Application of whole of Victorian government legislation and policies

Application of the Public Administration Act 2004 (PAA)

Regardless of whether an entity employs staff as public sector or public service employees, the PAA confers a range of obligations and rights on both employees and employers.

Employees

All public sector employees are expected to abide by the public sector values outlined in section 7 of the PAA.

In addition, employees are expected to abide by the Code of Conduct for Public Sector Employees which sets the standards of behaviour for public sector employees. The Code of Conduct reinforces the public sector values.

Employers must promote the public sector values and establish employment processes based on the employment principles (based on section 8 of the PAA).

The employment principles include:

• employment processes ensure that employment decisions are based on merit
• employees are treated fairly and reasonably
• equal employment opportunity is provided
• human rights as set out in the Charter of Human Rights and Responsibilities Act 2006 are upheld
• public sector employees have a reasonable avenue of redress against unfair or unreasonable treatment.

Employers are expected to abide by the Standards for the Application of the Public Sector Employment Principles(opens in a new window).

Additional obligations and rights of public service employers and employees

Additional functions apply to public service body Heads under the PAA. These include:

• Employment principle (section 8(e)): the development of a career public service is fostered
• Review of actions (section 64): an employee is entitled to have an action that relates to their employment reviewed in accordance with the regulations and the employment standards.

Public service employees are employed in accordance with the Victorian Public Service Enterprise Agreement (VPS Agreement).

Further information on the interpretation and application of the VPS Agreement is available from Industrial Relations Victoria.

How the PAA applies to declared authorities

Section 104 of the PAA provides for a mechanism to apply or exempt parts of the Act to public entities.

A public entity may be declared to be a ‘declared authority’ under section 104 of the PAA. In addition, the PAA specifies that statutory offices, prerogative offices or groups of people employed in the service of the Crown may be declared authorities.

Declarations are commonly used in relation to employment provisions. For example, a declaration can be made to:

• make executives of the entity subject to public service executive employment provisions, so that the standard executive contract applies
• make other staff subject to the public service employment provisions of the Act (e.g. CenITex)
• create a closer linkage to the relevant portfolio department than would otherwise apply.

A public entity may also be made a declared authority to preserve public service employment rights and responsibilities. For example, when a function is moved from a department to another organisation to the wider public sector. The declaration will ensure that staff who are transferred have the same employment conditions they had in the department.

A declaration is made through an Order in Council. Once declared, any provisions of the PAA specified in the Order will apply to the entity/officer. A declaration as a declared authority is extremely powerful because such a declaration can also potentially override other legislation and contractual provisions relating to the entity.

The declaration order specifies the name of the authority, the person or body having the function of public service body head and which provisions of the PAA apply to the authority. An up-to-date listing of declared authorities can be found on the VPSC’s Register of Instruments.

Transfer of existing employees

In some cases, establishing a public entity may require the transfer of existing employees to the new entity, either from the public service, or from other public entities. These transfers may be facilitated through sections 28 and 30 of the PAA.

Transferring employees is a complex matter. How a transfer is made will depend on specific circumstances of the entities and employees involved. However, there are several common issues you should think about:

• Which industrial agreement(s) will apply?
  • Will staff be covered by an existing agreement?
  • Is there a need for a new agreement?
  • Is there a need for a transitional agreement until a new agreement can be established?
• What executive employment arrangements will apply (including any right of return entitlements under section 27 of the PAA)?
• How to ensure that staff aren’t disadvantaged from the transfer in their employment terms and conditions (this can be both a legislative and industrial requirement)
• How to ensure the employees involved continue to be employed during the transfer
• How accrued leave entitlements will be transferred (note: this should be considered for each type of leave, e.g. sick leave, long service leave, annual leave and parental leave)
• How to provide continued access to defined benefit superannuation and other sector-specific schemes for eligible employees.

You also need to think about how the Fair Work Act 2009 (Cth) will apply. For example, if a new entity is being established, and staff will transfer from a department or an Administrative Office to the new entity, the employment conditions for staff that applied under their previous agreement must be maintained.

Any new employee would also be entitled to the same employment rights as transferring employees.

Application of the Financial Management Act 1994 (FMA)

Public entities

The FMA and associated regulations, Standing Directions and Financial Reporting Directions, set out the rules for financial management, accountability, and reporting for most Victorian government entities. However, without careful consideration prior to the formation of the entity, there may be confusion about whether an entity is covered by the entire FMA or only specific sections.

A department or public body is subject to the full requirements of the FMA and its subordinate instruments. The FMA definition of a department includes an office or body specified in section 16(1) of the PAA. This means that an office or body specified under section 16(1) is automatically subject to the full requirements. If this is not the intention for the new entity, DTF will be able to advise on potential options to achieve the desired purpose prior to the creation of the entity.

Some parts of the FMA may only apply to specific types of entities, e.g. Part 6 - Budget management mainly applies to departments who are listed in the annual Appropriation Act but not other entities, and certain aspects of the FMA Standing Directions may not apply, for example, independent offices such as integrity and judicial bodies have different requirements.

Administrative Offices

Under the FMA and associated Standing Directions, an AO is considered part of a related Portfolio department. The financial statements of an AO within the meaning of the PAA must be incorporated in and consolidated with the financial statements of the department for that financial year. If the finances of the AO are material in the context of the consolidated financial statements, the Department Head will need to have sufficient oversight of the financial management and operations of the AO to enable them to meet their legal obligation to sign off on the accuracy of the consolidated financial statements.

Application of other whole of government legislation and policies

The table below lists other relevant legislation, policies and obligations. You should contact the administering agency if you have questions about the application of any of these policies, please contact the administering agency.

Public entities have obligations under legislation relating to environmental protection, equal opportunity, human rights, modern slavery, consumer protection and occupational health and safety.

There may also be other relevant legislation specific to the entity and portfolio. You should seek legal advice from your department’s legal area. This will help you to understand which legislation will apply to the entity you are designing.