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Last updated: 29 November 2007

Implementing Machinery of Government Changes: A good practice guide

This publication has been updated.

The Second edition is available at www.apsc.gov.au/publications10/machineryofgovernment.htm

5 People management

MOG changes can cause a large degree of disruption to employees. If human resource issues are not managed appropriately, staff morale may suffer, leading to staff attrition. As described in section 3, it is good practice for the gaining agency to establish a steering committee or working group to manage and oversee staff changes and develop a people management strategy.

For effective change management, agency heads should advise staff on the rationale for, and the nature and extent of, the changes and should provide regular updates to staff. Agencies also need to consider relevant human resources legislation, principles and policies, particularly in relation to staffing and equity issues.

Agencies affected by a transfer of functions will need to establish early contact and work together in a cooperative manner to ensure continuity of Government business and a minimum of disruption to employees. As noted in section 3, documentation of the process is essential; it is highly desirable to develop MoUs detailing all decisions agreed between agencies, particularly relating to payment of transition costs and recovery of costs at a later stage. This is important where a losing agency agrees to continue providing some services for a period, such as allowing employees to remain in its accommodation and maintaining communications and information technology services. It will be necessary to record these expenses and to recover the cost from the gaining agency at a later date.

Agencies need to address the following as a matter of priority:

identification of affected employees including whether physical relocation is needed
connection to agency communications and information technology systems, including email
calculation of employee entitlements
transfer of hardcopy and digital personnel records of affected employees including personnel files and leave records (see section 6 for information on transfer of records).

Agencies may choose to finalise performance appraisals and, where relevant, make arrangements for calculation and payment of pro rata performance bonuses to staff leaving the organisation.

Agencies should also identify any other outstanding employee-related actions, such as investigations into suspected breaches of the Code of Conduct, harassment complaints, management disputes, non-performance, etc., and should contact the Commission for advice as to which agency should complete the action.

Affected employees should be consulted throughout these processes, kept informed of developments, and given the opportunity to speak to managers regarding any concerns they may have. Gaining agencies should provide induction sessions and information packages to help staff settle into the new organisation.

Before leaving an agency, employees must return agency items in their possession, such as vehicles, laptops, mobile phones, credit cards, and security passes (although there may be occasions where agreement is reached for an employee to continue to access the premises for a defined period for a particular purpose, for example, to finalise a project). In some cases, staff transferring to the gaining agency may be permitted to take certain items (such as phones and vehicles) from the losing agency, as part of an agreed transfer arrangement.

Employees should consider the implications of the transfer on delegations or authorisations required to perform their duties, governance documents, contractual arrangements, and any outstanding procurement or legal action, and advise the gaining agency of requirements or issues.

5.1 Induction of transferred employees

The gaining agency should ensure transferred employees are given an appropriate induction to the agency as soon as possible to provide them with information including:

the organisational structure
management systems, including performance management
the agency’s systems and arrangements for how its work is prepared, including information communications and technology issues and formats required for written material, recordkeeping policies and practices
workplace arrangements, remuneration and classification structure.

5.2 Legal framework

Section 72 of the PS Act provides a head of power for movement of staff whose duties are affected by MOG changes. The Commissioner may, if satisfied that it is necessary or desirable in order to give effect to an administrative re-arrangement:

move APS employees to another agency—section 72(1)(a)
determine that a person ceases to be an APS employee and becomes an employee of a specified Commonwealth authority—section 72(1)(b)
determine that a person ceases to be employed as a non-APS (Commonwealth) employee and becomes engaged as an APS employee in a specified agency—section 72(1)(c)
engage any person as an APS employee in a specified agency—section 72(1)(d).

The Public Service Regulations (PS Regulations) provide that any action taken, or not taken, under section 72 of the PS Act is not a ‘reviewable action’ for the purposes of section 33 of the PS Act. In other words, an employee is not entitled to a review of any action taken under section 72—see regulation 5.23 and Item 5 of Schedule 1 of the PS Regulations.

The following information is concerned with movement of employees between APS agencies under section 72(1)(a) as a result of MOG changes. If, as a result of the changes, there is a need to move staff into or out of the APS, the Commission and DEWR should be consulted.

5.3 Staff follow function

The general principle of ‘staff follow function’ applies to MOG changes. Under this principle, affected employees are moved with their function, and their employment status (i.e. ongoing or non-ongoing) remains the same.

The losing agency will need to identify the ongoing and non-ongoing employees who are to be moved and provide the Commission with the name, AGS number and APS classification of those employees. The Commissioner will make a determination under section 72(1)(a) of the PS Act to move the affected staff to the gaining agency. The names and other relevant details of staff to be moved will be set out in schedules to the determination.

In most cases, identification of the employees to be moved will be a straightforward exercise. Complexities can arise, however, where a functional or programme area is to be split. This more commonly affects support functions (e.g. corporate services areas). There may need to be detailed negotiations between the losing and gaining agencies to identify the staff to be moved. As a general rule, unless exceptional circumstances apply, the number of corporate services staff who are transferred will generally be in proportion to the number of programme staff leaving the losing agency.

5.3.1 Non-ongoing employees

A section 72(1)(a) determination will move identified non-ongoing employees to the gaining agency for a period equal to the unexpired part of their existing term of engagement, or for the remainder of the duration of the task for which they were originally engaged, or on the same irregular or intermittent basis as that on which they were originally engaged.

5.3.2 Employees on leave, secondment or temporary assignment

In identifying employees who are to be moved, the losing agency will need to provide details of any employees who normally perform work associated with the function that is to be moved but who are on paid or unpaid leave (including employees granted leave without pay to take up statutory appointments, or employment under the Members of Parliament (Staff ) Act 1984 or the Governor-General Act 1974), those on long term sick leave including where compensation payments are involved, and any employees who are seconded to another employer. All these employees will be moved to the gaining agency with effect from the date specified in the section 72(1)(a) determination but will not normally commence working there until their period of leave or secondment has expired.

The losing agency will also need to identify and provide details of any employees who normally perform work associated with the function that is to be moved but who, at the time of the MOG change, are temporarily performing duties in another part of the losing agency that is not affected. Employees in this situation are also moved to the gaining agency with effect from the date specified in the section 72(1)(a) determination and will commence work in the gaining agency on that date. In these circumstances, however, it is possible for the employee and the two agencies concerned to enter into a temporary movement agreement under section 26 of the PS Act, which would allow the employee to continue performing duties in the area in which they were working before the MOG change came into effect.

An arrangement to temporarily assign duties to an employee at a higher level within the employee’s agency under section 25 of the PS Act is not automatically preserved when the employee is moved to the gaining agency – the section 72(1)(a) determination will move employees at their APS classification. Rule 6(2) of the Public Service Classification Rules (the Classification Rules) provides that an ongoing employee temporarily assigned duties at a higher classification is not allocated a temporary higher APS classification.

Where there is an operational need, the gaining agency can continue any such arrangements by reassigning the higher duties under section 25 of the PS Act to an affected employee on or after the date of the move, although there is no obligation to do so.

5.3.3 Impediments to transfer

There may be occasions when there are impediments to transferring staff with functions, for example where the gaining agency has certain requirements such as high level security clearances which some transferring staff cannot meet or where there will be geographic relocation (i.e. to another city). In these situations, the gaining and losing agencies should make all efforts to accommodate these individuals. Where agencies are unable to resolve the situation, the Commission should be contacted for advice.

5.4 Unresolved staffing action

Agencies should liaise with the Commission on individual cases that may arise where an APS employee who is likely to be affected by a MOG change is subject to formal action under either the PS Act or agency procedures which involve the employee being:

dealt with under the redeployment, reduction and retrenchment provisions applying in the agency
the subject of an investigation into a suspected breach of the Code of Conduct
assessed as to whether agreed performance standards are being met
dealt with in relation to non-performance of duties or a loss of an essential qualification
assessed as to their fitness for continued duty.

There are a number of possible outcomes in such cases, depending on the effect of the MOG change, the type of action being undertaken and the stage reached in the process. While the general principle of ‘staff follow function’ will continue to apply, there may be circumstances where it is in the interests of the efficient administration of the APS, or in an employee’s interests, that the action be completed in the losing agency. Losing agencies should identify employees who might be affected by unresolved staffing action and consult the Commission as necessary.

5.5 Incomplete recruitment action

At the time of a MOG change, agencies may have Senior Executive Service (SES) and non-SES recruitment processes underway which have not been completed. The arrangements for handling such processes will depend on the stage reached in the process and the nature of the administrative re-arrangement.

5.5.1 Before decision to exercise employment powers

Where an employment opportunity has been notified and:

the agency head has not yet taken the decision to engage or to assign duties to the preferred applicant (including promotion), and
the employment opportunity now exists in the gaining agency the gaining agency head can decide either to discontinue the process or proceed with the recruitment action.

Where the gaining agency head decides to proceed with the recruitment action, he or she may decide either to continue with the current process, on the basis of the action taken in the agency in which the opportunity was notified, or to re-notify the employment opportunity in the Public Service Gazette and restart the recruitment process.

Where the gaining agency head decides to continue with the current process, any decision they ultimately take to promote or engage a person will need to satisfy the requirements of section 10(1)(b) and section 10(1)(m) of the PS Act (in relation to employment decisions being made on merit and people being given a reasonable opportunity to apply for employment). To do this, the gaining agency head will have to be satisfied that the action taken in the losing agency before the MOG change, and any subsequent action taken in the gaining agency, meets the minimum requirements of Chapter 4 (and, in relation to an SES vacancy, Chapter 6) of the Commissioner’s Directions 1999 (the Directions).

5.5.2 After decision to exercise employment powers and before taking effect

Except in situations involving abolition of an APS agency (see section 5.5.3), where the losing agency head has taken the decision to either engage, or assign duties to, the preferred applicant (including promotion), but:

at the time of the MOG change, the decision had not come into effect, and
as a result of the MOG change, the function associated with the employment opportunity now exists in the gaining agency

the recruitment process continues to finality, including any reviews of promotion decisions undertaken in accordance with Division 5.2 of the PS Regulations.

Until the process is complete, the employment opportunity remains in the losing agency. Once the relevant decision to engage, assign duties (including promotion), or move a person comes into effect, the person will, in accordance with the section 72(1)(a) determination, be immediately moved to the gaining agency. For example, if a decision to promote a person has been made and not come into effect when the part of the agency in which the person will perform the duties is moved to the gaining agency, the promotion will take effect in the losing agency. Once the promotion takes effect, the section 72(1)(a) determination will move the employee to the gaining agency.

A clause will be included in the section 72(1)(a) determination to address this issue.

When engaging people in this situation, the losing and gaining agencies may need to liaise on any outstanding action that needs to be taken in relation to any conditions of engagement that need to be satisfied before the engagement comes into effect—see section 5.6 below.

If, for any reason, a gaining agency head does not wish the recruitment action to come into effect, he or she will need to ask the losing agency head to cancel the recruitment action before it takes effect.

5.5.3 Abolition of agency

Where all the functions of an agency are moved to one or more gaining APS agencies and the losing agency is being abolished, any decision the losing agency head took to engage or assign duties to a preferred applicant (including promotion) that has not yet taken effect at the time of the MOG change will lapse. For example, where a decision to promote an employee has been notified in the Public Service Gazette but the decision has not yet taken effect, the promotion will lapse.

If, however, a gaining agency head wants to proceed with the recruitment action, he or she can decide to continue with the current process on the basis of the action taken in the agency in which the employment opportunity was notified. A gaining agency head may exercise powers under the relevant sections of the PS Act to promote or engage a person but will need to be satisfied that any action taken in the losing and gaining agencies meets the minimum requirements of Chapter 4 (and, where relevant, Chapter 6) of the Directions.

Where an engagement or promotion decision has lapsed, and the gaining agency head decides to continue with the process and engage or promote the preferred applicant on the basis of the selection process undertaken in the losing agency, the engagement or promotion should be notified again in the Public Service Gazette. This will be a new engagement or promotion with a new date of effect and may be subject to different remuneration and other terms and conditions of employment, depending on the arrangements that apply in the gaining agency.

There should be consultation with the employee on remuneration and other conditions applying to the job.

In other cases, the applicant should be notified that the engagement or promotion has lapsed.

5.5.4 Subsequent and.recurring opportunities

A gaining agency head should generally not use an order of merit that was finalised in the losing agency to fill a subsequent or recurring employment opportunity in the gaining agency, even if it is within 12 months from the date of the Public Service Gazette notification.

5.5.5 Non-ongoing employment

A gaining agency should generally not use a register or panel arrangement created by a losing agency to select non-ongoing employees for employment in the gaining agency. The gaining agency may, however, wish to encourage people on the losing agency’s panel to apply for non-ongoing employment opportunities in line with the procedures or arrangements that apply in the gaining agency.

5.5.6 Independent Selection Advisory Committees

Where there has been a request for an Independent Selection Advisory Committee (ISAC) in relation to employment opportunities in an agency that is subject to a MOG change, but the ISAC has not been established, the Merit Protection Commissioner will consider the request in consultation with the relevant agency heads.

Where an ISAC has been established to make recommendations to an agency head about the suitability of candidates for engagement, promotion, or assignment to duties in connection with employment in the agency, and:

that ISAC has not yet made a recommendation to the agency head as to which candidate(s) is considered to be most suitable for the relevant employment, and
as a result of a MOG change, some or all of the employment opportunities for which the ISAC was established to recommend candidates now exist in the gaining agency

the ISAC may continue its function in relation to the employment opportunities that still exist in the losing agency. If the gaining agency head wishes to take any further action to fill particular employment opportunities that now exist in the gaining agency, he or she will need to restart the selection process, and may ask the Merit Protection Commissioner to establish a new ISAC.

Where:

an ISAC has made recommendations to an agency head about the suitability of candidates for engagement, promotion, or assignment to duties in connection with employment in the agency, and
as a result of a MOG change, some or all of the employment opportunities about which the ISAC has made its recommendations now exist in a gaining agency

the losing agency head may choose to use the recommendation of the ISAC in deciding the most suitable candidates for the employment opportunities that still exist in the losing agency. The gaining agency head is unable to use the original ISAC for employment opportunities that now exist in the gaining agency.

In circumstances where all functions of an agency are moved to one or more gaining APS agencies and the losing agency is abolished, an ISAC established to make recommendations to the losing agency head would lapse.

5.6 Conditions of engagement

Where an employee who is to be moved to a gaining APS agency is still subject to a condition of engagement that was imposed under section 22(6) of the PS Act at the time of the employee’s original engagement in the APS, that condition will continue to apply to the employee’s employment in the gaining agency.

It will be up to the gaining agency head to be satisfied as to whether the condition has been met. A gaining agency head can decide that an employee has met a condition within the period specified in the original condition of engagement (e.g. end a probationary period before the date specified) or that the condition no longer needs to be met.The gaining agency head may not, however, vary a section 22(6) condition that was originally imposed in the losing agency or impose a new condition of engagement under section 22(6) of the PS Act, on an employee moved to the agency under section 72(1)(a) of the PS Act.

5.7 Temporary movements

A section 72(1)(a) determination made by the Commissioner will deal, among other things, with the situation of people who are on temporary movement from their home agency (the pre-temporary move agency) to another APS agency (the post-temporary move agency) at the time of an administrative re-arrangement.

5.7.1 Changes in the post-temporary move agency

The following arrangement applies where an APS employee has temporarily moved to an agency under section 26 of the PS Act and the part of the agency in which the employee is working temporarily is moved to another APS agency (the gaining agency) as a result of an administrative re-arrangement.

The section 72(1)(a) determination will provide that the employee will move with the function to the gaining agency for the remainder of the temporary movement agreement.The temporary movement agreement will continue in accordance with its original terms as if it had been made with the agency head of the gaining agency. At the expiration of the temporary movement agreement, the employee will return to their pre-temporary move agency, except in the circumstances outlined below, or unless alternative arrangements are agreed between the parties (e.g. early termination of the arrangement, a further extension of the temporary movement, or an ongoing move).

In some cases, the employee’s pre-temporary move agency may also be affected by the MOG change. If the part of that agency where the employee worked prior to the temporary movement is moved to another APS agency (the gaining agency), the Commissioner’s section 72(1)(a) determination will move the employee to the gaining agency with effect from the next working day after the temporary movement agreement expires.

If, however, the function the APS employee is performing in the post-temporary move agency is moved to the employee’s pre-temporary move agency, the temporary movement agreement lapses.

A losing agency will need to establish if there are any employees who are on temporary movement from another APS agency and are working in parts of the losing agency affected by the administrative re-arrangement. If so, the section 72(1)(a) determination will move these employees in accordance with the arrangements outlined above. The Commission will liaise with the losing agency on appropriate words to include in the determination to cover these employees.

5.7.2 Changes in the pre-temporary move agency

The following arrangement applies where an APS employee has temporarily moved from his or her agency to another agency under section 26 of the PS Act and the part of the pre- temporary move agency that the person was working in before entering into the temporary movement agreement is affected by an administrative re-arrangement which involves the functions being moved to a gaining agency.

In these circumstances, the temporary movement is not affected by the administrative rearrangement.The Commissioner’s section 72(1)(a) determination will provide that the person will become employed in the gaining agency, with effect from the next working day after the temporary movement agreement expires, unless the parties agree on alternative arrangements (e.g. early termination of the arrangement, a further extension of the temporary movement, or an ongoing move).

Where the part of the pre-temporary movement agency in which a person was working before entering into the temporary movement agreement is moved to the same agency in which the employee is working as a result of the temporary movement agreement, the temporary movement agreement will lapse.

A losing agency will need to establish if there are any employees who are on temporary movement to another APS agency but who, before entering into the temporary movement agreement, were performing duties in the part of the losing agency affected by the administrative re-arrangement. If so, the determination the Commissioner will make will move these employees with effect from the end of the temporary movement agreement. The Commission will liaise with the losing agency on the wording to include in the determination to cover these employees.

5.8 Review of actions

The PS Regulations do not provide for transfer between agencies of applications for reviews of actions made under Division 5.3 of the Regulations. Where such an issue arises concerning an APS employee, agencies are encouraged to contact the Commission to seek further advice about whether the review may be continued, or whether the employee should be advised to lodge a new application with the gaining agency.

5.9 Classification, duties and the place duties are to be performed

Under rule 6(1) of the Classification Rules, an agency head must allocate an approved classification (as set out in schedule 1 to the Classification Rules) to each employee in the agency. Under section 25 of the PS Act, an agency head may, from time to time, determine the duties of an APS employee and the place at which those duties are to be performed.

A gaining agency head will need to take action under the Classification Rules to allocate an approved classification and to assign duties under section 25 of the PS Act to any employee who is moved to the agency under section 72(1)(a) of the PS Act.

It will be sufficient for a gaining agency head to execute a global instrument allocating to all employees who are moved under section 72(1)(a) of the PS Act the same approved classification that was applied to them in their previous agency or a corresponding approved classification in the same group. Pending any action by the gaining agency head, the previous classification and duties should be regarded as continuing.

Where an employee’s approved classification is part of a broadband in a losing agency, the employee should be allocated the same approved classification in the gaining agency. A losing agency should ensure that, before any movements to a gaining agency occur, the approved classifications required under Classification Rule 6 have been identified for all employees, including those within broadbands.

Section 23(4) of the PS Act does not allow an agency head to reduce the classification of an APS employee without their consent, except in specified circumstances. An employee cannot be assigned duties at a higher classification except in accordance with clause 4.6 of the Directions.

5.10 Engagement of non-ongoing employees

Where non-ongoing employees are moved between APS agencies as a result of a MOG change, the circumstances relating to engagement of a person as a non-ongoing SES employee (as set out in PS Regulation 3.4), or as a non-ongoing non-SES employee (as set out in PS Regulation 3.5) are taken to be the circumstances under which the person is employed in the gaining agency.

The gaining agency head may extend the engagement of a non-ongoing employee who is moving as part of a MOG change provided the extension is made in accordance with the provisions of PS Regulation 3.4 (for non-ongoing SES employees) or PS Regulation 3.6 (for specified term non-SES employees) and clause 4.5 of the Directions. However, any provision of the PS Regulations relating to extending the engagement of a SES or non-SES non-ongoing employee applies to any extension of the engagement by the gaining agency head as if the total period of engagement was in the gaining agency.

5.11 Delegations and authorisations

The Australian Government Solicitor addresses the issue of delegations and authorisations after a general election in its Legal Briefing No. 72 of 29 October 2004 entitled ‘After the election—what happens?’. A copy of the Legal Briefing is available at http://ags.gov.au/publications/agspubs/legalpubs/legalbriefings/index.htm.

The Briefing advises that the changes in Ministers, departments and secretaries which occur following an election make it essential that each agency review its instruments of delegation and authorisation.

The Briefing notes that an instrument of delegation or a statutory authorisation made by a Minister or agency head will continue to have effect following a general election if the only substantive administrative change is the person who holds the office of Minister or agency head. Similarly, a delegation or statutory authorisation continues in effect where there has simply been a change in the designation of a Minister, agency head or department. In both cases, however, it is clearly good administrative practice to provide new office-holders with the opportunity to reconsider these arrangements and issue new instruments of delegation or statutory authorisation.

Where functions and staff are moved between agencies, however, any delegations or statutory authorisations of power attached to staff within the losing agency will cease to have effect at the time the functions and staff are moved to the gaining agency; delegations or statutory authorisations will have to be remade. Delegations or statutory authorisations will also cease to have effect where an agency is abolished.

The Briefing also indicates that the position is different where instruments of authorisation provide for specified people to exercise relevant powers for and on behalf of an office-holder under the Carltona Principle (refer to glossary). All authorisations of that kind cease to have effect when the person holding the relevant office changes and all such instruments of authorisation should be re-made without delay.

5.12 Remuneration and other conditions of employment

The PS Act and PS Regulations describe the arrangements that apply to the remuneration and other conditions of employment of staff moved within the APS as a result of a MOG change (section 72(5) and regulation 8.1). These provisions apply where APS employees are moved to an existing APS agency as well as where employees are moved to a newly established APS agency.

Where an APS employee is moved to either an existing or newly created APS agency, the steps to be taken include:

identifying what industrial instrument(s) apply to the employee in the new situation
applying PS Regulation 8.1(2) to determine the employee’s annual salary upon the date of the move.

As well, the gaining agency head should consider whether it is necessary or appropriate to preserve particular conditions of employment from the losing agency, pending the employee entering into a new workplace agreement under the WR Act.

All agencies should liaise with DEWR early in this process, particularly when considering whether to preserve certain conditions of employment after a MOG change has taken affect.

Some agencies may provide their employees with access to certain facilities (e.g. vehicles and childcare) available under salary packaging which may not be available in the gaining agency. Agencies may also have different approved providers or financiers for salary packaging. These situations should be dealt with flexibly by the gaining agency where possible.

The advice that follows on remuneration and conditions of employment provides broad guidance only and, where there is any uncertainty, it is recommended agencies obtain their own legal advice.

5.13 Employee superannuation arrangements

The superannuation arrangements for Commonwealth employees are included in, or operate in accordance with, legislation, including the Superannuation Guarantee (Administration) Act 1992 (SG Act), the Superannuation Act 1976, Superannuation Act 1990 and Superannuation Act 2005, the Superannuation (Productivity Benefit) Act 1988 and the Superannuation Benefits (Supervisory Mechanisms) Act 1990 and delegated legislation made under those Acts.

In many cases, employees affected by a MOG change will be members of the CSS, the PSS or the Public Sector Superannuation Accumulation Plan (PSSAP). However, some agencies may have, or have had, their own superannuation scheme or arrangements. Also, many new employees will have a choice of superannuation fund in accordance with the SG Act.

Superannuation arrangements that may be affected by MOG changes include those superannuation arrangements that are in workplace agreements. Examples of arrangements that may be in workplace agreements include the level of employer superannuation contribution to be paid for employees, agency-specific choice of superannuation fund arrangements and the superannuation salary for employees who are CSS, PSS or PSSAP members. Both the losing and gaining agencies should address these matters early in the planning process.

In addition, employees may automatically become members of a Commonwealth superannuation scheme or may lose membership of one of those schemes if they move into or out of the APS. Agencies that had authority to have their own superannuation arrangements may no longer have that authority.

Queries concerning superannuation arrangements for Commonwealth employees should be directed to the Superannuation Branches in Finance in the first instance at http://www. finance.gov.au/super/about_superannuation_branch.html.

5.14 Movement of APS employees to an existing APS agency.

MOG changes can have an effect on APS employees’ industrial instruments. The relationship between these instruments can be complex, and agencies may need to seek specific legal advice in this area.

5.14.1 Industrial instruments

Agencies should identify what industrial instrument will apply to the employee after the administrative re-arrangement.

This involves looking both at any industrial instrument(s) that applied to the employee in the losing agency, to see if they continue to apply, and at the terms of those instruments of the gaining agency to see if they would apply. In interpreting such instruments, it is important to note that where, as part of the administrative re-arrangement there is merely a change to the name of the agency, references in a workplace agreement to the old agency are to be read as references to the renamed body.

General approach

In general, provisions of the WR Act relating to transmission of business do not apply in the case of movements between APS agencies, nor when an agency is renamed. This is because the employer remains the Commonwealth at all times where employment is under the PS Act.

Where APS staff are transferred to a newly created APS agency or functions are transferred from one APS agency to another, in most cases, the existing certified agreement or collective agreement would cease to apply to the transferred employees. There may, however, be some instances where the wording of the existing instrument specifically provides for it to continue to apply to transferred workers after a MOG change.

Where the employer does change as a result of a MOG change (for example where functions or staff are transferred into or out of the APS) the provisions of the WR Act relating to transmission of business may apply. Under the transmission of business provisions in the WR Act the industrial instruments that apply to the old employer will transfer to the new employer in relation to any ‘transferring employees’ for a maximum period of 12 months. Generally, a transferring employee is an employee employed by the old employer who becomes employed by the new employer in the business being transferred.

Note that a new employer may have notification obligations in respect of any transferring employees, including those in relation to preserved redundancy entitlements.

If there is a transmission of business, preserved redundancy entitlements will continue to bind the new employer for a period of up to two years from the time the federal agreement was terminated.

When a workplace agreement is unilaterally terminated by the employer (or a pre-reform agreement is terminated by the Australian Industrial Relations Commission on the application of the employer), redundancy entitlements under that agreement will continue to bind the employer and employee/s for a period of two years.

Whether or not industrial instruments that cover employees of the old employer (or losing agency) will bind a new employer (or gaining agency) in a MOG change must be determined on a case-by-case basis. As such, agencies involved in a MOG change should consult with their client contact in DEWR to discuss the possible implications with respect to the agencies and employees involved.

Australian Workplace Agreements

Depending on the circumstances, an employee’s AWA may continue to apply where an employee is moved under section 72(1)(a) of the PS Act to another APS agency as part of an administrative re-arrangement. Whether the AWA applies will depend on a variety of factors—principally the wording of the AWA—and agencies should seek their own legal advice when in doubt. Where an AWA continues, PS Regulation 8.1 will not need to be applied, as the salary and conditions under the AWA continue to apply.

Collective agreements (union and employee)

As a general rule, an agency’s existing certified or collective agreement will not apply to a transferred employee, unless there is a transmission of business or a term in the certified or collective agreement providing that it will apply. Even if an agency’s existing certified or collective agreement may apply to an employee, it will not apply if the employee is covered by an AWA that relates to the same employment as the collective agreement.

Awards

All transferring employees will generally be protected by the Australian Fair Pay and Conditions Standard (the Standard). Some elements of particular awards will continue to apply, unless excluded by a continuing certified or collective agreement that applies to the transferring employees. The Australian Public Service Award 1998 (APS Award), for example, binds all Ministers of the Crown for the Commonwealth in respect of APS employees employed under the PS Act. The APS Award, apart from various agency-specific provisions, applies to all APS employees. Movement of APS employees from one agency to another will not affect the application of an award or the Standard, however agencies will need to aware of specific provisions in an award that may apply to an employee.

Agencies should consult their client contact in DEWR with any enquiries.

Determinations under section 24(1) of the PS Act

In rare cases, the terms and conditions of employees in the losing agency or the gaining agency may be governed by section 24(1) determinations (e.g. where a newly created agency has not yet entered a workplace agreement). Agencies should seek legal advice and consult DEWR if such a situation arises.The use of such a determination must be consistent with the Government’s Workplace Relations Policy Parameters for Agreement Making in the APS (which are available at: http://www.workplace.gov.au). Additionally, such determinations should only remain in force for a maximum of six months as a purely interim arrangement until a workplace agreement is formalised.

5.14.2 Annual salary

PS Regulation 8.1(2) provides that, where an APS employee is moved between APS agencies, the annual salary that applies to the employee on the day when the move occurs will be the greater of:

the salary the person was entitled to before the move, and
the annual salary that would, apart from PS Regulation 8.1, apply to the APS employee after the move.

The general policy approach that underpins this regulation is that, while employees should not suffer a loss in salary as the result of a move, they should move as quickly as possible to the salary regime of the gaining agency. In many cases, this simply means translating affected employees to the equivalent salary level or the nearest salary point specified in the gaining agency’s workplace agreement as applying to their classification. However, if on the day of the move, the industrial instruments that now apply would result in the employee receiving a lower annual salary, PS Regulation 8.1(2) preserves the previous salary.

The provisions relating to ‘no loss of salary’ relate to base salary only and not to any higher duties allowance or additional salary type components that may be paid by the losing agency under a variety of industrial instruments.

At a later date the employee may become entitled under the gaining agency’s workplace agreement to a higher salary (e.g. under a salary advancement provision or as a result of an across-the-board salary increase). At that point, PS Regulation 8.1(2) ceases to apply.

It should be noted that operation of PS Regulation 8.1(2) does not create an entitlement to any further increases that would have become available under a losing agency’s workplace agreement that has ceased to apply to the employee.The gaining agency’s collective agreement (if any) will, in so far as it applies to the employee, govern any future salary increases.

5.14.3 Section 24(1) determination

Section 24(1) of the PS Act gives the gaining agency head the power to make a determination to carry across some or all of the ‘other conditions of employment’ that applied to the APSemployee immediately before the move (see Regulation 8.1(3)). This is particularly relevant where the gaining agency’s workplace agreement does not include conditions of employment essential for the operational requirements associated with the transferred functions (e.g. shift work or remote locality provisions).

Agencies must consult DEWR before undertaking a determination of this nature. A number of other conditions also apply to making a section 24(1) determination pursuant to PS Regulation 8.1(3), namely:

a section 24(1) determination cannot be used to reduce benefits contained in an award or an agreement that would otherwise apply
agency heads must consult with affected employees
a section 24(1) determination is not to be used as a substitute for agreement making; nor should section 24(1) be used to enhance terms and conditions that would otherwise be determined through workplace agreements, or to vary existing agreements in due course
as far as possible, new workplace agreements should be drafted to encompass situations that can be foreseen as arising during the life of an agreement, such as predictable variations in remuneration or conditions
in making a section 24(1) determination, agency heads are to be mindful of the Workplace Relations Policy Parameters for Agreement Making in the APS, that improvements in pay and conditions are to be linked to improvements in organisational productivity and performance
the section 24(1) determination cannot take effect any sooner than the date the employee(s) are moved to the new agency.

The gaining agency head is not obliged to carry across any or all of the terms and conditions that previously applied where they are not considered appropriate to the needs of the gaining agency. In some cases, it may not be practicable to preserve particular conditions, for example, access to work-based childcare may not be available in the gaining agency.

PS Regulation 8.1(4) provides that such a determination ceases to apply when a new workplace agreement comes into effect after the move that applies to the relevant employee(s).

Government policy is that the terms and conditions of APS employees should be established through agreements made under the WR Act. In line with this policy, gaining agencies should replace section 24(1) determinations as soon as practicable. Entering into a new workplace agreement will, for example, help the gaining agency integrate all employees into a common human resources framework.

5.15 Creation of a new APS agency

Special issues arise where a new APS agency is created, whether it is a new department, an executive agency or a statutory agency staffed under the PS Act.

The process for determining the terms and conditions of APS employees who are moved to the new agency is similar to that which applies where APS employees are moved to an existing APS agency.

5.15.1 Industrial instruments

The process for identifying which industrial instruments apply is as set out in section 5.14.1, except in relation to collective agreements.

In some cases, where a separate business unit (within an agency) with its own collective agreement has been given agency status, the existing agreement continues to apply.

However, the most usual situation is that the newly created agency will not have a workplace agreement. In that case, unless a transferred employee is covered by a workplace agreement that carried across from the losing agency, the agency may need to seek legal advice on what arrangements may apply. Agencies should contact DEWR in such a situation.

5.15.2 Annual salary

In most cases, there will not be a workplace agreement that applies to the new agency, nor will a previous workplace agreement continue to apply. The effect of PS Regulation 8.1(2) will, therefore, almost always be to preserve the salary to which the transferred employee was entitled before the move.

5.15.3 Section 24(1) determination

The same principles as set out in section 5.14.3 generally apply. The main difference is that it is likely that an agency may wish to preserve nearly all the conditions of employment that previously applied.

However, as any section 24(1) determination made in accordance with PS Regulation 8.1 only applies to existing APS employees moved to the new agency, it may also be necessary to make a separate section 24(1) determination creating interim remuneration and conditions for other employees who may be engaged by, or move to, the new agency at a later date (see section 5.15.4).

The use of a section 24(1) determination will be subject to assessment against the Government’s Workplace Relations Policy Parameters for Agreement Making in the APS (which are available at: http://www.workplace.gov.au). Additionally, such a determination should only remain in force for a maximum of six months as a purely interim arrangement until a workplace agreement is formalised.

A gaining agency head may wish to draft a determination providing that the transferred employees’ conditions of employment are the same as they enjoyed under the collective agreement of the losing agency, subject to specified qualifications. Such qualifications might include definitional changes so that particular references (e.g. as to the agency, agency head, Minister and agreement) continue to work in the new context, or to exclude certain clauses that are not relevant to the new agency.

There may also be terms and conditions in the losing agency’s agreement that the gaining agency head does not wish to continue to apply.

There is a proviso in section 24(1) of the PS Act that a section 24(1) determination is of no effect to the extent that it would reduce the benefit to an employee of any individual term or condition applicable to the employee under an award or an agreement.

Section 24(1) determinations made in accordance with PS Regulation 8.1(3) can only preserve some or all of an employee’s pre-existing terms and conditions—they cannot be used to introduce a new regime. Thus, where employees have been moved to the new agency from several different APS agencies, the new agency will generally be required to preserve separate terms and conditions for the employees from each losing agency. It may only be at the point that the new agency negotiates a new collective agreement and/or enters into AWAs with the transferred employees that it will be in a position to harmonise the terms and conditions of all its employees into a single conditions framework.

5.15.4 Employees who are engaged by, or move to, the agency at a later date

Where no collective agreement applies to the newly created agency, it may also be necessary to determine interim remuneration and other conditions of employment under section 24(1) of the PS Act for people who are engaged by, or who move voluntarily to, that agency at a later date.

In this circumstance, it is desirable:

not to compromise the ability to negotiate future agreements under the WR Act that comply with the Government’s Policy Parameters for Agreement Making in the APS, by including inconsistent provisions in a section 24(1) determination
to include a recital that the base salary includes a benefit in lieu of any conditions in previous industrial instruments that have been rolled into base pay.

Further, there are some minor technical differences that apply to making such a determination under section 24(1) of the PS Act, due to the fact that it is not made in accordance with the process requirements of PS Regulation 8.1(3). In this situation:

it is necessary to determine the employee’s remuneration as well as other conditions of employment
it is not necessary to consult the employee/s before making such a determination
as PS Regulation 8.1(4) does not apply, it will generally be desirable to state that the determination will cease once it is displaced by a workplace agreement.

Where staff have been moved to a new APS agency from several different APS agencies, the new agency head will face a more difficult practical choice as to what is the most appropriate interim conditions framework for employees who are later engaged by the new agency, pending negotiation of a new workplace agreement.

While the PS Act provides a mechanism for making interim arrangements, it is important to move as quickly as possible to enter into agreements under the WR Act as well as to develop new human resource policies and procedures. This may also help address any unforeseen difficulties in interpreting interim section 24(1) determinations that were drafted by reference to the workplace agreement of a different agency, and in harmonising the terms and conditions of employees who came to the new agency from different agencies.

Once all employees of a new agency are covered, either by a workplace agreement or agreements, it is desirable to formally revoke any section 24(1) determinations made.

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