Performance management and misconduct under the Government Sector Employment Act 2013
Nichola Constant, Assistant Crown Solicitor
Summary of seminar presented on 22 July 2015
This paper explores the legislative scheme introduced following the Commission of Audit Review and the Public Service Commission Review of the Public Sector:
with a focus on provisions relating to performance management and misconduct.
Impetus for introduction of Government Sector Employment Act
In 2012, the Commission of Audit of the Public Service Commission ("PSC") found that within the public sector there was inefficient and ineffective recruitment and selection practices, a focus on single highly specific positions, virtually non-existent workplace planning and limited staff mobility for employees at all levels. Very few public sector agencies had effective performance management systems in place.
In response, the Government introduced the GSE Act, with a main objective to:
"develop a modern high performing government sector that is efficient and effective in serving the Government in the delivery of services to the people of NSW; and that has effective and fair employment arrangements, management and leadership" (s. 4 of the GSE Act).
The Government Sector Employment Act
Some of the main reforms implemented are:
- Roles: people are no longer employed in "positions" but are employed at a classification (if non-executive) or within a band (if executive). They are assigned to a role, theoretically encouraging staff mobility across bands and classifications.
- Senior executives: upon implementation of the GSE Implementation Plan in agencies, senior executives' employment will be contract-based with limited rights for employees to challenge employment decisions.
- Performance management process: with express legislative provisions requiring that expectations be made clear, feedback be provided and support to be provided to employees.
Misconduct and performance management are dealt with separately under the GSE Act.
Performance management system
Under s. 67 of the GSE Act, all government sector agencies are to have a performance management system. Core requirements of a performance management system are to:
- set and clarify expectations for employees
- monitor employee performance
- plan and review employee performance
- develop employee capability
- recognise employee achievements
- resolve unsatisfactory employee performance (r. 35(1)).
The PSC has determined the essential elements of these core requirements in the Performance Development Framework (available on the PSC website www.psc.nsw.gov.au). For example, an essential element of the core requirement 'to set and clarify expectations' is that role descriptions include public sector values, codes of conduct policies, procedures and standards. Under the core requirement it is also an essential element that employees should have regular opportunities to give informal feedback to their managers. If these core requirements are not met, then action taken in response to poor performance may be open to challenge by employees.
Before taking action in respect of unsatisfactory performance, the agency head must be satisfied of certain matters; in particular that:
- there has been unsatisfactory performance in accordance with the agency's policy
- reasonable steps have been taken to advise the employee that their performance is unsatisfactory
- the employee has been notified of the action proposed to be taken by the agency head
- the employee has had a reasonable opportunity to respond
- the employee's response has been considered by the agency head
If the agency head is satisfied of those matters, then the agency head can determine whether or not there has been unsatisfactory performance. If there has been unsatisfactory performance, the agency head can take actions including:
- terminate the employment of the employee (after giving the employee the opportunity to resign)
- reduce the employee's remuneration, grade or classification
- assign the employee to a different role.
The GSE Act explicitly provides that misconduct may relate to an incident or conduct that occurred while the person was not on duty, or before his or her employment (s. 69).
Part 8 of the GSE Rules sets out the procedural fairness requirements when handling misconduct allegations. Part 8 of the GSE Rules only applies to public service agencies and other government sector agencies prescribed by the regulations (the NSW Police Force comprising administrative officers (r. 37 of the GSE Rules, s. 69 of the GSE Act and cl. 6 of the GSE Regulations). Government sector agencies not covered by Pt. 8 of the GSE Rules will need to comply with any other applicable legislation or requirements.
Initial procedural requirements
When a complaint of misconduct is made, the complaint undergoes an initial assessment by the agency head to decide whether or not to proceed with the matter. The agency head may decide not to proceed if satisfied, for example, that the allegation is vexatious or the incident or conduct concerned would not, if made out, amount to misconduct.
If the agency head decides to proceed with the matter, the employee must be advised and provided with details of any and all allegations and any action that may be taken by the agency head if the allegations are substantiated. The employee will be given reasonable opportunity to make a statement and, as a result of the employee's statement, the agency head may decide to proceed further or may decide not to proceed. Having made a decision whether to proceed or not, the agency head must notify both the employee and the person(s) who made the complaint of that decision.
Inquiries into alleged misconduct
If the agency head decides to proceed with the investigation, he or she may conduct whatever inquiries they consider appropriate (r. 39 of the GSE Rules). For example, the agency head may appoint an internal or external investigator, or make the inquiries themselves. A formal hearing cannot be undertaken at this stage, nor can the employee be cross-examined (r. 39(2) of the GSE Rules). If the investigation is undertaken by someone other than the agency head, the appointed investigator can only make recommendations as to the course of action; it is the agency head who must be satisfied that misconduct has occurred.
If the agency head makes a finding of misconduct, then before they take any action they must notify the employee of any proposed action and give the employee a reasonable opportunity to make submissions about the proposed action (r. 40(2) of the GSE Rules). The submissions must be taken into consideration by the agency head. The possible actions that the agency head may take are (s. 69(4) of the GSE Act):
- terminating the employment of the employee (without, or after, giving the employee an opportunity to resign)
- imposing a fine on the employee (which may be deducted from the remuneration payable to the employee)
- reduce the employee's remuneration, grade or classification
- assigning the employee to a different role
- cautioning or reprimanding the employee.
Instead of taking any of these actions, the agency head can require that the employee's conduct be monitored over a specified period of time (r. 40(3) of the GSE Rules). If that approach is adopted and misconduct occurs again in that specified period of time, action may be taken under s. 69(4) of the GSE Act without any submissions by the employee (r. 40(3) and (4) of the GSE Rules).
A written record of the misconduct proceedings and action should be kept by the agency head and the agency head should consider whether the matter will be included in the employee's file.
Section 41 of the GSE Act, which only applies to senior executives allows for termination of their employment at any time for any or no reason and without notice. A senior executive's entitlement to compensation is limited by their contract of employment.
Senior executives legal options are limited by s. 58 of the GSE Act (subject to the transitional provisions with the relevant agency which was implemented in Senior Executive Implementation Plan) if their employment is terminated or their conditions are negatively impacted. A senior executive cannot bring an unfair dismissal claim, and they cannot bring an unfair contracts claim, and the employment of a senior executive, or any matter, question or dispute relating to their employment is not an industrial matter for the purposes of the Industrial Relations Act 1996.
The GSE Act applies to conduct that occurred prior to the enactment of the GSE Act, but only if proceedings for misconduct or unsatisfactory performance were not pending at the time of the repeal of the Public Sector Employment and Management Act 2002 ("PSEM Act").
If you are performance managing a senior executive or taking action in response to reported misconduct of a senior executive and you have not been through your Senior Executive Implementation period – look carefully at the transitional provisions because they will deal with what entitlements employees have and they will refer back to the PSEM Act.
The webinar can be accessed here.