24 February 2016

2nd Reading Speech

The Hon. ADAM SEARLE (Leader of the Opposition) [4.35 p.m.]: I lead for the Opposition on the Government Sector Employment Legislation Amendment Bill 2016. The Opposition does not oppose this bill, but it has a number of concerns that I will outline in my contribution. I know that the Christian Democratic Party has a number of amendments and the Opposition has also lodged some amendments with the Clerk that address some of our concerns. We urge all honourable members to give close attention to those amendments.

During the passage of the Government Sector Employment Act in June 2013 the Government indicated that a second stage bill to align the Police, Transport and Health senior executive services would be introduced later that year. The Government Sector Employment Legislation Amendment Bill 2013 was introduced, but was then withdrawn. Before the House is the latest iteration of the concepts in that bill and it contains much of the same features. The Government Sector Employment Legislation Amendment Bill 2016 aims to align the senior executive service of Police, Transport and Health with employment arrangements in the public service.

The New South Wales Labor Opposition opposed the government sector employment legislation and committed to a review and a rewriting of public sector employment laws at the 2015 State election. Therefore, we are cautious about this bill. The Labor Opposition had a number of concerns about the Government Sector Employment Act, concepts in it and the framework underpinning it, which I outlined fully on 19 June 2013 in this place in my contribution to the second reading debate. I will not repeat the things I said on that occasion.

The Government Sector Employment Legislation Amendment Bill 2016 will amend the Government Sector Employment Act 2013, the Health Services Act 1997, the Police Act 1990 and the Transport Administration 1988 to bring employment arrangements for senior executives in the Health Service, the Police Force and the Transport Service into line with employment arrangements for senior executives in the public service under the Government Sector Employment Act. The bill will also bring employment arrangements for non-executive employees of the NSW Police Force who are not police officers into line with the employment arrangements for non-executive employees of the public service.

The bill also facilitates the mobility of senior executives between the public service, Police, Transport and Health, with certain caveats and riders. For example, if people not from a health background are to be moved as senior executives into the Health Service it can only be done with approval of local area health boards and the like, so there are certain safeguards and caveats. The mobility provisions are not opposed by the Opposition. We have concerns about whether bringing the employment arrangements from all the different sectors into one constellation is necessarily desirable. The purpose and function of the Police Force is incredibly different from that of the public service generally. It is doubtful that uniformity or convergence of employment arrangements for their own sake would be desirable, given the different purposes for which the different services were created. The Opposition does not have any problems with the mobility provisions.

The bill also makes consequential amendments to the Government Sector Employment Act 2013, including provisions dealing with the transfer and secondment of government sector employees between agencies and the termination of employment and compensation payable to senior executives. The absence of substantive rights in the area of termination is already an issue in the public service. We highlighted this in the parliamentary debate on the Government Sector Employment Act. It appears that this issue will now be extended into the areas of Health, Police and Transport. I ask the Parliamentary Secretary to give some thought to this in her reply. On page 5 item [20] introduces a new section 39 (7) to the Government Sector Employment Act which provides:

The regulations may make provision with respect to the compensation (if any) to which a Public Service senior executive whose employment is terminated is entitled under his or her contract of employment.

The existing provision in section 39 (4) (h) and (i) already touches on compensation for senior public servants. It deals with it substantively in (h), and (i) talks about any matter dealt with in the regulations. It is clear that this matter can already be dealt with comprehensively and in fact is dealt with in schedule 1 to the Government Sector Employment Rules 2014. There is a model contract for senior executives in the public service that says on termination the rights are governed by section 36 of the Government Sector Employment Regulation. The Opposition does not think those provisions are adequate. Nevertheless, the issue is comprehensively dealt with in a legal way. The Opposition queries and would like the Government to elucidate why new subsection (7) is deemed to be necessary in this situation. We do not oppose it. We think there is a problem here, but not for the same reasons that the Government does.

The bill will now explicitly exclude Crown law officers from the summary removal provisions of the Government Sector Employment Act. It does this by an amendment to section 76 of the Government Sector Employment Act. I am dealing with item [63], on page 9 of the bill. The Opposition thinks that this is a good thing. In fact, contrary to what the Parliamentary Secretary said in her second reading speech and contrary to what the Parliamentary Secretary in the other place said, this issue was well aired in both places during debate on the Government Sector Employment Bill. The Labor Opposition clearly raised as an issue that, although unintentionally, the terms of the Government Sector Employment Act overrode and abrogated the security of tenure of a range of important statutory office holders such as the Solicitor General, the Crown Advocate, the Director of Public Prosecutions, the Deputy Director of Public Prosecutions, the Solicitor for Public Prosecutions, public defenders and Crown prosecutors.

In the second reading debate on that bill and in debate in the Committee stage we said that, although unintentional, there was this abrogation of security of tenure and it should be dealt with by way of an amendment to the legislation to put it beyond doubt. The Opposition put forward an amendment on 19 June 2013. This place divided on it. It was negatived and the amendment was lost. Imagine my surprise when I saw the item [63] amendment, which is word for word the amendment that the Opposition proposed two years ago. It is worth observing that imitation is the most sincere form of flattery. It is pleasing that the Government has recognised that, although unintentionally, in its zeal to enact the government sector employment framework significant damage was done to the independence of those important public office holders and it will now be corrected.

We strongly commend the Government for bringing that amendment to the Parliament in the form of this bill. We think that is good thing because the mischief that we averred to was that one could imagine the situation where a public defender, a Crown prosecutor or the Director of Public Prosecutions could take a course of action with which the government of the day disagreed. In the public hue and cry over a matter, a government could conceivably decide to remove that office holder from their position. I think members would think that would be a bad thing. At the moment, only each House of Parliament can do that. That is why it is a good thing that this amendment is in the bill.

The bill also provides for the reinstatement or re-employment of senior executives in circumstances where the Public Service Commissioner believes that the employment was terminated either wholly or substantially in reprisal for a public interest disclosure. I am dealing with proposed section 83A on pages 10 and 11 of the bill. The absence of statutory provisions for the reinstatement of senior executives, including in circumstances in which termination was a reprisal for public interest disclosure, has been raised in the past with the Public Service Commissioner. New section 83A addresses this. The explanatory note to the bill says that the intention for this provision of the bill is to cover not only the public service but also senior executives in Health, Transport and Police. If one looks at page 9 of the bill, subclause (9), the definition of “senior executive” does capture all those different services. We welcome that, but we think that the drafting is a little cumbersome and clumsy.

It also rests on the notion of the Public Service Commissioner being satisfied that a relevant wrong was done and deciding that a person should be reinstated or re-employed. A further hurdle is the requirement to then give a direction under section 13 to the head of the relevant agency to reinstate or re-employ a person. There is another hurdle. Where the person’s employer is the Minister, the commissioner may make a recommendation to the Minister that the person be reinstated or re-employed, but it is only a recommendation; it is not a direction. The situation may arise where a substantive wrong could be done to a senior executive, but there could be no remedy, even where the Public Service Commissioner feels that there ought to be.

One of the issues we had with the government sector employment framework was not just the overweening centralisation of authority over the public service, which is now to be extended to Health, Police and Transport, but the concentration of power in the person of the Public Service Commissioner. This is not a criticism of the holder of that office, but we think such centralisation of power is not a good thing. Soviet-style centralisation ought to be relegated to the past.

The Hon. Dr Peter Phelps: Or to The Greens.

The Hon. ADAM SEARLE: I acknowledge that interjection. Not only is that control and authority concentrated over the public service to an extent not seen since the days of the old Public Service Board but now that centralisation is to extend to Health, Police and Transport. The idea of centralisation and control for its own sake is not a good thing. Uniformity or standardisation in all circumstances does not necessarily make different services fit for purpose. One must have regard to the purpose for which they were created and the function that they discharge.

In relation to the reinstatement or re-employment of persons whose employment was terminated substantially in reprisal for public interest disclosures, while we commend the Government for providing a mechanism that was previously missing, we think that the bill should be complemented by the creation of an alternative remedy reposed in the independent umpire, the NSW Industrial Relations Commission. That is, an aggrieved person should be given the choice of whether to pursue a remedy through the Public Service Commissioner or to make their case to the independent umpire.

We will be proposing an amendment that gives effect to that policy concern. We share the policy approach of the Government that the omission in the original legislation of such a remedy should be fixed. We do have some concerns about the model proposed by the Government. But rather than just carp we will be providing a constructive alternative remedy which we think should sit alongside it. This bill will also, as I indicated earlier, allow for control over senior health, police and transport employees by the Public Service Commissioner through the Government Sector Employment Rules which will be extended now beyond the public service into those other services. These rules are determined by the Public Service Commissioner but they are not able to be scrutinised by Parliament or disallowed like other forms of delegated legislation.

Part of our criticism of the GSE framework relates to these Government Sector Employment Rules. It was a key feature of the Government Sector Employment Act not only to simplify statutory employment arrangements but also to move much of the substance and detail of public sector employment out of the legislation and into these public sector employment rules made by the commissioner. The rules are not subject to any parliamentary scrutiny or oversight, which diminishes the role of Parliament in overseeing the administration of the public sector of New South Wales. Also as I indicated earlier, although the iteration of these new Government Sector Employment Rules in Health, Transport and Police will require the Public Service Commissioner to consult with the Commissioner of Police, the health secretary or the transport secretary on the content of proposed rules, importantly none of those officeholders will have any veto over what is proposed by the Public Service Commissioner.

I know the Government says that the holders of those offices have all collaborated on the authoring of this bill and that they all support it. I do not seek to cavil with that except to say that if they had a full appreciation of the degree to which the Public Service Commissioner could then reach into and determine the substantive content of employment rules and relationships, how things are to be done and what is to be the legal content of those things even against their objection, then I think they would have some concerns. Again, it brings under the auspices of the Public Service Commissioner those other services. I am not suggesting that the Public Service Commissioner would willy-nilly do this but there is a significant risk that over time we will see the extension of that control; and the determination of what should be the substantive content of the employment relationship and its legal obligations in those rules is a real problem. It is a problem we see.

My original thought was that those provisions in this bill that provide for extending the government sector employment rules to these other services should simply be removed, and that would remove new section 81F, relating to the Police Act; new section 121E, relating to the Health Services Act; and new section 68E, relating to the transport legislation. The problem with that is that the way this bill is structured is that much of the content of how things will work—the moving machinery that will give life to the arrangements in this bill—would be removed. So a whole bunch of things that frankly would need to be fleshed out in the form of government sector employment rules would simply not be able to occur, which would not only sabotage the legislation but also impede the effective operation of those services over time.

Instead what the Opposition will be proposing is an amendment which addresses our original policy objection to the Government Sector Employment Rules in their current form—that is, they will still be able to be made by the Public Service Commissioner, as he can do now, and we would not seek to change the way in which he could do so for Health, Police or Transport, but like all other forms of delegated legislation the Government Sector Employment Rules should be disallowable instruments. They should be able to be scrutinised by this place and by the other place. That is not to interfere with the proper workings of Executive Government but rather to provide a proper check and balance and proper scrutiny by the Parliament of the work of the Public Service Commission and the commissioner.

We think that reposing too much power in the hands of one institution and one person is a recipe for disaster at some point, irrespective of whether it is the current Public Service Commissioner or any other future holder of that office. We think that providing a proper check and balance would be a good thing. We are concerned about this potential overcentralisation—this sort of Stalinist, Soviet-style approach by this Government towards public sector employment. We think it needs to take a calmer approach.

The Hon. Paul Green: Is that calmer or karma?

The Hon. ADAM SEARLE: I acknowledge that interjection. Another area that the Labor Opposition has some serious concerns about is remuneration, benefits and allowances for senior executives. I am dealing here with the amendments to the health services legislation at new section 121G (2), the amendments to the Police Act in new section 39 (2) and the proposed amendments to the Transport Administration Act in new section 68I (2). These provisions would permit remuneration packages to be awarded to senior executives that are outside the range determined for a position under the Statutory and Other Offices Remuneration Act 1975. I know the Hon. Catherine Cusack gave a rationale in her second reading contribution for why this is in the legislation. She said that the tribunal used to have such a power, that its removal was inadvertent and that this simply restores the status quo. I do not agree with that analysis.

Even were it to be so, the idea of having a system that determines remuneration in bands for certain roles and positions and then determining that, in consultation of course with the Public Service Commissioner, the head of these agencies could determine a remuneration package for a senior executive or class of senior executives in a range higher than that determined under the Statutory and Other Offices Remuneration Act for the band in which the executive or class of executives is employed. We think that is a recipe for disaster in the public sector. We understand the need to attract and retain suitably skilled and qualified professionals. But senior executives in New South Wales are not badly paid, particularly compared to their political masters—the Ministers—under any government. I think they are relatively higher paid than in any other jurisdiction in New South Wales and I do not cavil with that. But it is a matter—

The Hon. Catherine Cusack: Not compared to doctors, though.

The Hon. ADAM SEARLE: I acknowledge that interjection. But the idea about setting the bands to attract and retain people should be a matter for the tribunal under the Act and a matter for reasoned argument before that body to determine what are the appropriate bands. That might mean in the appropriate case—if we are talking about medical specialists, for example—arguing for a higher upper limit in a given band. It is not appropriate for the head of the health service, the police commissioner or the transport secretary to decide that for a person or class of persons they will simply go outside the rules. That runs the risk of having significant remuneration increases for senior executives well outside government wages policy, for example.

Regular graded public sector workers, working hard through the week delivering services to the wider community of New South Wales, have their pay set by awards and agreements. The amount they can get from year to year in increases is capped by the government wages policy. We have argued in this place many times about the 2.5 per cent wages policy, and I will not repeat those arguments. But the pay of those workers who deliver the services is capped. These provisions provide a mega highway for senior executives to bypass the Government wages policy.

Whether that is the intention or not, it sends a bad signal to the hundreds of thousands of hardworking public servants that because they are regular public sector workers it is okay for the Government to regulate their wages and conditions and to impose a ceiling on the yearly increase but that will not apply to the people at the top of the food chain. They will get a separate special deal where the Government wages policy can simply be bypassed. That is such a bad signal to send to the workforce who are working hard to deliver services to the community and we think it should not be allowed.

The Opposition foreshadows amendments to this bill in the Committee stage that will remove these provisions from the bill. If the Government wishes to revisit this in a slightly differently calibrated way that would meet a more reasoned policy objective the Opposition is happy to have that discussion. We think this bill not only sends the wrong message but also provides—even more than exists at present—a type of two-class system. Regular graded public sector workers have one set of restrictive rules that apply to them but a senior executive under the government sector employment framework gets a separate and much more beneficial deal as long as they can persuade the head of the service to assemble that remuneration package outside the rules set by the independent Statutory and Other Officers Remuneration Tribunal.

The Labor Opposition also has concerns about the termination provisions proposed for senior police executives, particularly those who are pre-1988 sworn police officers. We think the interaction between the holding of a police office and the availability of certain superannuation entitlements on termination, and the impact of proposed termination provisions in the bill on those entitlements, is a significant issue that requires careful scrutiny. We understand that the Police Association has deep concerns about the interaction between new section 40 of the Police Act and section 28 dealing with superannuation matters.

I understand that the Christian Democratic Party will be bringing amendments forward in the Committee stage to address those concerns. The Opposition will certainly be supporting those amendments but the amendments must address the concerns for all, whether we are talking about the police commissioner, deputy police commissioners, assistant police commissioners or other senior executives as determined under this legislation. The rule for one should be the rule for all, and people should not be disadvantaged relative to their current legal rights upon the enactment of this legislation.

I refer to page 32 of the bill and new section 40 that deals with termination of employment. I believe it is substantially the same as the existing section 51 of the Police Act but whereas that provision deals with removal from office, the terminology in new section 40 is “terminate the appointment”. Removal from office on the one hand or terminate the appointment. I ask the Government to enlighten the Chamber as to why there is that significant change of terminology. On the one hand it does not seem to be a very significant change but I assume there is some thinking beyond the passing fancies of Parliamentary Counsel as to the words it uses; that some substantive legal change is meant to be effected here.

As I indicated earlier, it may relate to that adverse impact on superannuation rights upon termination of certain senior police officials should this bill become law and maybe that change in terminology causes that negative impact. If so, the amendments foreshadowed by the Christian Democratic Party may not achieve that objective if the words in new section 40 remain the same. I say to members of the crossbench and the Government that in our haste to pass a law let us not overlook important areas that require careful handling and dealing with in a balanced way. In our haste to enact a bill we do not want to create a situation where people’s existing superannuation entitlements are taken from them or reduced in some way.

If the Government intends to effect a substantive legal change in the legal rights of persons who may be terminated under new section 40 it would be useful to place those reasons on the record so that the Parliament and indeed the community can understand why those changes are being proposed by the Government. There may be other areas not touched on in my contribution which require careful consideration and more time as well but the debate is upon us. Of course, we have the capacity to not finish the debate today and not deal with the Committee stage today if members still have significant concerns about the effect of the bill and its impact on different classes of employees. If other members have similar concerns to those of the Opposition we ought to hasten slowly and deal with this bill in a mature and reflective way.

As I indicated at the outset of my contribution, the Labor Opposition will not be opposing the bill because it understands that compared to the current state of the Government Sector Employment Act this bill brings improvements to that legislation. We remain concerned about the extension of that framework and the concepts in it relating to health, police and transport because we think the whole Government Sector Employment Act framework, and the concepts underpinning it, are flawed. The Opposition remains committed to a substantive proper rewrite of these laws should the Labor Party come to government. Given the time that we have had to deal with the bill before the House, we have prepared amendments that deal with some of our concerns.

We will support the bill on the second reading to propose our amendments and to see the amendments foreshadowed by the Christian Democratic Party. If the improvements to the bill are sufficient the Opposition will not oppose it on its third reading, despite the Opposition’s existing and ongoing concerns about the Government Sector Employment Act framework. I urge members to be attentive in the Committee stage and to bring a fair mind to the Opposition’s foreshadowed amendments because it brings them forward in a spirit of non-partisanship to try to improve the proposal brought to this Chamber by the Government.