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Last updated: 30 November 2006

Chapter 4: Integrity and fairness

Abbreviations

A list of the abbreviations used in this report is available in the Glossary

Operation of the Code of Conduct

Employees need to have confidence that agencies promote the Values and the Code and will take appropriate action if the behaviour or actions of employees is suspected to have breached the Code. This section looks at reporting and managing suspected breaches of the Code and reviews of Code decisions.

There was a particularly high number of finalised investigations into the Code in 2005–06. Fifty-two agencies finalised investigations into the behaviour of 1491 employees suspected of breaching the Code. This result was largely due to an increase in the number of investigations finalised in Centrelink (835 in 2005–06 compared to 203 in 2004–05) resulting from a strengthened IT system introduced last year to monitor employees accessing client records inappropriately. In the discussion below, the impact of the Centrelink result on APS-wide figures is highlighted where appropriate.

Reporting suspected breaches of the Code of Conduct

All employees have a role in alerting agencies to suspected breaches of the Code. Agencies, therefore, have a strong interest in ensuring that employees are educated in all aspects of the Code, including how they can report suspected misconduct and the protections against victimisation or discrimination available to them should they do so.

Agencies have been successful in increasing awareness among their employees of how to report suspected breaches of the Code. In particular, 74% of employees indicated that they had been made aware by their current agency that they can report a suspected breach of the Code to an authorised person in their agency compared to 69% of employees last year.

Most employees have also been made aware of their rights to protection if they do report misconduct. Almost four out of five (79%) of those employees who were made aware had also been made aware that if they report a suspected breach of the Code to an authorised person they are provided with protection from victimisation and discrimination, a slight improvement on last year’s results.

This year, there was a slight decrease in the proportion of employees who indicated that they had witnessed a serious breach of the Code (8% in 2006, down from 11% in the previous two years).⁵ The employee survey results continue to raise some concerns about the extent to which employees are prepared to report serious breaches of the Code. Consistent with previous years, around half of employees who indicated that they had witnessed a serious breach of the Code reported the suspected breach.

Employees who witnessed a serious breach gave three main reasons for not reporting the suspected breach: the suspected breach had already been reported or had been reported in the past and nothing had been done about it; concern about retribution or victimisation that would result from reporting; and concern about the negative effect reporting would have on their career. To a lesser extent, some employees indicated that they were not aware how to report a suspected breach and some indicated that the breach had already been reported by someone else and action was being taken.

Employee comments on these issues included the following (these comments are not necessarily representative).

Previous breaches were reported to senior management and yet there did not seem to be an improvement in the situation and the inappropriate conduct continued.

Fear for myself and my job. Although we have mechanisms for reporting this behaviour, I am not confident that I would be able to tough it out if I was further harassed about reporting this.

Fear of report impacting on job prospects.

I was not aware that a complaint could be made.

Methods of reporting

The impact of the increased number of investigations of suspected Code breaches at Centrelink has had a substantial impact on the means by which suspected breaches of the Code had been brought to agencies’ attention.⁶ Reflecting the overwhelming impact of the Centrelink cases on the overall statistics, the most common means is now through an agency’s compliance or monitoring systems such as audit (accounting for 60% of investigations compared to 27% in 2004–05).

When Centrelink’s results are removed from the analysis, the result for agencies’ compliance or monitoring systems is consistent with last year’s at 25%. Conduct identified by work colleagues (24%) and supervisors and/or managers (23%) also continue to be important ways in which agencies’ are made aware of suspected breaches of the Code. Complaints from members of the public or stakeholders have declined for the second consecutive year as a proportion of investigations from 17% in 2003–04 to 9% this year. Consistent with previous years, 10% of investigations arose from other sources, including notification by another agency and state and territory police.

Whistleblower reports

The APS whistleblowing scheme is provided for in the Act and the Regulations. Section 16 of the Act states that a person performing functions in or for an agency must not victimise, or discriminate against, an APS employee because they have reported a breach or alleged breach of the Code to an authorised person within the agency. The Regulations require an agency head to establish procedures for dealing with a whistleblower report made to an authorised person in the agency and to outline how reports are to be handled. They also outline the role of the Australian Public Service Commissioner and the Merit Protection Commissioner.

One conclusion from the Commission’s evaluation of managing breaches of the Code is that there is widespread confusion about the current arrangements for whistleblower reports. Reflecting this concern, the current provisions and their relationship with the Code have been examined as part of the review of the Act. A particular issue has arisen as to whether the procedures serve their initial intention of allowing employees to report significant suspected misconduct in the public interest.

The need to examine the effectiveness of whistleblowing procedures is also an issue that has received international attention. For example, a recent reform in Canada that found its genesis in the ‘AdScam’ scandal is the Public Servants Disclosure Protection Act 2005 (PSDP Act).⁷ The PSDP Act works in tandem with the Financial Administration Act to ensure that all Canadians reporting government wrong-doing are protected. The PSDP Act also creates a new agency, the Public Sector Integrity Commission, to receive and investigate disclosures of wrong-doing.

In the APS context, very few finalised investigations result from reports made under agency whistleblower procedures. In 2005–06, only 3% of finalised investigations into suspected breaches of the Code were instigated as a result of a report under the agency whistleblower procedures. The proportion rises to 6% when Centrelink data is removed, a slight increase on the 4% reported last year.

Only a small number of agencies have not established procedures for dealing with whistleblower reports, as required by the Regulations. One medium agency reported that it had no procedures in place for dealing with whistleblower reports made by employees and was not developing such procedures, and a further eight agencies reported that they were developing procedures. Of the eight agencies developing such procedures in 2004–05, five continued to report that they were developing procedures in 2005–06).

People authorised to receive reports

In previous evaluation work conducted by the Commission, concern was expressed that there may be an under-reporting of whistleblower reports because of an inability on the part of agencies and employees to recognise when a report of an alleged breach of the Code is also a whistleblower report. This may result from a lack of clarity in the Regulations, and from agencies designating a wide range of authorised persons to receive reports of suspected misconduct, who may not then treat many of the reports of suspected misconduct as whistleblower reports.

There is a wide variation in who is authorised to receive whistleblower reports for the purposes of section16(c) of the Act within agencies (see Table 4.2). However, consistent with last year’s result, only 17% of agencies rely solely on the agency head and have not authorised any other people to receive reports.

This year, the most commonly nominated authorised people continue to be the head of corporate services (46%) and the human resources manager (43%). Only nine agencies, however, have authorised all line managers to receive reports under the agency’s whistleblowing procedures.

Table 4.2: Person(s) authorised to receive whistleblower reports, 2005–06
Categories of ‘authorised’ persons	Number of agencies reporting each category
	Small	Medium	Large	All agencies
Head of corporate services	13	14	12	39
HR manager	9	14	13	36
All line managers	1	2	6	9
Employees in a specialist conduct unit	0	1	8	9
Agency head only person	6	7	1	14
All SES	11	6	6	23
SES Band 2s and 3s	1	3	6	10
Source: Agency survey

The numbers of authorised people tended to increase with agency size. Larger agencies also tended to have more authorised people outside the ACT.

Whistleblower referrals to the Australian Public Service Commissioner or Merit Protection Commissioner

In circumstances where it is not appropriate for an agency head to deal with a particular matter, or where the whistleblower is not satisfied with the outcome of the investigation by the agency, an APS employee may refer the report to the Australian Public Service Commissioner or the Merit Protection Commissioner.

Table 4.3: Whistleblower reports received during 2005–06
	Carried over from 2004–05	Received	Withdrawn	Not accepted	Under consideration	Finalised
Merit Protection Commissioner	0	5	1	2	2	0
Australian Public Service Commissioner	3	17	0	14	2	4
Source: Merit Protection Commissioner

As Table 4.3 indicates, the Merit Protection Commissioner received five whistleblower reports during 2005–06, one more than in 2004–05. One report was withdrawn, two were not accepted, and the remaining two were still being considered at the end of the reporting period. Issues raised included falsifying information, performance management issues, and bullying and harassment.

The Australian Public Service Commissioner received 17 reports in 2005–06, two fewer than in 2004–05. Nine of these were from current employees and eight from private citizens.

The Australian Public Service Commissioner considered reports from two employees in relation to the conduct of agency heads and a report from an employee in relation to the conduct of the Merit Protection Commissioner. In all three cases, it was considered that there was no evidence to support the allegations of inappropriate behaviour made by the employees. In the case of the Merit Protection Commissioner, it was the Australian Public Service Commissioner’s view that the allegations reflected the employee’s disappointment with the outcome of a review matter.

Twelve of the remaining reports did not meet the criteria for investigation by the Australian Public Service Commissioner. Advice was provided to the eight private citizens (not covered by the whistleblower reporting provisions) on the appropriate ways in which their concerns could be addressed, either by referral to the relevant agency head or to other administrative review bodies, such as the Commonwealth Ombudsman. Four APS employees were advised that the Regulations require that they should direct their allegations to the relevant agency head, unless it is inappropriate for the agency head to deal with a particular matter or where the whistleblower is not satisfied with the outcome of the investigation by the agency. The remaining two reports were on hand at the end of the reporting period.

Matters covered in the reports received ranged from concerns about payments administered by Comcare to allegations of discrimination and harassment.

An inquiry started in 2004–05 into three reports relating to allegations of harassment was discontinued this year, as the person against whom the allegations were made had left APS employment.

Managing suspected breaches of the Code of Conduct

The way in which agencies manage investigations of suspected breaches of the Code can have an important influence on perceptions of integrity and fairness by employees and the public. This section examines data on the nature of investigations into suspected breaches of the Code by agencies in 2005–06 and how suspected breaches were managed.

Levels of investigation

There continues to be a large variation amongst agencies, not explained by agency size, in the proportion of employees subject to investigations into suspected breaches of the Code. In 2005–06, nine large agencies reported fewer than three investigations for every 1000 employees (AGD, ASIC, BoM, CRS, DEH, DFAT, DOTARS, FaCSIA and Medicare Australia). Five large agencies reported more than 10 investigations per 1000 employees (Centrelink, CSA, Customs, Finance and DIMA—Centrelink reported more than 30 per 1000 employees).

Of the employees investigated for a suspected breach, 71% were from three agencies (Centrelink, ATO, and Defence). These agencies are over-represented among investigations, accounting for just under half of all APS employment.

This year, 76% of employees who were investigated were found to have breached the Code—an increase on the 63% of employees found to have breached the Code in previous years. Some, but not all of the increase this year can be attributed to investigations in Centrelink. When Centrelink data is removed from this year’s analysis, 69% of employees investigated were found to have breached the Code.

Nature of reported breaches

Table 4.4 sets out the frequency with which particular elements of the Code were suspected of being breached in the formal investigations finalised during 2005–06 and the number of agencies that reported having finalised at least one formal investigation involving a suspected breach of that element of the Code.

There continues to be significant variation in the extent to which employees are investigated for suspected breaches of different elements of the Code. The element that was suspected of being breached by the highest number of employees overall was section 13(11) of the Act—‘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’. Investigations into possible breaches of section 13(11) were finalised in 14% of small agencies, 38% of medium agencies and 87% of large agencies. This may in part reflect its use in combination with other elements.

Other elements that were more commonly used related to complying with lawful and reasonable directions, behaving with honesty and integrity, avoiding conflict of interest, and complying with Australian laws.

Table 4.4: Elements of the Code suspected of being breached in investigations finalised during 2005–06
Element of the Code	No. of employees investigated for a suspected breach of this element (Number)	Percentage of cases where a breach was found (%)	No. of agencies with finalised investigations (Number)
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 (s.13(11))	1032	78	35
comply with any lawful and reasonable direction given by someone in the employee’s agency who has authority to give the direction (s.13(5))	981	84	25
behave honestly and with integrity in the course of APS employment (s.13(1))	930	76	30
act with care and diligence in the course of APS employment (s.13(2))	826	81	25
disclose, and take reasonable steps to avoid, any conflict of interest (real or apparent) in connection with APS employment (s.13(7))	777	80	10
when acting in the course of APS employment, comply with all applicable Australian laws (s.13(4))	762	81	18
use Commonwealth resources in a proper manner (s.13(8))	312	76	35
when acting in the course of APS employment, treat everyone with respect and courtesy, and without harassment (s.13(3))	200	63	37
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 (s.13(10))	99	36	13
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 (s.13(9))	57	58	10
maintain appropriate confidentiality about dealings that the employee has with any Minister or Minister’s member of staff (s.13(6))	22	41	2
not disclose certain information without authority (s.13(13) and Regulation 2.1)⁸	3	67	3
while on duty overseas, at all times behave in a way that upholds the good reputation of Australia (s.13(12))	3	67	3
Note: Agencies were asked for data on employees that were the subject of formal investigations, and were specifically asked not to include data on initial investigations that did not proceed to formal misconduct procedures. However, it is possible that some agencies may have provided information on elements of the Code that were suspected of being breached in both formal and informal investigations. Source: Agency survey

In 2005–06, there was an increase in the average number of elements of the Code suspected to have been breached, investigated per employee. This year, the 1491 employees involved in finalised investigations were investigated against a total of 6004 suspected breaches of elements of the Code (some of these breaches are likely to involve the same action which has breached more than one element of the Code). This represents an average of four elements of the Code suspected of having been breached by each employee investigated, an increase from 2.5 elements in 2004–05 and 1.8 in 2003–04. This increase was due to investigations in Centrelink, and when this data was removed from the analysis, the average number of elements per employee investigated dropped substantially to 2.2 elements per employee.

Table 4.5 shows improper access to personal information and conflict of interest were the two most common subjects of misconduct investigations. Investigations in Centrelink accounted for over 90% of investigations that related to these two types of misconduct. When Centrelink’s results are removed, the most common type of misconduct investigated, as in 2004–05, was improper use of the Internet and/or email (244 employees investigated in 28 agencies).

The action taken by Centrelink to address the improper use of customer records, both through the development of a strengthened IT system and by taking action against employees found to have behaved improperly, demonstrates the importance that the APS places on protecting the personal information it holds. It also demonstrates that employees who do the wrong thing will be caught and sanctioned appropriately. The Australian Public Service Commissioner released a statement on the breaches of the Privacy Act 1988 and the Public Service Act 1999 on 30 August 2006. In the statement she stressed that all agencies need to ensure they have the necessary educative and compliance mechanisms in place to ensure their privacy and confidentiality obligations are met.

Table 4.5: Number of employees by types of misconduct in investigations finalised during 2005–06
Type of misconduct	No. of employees investigated for this type of misconduct (Number)⁽¹⁾	Percentage of cases where a breach was found (%)	No. of agencies with finalised investigations (Number)
Improper access to personal information (e.g. browsing)	792	82	10
Conflict of interest	755	80	9
Improper use of Internet/email	283	78	29
Inappropriate behaviour of employees (other than harassment or bullying) during working hours (e.g. treating clients or stakeholders disrespectfully)	133	70	33
Harassment and/or bullying	72	53	27
Improper use of resources other than Internet/email (e.g. vehicles)	52	75	13
Unauthorised disclosure of information (e.g. leaks)	41	20	12
Fraud other than theft (e.g. identity fraud)	40	80	13
Improper use of position status (e.g. abuse of power, exceeding delegations)	28	50	10
Private behaviour of employees (e.g. at social functions outside working hours)	21	57	12
Theft	20	60	11
Misuse of drugs or alcohol	9	78	6
⁽¹⁾ An individual employee may be counted against more than one type of misconduct. Note: Agencies were asked for data on employees who were the subject of formal investigations, and were specifically asked not to include data on initial investigations that did not proceed to formal misconduct procedures. However, it is possible that some agencies may have provided information on elements of the Code that were suspected of being breached in both formal and informal investigations. Source: Agency survey

Consistent with last year’s findings, Table 4.5 suggests that misconduct in areas where the investigation of the suspected breach relies more on physical evidence (e.g. computer records or actions identified through routine audit practices) than on opinion or observation is more likely to result in a finding that the Code has been breached. The Commission’s previous evaluation work suggests that another factor influencing the likelihood of a finding that the Code was breached is the different practices in agencies as to the amount of evidence required before commencing an investigation. Some agencies delay commencing a formal investigation until a preliminary investigation has been conducted, whereas other agencies routinely commence formal investigations as soon as they are notified of a suspected breach.

Outcomes of finalised investigations

Table 4.6 shows the outcomes of investigations into suspected breaches of the Code finalised by agencies in 2005–06.

Table 4.6: Outcomes of finalised investigations into suspected breaches of the Code, 2005–06
Outcome	No. of employees affected⁽¹⁾	No. of agencies that reported the outcome
Reprimand	419	34
Deduction from salary by way of a fine	344	21
No breach found	220	23
Reduction in salary	197	13
Employee counselled	173	22
Investigation discontinued because of resignation of employee under investigation	169	17
Termination of employment	92	19
Breach found but no sanction imposed	57	6
Reduction in classification	52	16
Reassignment of duties	23	8
Other	17	10
⁽¹⁾ An employee may be counted against more than one outcome. Note: Agencies were asked for data on employees who were the subject of formal investigations, and were specifically asked not to include data on initial investigations that did not proceed to formal misconduct procedures. However, it is possible that some agencies may have provided information on elements of the Code that were suspected of being breached in both formal and informal investigations. Source: Agency survey

In 169 cases (11%), the formal investigation into a suspected breach of the Code was discontinued when the employee under investigation resigned from the APS (proportionally this is the case, even when the Centrelink data is removed). There has been no change to the resignation rate in such circumstances since 2003–04.

The most common sanction applied to employees continues to be a reprimand, followed by a deduction of salary by way of a fine. The use of high impact sanctions—termination of employment, reduction in classification and reduction in salary—is relatively less common, although a reduction in salary is by far the most commonly used high impact sanction.

The employment of 92 employees from 19 agencies was terminated as a consequence of misconduct investigations finalised during 2005–06. Centrelink accounted for 42% of terminations, with Defence and ATO accounting for a further 24% of terminations. Reductions in classification occurred in 16 agencies, with half (48%) of the reductions reported in Centrelink, and a further 21% in Defence and CSA. Thirteen agencies reduced the salary of 197 employees—Centrelink accounted for 79% of the salary reductions.

Previous State of the Service reports have noted variation between large agencies in the extent of their use of high impact sanctions. This variation continued in 2005–06. The total number of sanctions imposed by 22 of the 23 large agencies ⁹ ranged from 2 to 948 (when Centrelink results are removed, the range is consistent with previous results). High impact sanctions accounted for 19% of sanctions imposed. The imposition of high impact sanctions varied between 0% and 100% of total sanctions imposed amongst the 22 large agencies—one agency had only two sanctions imposed but these were both high impact. High impact sanctions were not used in five large agencies and were greater than 30% of total sanctions in four of the 22 agencies.

Assurance mechanisms

It is important for agencies to be confident that they have proper processes in place for handling suspected breaches of the Code. The integrity of these processes is a fundamental part of effective governance, and is directly related to levels of employee satisfaction and engagement, and public confidence.

There was a relatively low use of staff surveys, consultative committees, or other mechanisms to collect information on employees’ confidence that agency investigations into suspected breaches of the Code of Conduct were conducted fairly and objectively. Only 18% of agencies reported that they used at least one mechanism—with consultative mechanisms more common (8%) than staff surveys (5%). Five agencies reported using other mechanisms including seeking feedback from employees in the context of revising administrative circulars, and seeking feedback from employees subject to investigation. ATO had the most comprehensive approach with monthly quality assurance and technical quality reviews using external reviewers.

These results suggest that there is scope for agencies to make a more concerted effort to consider how best they can assure themselves that employees have confidence in their handling of misconduct.

Reviews related to Code of Conduct matters

The Regulations provide non-SES employees with a review right in relation to a determination that they breached the Code and/or the sanction imposed for a breach (other than termination decisions). An application for such a review is lodged directly with the Merit Protection Commissioner.

Table 4.7: Reviews related to Code breaches or sanctions, 2001–02 to 2005–06
	2001–02	2002–03	2003–04	2004–05	2005–06
Number received	43(a)	43	58	41	42
Percentage of finalised cases where the original decision was confirmed	64%	34%	43%	46%	77%
Note: ^(a) This figure now excludes a matter dealt with under the Public Employment (Consequential and Transitional) Amendment Act 1999. Source: Merit Protection Commissioner

In 2005–06, the Merit Protection Commissioner received 42 applications for review compared to 41 in 2004–05 (see Table 4.7). This represents a review rate of around 4% of finalised investigations where employees were found to have breached the Code.

During 2005–06, the Merit Protection Commissioner made a formal recommendation to an agency head in 30 cases. In 23 (77%) of these, the Merit Protection Commissioner recommended the decision be confirmed. In the remaining seven cases the Merit Protection Commissioner recommended that the agency head vary the decision. Only three reviews included a recommendation to vary the sanction imposed. No systemic issues were identified through these reviews.

The data indicates that the proportion of cases in which original decisions are set aside can vary greatly from year to year. This reflects both the small number of reviews and the diverse nature of the diff erent cases.

Disclosure of information

Last year’s report noted developments concerning Public Service Regulation 2.1—part of the statutory framework limiting the disclosure of information by APS employees.

In December 2003, the validity of Regulation 2.1 was cast into doubt by the decision in Bennett v The President, Human Rights and Equal Opportunity Commission (2003) 204 ALR 119 (the Bennett case). A new Regulation 2.1 was subsequently developed and came into effect on 23 December 2004; however, the Senate disallowed the new regulation on 16 June 2005.

During the period that the new form of Regulation 2.1 was in force, its validity was challenged in a case before the ACT Magistrates Court (van Hilst v Scrine [ACT Magistrates Court, 15 December 2005]). In that case, the Magistrate expressed some concern about the limitations on disclosure applied by the revised form of the Regulation, particularly as it related to information that was already in the public domain.

Taking account of the van Hilst v Scrine decision, the Government submitted a revised Regulation 2.1 to the Governor-General, which came into effect on 15 July 2006. This regulation has not been disallowed.¹⁰

The employee survey gave the following examples of a serious breach: fraud, theft, misusing clients’ personal information, sexual harassment, and leaking classified documentation.
Centrelink introduced a strengthened IT system last year designed to monitor inappropriate accessing of client records which resulted in a significant increase in the number of investigations finalised in Centrelink (discussed above).
Commission of Inquiry into the Sponsorship Program and Advertising Activities (Gomery Review) 2005, <http://www.gomery.ca/en/index.asp>; Parliamentary Information and Research Service 2006, The Public Servants Disclosure Protection Act and Proposed Amendments, <http://www.parl.gc.ca/information/library/PRBpubs/prb0556-e.htm>
The same version of Regulation 2.1 was in place for the reporting period 2005–06. See the discussion of changes to Regulation 2.1 in the section ‘Disclosure of Information’ later in this chapter.
ASIC was the only large agency that did not finalise any investigations into suspected breaches of the Code in 2005–06.
Further information on Regulation 2.1 can be found in the Commission’s Circular, 2006/03, Amendment to the Public Service Regulations 1999, <http://www.apsc.gov.au/circulars/circular063.htm>