commission when they become aware they are likely to be affected by a MoG change.
Remuneration and other conditions of employment
The PS Act and the Public Service Regulations 1999 (the Regulations) also describe the arrangements that apply in relation to the remuneration and other conditions of employment of employees moved within the APS as a result of a MoG change (s.72(5) and regulation 8.1).
In relation to these moves:
- The provisions of the Fair Work Act 2009 (FW Act) relating to transfer of business do not apply.
- Regulation 8.1(2) operates to at least preserve the salary that the person received in the losing agency prior to the move. It provides that the annual salary of an APS employee moved to another APS agency as a result of a MoG change will be the greater of the annual salary the person was entitled to before the move and the annual salary that would otherwise apply after the move.
- In most cases, employees will cease to be covered by the collective or enterprise agreement applying in the losing agency and will become covered by the gaining agency’s collective or enterprise agreement.
- Some employees (particularly SES employees) may have their terms and conditions of employment set by a determination made under s.24(1) of the PS Act, an Australian Workplace Agreement (AWA) or by a common law contract.
- A s.24(1) determination made in the losing agency will cease to apply to the employee when he/she is moved to a gaining agency and employees will generally need to renegotiate their terms and conditions of employment with the gaining agency.
- Whether or not an AWA or common law contract can continue to apply to employees moved to a new agency as a result of a MoG change will depend on the wording of the AWA/terms of the contract. Agencies are advised to seek legal advice in these circumstances.
- Regulation 8.1(3) enables the gaining agency head to preserve some or all of the previous conditions of employment of the APS employee through a determination under s.24(1) of the PS Act. Certain conditions apply to the making of a s.24(1) determination in these circumstances—for example there are certain consultation requirements. This is a discretionary power vested in the gaining agency head and where such a determination is made, regulation 8.1(4) provides that it ceases to apply if an enterprise agreement or other instrument setting terms and conditions of employment (e.g. another s.24(1) determination or written contract of employment) comes into effect that applies to the relevant employees.
In circumstances where APS employees are moved to a newly established APS agency, there will generally be no agency level industrial instruments in place. It is therefore likely that the gaining agency will need to make a collective s.24(1) determination to preserve some or all of the conditions that applied in the former APS agency until the new agency establishes its own workplace arrangements.
In relation to moves into the APS from other Commonwealth employment, regulation 8.2 enables the gaining APS agency head to make a determination to preserve some or all of the previous remuneration and other conditions of employment of the affected employees.
In relation to moves out of the APS to non-APS Commonwealth employment, sections 72(3) and 72(4) of the PS Act provide that affected employees are entitled to remuneration and other conditions of employment that are not less favourable than they were previously entitled to in the APS under a fair work instrument, a WR Act transitional instrument or a determination made under the PS Act.
It is possible that the transfer of business provisions of the FW Act may also apply to moves into, or out of, the APS, although this will depend on the circumstances of the particular case. Agencies should generally consult with the Australian Public Service Commission and seek legal advice in relation to such moves.
Publications
Legislation
- Public Service Act 1999, sections 72 and 24
- Public Service Regulations 1999, regulations 8.1 and 8.2
