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Last updated: July 1998

Employment framework for Information Technology outsourcing

Please note: These documents are for reference purposes only and are no longer considered by the APS Commission to be current. They may contain good practice advice and/or advice on the transitional arrangements between the 1922 and 1999 Public Service Acts.

Foreword

The Government announced in the 1997 Budget its 'in principle' agreement to the outsourcing of information technology (IT) infrastructure services across Budget funded agencies subject to the outcome of a competitive tendering process. The Minister for Finance and Administration and the Minister Assisting the Prime Minister for the Public Service were authorised to develop a framework that would assist agencies manage the human resource dimensions of the IT infrastructure initiative. Agencies were advised by the Office of Government Information Technology of the key elements of that framework in August last year.

This booklet develops the framework and provides more comprehensive guidance to Australian Public Service (APS) agencies on the management of staff affected by the outsourcing of IT. The framework applies to all IT outsourcing initiatives, whether they be part of the whole of government IT initiative or an agency specific IT project. The booklet identifies the issues to be addressed in achieving effective human resource management in IT outsourcing. Careful attention to human resource issues is crucial to a fair and equitable outcome for staff affected by outsourcing and to realising positive outcomes for the Government, new providers and clients.

The booklet should be read in conjunction with the document, Outsourcing, Human Resource Management, Principles, Guidelines, Good Practice, Second Edition, 1998. This latter publication outlines the key principles, legal context and good practice that managers should consider when addressing the human resource and workplace relations implications of any outsourcing initiative.

Helen Williams
Public Service Commissioner

July 1998

Overview

Agencies will be implementing the Government's IT infrastructure initiative at a time when they are addressing a range of other public service reforms.

While this booklet concentrates on the management of staff affected by IT outsourcing, it takes account of other changes being introduced in the workplace and the Government's competitive tendering and contracting out initiative.

The staffing strategy appropriate to IT is addressed in Part One of this booklet.

Parts Two and Three draw attention to some of the linkages between HR planning generally and key project stages in the tender process associated with IT outsourcing. The information in Part Two is drawn from the Public Service and Merit Protection Commission's (PSMPC) publication, Outsourcing, Human Resource Management, Principles, Guidelines and Good Practice, Second Edition, 1998 (hereafter referred to as 'the general Outsourcing booklet'). The information in Part Three is formulated from papers developed in 1997 by the Office of Government Information Technology.

This booklet has been developed in consultation with the Department of Finance and Administration, the Department of Workplace Relations and Small Business and the Office of Asset Sales and Information Technology Outsourcing (OASITO). Agencies should note that the arrangements discussed in the booklet apply to all IT outsourcing projects whether they are part of the whole of government initiative or not.

For coverage of general policy matters relating to outsourcing, managers should refer to the Department of Finance and Administration publications, Competitive Tendering and Contracting: Guidance for managers, 1998 and The Performance Improvement Cycle: Guidance for managers, 1998.

Part One: Employment framework for Information Technology Outsourcing

Part One of this booklet outlines the employment framework which was developed to give effect to the Government's whole of government IT initiative. The arrangements described in this booklet, however, apply to all IT outsourcing projects undertaken by agencies.

The whole of government approach to outsourcing IT infrastructure services was agreed because there are significant benefits to be realised in the form of:

• opportunities for economies of scale;
• common IT platforms across agencies;
• less duplication in developing solutions, procurement and support services; and
• leverage in negotiations with service providers.

The whole of government approach required agencies to form into 'clusters' (now known as 'groups') in order to achieve business synergies and common hardware/software or geographic structures.

The employment transition framework is designed to facilitate cost effective implementation of IT outsourcing. Agencies were advised of the key elements of this framework by the Office of Government Information Technology in August 1997.

The arrangements outlined in Part One build on that advice and specifically describe how staffing and related matters will be handled. These matters include:

• general principles underpinning the staffing approach to be used by agencies;
• the Clean Break approach and its application by agencies;
• the Phased approach and its application by agencies; and
• a mechanism supporting the Phased approach.

1.1 General principles

The agreed employment framework that has been established for IT outsourcing allows agencies a choice between two staffing approaches, the Clean Break approach and the Phased approach. Each approach provides a discrete set of options for managing the human resource aspects and workplace relations issues that agencies need to address in the outsourcing context.

It is the responsibility of Agency Heads to ensure that the terms of the chosen staffing approach is applied in accordance with approved Government policy and that the following general principles are observed:

the APS has the highest ethical standards, including the highest standards of probity in all phases of the outsourcing process;

• only one staffing approach is used in any 'group';
  - the staffing approach must be agreed by agencies at the 'group' level;

  where the Phased approach is used, the transitional terms and conditions for staff accepting employment with the new provider are fixed;
  - there is no scope for agencies to vary the specific elements;

  no hybridisation of either approach available to agencies;
  - the possibility of outsourcing agencies offering voluntary redundancies plus arranging a job with the new provider does not exist under either approach;

  there is no scope for leave without pay or secondment arrangements under either staffing approach; and

• APS staff may not be compulsorily transferred or compelled to take employment with a private sector employer.

1.2 The Clean Break approach

The Clean Break approach suits those circumstances where an agency considers it more appropriate to leave recruitment solely to the new provider.

1.2.1 Clean Break approach - key underlying principles

affected staff are subject to the normal redeployment, retirement and redundancy provisions;

• affected staff may be redeployed, may accept voluntary retrenchment, if offered, or be retired;
  outsourcing agencies must remain at arms length from the new provider's recruitment process to ensure the integrity of the Clean Break approach;
• an outsourcing agency cannot be involved in brokering or negotiating jobs for affected staff with the new provider;
  the new provider may negotiate directly with staff and make offers of employment before the handover date;
• there is no restriction on the subsequent employment of former staff with the new provider or other private sector providers;
• there are, however, restrictions on subsequent APS re-employment - see below.

1.2.2 Clean Break approach - staff entitlements

Staff entitlements under the Clean Break are as follows:

• Severance payment and notice period employees who are offered and accept voluntary retrenchment receive entitlements in accordance with the 'relevant redeployment and retirement arrangements' in operation in their agency; in addition, under the Workplace Relations Act 1996, employees are entitled to four (or five if the employee is over 45 years old and has at least five years of continuous service) weeks notice or payment in lieu of notice. Note : the term 'relevant redeployment and retirement arrangements' refers to the provisions applying in the agency for managing excess staff - either the Redeployment and Retirement provisions of the APS General Employment Conditions Award 1995 (GECA) and the Job Security and Redeployment provisions of the Continuous Improvement in the APS Enterprise Agreement: 1995-96 or the redeployment and retirement provisions under the agency specific Certified Agreement or an Australian Workplace Agreement.
• Taxation a severance payment is regarded as a 'bona fide redundancy' payment for taxation purposes if there is no agreement in place between the outsourcing agency and either the employee or the new provider about the employment of the employee by the new provider at a later time; when this condition is met, the severance benefit is taxed at a concessional rate; the concessional tax treatment of the severance payment is not compromised if an employee obtains employment, through their own efforts, with the new provider either prior to or after ceasing employment with the APS. Note : Further information on the taxation treatment of severance benefits under the Clean Break approach is set out in section 3.8, Part Three of the general Outsourcing booklet.

Superannuation Contributors to either the Commonwealth Superannuation Scheme (CSS) or the Public Sector Superannuation scheme (PSS) who are made redundant have access to a range of superannuation options including access to a lump sum of their total superannuation benefit, including the employer component; For redundancies that occur on or after 1 July 1999, current government policy requires that the employer component must be preserved until retirement from the workforce on or after preservation age (currently age 55); - from 1 July 1999 access to the employee component of superannuation will also be restricted to contributions made and interest earned before that date. Note : Further information on superannuation issues is contained in section 3.1, Part Three of the general Outsourcing booklet.

1.2.3 Clean Break approach - application

The Clean Break approach applies on the following basis:

• the new provider is free to recruit the employees it requires to meet its business needs from any source;
• the outsourcing agency will not provide details of affected staff to the new provider other than general information which may be required under due diligence (for example, details of staffing structures and profiles);
• there are no leave without pay or secondment arrangements for affected staff to work for the new provider (normal leave arrangements to undertake short periods of training with the new provider may be permissible subject to the operational requirements of the outsourcing agency);
• employees are free to choose whether or not to accept a job with the new provider;
• no agreements or understandings are entered into between the outsourcing agency and the new provider, or the outsourcing agency and its employees, about the employment of any specific individuals or any groups of individuals by the new provider.

In addition, it should be noted that there are certain restrictions on the subsequent APS employment of APS employees who retire with a severance benefit. Further information on the restrictions on employment is contained in section 3.9, Part Three of the general Outsourcing booklet.

1.3 The Phased approach

This approach suits those circumstances where the viability of the activity being outsourced is critically dependent upon the skills and experience of existing key staff and the continued employment of those staff with the new provider.

1.3.1 Phased approach - key underlying principles

the use of this approach by an agency requires a new provider to meet its additional staffing requirements initially from within the pool of staff performing the function to be outsourced;

• the outsourcing agency is expected to negotiate with the new provider on employment opportunities and facilitate discussions between their staff and the new provider;
• affected staff resign to accept a job with the new provider;
• apart from the transitional entitlements, the terms and conditions of employment following outsourcing are determined by the new provider;
• the benefits offered by the Commonwealth are fixed and are not subject to negotiation with the new provider, staff or their representatives.

1.3.2 Phased approach - terms

The entitlements of affected staff who resign from the APS to take up employment with the new provider under the Phased approach are outlined below.

Transition Payment

• APS employees who resign to take up employment with the new provider will receive a transition payment of one week's salary for each completed year of Commonwealth service (and a pro rata amount for each completed month of service) with a minimum of 4 weeks and a maximum of 16 weeks salary;
• this payment is regarded as an Eligible Termination Payment (taxed up to a maximum of 31.5%), but is not a bona fide redundancy payment.

Preservation of severance payment entitlements for three years

• The dollar amount of the severance benefit an employee would have been entitled to receive had they been offered and accepted voluntary redundancy from the APS at the time of outsourcing is frozen;
• employees who are made redundant within three years of commencing with the new provider will be paid this frozen severance benefit, minus the transition payment made at the time of resignation. This benefit will be in addition to any severance payments made by the new provider.

Long Service Leave

• All staff with more than 12 months service will have their long service leave accruals paid out - including those staff with less than 10 years service;
• no long service leave credits are carried across to the new provider. All staff will have their period of Commonwealth service (which has been recognised for long service leave purposes) counted by the new provider for the purpose of the new provider's qualifying period of access to long service leave.

Eligibility for maternity leave for 12 months

• Employees who were entitled to paid maternity leave prior to outsourcing and who commence their mandatory period of maternity leave within 12 months of taking up employment with the new provider will have up to 12 weeks paid maternity leave.

Superannuation

• The introduction of new superannuation arrangements means that on resignation from their APS employment, affected staff in the PSS and CSS superannuation schemes who take up a job with the new provider will be able to roll over their total superannuation benefit into the new provider's (or another) superannuation scheme;
• this allows employees, if they choose, to access a lump sum payment of their own contributions plus interest. The employer component, however, will be required to be preserved until retirement from the workforce;
  - in addition, from 1 July 1999, employee contributions made and interest earned on or after that date will be required to be preserved until retirement from the workforce on or after preservation age (currently age 55);
• employees who are not offered jobs and are made redundant will have access to the same options as staff made redundant under the Clean Break approach - see 1.2.2.

Preservation of Superannuation Options for Three Years Where Equity Preserved

• Both the CSS and PSS have a provision within their rules allowing staff who cease to be members because of the sale or transfer of assets or services to access the full range of redundancy benefits if they are made redundant by their new employer within three years of the date of the function's transfer;
• this option may be made available to staff who preserve their equity in the scheme at the time of leaving the APS to join a new provider;
• this provision will be activated if the Minister for Finance and Administration and the Boards of Trustees agree.

1.3.3 Phased approach - application

Under the Phased approach the new provider is required, under the terms of the contract, to fill additional jobs required for the performance of the activity, initially from within the pool of affected staff. This means that:

• affected staff will be considered first for employment with the new provider;
• recruitment will be subject to the requirements established by the new provider;
• details of the new provider's recruitment process will be made public in advance of any recruitment;
• the agency is able to monitor the integrity of the process; and
• the agency will facilitate the recruitment process by giving the new provider access to information about structures, classifications, shift arrangements, names of staff, etc.

Employees are free to choose whether or not to accept a job offer from the new provider. Where employees do not receive or do not accept a job offer from the new provider, they are covered by accordance with the relevant redeployment, retirement and redundancy provisions which apply in the outsourcing agency.

As indicated earlier, there are no leave without pay provisions or secondment arrangements for affected staff to work with the new provider, although the use of normal leave arrangements to undertake short periods of training with the new provider may be permissible subject to the operational requirements of the outsourcing agency.

Affected staff who are not selected or do not accept a job with the new provider and who receive voluntary retrenchment from the APS will not be able to be considered for vacancies in the APS for a period of 12 months following their retirement (see section 3.9 in Part Three of the general Outsourcing booklet for further details). Staff in this situation will also be subject to the following arrangements in respect of employment with the new provider.

1.4 Supporting mechanism for the Phased approach

A private sector provider is required to support the effective application of the Phased approach by carrying out recruitment of APS staff before handover. This requirement recognises the investment of resources by the Commonwealth in arranging a Phased approach.

The implementation of this strategy is able to be supported by the inclusion of a provision in tender documentation requiring the new provider to pay an amount ($25,000) to the outsourcing agency where the provider employs a person who has received a severance benefit within 6 months of the handover date.

Appendix A provides agencies with a formal set of words, developed in consultation with the Attorney-General's Department, for inclusion in tender documentation.

Part Two: The Outsourcing Context

Part Two of this booklet is concerned with the broader human resource management context of IT outsourcing.

The following is a summary of the main principles and issues that agencies will need to address in outsourcing IT. The material is drawn principally from the general Outsourcing booklet.

2.1 Legislative context

In dealing with staffing issues in IT outsourcing, managers will need to address and comply with the legislative provisions contained in:

• the Public Service Act 1922 (the PS Act);
• the Workplace Relations Act 1996; and
• the Superannuation Acts.

Part Three of the general Outsourcing booklet provides advice on legislative issues, including on such matters as superannuation benefits; mobility rights under the PS Act; the taxation treatment of redundancy benefits under the Clean Break approach; transfer of custody or ownership of personnel records under the Archives Act 1983; and the implications of the Affirmative Action (Equal Opportunity for Women) Act 1986 and the Occupational Health and Safety (Commonwealth Employment) Act 1981 for outsourcing decisions.

The Government has endorsed a set of APS values and a Code of Conduct that will apply to all APS staff. These standards are deemed necessary to maintain public confidence in the integrity of the public service and the professionalism of public servants. Certain provisions of the Values and the Code of Conduct are relevant to the outsourcing exercises and to the handling of the HRM aspects of outsourcing. The Values and the Code have been incorporated into the Public Service Regulations (the PS Regulations) - see subsection 2.2 below.

Managers will also need to address relevant redeployment and retirement provisions in:

• agency specific Certified Agreements or Australian Workplace Agreements; or
• the APS General Employment Conditions Award 1995 (GECA); and
• the Continuous Improvement in the APS Enterprise Agreement 1995-96.

Advice on the management of excess staff situations in the APS is contained in the PSMPC's publication, Management of Excess Staff Situations in the APS, Human Resource Management Principles, Guidelines, Good Practice. While this advice is based on the redeployment and retirement arrangements set out in GECA (which may no longer be relevant in a number of agencies), the good practice advice contained in this booklet will assist managers in effectively dealing with staff who are excess to requirements as a result of the outsourcing of an IT activity.

Managers should also be aware of privacy considerations in relation to personal information under the Privacy Act 1988 and the Freedom of Information Act 1982. Amendments introduced to the Privacy Act 1988 and foreshadowed in relation to the Freedom of Information Act 1982, will, if passed, bring government information controlled by private contractors to the Government within the scope of these Acts.

2.2 Key principles

Effective HRM planning in an outsourcing situation is built around several key principles, namely:

• ensuring that all staff affected by outsourcing are treated fairly and equitably;
• achieving best value for money through balancing risks and benefits;
• maintaining the viability of the function during the outsourcing process;
• providing a degree of certainty about the staffing approach to be adopted;
• limiting the incidence of industrial disputation by promoting industrial harmony in the changeover to the new provider; and
• promoting behaviour which is consistent with high ethical standards and the APS Values and the Code of Conduct.

Positive outcomes for the Government, new providers, clients and staff affected by outsourcing are more likely where agencies have regard to these principles and incorporate an effective human resource management (HRM) strategy into their outsourcing plans at the outset. While HRM issues represent one element of outsourcing, they are nonetheless of crucial importance in successful outsourcing. Failure to address HRM issues early in the outsourcing process can contribute to delays in implementation, industrial disputation, poor staff relations, difficulties in retaining key staff in situ during outsourcing and a lowering of morale generally across the organisation.

The Government has stated its commitment to ensuring the APS has the highest ethical standards with the introduction of APS values and a Code of Conduct in the Public Service Regulations. In relation to outsourcing this means that the highest standards of probity must be maintained through the outsourcing process. To assist agencies, the APS Values and the Code of Conduct are reproduced at Appendix B.

In summary, the following points should be kept in mind during the outsourcing process:

• an APS employee is required to behave at all times in a way that upholds the APS Values (sub-regulation 7(11));
• Agency Heads are required to uphold and promote the new APS Values and will be required to report to the Public Service Commissioner on the extent to which they are being upheld within their agency (regulations 6 & 12); and
• an APS employee must disclose, and take reasonable steps to avoid, any conflict of interest (real or apparent) in connection with their APS employment (sub-regulation 7(7)).

To avoid any real or apparent conflict of interest, or potential conflict of interest, inscope staff should not make decisions about who the successful tender will be. Agencies should ensure that no one person controls the final outcome and that all significant decisions and recommendations are subject to review by peers and senior management.

To maintain the integrity of the process, the Government believes that key decision makers should not be employed by the successful tenderer within 12 months of the completion of the tendering process.

In outsourcing an activity agencies should ensure that:

• they perform their functions in a professional manner;
• services are delivered to the Australian public in a fair and impartial way;
• decisions are made in the interests of the Commonwealth; and
• they observe the highest ethical standards and that all staff are aware of and understand the APS Values and APS Code of Conduct.

OASITO has developed probity protocols as a guide for agencies when outsourcing information technology activities. A copy of the probity protocols is at Appendix C.

The experience of agencies, such as the Departments of Defence and Veterans' Affairs, has shown that a carefully planned, structured and executed HRM strategy will help agencies effectively to:

• maximise returns to the Commonwealth;
• address business and service continuity;
• minimise transition and changeover liabilities;
• achieve fair and equitable outcomes for staff in the activity being outsourced; and
• address the impact on the change on the organisation and remaining staff, and sustain productivity.

How agencies conduct the planning and implementation of their outsourcing will be influenced by the objectives of the specific projects, the time frames involved, the industrial context and a range of financial, performance and organisational variables intrinsic to each agency.

HRM planning and implementation needs to be sufficiently flexible to adapt to changing circumstances and sufficient lead time must be built in to meet specific target dates associated with the outsourcing exercise.

Good HRM practice begins with an agency adopting a coordinated approach to the HR aspects of outsourcing. The chart on page XX illustrates the way HR planning and management can be integrated into an agency's outsourcing process (see also Part Two of the general Outsourcing booklet).

Good communication and effective staff management play a pivotal role in the successful outsourcing of a function.

2.3 Communication

Communication is crucial in getting all parties to understand and accept the agency's approach to outsourcing. Good practice in relation to communication is focussed on:

• informing staff of their entitlements, options, support services, and the timing and progress of key events;
  - timely identification of HR contacts and use of information kits, staff bulletins, staff surveys and formal consultative requirements under the relevant redeployment and retirement arrangements are important elements;
• providing necessary briefings/advice on the progress of the ourtsourcing exercise to the Minister, Agency Head, senior management and staff representatives;
• providing guidance to staff on vendor contact including due diligence protocols;
• establishing protocols for staff involved in in-house tendering bids to avoid conflicts of interests; and
• managing the impact of outsourcing on staff morale across the agency.

A good communication strategy must clearly set out direction and processes, address the information needs of all key parties involved in an outsourcing initiative and be capable of being adjusted to changing circumstances. A key element of outsourcing good practice is that agencies ensure they communicate with all staff on significant matters affecting them in the workplace.

2.4 Staff management

Effective staff management is crucial to maintaining industrial harmony, managing morale and productivity within the organisation and retaining key staff for business continuity purposes. It is also essential in reducing personal stress levels of people affected by outsourcing. As indicated in the chart, staffing issues arise in all key stages of outsourcing and require good processes and timely decisions to be successfully managed. Good HR planning will identify the stages, milestones, responsibilities, processes and timeframes. Key features in relation to staff management include:

• identifying the appropriate staffing strategy to be adopted (Clean Break or Phased) as early as possible;
• effectively managing excess staff under the relevant redeployment and retirement arrangements - i.e. providing clear direction on formal processes, access and timing of voluntary redundancies, developing a redeployment plan, undertaking appropriate vacancy management within the agency, examining job swap options including outplacement assistance;
• identifying available staff support mechanisms such as dedicated support staff; financial and other counselling services; retraining courses addressing job interview techniques and resumes; and other avenues for external support (e.g. the APS Labour Market Adjustment Program (APSLMAP), ComSuper, Centrelink, etc.);
• making contingency plans (for example in case of industrial disputation) to ensure critical functions are maintained;
• developing a profile of affected staff to assist redeployment and retirement processes and skills and staff retention decisions;
• identifying any necessary administrative arrangements and the processing of any changes to systems; and
• identifying the new organisational structure and staff profile to apply after outsourcing and preparing a related skills development and acquisition plan.

HR activities also need to be adequately resourced as part of agency financial planning including appropriate budget allocations for staff support mechanisms and redeployment and retirement processes. The experience of agencies shows that significant benefits come from involvement of dedicated project team members who are knowledgeable about the objectives of each outsourcing stage and are adequately trained in HRM processes.

Managers will also need to take care that agency HR planning extends beyond the processes related to the specific outsourcing exercise. For example, where the Phased approach is used, HR planning should include processes to facilitate recruitment of agency staff by the new provider. In addition, agencies need to consider work and organisational redesign and the necessary skill requirements for contract management.

Including these arrangements in the overall outsourcing strategy will assist agencies not only to successfully maintain the activity during handover but also to set in place mechanisms that will ensure services are performed at the required standard by the new service provider.

Managers will find further details on these processes in the general Outsourcing booklet.

2.5 Indicators of good human resource practice

The following indicators reflect good practice adopted by agencies in outsourcing situations and may assist managers to benchmark their own planning and HR processes.

• defined plans are in place to manage HRM issues;
• timely and professional advice and support services are provided to affected staff;
• staff and their representatives are consulted in accordance with agreed requirements;
• the process is managed in a cost effective way with minimal industrial disputation and in compliance with relevant legislation and redeployment and retirement provisions;
• staff are advised of their responsibilities regarding official conduct and conflict of interest in the tendering process;
  - staff do not assist tenderers with their bids;
• the staffing approaches outlined in Part One of this booklet are complied with and hybrid approaches are avoided;
• the viability of the activity is maintained during changeover to the new provider and arrangements are in place to manage performance at the required standard under the new contract.

 

Corporate framework for outsourcing
Activity to be outsourced is identified
								Phased or clean break approach A decision to adopt one approach should be made as early as possible in the process
Outsourcing project plan
Financial and resource planning includes: outsourcing timeframes project team-roles and responsibilities budget allocations		Tender process includes: tender requirements developed request for tenders tender negotiations		Human resource management plan includes: communication and consultation with staff and their representatives staff support plan management of excess staff		Implementation plan includes: implementation date/ conditions negotiated relevant redeployment and retrenchment processes contract management responsibilities handover arrangements
								Activity outsourced
								Contract management arrangements established
Communications strategy

Part Three: Key project phases and Human Resource issues

Part Three of the booklet describes the linkage between the project stages and the human resource management activities. The material presented here draws on the experience of the Office of Government Information Technology and, more recently, the Office of Asset Sales and Information Technology Outsourcing in relation to the whole of government information technology initiative.

The material supplements processes included in Parts One and Two of this booklet and is designed to help agencies determine the timing of their key human resource related activities.

3.1 Project stages

The stages illustrated below may apply to the 'group' process associated with the whole of government IT initiative or to individual IT outsourcing projects. Staffing approaches outlined in Part One require agencies in a group to coordinate their internal communication and key staff management processes and to avoid the risk of delay or disruption to the timing of the group tender process and contract negotiations.

3.1.1 Starting up

The first stage, which involves establishing the project, or starting up, requires managers to address a range of HR activities:

Project stages

Associated HR activities

Stage 1 Establish project structure Convene steering committee and negotiation/project team Agree project timeframes and milestones identify key HR resources/budget allocation; establish HR group; develop roles/responsibilities/partnerships; set communication strategy in place; commence consultation with staff and other key stakeholders; identify contingency plan (for example in case of industrial disputation) to ensure critical functions are maintained; identify business, technical or other synergies; and establish how IT will fit into an agency's future business plans.

Agencies in a 'group' will operate under a Steering Committee and a Negotiation Team that can draw on the assistance of HR specialists. Such assistance may be available from agency specific personnel and/or private sector consultants who form part of the project team or a support group to the project team. 'Group' specific issues will need to be considered e.g. staffing approach (Clean Break or Phased), joint communication, use of group resources for training, agency flexibility versus 'group' consistency and reporting requirements.

3.1.2 Tender stages

The various tender stages are as follows:

Project stages

Associated HR activities

Stage 2 Development of Invitation to Register Interest (ITRI)
Stage 3 Draft Request for Tender (RFT) preparation
Stage 4 Draft RFT issued to Industry
Stage 5 Final RFT issued
Stage 6 Tenders lodged and evaluated review industrial environment/agency agreements; determine preferred staffing approach; identify staff affected by outsourcing initiative and develop a staff profile; identify staff preferences (survey) where Phased approach is to be used; and refine (group specific) communication, skills development, restructuring, excess staff management and staff support strategies. develop HR clauses for RFT; develop HR evaluation criteria; develop HR clauses for contract; and issue guidance for contact with bidders, including due diligence protocols and privacy considerations. due diligence commences; and bidders require input from group/agency/HR manager or professionals. due diligence completed. evaluate bidder HR management/ implementation proposals; and refine HR clauses for contract.

At this point, it is important to make clear to staff the processes for determining those staff who are affected by outsourcing and those who are not. Where the Phased approach is to be used, staff preferences need to be identified in Stage 2 in terms of taking voluntary redundancy, jobs with the new contractor, or redeployment within the agency or elsewhere in the APS.

Retention of key staff in situ during these phases will be a priority task for management. Agencies will need to maintain effective communication with affected staff and other key stakeholders in order to sustain productivity and gain general support for the changes to be initiated.

Vacancy management, training and other staff support services should be in place for affected staff to enhance redeployment opportunities where this is part of the agreed staffing strategy. The impact on the Government's workplace diversity requirements will also need to be assessed as part of the planning and implementation process.

3.1.3 Final stages

Human resource activities associated with the final stages of outsourcing include:

Project stages

Associated HR activities

Stage 7 Final contract negotiations
Stage 8 Hand over date
Stage 9 Post hand over establish time for commencement of excess staff processes; finalise restructuring plan, including retraining requirements for retained staff; and vendor recruitment process (ensure Clean Break, if adopted, and privacy provisions are met). separation of agency staff; payment of voluntary redundancies or Phased approach transitional entitlements; redeployment of affected staff continues; and finalising training for retained staff (e.g. contract management). commence contract management arrangements; implement changed structures within agency and work redesign; manage redeployment; and action skills acquisition and recruitment plan.

These final stages of outsourcing involve agencies in a range of sensitive human resource management issues. Careful attention to these issues will benefit future productivity within the organisation.

The PSMPC can assist agencies on specific legislative provisions and the formal processes associated with the management of excess staff, e.g. retirement, redeployment and redundancy provisions. Guidance can be obtained from the Department of Workplace Relations and Small Business on workplace relations arrangements and agreement making.

Appendix A : Mechanism supporting the phased approach

Contractual obligation on an outsourcing contractor to pay an amount to a Department or Agency where the contractor employs or engages a person who has received a severance benefit from the Department or Agency in a situation where the 'Phased' approach has been adopted

Overview

A payment will be made to a department or agency only where the 'Phased' approach has been adopted, i.e., where a department or agency has negotiated with a Contractor the filling of vacant positions initially from APS staff currently performing the activity and certain terms and conditions to be offered to APS staff accepting employment with the Contractor.

Obligation

Where the Contractor employs or engages a person within six months of the commencement of the contract who has received a voluntary redundancy benefit from the contracting department or agency under the provisions of clause 11 of the APS General Employment Conditions Award 1995 or any successor provisions (including an agency specific Certified Agreement or Australian Workplace Agreements) the Contractor will pay to the department or agency an amount of $25,000.

A payment will be due and payable in respect of each person engaged irrespective of the period of employment or engagement by the Contractor, provided they are in the employment of the Contractor at some time between the commencement of the contract and the sixth month anniversary of the contract. The Contractor will pay the amount within 14 days of being advised by the department or agency of the amount payable by the Contractor. If the amount is not paid within 14 days the department or agency has the right to deduct the amount from monies otherwise payable to the Contractor.

No payment is required where the Contractor employs or engages a person who has resigned from the APS.

Administration

The Contractor is to provide in writing to the department or agency within 14 days after:

(a) the date on which the contract between them commences, the names, dates of birth, addresses and dates of commencement of all person employed or engaged by the Contractor on the commencement of the contract to perform work covered by the contract; and
(b) the commencement of a person's employment or engagement if the person is employed or engaged within six months after the commencement of the contract to perform work covered by the contract, the name, date of birth, address and date of commencement of the person.

Appendix B : APS Values and the Code of Conduct

APS values

• the APS is apolitical, performing its functions in an impartial and professional manner;
• the APS is a public service in which employment decisions are based on merit;
• the APS provides a workplace that is free from discrimination and recognises the diverse backgrounds of APS employees;
• the APS has the highest ethical standards;
• the APS is accountable for its actions, within the framework of Ministerial responsibility, to the Government, the Parliament and the Australian public;
• the APS is responsive to the Government in providing frank, honest, comprehensive, accurate and timely advice and implementing the Government's policies and programs;
• the APS delivers services fairly, effectively, impartially and courteously to the Australian public;
• the APS has leadership of the highest quality;
• the APS establishes cooperative workplace relations based on consultation and communication;
• the APS provides a fair, flexible, safe and rewarding workplace; and
• the APS focuses on achieving results and managing performance.

APS Code of Conduct

• an APS employee must behave honestly and with integrity in the course of APS employment;
• an APS employee must act with care and diligence in the course of APS employment;
• an APS employee, when acting in the course of APS employment, must treat everyone with respect and courtesy, and without harassment;
• an APS employee, when acting in the course of APS employment, must comply with all applicable Australian laws;
• an APS employee must comply with any lawful and reasonable direction given by someone in the employee's Agency who has authority to give the direction;
• an APS employee must maintain appropriate confidentiality about dealings that the employee has with any Minister or Minister's member of staff;
• an APS employee must disclose, and take reasonable steps to avoid, any conflict of interest (real or apparent) in connection with APS employment;
• an APS employee must use Commonwealth resources in a proper manner;
• an APS employee must not provide false or misleading information in response to a request for information that is made for official purposes in connection with the employee's APS employment;
• an APS employee must not make improper use of:
  - inside information; or
  - the employee's duties, status, power or authority;
  in order to gain, or seek to gain, a benefit or advantage for the employee or for any other person;
• an APS employee must at all times behave in a way that upholds the APS Values and the integrity and good reputation of the APS;
• an APS employee on duty overseas must at all times behave in a way that upholds the good reputation of Australia; and
• an APS employee must not, except in the course of his or her duties as an APS employee or with the Agency Head's express authority, give or disclose, directly or indirectly, any information about public business or anything of which the employee has official knowledge.

Appendix C : Probity protocols

Background

In April 1997, the Commonwealth Government announced the IT Infrastructure Initiative.

Over the next two years, Requests for Tenders (RFTs) for various Projects will be released to industry.

The Government is committed to ensuring a high standard of probity in all phases of evaluation and decision making for the Projects.

The probity process has been developed to ensure there is objective and consistent assessment during all phases of the decision making for each Project to promote industry and community confidence in the Initiative.

The following protocols contemplate situations that Group Agency employees and consultants may face in relation to Meetings. These protocols are in addition to and supplement any other obligations which apply to Group Agency employees as public servants such as those in the Public Service Act, the Crimes Act, the Privacy Act, the Archives Act and guidance such as Guidelines on Official Conduct of Commonwealth Public Servants.

The Government will view any failure to comply fully with any of these protocols as a breach of process which may have serious ramifications.

If you are aware of any breach of the protocols, or if any tenderer or potential tenderer encourages you in any way to breach these protocols, or if you are concerned that the process may have been compromised or that such a perception may exist, you should document all details immediately and inform your Agency's Project Manager and the Project Coordinator or Project Directorate at the IT Infrastructure Initiative (ITII).

Protocols

Agency nomination of meeting participants

Meetings are not open for any interested person to attend. Agencies are responsible for the selection of their representatives for Meetings. It is preferable for agencies to nominate a permanent representative, in order to maintain consistency.

Prior written notice of the names and positions of all such representatives should be given by the Project Manager at each Agency to the Project Coordinator at the ITII. The Project Coordinator will be present at all Meetings. The Project Coordinator will commence all Meetings with a roll call of the nominated representatives to ensure that only those people are in attendance.

Confidentiality and privacy

Group Agency employees must comply with the confidentiality and privacy obligations imposed under the Public Service Act and Privacy Act, respectively.

Consultants must execute and return to the Project Coordinator at the ITII a copy of the attached Deed of Confidentiality and Privacy before being admitted to a Meeting, and must strictly comply with its terms. Compliance with this requirement will be checked by the Project Coordinator at the roll call of each Meeting.

The proceedings and minutes of Meetings are confidential. Where that information must be disclosed to Agency personnel for the purposes of the Initiative, the confidentiality of the information must be impressed upon those personnel.

Declarations of interest

If you (or in the case of a consultant, others in your firm or business entity) have any existing business or personal relationship (or develop a relationship during the duration of the Initiative) with a tenderer or potential tenderer which could raise a conflict of interest or give the appearance of a conflict of interest, you must inform your Project Manager and the ITII Project Directorate promptly in writing of the nature of this relationship.

Gifts, hospitality and other benefits

You must not seek or receive any gifts (including Christmas gifts) hospitality (including Christmas functions) or any other benefits from any tenderer or potential tenderer. You must immediately inform your Project Manager and the Project Coordinator if any tenderer or potential tenderer offers you any gifts, hospitality or other benefits.

Conferences

You must not attend or participate in conferences organised or sponsored by tenderers or potential tenderers, unless specific prior written permission is given by the Project Manager in consultation with the Project Coordinator. You may attend or participate in other IT & T industry conferences. Under no circumstances should a tenderer or potential tenderer pay for your attendance at a conference or any related expenses. In any event, you should excuse yourself from social functions associated with any conference at which tenderers or potential tenderers are present and you should comply fully with these protocols and their intent at all times.

Offers of employment

If any tenderer or potential tenderer discusses the possibility of offering you employment during or after the completion of the Project, you must immediately inform your Project Manager who will inform the Project Coordinator.

Inquiries from government personnel not engaged in the initiative

Information about the Initiative, a Project or an RFT process should only be provided to Government personnel not engaged in the Initiative on a strict need to know basis. If any Government employee (including your Agency) not engaged in this Initiative makes any inquiry or requests any information regarding the Initiative or a Project, you must refrain from providing any such information and promptly inform your Project Manager and the Project Coordinator at the ITII.

Existing relationships with industry

It is possible that Government arrangements may exist which require Group Agency personnel or consultants engaged directly on the Initiative to interact with tenderers and potential tenderers in matters unrelated to the Project (eg. incumbent suppliers). Under no circumstances should the Initiative, a Project or the RFT process be discussed during interactions relating to these existing arrangements. You must advise your Project Manager and the Project Coordinator of any unauthorised attempt by a tenderer or potential tenderer to enter into such discussions during these interactions.

Media

The Initiative, a Project or an RFT process must not be discussed with the media nor must any comments be made which are capable of being reported. Any media request made to you should be directed to the Office of the Minister for Finance and Administration and the Project Coordinator should be informed immediately.

Perception

Not only must a high standard of probity be maintained but you must also ensure that your conduct does not give rise to a perception that would allow for the erosion of industry and community confidence in the way in which the Initiative, all Projects and all RFT processes are implemented. Conduct which has a tendency to increase the risk of issues of integrity to be raised as a matter of public concern should be avoided.

PRIVACY AND CONFIDENTIALITY DEED

Non APS Staff

Name:

Address:

DEED

1. "Confidential Information":
(a) means all information that:
(i) I become aware of or create (whether disclosed to me orally, in writing or in any other form) while carrying out my duties for the Commonwealth regarding the IT Infrastructure Initiative (ITII); and
(ii) is confidential to any person including the Commonwealth Government, the Office of Asset Sales and IT Outsourcing (OASITO), Commonwealth agencies, suppliers or consultants;
(b) includes all copies and notes that I make based on or arising out of any disclosure under clause 1(a); and
(c) does not include information to the extent that I:
(i) independently develop or know the information; or
(ii) am required to disclose the information by law.

2. "Personal Information" means information or an opinion (including information or an opinion forming part of a database), whether true or not, and whether recorded in a material form or not, about a natural person whose identity is apparent, or can be reasonably ascertained, from the information or opinion.

3. I acknowledge that it could cause significant loss and damage to the Commonwealth if I use or disclose the Confidential Information or Personal Information other than as necessary for my duties relating to the ITII.

4. In return for being given access to the Confidential Information and Personal Information I agree:
(a) to keep the Confidential Information confidential;
(b) only to use the Confidential Information and Personal Information as necessary to carry out my duties relating to the ITII;
(c) only to copy the Confidential Information as directed by OASITO and to mark any such copy ëConfidentialí; and
(d) that I will not disclose the Confidential Information.

5. I agree that I will immediately notify OASITO if I become aware that any of the Confidential Information or Personal Information:
(a) has been used, copied or disclosed without authority; or
(b) is required to be disclosed by law.

6. If:
(a) OASITO asks me to return or destroy any or all copies of Confidential Information or Personal Information;
(b) I breach any provision of this Deed; or
(c) I no longer need to use the Confidential Information or Personal Information to carry out my duties relating to the ITII (e.g. because I leave),
then I will immediately:
(d) destroy all copies of the Confidential Information and Personal Information that I have made and stored in electronic form on any equipment other than Commonwealth owned equipment; and
(e) return to OASITO all other copies of the Confidential Information and Personal Information (e.g. photocopies); and

and I will never disclose or make any further use of the Confidential Information or Personal Information.

7. This Deed:
(a) does not transfer any interest in any intellectual property; and
(b) is governed by the laws applicable in the Australian Capital Territory.

EXECUTED as a Deed on DATE .

SIGNED SEALED and DELIVERED by

 

................................................................... ...................................................
(Print name) (Signature)

in the presence of

.....................................................................
(Signature of witness)

......................................................................
(Print name of witness)

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