Public Service Legislation Bill

  • enacted

Public Service Legislation Bill

Government Bill

189—1

Explanatory note

This Bill is an omnibus Bill that amends more than 1 Act and is introduced under Standing Order 263(a) because the amendments deal with an interrelated topic that can be regarded as implementing a single broad policy. That single broad policy is to provide a modern legislative framework for achieving a more adaptive and collaborative public service, by expanding the types of agencies that comprise the public service, unified by a common purpose, ethos, and strengthened leadership arrangements.

Following the committee of the whole House stage it is intended that this Bill will be divided into 2 Bills. The Bill (except Part 7) will become the Public Service Bill and Part 7 will become the Public Finance Amendment Bill.

General policy statement

This omnibus Bill repeals the State Sector Act 1988 (the 1988 Act), replaces it with a new Public Service Act, and makes a small number of related amendments to the Public Finance Act 1989 (the PFA). These are the main statutes governing the management of the State sector and public finances in New Zealand. Parts 1 to 6 of the Bill include provisions for a new Public Service Act, and the repeal of the 1988 Act, while provisions in Part 7 amend the PFA. The Bill is informed by a review of the 1988 Act that built on various reviews and public commentary on the public management system from the past 30 years and involved an extensive consultation process. Public consultation was based on the aims of—

  • enabling the public service to deliver better outcomes and better services:

  • creating a modern, agile, and adaptive public service:

  • affirming the constitutional role of the public service in supporting New Zealand’s democratic form of government.

The review found that the current system narrows each department’s focus to its own particular outputs, incentivising officials to focus on their own agency rather than encouraging a wider, collaborative public service identity. A collaborative and cohesive public service is necessary in order to address complex issues that span agency boundaries, and to provide wraparound services based on New Zealanders’ needs, rather than agency convenience.

In order to address this problem, and to achieve the objectives above, the Bill does the following things:

  • clearly establishes the purpose, principles, and values of an apolitical public service, as well as its role in government formation:

  • recognises the role of the public service to support the Crown in its commitment to its relationships with Māori:

  • provides a more flexible set of options for organisational arrangements to support the public service in better responding to priorities and joining up more effectively:

  • increases interoperability across the public service workforce and preserves the future public service as an attractive and inclusive place to work:

  • strengthens leadership across the public service, and provides for system- and future-focused leadership.

The Bill also amends the PFA to provide the necessary financial powers and reporting obligations for the various organisational arrangements that will be established through the Public Service Act.

Clearly establishes the purpose, principles, and values of an apolitical public service, as well as its role in government formation

While the 1988 Act sets out the framework for the State sector, it focuses on the actors within the public management system, and does not articulate the purpose or role of the public service. Public servants do not always clearly understand their constitutional role in supporting New Zealand’s system of government, nor are there incentives to act as a unified system. This Bill—

  • states the purpose, principles, and values of the public service, and acknowledges the spirit of service as a fundamental characteristic of the public service:

  • puts responsibilities on public service chief executives and boards of Crown agents to ensure that the principles of the public service are upheld:

  • provides for the Public Service Commissioner (currently the State Services Commissioner) to set standards of and issue guidance on integrity and conduct:

  • acknowledges that public servants have all the rights and freedoms affirmed in the New Zealand Bill of Rights Act 1990 in accordance with the provisions of that Act:

  • provides that Crown agents are part of the public service for some purposes:

  • provides that the Commissioner will manage involvement by officials in the government formation process, including granting access to public service agencies and functional chief executives.

Supports the Crown in its commitment to its relationships with Māori

The 1988 Act is silent on the Treaty of Waitangi (te Tiriti o Waitangi) and the Māori-Crown relationships aside from good employer requirements on public service employers in relation to Māori. This Bill continues the good employer requirements established under the 1988 Act, and further—

  • explicitly recognises the role of the public service in supporting the Crown in its relationships with Māori under the Treaty of Waitangi (te Tiriti o Waitangi):

  • provides that, in order to carry out that role—

    • public service leaders are responsible for developing and maintaining the capability of the public service to engage with Māori and to understand Māori perspectives; and

    • the Commissioner, in the development and implementation of the leadership strategy, must recognise the good employer requirements in relation to Māori.

Flexible set of options for organisational arrangements

The 1988 Act provides for departments as the basic building block of the public service. While this model works well for most public service work, it is not always flexible enough to carry out certain roles. The departmental agency model was developed as a new model of entity, sitting within a host department and operating within the host department’s policy and funding framework, but with its own chief executive directly responsible to a Minister, avoiding the need for a fully separate department. However, the model has not proved flexible enough to provide for its application in a range of different contexts. This Bill makes changes to the departmental agency model to increase its flexibility and enable the model to be tailored to specific functions in each case.

The Bill also provides for 2 new organisational forms within the public service that build on current collaborative models as follows:

  • interdepartmental executive boards will consist of a group of chief executives, working together towards common outcomes, who are individually and jointly responsible for a board’s work. A board will have the ability to employ staff, enter into contracts, and administer appropriations. This model will enable joined-up strategic policy, planning, and budgeting around shared outcomes:

  • interdepartmental ventures that will allow resources to be brought together into a single distinct entity that will be able to hold assets, employ staff, enter into contracts, and administer appropriations just as a public service department does.

The Bill also provides a formal structure for co-operative and collaborative working arrangements between public service agencies in the form of—

  • joint operational arrangements that will consist of a commitment to joint work through a formal agreement between chief executives or boards of public service agencies but with relevant funding, assets, and staff remaining under the formal control of participating agencies.

Increases interoperability across the public service workforce and preserves the future public service as an attractive and inclusive place to work

The 1988 Act treats each individual department as a distinct employer, which makes it difficult for the public service to act as a single unified service, capable of cross-agency collaboration. It also means that agencies have varying terms and conditions, and approaches to fostering inclusion. This Bill—

  • provides for public servants (in public service departments and joint ventures) to be appointed to the public service, while preserving the role of departmental chief executives as the employer of employees in their agencies:

  • provides for the Commissioner to place conditions on their powers of delegation regarding negotiation of collective agreements, to enable fostering of consistent employment terms and conditions across departments of the public service:

  • provides the Commissioner with the same powers of delegation for pay equity negotiations as for collective agreement negotiations:

  • expands the potential scope of Government Workforce Policy Statements to enable their use in the wider State sector, and clarifies the range of subjects that these statements may cover:

  • provides explicit recognition of the value of diversity and fostering inclusiveness, puts a responsibility on chief executives to promote inclusiveness in employment and workforce practices, and requires the Commissioner to lead on diversity and inclusion:

  • provides for public servants to transfer accumulated annual leave and other statutory leave when moving between public service departments.

Strengthens leadership across the public service, and provides for system- and future-focused leadership

Although steps have been taken in the right direction to join up leadership in the public service, and put more emphasis on system- and future-focused leadership, the current model for the public service emphasises leadership of discrete entities, with a focus on short- to mid-term planning. In order to strengthen system leadership, the Bill—

  • requires the Commissioner to establish a public service leadership team. The purpose of this team is to provide strategic leadership spanning the whole of the public service that contributes to an effective and cohesive public service. The team will work collaboratively and model leadership behaviours for the public service, while also assisting the members to fulfil their responsibilities under the new Act. This essentially formalises the current non-statutory State sector leadership team:

  • provides for the designation of chief executives as system leaders, responsible for leading and co-ordinating work in a particular subject-matter area across the State services system. This essentially formalises the current model of functional leads and heads of profession:

  • establishes a new type of chief executive called a functional chief executive, who will not lead a separate agency but will be responsible for specific functions within a department:

  • requires the Commissioner to work with public service leaders to develop a strategy for senior leadership and management capability, for the purposes both of leadership development and to meet system needs:

  • provides for the appointment of a second statutory Deputy Public Service Commissioner, who could have responsibilities to achieve objectives in a designated area:

  • requires the Commissioner to produce a briefing on the state of the public service at least once every 3 years, to be tabled in Parliament by the appropriate Minister:

  • requires chief executives (either individually or as a collective representing a sector) to produce long-term insights briefings.

Departmental disclosure statement

The State Services Commission is required to prepare a disclosure statement to assist with the scrutiny of this Bill. The disclosure statement provides access to information about the policy development of the Bill and identifies any significant or unusual legislative features of the Bill.

Regulatory impact assessment

The State Services Commission produced a regulatory impact assessment on 18 April 2019 to help inform the main policy decisions taken by the Government relating to the contents of this Bill.

Clause by clause analysis

Clause 1 is the Title clause. This Bill is the Public Service Legislation Bill. The Bill replaces the State Sector Act 1988 (the Act) and amends the Public Finance Act 1989 (the PFA).

Clause 2 is the commencement clause. Clause 89 will come into force on a date set by Order in Council. Clause 2 also refers to clause 110(1), which repeals a section, Parts, and schedules in this Bill relating to repeals, revocations, and amendments that implement changes made by the Bill across the statute book. Commencement of clause 110(1) is delayed to 1 January 2021 to allow those repeals, revocations, and amendments to happen or be made before the operative provisions for them are then removed from the Bill. The rest of the Bill will come into force on the day after the date of Royal assent.

Part 1Preliminary provisions

Subpart 1—Provisions for operation of Act

Clause 3 sets out the purposes of the Bill. This clause differs from section 1A of the Act; however, some elements of section 1A that are not in this clause are found elsewhere in the Bill, for example, in the public service principles clause in clause 10. The purposes of the Bill are—

  • to continue the public service and modernise its operation, while recognising and enhancing the non-legislative conventions that it operates under:

  • to set out the shared purpose, principles, and values of the public service and the people working in it:

  • to establish organisational forms and ways of working, including across public service agencies, to achieve better outcomes for the public:

  • to extend some clauses in the Bill that apply to the public service to other State services and other areas of government:

  • to affirm that the fundamental characteristic of the public service is acting with a spirit of service to the community.

Clause 4 contains a guide to the Bill that describes its scope and the main features of each Part. The Bill will apply mainly to the public service, which includes public service agencies and Crown agents (but, in the latter case, for the purposes of subparts 2 and 4 of Part 1 only). Some clauses of the Bill will also apply to the wider State services and other areas of government.

Clause 5 contains definitions of words and terms used in the Bill. These are largely based on those in section 2 of the Act. Some have been changed to reflect changes in names of some public service roles, to reflect the new types of public service agencies, or to include the role of functional chief executive (which is a new role established by the Bill). Some definitions remain the same as in the Act, although in some cases the language has been updated.

Clause 6 is the operative clause for transitional, savings, and related provisions that are set out in Schedule 1.

Clause 7 says that the Bill binds the Crown.

Subpart 2—Public service defined, purpose, public service principles, and spirit of service to community

Public service defined

Clause 8 contains a definition of the public service. The public service will comprise 4 types of public service agencies, which are departments, departmental agencies, interdepartmental executive boards, and interdepartmental ventures. Some changes have been made to the departmental agency model that has existed since 2013. These are set out in Part 2. The latter 2 types of agencies are new and further detail about their operation is set out in Part 2. The public service also includes Crown agents for the purposes of subparts 2 and 4 of Part 1 only. Crown agents are also covered by other clauses in the Bill outside of subparts 2 and 4 of Part 1. However, this is because they are Crown entities that are part of the wider State services.

Purpose, public service principles, and spirit of service to community

Clause 9 sets out the purpose of the public service, which has 5 elements:

  • to support constitutional and democratic government:

  • to enable both the current Government and successive governments to develop and implement their policies:

  • to deliver high-quality and efficient public services:

  • to support the Government to pursue the long-term public interest:

  • to facilitate active citizenship.

Clause 10 sets out the public service principles and describes corresponding behaviours to achieve the purpose of the public service set out in clause 9. Those behaviours are—

  • to act in a politically neutral manner:

  • when giving advice to Ministers, to do so in a free and frank manner:

  • to make merit-based appointments (unless an exception applies under the Bill):

  • to foster a culture of open government:

  • to proactively promote stewardship of the public service, including of its long-term capability and its people, its institutional knowledge and information, its systems and processes, its assets, and the legislation administered by agencies.

Clause 10 also says that public service chief executives and boards of Crown agents have particular responsibilities in relation to the public service principles. Chief executives are responsible for upholding the principles when carrying out their responsibilities and functions under clause 50, and for ensuring that the agencies they lead, or (in the case of functional chief executives) carry out some functions for, do so. Chief executives are responsible for these things only to the Commissioner. Boards of Crown agents are responsible for ensuring that the entities they govern uphold the principles when carrying out their functions. The responsibility on boards of Crown agents is a collective duty of each board and is owed only to the responsible Minister under section 58 of the Crown Entities Act 2004.

Clause 11 says that the fundamental characteristic of the public service is acting with a spirit of service to the community. Clause 11 also says that chief executives and boards of Crown agents must preserve, protect, and nurture the spirit of service to the community that public service employees bring to their work.

Subpart 3—Crown’s relationships with Māori

Clause 12 says that the role of the public service includes supporting the Crown in its relationships with Māori under the Treaty of Waitangi (te Tiriti o Waitangi). In the Act currently, express provision for Māori is limited to references in 2 sections setting out good employer requirements. Clause 12 says that the Commissioner, chief executives, interdepartmental executive boards, and boards of interdepartmental ventures are responsible for:

  • developing and maintaining the capability of the public service to engage with Māori and to understand Māori perspectives:

  • in the employment area,—

    • in the case of the Commissioner, recognising the matters listed in clause 71(2)(d) in the development and implementation of the leadership strategy under clause 59:

    • in the case of chief executives and public service boards that employ staff, operate an employment policy that meets the requirements of clause 71(2)(d).

Clause 71(2)(d) of the Bill is based on section 56(2)(d) of the Act.

Clause 13 describes whom the responsibilities under clause 12 are owed to by the people and boards listed in clause 12 and how these apply. Clause 13 also imposes a requirement on those people and boards to report to the Commissioner on progress made towards achieving those responsibilities.

Subpart 4—Public service values, minimum standards of integrity and conduct, and New Zealand Bill of Rights Act 1990

Public service values and minimum standards of integrity and conduct

Clause 14 sets out the public service values along with corresponding behaviours. The public service values are to seek—

  • to treat all people fairly, without favour or bias:

  • to take responsibility for its work, actions, and decisions:

  • to act with integrity and be open and transparent:

  • to treat all people with dignity and compassion and act with humility:

  • to understand and meet people’s needs and aspirations.

Clause 14 also says that the public service values are given effect to only through minimum standards of conduct set by the Commissioner.

Clause 15 gives the Commissioner a power to set minimum standards of integrity and conduct that apply in the public service and other specified agencies in the State services. This clause is largely based on section 57 of the Act. One change made in the Bill is that the Parliamentary Service is no longer subject to standards set by the Commissioner. Another change is that the standards may be set out in any form the Commissioner thinks fit rather than being limited to the form of a code of conduct as is required by the Act currently.

A transitional provision in clause 8 of Schedule 1 has the effect that the contents of the code of conduct that are current immediately before the commencement of the Bill are to be treated as minimum standards set by the Commissioner under clause 15 of the Bill until the contents are altered or replaced.

The Commissioner may vary the application of standards in particular cases. The standards must be notified to the agencies in or to which they apply and any variation in application must be notified to the agency concerned. Clause 15 also allows the Commissioner to provide advice to other State services on matters that affect the integrity and conduct of individuals.

Clause 16 says that agencies, individuals, and groups must comply with minimum standards set by the Commissioner. However, an exception can be granted by the Commissioner or the appropriate Minister. Exceptions cannot be granted for public service agencies or Crown agents. This is new for Crown agents which, at present, can derogate from standards under section 57A of the Act.

Clause 17 gives the Commissioner a power to issue guidance on integrity and conduct. The guidance is not limited to the subject matter of minimum standards set under clause 15. Guidance must be notified to agencies in or to which it applies.

Clause 18 says that if guidance on rights and responsibilities is issued it must address rights and responsibilities relating to freedom of expression and the rights and responsibilities of individuals who have obligations as a member of a profession.

Clause 19 says that minimum standards and guidance are neither legislative instruments nor disallowable instruments and do not have to be presented to the House of Representatives.

New Zealand Bill of Rights Act 1990

Clause 20 acknowledges that employees of the public service have all the rights and freedoms affirmed in the New Zealand Bill of Rights Act 1990 in accordance with the provisions of that Act. Clause 20 also says that the Act applies to the exercise and enforcement of those rights and freedoms, along with any other enactment that does so, including the Human Rights Act 1993. This clause is intended to have no legal effect beyond that in the Acts referred to or in other enactments that apply to the exercise or enforcement of those rights and freedoms.

Part 2Public service agencies and joint operational agreements

Subpart 1—Public service agencies

Departments and departmental agencies

Clause 21 applies when departments and departmental agencies are established, disestablished, or reorganised by the executive government. The decision to do so will be recorded in an Order in Council that adds, removes, or amends items in Part 1 or 2 of Schedule 2 so that the lists of departments and departmental agencies in the schedule remain current. An order establishing a departmental agency must also identify its host department, and the name of the host department will also be also added to Schedule 2.

Clause 22 says that the functions of a departmental agency may be determined by the appropriate Minister for the agency and the appropriate Minister for its host department, except as provided in an enactment.

Clause 22(2) describes 2 types of working arrangements. These are that the chief executive of the departmental agency may operate outside the strategic and policy framework of the host department and that the chief executive of the departmental agency may manage assets and liabilities. These working arrangements, if they apply in any case, will have consequences for the departmental agency under the PFA. The Ministers may decide that 1 or both of the working arrangements will apply only if they are reasonably satisfied, in each case, that this is necessary or desirable for the agency to carry out its functions. Clause 21(2)(b) requires that if either or both working arrangements apply, this must be recorded in the Order in Council relating to the departmental agency.

Clause 22 also says that a host department must provide corporate services to a departmental agency unless the 2 chief executives agree a variation. Other working arrangements must be agreed by the 2 chief executives and approved by the appropriate Ministers.

Interdepartmental executive boards

Clause 23 sets out the purposes of interdepartmental executive boards. These are—

  • to align and co-ordinate strategic policy, planning, and budgeting activities for 2 or more departments with responsibilities in a subject-matter area:

  • to support those departments to undertake priority work in the subject-matter area:

  • to support cross-department initiatives in the subject-matter area.

Clause 24 applies when an interdepartmental executive board is established, disestablished, or reorganised by the executive government. The decision to do so will be recorded in an Order in Council that adds, removes, or amends an item in Part 3 of Schedule 2 so that the list of interdepartmental executive boards in the schedule remains current. An order must state the name of the board, list the departments with responsibilities in the subject-matter area in which the board will work (the board’s remit), and identify the servicing department. The name of the servicing department will also be added to Schedule 2.

In clause 24, the word departments means departments, departmental agencies, the New Zealand Police, and the New Zealand Defence Force.

Clause 25 lists clauses of the Bill that will apply to these new boards. The boards will have certain responsibilities and powers as if they were public service chief executives. Other clauses in the Bill also apply to these boards, but by express reference in those clauses. For example, because a board is a public service agency, it may be the subject of an access request under clause 16 of Schedule 3. These access requests may be made by political parties during negotiations to form a government after a general election.

Boards also have a power to delegate administrative tasks to their servicing department.

Clause 26 says that the members of a board are jointly responsible to the appropriate Minister for the operation of the board.

Clause 27 gives the Commissioner the function of selecting members of a board from the chief executives of the departments that are included in the board’s remit. The Commissioner must designate 1 of those members as the chairperson and may appoint 1 or more independent advisers to the board. The Commissioner must seek input from the Minister of State Services and the appropriate Minister before selecting board members or designating a chairperson, and may seek advice from other sources.

In clause 27, the term chief executives means the chief executives of departments, departmental agencies, the New Zealand Police, and the New Zealand Defence Force.

Clause 28 says that independent advisers do not have any decision-making authority on a board.

Clause 29 requires a board to publish its operating procedures on the Internet.

Interdepartmental ventures

Clause 30 sets out the purposes of interdepartmental ventures. These are—

  • to deliver services or carry out regulatory functions that relate to the responsibilities of 2 or more departments:

  • to assist to develop and implement operational policy relating to those services or regulatory functions.

Clause 31 applies when an interdepartmental venture is established, disestablished, or reorganised by the executive government. The decision to do so will be recorded in an Order in Council that adds, removes, or amends an item in Part 4 of Schedule 2 so that the list of interdepartmental ventures in the schedule remains current. An order must state the name of the venture and list the departments with responsibilities that relate to the services or regulatory functions that will be delivered or carried out by the venture (the relevant departments).

In clause 31, the word departments means departments, departmental agencies, the New Zealand Police, and the New Zealand Defence Force.

Clause 32 lists clauses of the Bill that will apply to the boards of these new ventures. The boards will have certain responsibilities and powers as if they were public service chief executives. Other clauses in the Bill also apply to these boards, but by express reference in those clauses. For example, a board of a venture is required to be a good employer under clause 71.

Clause 33 says that the members of a board are jointly responsible to the appropriate Minister for the operation of the board.

Clause 34 says that the members of the board of a venture are the chief executives of all the relevant departments. Clause 34 also gives the Commissioner the function of designating 1 of those members as the chairperson. The Commissioner must seek input from the Minister of State Services and the appropriate Minister before designating a chairperson, and may seek advice from other sources.

In clause 34, the term chief executives means the chief executives of departments, departmental agencies, the New Zealand Police, and the New Zealand Defence Force.

Clause 35 requires a venture to publish its operating procedures on the Internet.

Subpart 2—Joint operational agreements

Clause 36 sets out the purpose of joint operational agreements, which is to provide a formal structure for co-operative and collaborative working arrangements between public service agencies.

Clause 37 says that 2 or more chief executives or boards may enter into a joint operational agreement for their agencies to work together to achieve stated goals. The agreement of the Commissioner is required before an agreement can be executed and it may not do certain specified things.

Clause 38 requires the chief executives who are parties to a joint operational agreement to take reasonable steps to provide sufficient resources to achieve the stated goals of the agreement. Clause 38 also places a limit on enforceability of these agreements. They are enforceable only as a matter for which a chief executive or board is accountable for their actions to the Commissioner or to the appropriate Minister.

Clause 39 lists the 3 ways in which an agreement may be terminated.

Part 3People working in public service

Subpart 1—Public Service Commission leaders and advisory committees

Public Service Commissioner and Deputy Public Service Commissioners

This subpart deals with the appointment of leaders of the Public Service Commission. Transitional provisions in Schedule 1 provide that on and after the commencement of the Bill—

  • the State Services Commission becomes the Public Service Commission (the Commission):

  • the State Services Commissioner becomes the Public Service Commissioner (the Commissioner):

  • the Deputy State Services Commissioner becomes a Deputy Public Service Commissioner (a Deputy Commissioner).

Clause 40 provides for a Commissioner to be appointed by the Governor-General. An appointment will be made on the recommendation of the Prime Minister after consultation with the leader of each political party represented in the House of Representatives. The consultation requirement is new.

Clause 41 describes the role of the Commissioner, who will act as the Head of Service by providing leadership of the public service, including of its agencies and workforce, and by oversight of the performance and integrity of the system. The Commissioner also will provide leadership to the wider State services in the ways provided in the Bill.

Clause 42 lists the general functions of the Commissioner. This clause updates section 6 of the Act. Clause 42 does not provide a complete list of the Commissioner’s functions. Other functions are expressly provided for in other clauses in the Bill.

Clause 43 requires the Commissioner to act independently when making decisions about individual chief executives. However, this does not apply when the Commissioner is appointing, reappointing, transferring, or removing a chief executive to or from office, or when setting the conditions of employment for a chief executive.

Clause 44 is the operative provision for other functions and powers of the Commissioner that are set out in Schedule 3.

Clause 45 provides for the appointment of at least 1 but not more than 2 Deputy Commissioners. The Act allows for the appointment of 1 Deputy Commissioner currently. Under the Bill, a Deputy Commissioner may be appointed by the Governor-General. An appointment will be made on the recommendation of the Prime Minister after consultation with the leader of each political party represented in the House of Representatives. The consultation requirement is new.

A Deputy Commissioner may carry out all the functions of the Commissioner subject to control of the Commissioner. If 2 Deputy Commissioners are appointed, the Commissioner may assign to either or both of them responsibilities to achieve objectives in particular subject-matter areas. A Deputy Commissioner may act as the Commissioner in specified circumstances. A Deputy Commissioner may also be appointed an acting Commissioner under clause 2(1) of Schedule 4.

Clause 46 is the operative provision for other terms and conditions of employment for the Commissioner and Deputy Commissioners that are set out in Schedule 4.

Chief executive of Public Service Commission

Clause 47 says that the Commissioner is the chief executive of the Commission. The Commissioner may delegate all or part of the chief executive role to a Deputy Commissioner or other person. The ability to delegate the role is now expressly provided for in this clause, although it is available currently under the general delegation power in the Act. The general rules for delegation in clauses 2 to 4 of Schedule 6 (based on sections 41 and 42 of the Act) apply to a delegation under this clause.

Advisory committees

Clause 48 gives the Commissioner a power to appoint 1 or more advisory committees to assist with carrying out any of the Commissioner’s functions. An advisory committee will be able to make inquiries, conduct research, or make reports. The Commissioner will decide who the members of an advisory committee will be after having due regard to the nature of the community interest in the particular matter or matters to be addressed by that advisory committee.

Subpart 2—Public service chief executives and public service leadership team

Public service chief executives

Clause 49 gives the Commissioner the power to appoint chief executives to lead departments and departmental agencies as well as to appoint individuals to the new functional chief executive roles. Both chief executives who lead departments or departmental agencies and functional chief executives who will carry out some functions within departments are public service chief executives under the definition in clause 5.

The term administrative head applying to chief executives who lead departments and departmental agencies in section 31 of the Act is not carried over into the Bill. A transitional provision in clause 4(2) of Schedule 1 says that this change does not create any distinction between public service chief executives whether they were appointed or reappointed before, on, or after the commencement of the Bill.

When a functional chief executive role is established, disestablished, or reorganised by the executive government, the decision to do so will be recorded in an Order in Council. The order will add, remove, or amend an item in Schedule 5 so that the list of functional chief executives in the schedule remains current. An order must state the designation of the role, identify the host department, and set out the particular functions that the role will have within the host department (see the definition of particular functions in clause 5). The name of the host department will also be also added to Schedule 2.

Clause 49 also refers to Schedule 7, which contains provisions relating to the appointment and performance review of chief executives. Clause 11 of Schedule 7 makes special provision for the Commissioner as chief executive of the Commission and for the Solicitor-General as chief executive of the Crown Law Office. Some provisions in that schedule do not apply to those two roles. This special provision is currently provided for in section 44 of the Act.

Clause 50 sets out the general responsibilities of chief executives who lead agencies. This clause is largely based on section 32 of the Act. One change made by the Bill relates to the responsibility for stewardship. The responsibility for stewardship currently in section 32(1)(d) of the Act has been moved to clause 10 (public service principles) and has been extended. A new stewardship responsibility is now in clause 50(1)(d). This is to support the Minister to act as a good steward of the public interest in specified ways. The responsibilities listed in this clause are additional to responsibilities and functions expressly provided for in other clauses in the Bill.

Clause 50 also says that—

  • the chief executive of a department is not responsible for carrying out functions of a departmental agency hosted by the department unless expressly provided in an enactment:

  • the chief executive of a departmental agency is responsible for carrying out its functions only, and not any functions of the host department unless expressly provided in an enactment:

  • the chief executive of a servicing department of an interdepartmental executive board is not responsible for carrying out functions of the board, except for tasks delegated to the department under clause 25(2); however, if that chief executive is also a member of that board they have full responsibilities as a member of the board.

Clause 51 says that the responsibilities listed in clause 50 apply to functional chief executives but that they are responsible to the appropriate Minister for the responsibilities listed only to the extent that those responsibilities are relevant to their particular functions (see the definition of particular functions in clause 5). A functional chief executive is responsible for carrying out their particular functions only, and not any other functions of the host department unless expressly provided for in the Bill, and has other responsibilities under the Bill to the extent only that is relevant to those particular functions. The chief executive of a department is not responsible for carrying out the functions of a functional chief executive hosted by the department unless expressly provided in the Bill.

Clause 52 requires chief executives to act independently when making decisions about individual employees. However, this does not apply when a chief executive is making decisions about ministerial staff under clause 68.

Clause 53 says that working arrangements between a functional chief executive and a host department must be agreed by the 2 chief executives and approved by the appropriate Ministers.

Clause 54 gives the Commissioner the power to designate a public service chief executive as a system leader to lead and co-ordinate best practice in a particular subject-matter area across the whole or part of the State services. System leaders are responsible to the appropriate Minister.

Clause 55 allows a system leader to set standards and issue guidance relating to the particular subject-matter area that they lead and co-ordinate. This can be done only if agreed by the appropriate Minister. The standards will apply only in or to public service agencies. Guidance issued by a system leader applies more widely in or to all State services.

Clause 56 is the operative provision for other functions and powers of chief executives set out in Schedule 6 and clauses relating to the appointment and performance review of chief executives in Schedule 7.

Public service leadership team

Clause 57 requires the Commissioner to establish a public service leadership team made up of all chief executives of departments, the 1 or 2 Deputy Commissioners, and 1 or more persons from 1 or more of the following (as the Commissioner thinks fit):

  • chief executives of departmental agencies:

  • functional chief executives:

  • chief executives of Crown agents:

  • the chief executive of the New Zealand Police:

  • the chief executive of the New Zealand Defence Force.

Clause 58 sets out the purposes of the public service leadership team, which are—

  • to provide strategic leadership that contributes to an effective and cohesive public service:

  • to work together co-operatively and model leadership behaviours:

  • to assist its members to fulfil their responsibilities.

Subpart 3—Senior leadership and management capability

Clause 59 requires the Commissioner to develop and implement a strategy for the development of senior leadership and management capability in the public service (the leadership strategy). In doing so, the Commissioner must ensure that the strategy meets both the needs of agencies themselves and the needs of the public service as a whole. This must include allowing for the flexible deployment of senior leaders. The Commissioner may promote the leadership strategy to other State services and invite them to assist to develop and implement the strategy. This clause is largely based on section 47 of the Act.

Under clause 12(2)(b)(i) of the Bill, the Commissioner is responsible for recognising the matters listed in clause 71(2)(d) when developing the leadership strategy. Clause 71(2)(d) relates to good employer requirements for Māori and is based on section 56(2)(d) of the Act.

Clause 60 gives the Commissioner a new power to issue guidance to chief executives to assist them to implement the leadership strategy.

Clause 61 requires chief executives and boards of public service agencies to—

  • develop senior leadership and management capability of their employees:

  • flexibly deploy senior leaders in their agency to contribute to meeting the needs of the public service.

All chief executives must assist the Commissioner to develop a leadership strategy under clause 59. A chief executive or board that is the employer of staff in a public service agency (including under delegation) must appoint and deploy senior leaders, having regard to the leadership strategy.

Clause 62 allows the Commissioner to arrange for a public service employee to be seconded elsewhere in the public service for specified purposes. Certain requirements that would usually apply to appointments do not apply to secondments under this clause.

Subpart 4—Public service workforce

Public service employees

Clause 63 defines certain terms relating to public service employees.

Clauses 64 to 67 set out the rights, duties, and powers of an employer that the chief executive or board of a public service agency has in relation to public service employees who carry out the functions of the agency. These provisions are based on section 59 of the Act and are expanded to include the new types of public service agencies provided for in the Bill.

Clause 64 relates to departments. The chief executive of a department may appoint the public service employees that the chief executive thinks necessary to carry out the functions of the department. The chief executive has the power to remove employees. The chief executive also generally has the other rights, duties, and powers of an employer in relation to the employees. There are some exceptions to this (for example, see clauses 76(b), 77, and 80) where the Commissioner has a role. This clause is based on section 59(1) of the Act.

As provided in clause 63, a person employed in a position in a department may be referred to as a public service employee or, more specifically, an employee of the department.

Clause 65 relates to interdepartmental ventures. It confers equivalent employer rights, duties, and powers on the board of an interdepartmental venture, in relation to carrying out the functions of the interdepartmental venture, to those the chief executive of a department has under clause 64 in respect of a department’s functions.

As provided in clause 63, a person employed in a position in an interdepartmental venture may be referred to as a public service employee or, more specifically, an employee of the interdepartmental venture.

Clause 66 applies to a departmental agency. In relation to the employees of the departmental agency’s host department who carry out the functions of the departmental agency, the chief executive of the departmental agency is treated as having certain powers as an employer. These are the ability to appoint and remove employees and the other rights, duties, and powers specifically set out in this clause.

These rights, duties, and powers are treated as delegated by the chief executive of the agency’s host department (and that chief executive is not able to exercise those powers in respect of those employees). That is, although the employees are referred to as employees of the host department, in many respects in relation to individual employees the chief executive of the departmental agency carries out the role of employer. This clause is based on section 59(2) and (3) of the Act.

Clause 67 applies to interdepartmental executive boards. It confers equivalent employer rights, duties, and powers on an interdepartmental executive board, in relation to carrying out the functions of the board, to those the chief executive of a departmental agency has under clause 66 in respect of a departmental agency’s functions.

These rights, duties, and powers are treated as delegated by the chief executive of the interdepartmental executive board’s servicing department (and that chief executive is not able to exercise those powers in respect of those employees). That is, although the employees are referred to as employees of the servicing department, in many respects in relation to individual employees, the interdepartmental executive board carries out the role of employer.

Clause 68 provides that the chief executive of a public service agency that is responsible for the employment of ministerial staff across all Ministers’ offices must have regard to the wishes of the relevant Minister when engaging ministerial staff. It also provides that clause 70, which relates to appointment on merit, does not apply to the appointment of ministerial staff. This clause replaces section 59(5) and part of section 66 of the Act. See also other existing exceptions regarding ministerial staff that are carried over in clauses 1, 4, and 5 of Schedule 8.

Clause 69 continues the existing process for review of appointments of public service employees. It replaces section 59(4) of the Act.

Clause 70 provides that when making an appointment under this Act, a chief executive or board must give preference to the person who is best suited to the position. This clause replaces section 60 of the Act.

Good employer requirements

Clause 71 sets out good employer requirements for departments and interdepartmental ventures. It is largely based on section 56(1) and (2) of the Act. Subclause (3) is new and sets out the responsibilities of departmental agencies and interdepartmental executive boards regarding the good employer requirements.

Clause 72 sets out functions of the Commissioner in relation to equal employment opportunities. This clause is largely based on section 58 of the Act.

Promoting diversity and inclusiveness

Clause 73 is new, and sets out requirements on departments and interdepartmental ventures in relation to promoting diversity and inclusiveness. Subclause (2) sets out the responsibilities of departmental agencies and interdepartmental executive boards regarding the diversity and inclusiveness requirements.

Clause 74 sets out functions of the Commissioner in relation to promoting diversity and inclusiveness.

Application of Employment Relations Act 2000 to public service

Clause 75 provides that the Employment Relations Act 2000 applies to the public service (subject to any exceptions in the Act). This clause replaces section 67 of the Act.

Clause 76 specifies who exercises the responsibilities of an employer in relation to personal grievances and disputes concerning public service employees. This clause replaces section 69 of the Act.

Negotiation of collective agreements

Clause 77 provides that the Commissioner is responsible for negotiating collective agreements that apply to departments and interdepartmental ventures. The collective agreements applicable to a department also apply to a departmental agency or an interdepartmental executive board for which the department is the host or servicing department. This clause replaces section 68(1) to (3) of the Act.

Clause 78 sets out further provisions in relation to collective agreements, including the required parties to the agreement and how it binds public service employers and employees. This clause replaces section 68(4) to (6) of the Act.

Clause 79 provides that the Commissioner may delegate the Commissioner’s functions to negotiate collective agreements. This delegation would be to a chief executive of a department or the board of an interdepartmental venture. This clause replaces section 70 of the Act.

Pay equity claims

Clause 80 is new and applies to a pay equity claim (as defined in subclause (6)) made by an employee or employees of a department or an interdepartmental venture. This clause would also apply to employees of a department who are carrying out the functions of a departmental agency or an interdepartmental executive board for which the department is the host or servicing department. The clause provides that the Commissioner may choose to be responsible for negotiations in relation to the claim. This applies until any time that the claim goes into mediation under the Employment Relations Act 2000 or proceedings in the Employment Relations Authority, a tribunal, or a court. After that point, the employer is, or employers are, the chief executive of each department and the board of each inter-departmental venture in which any of the employees are employed acting, if the Commissioner so requires, together with or in consultation with the Commissioner.

Clause 81 sets out further provisions relating to dealing with pay equity claims. Subclause (1) provides that if the Commissioner enters into negotiations in relation to a pay equity claim, the Commissioner must do so in consultation with the chief executive or board of each affected department or interdepartmental venture. Subclause (2) provides that the Commissioner may require any two or more chief executives or boards to negotiate a pay equity claim or pay equity claims in consultation with each other.

Clause 82 sets out who is bound by an agreement in relation to a pay equity claim that is entered into between the Commissioner and 1 or more public service employees, and who is responsible for implementing the agreement.

Clause 83 provides that the Commissioner may delegate the Commissioner’s functions regarding pay equity claims. This delegation would be to a chief executive of a department or to a board of an interdepartmental venture.

Other employment provisions

Clause 84 gives effect to the employment provisions set out in Schedule 8. These relate to—

  • obligations to notify vacancies and appointments (clauses 1 and 4):

  • review of appointments (clause 5):

  • making acting appointments where an employee is absent or there is a vacancy in a position (clause 2)

  • the manner of providing evidence of appointments (clause 3)

  • the ability to request that an employee undergo a medical examination (clause 6):

  • provisions relating to transfers of functions between Crown entities and public service agencies (clauses 7 to 10):

  • superannuation schemes for employees of State services agencies (clauses 11 to 13).

Clause 85 is new and provides a power to transfer employees where there is a transfer of functions from one public service agency to another. It applies only in the specific circumstances set out in subclause (2). This clause is intended to avoid the need for employees to go through an offer and acceptance process in the cases to which the clause applies. Subclause (4) provides that the employment of an employee to whom this clause applies will be treated as continuous for the purpose of the statutory leave entitlements described in clause 90(1)(a) and (b) and the KiwiSaver scheme (see clause 90(1)(c)).

Clause 86 provides that an employee transferred under clause 85 is not entitled to a redundancy payment.

Clause 87 provides for other restrictions on redundancy payments where a public service employee has received a notice of termination by reason of redundancy and—

  • is offered and accepts a position in a State services agency as described in subclause (1)(a); or

  • is offered an alternative position in a State services agency as described in subclause (1)(b)

This clause is largely based on section 61A of the Act except for subclause (2). Subclause (2) provides that if an employee moves from a position in a department or an interdepartmental venture to a position in another department or interdepartmental venture the person’s employment will be treated as continuous for the purpose of the statutory leave entitlements described in clause 90(1)(a) and (b) and the KiwiSaver scheme (see clause 90(1)(c)).

Clause 88 provides that certain provisions of the Bill (relating to appointments on merit, obligation to notify vacancies, and review of appointments) do not apply where a person is transferred under clause 85 or moves position as described in clause 87(1).

Employment in public service continuous for purpose of certain enactments

Clause 89 is new. It provides that clause 90 applies if an employee moves from a position in one public service agency into a position in another public service agency. This clause applies to a person who chooses to move from one position in the public service to another. It also applies in the circumstances provided for by clauses 85 and 87. It is intended that this clause will come into force by Order in Council at a later date than the rest of the Bill’s provisions. This is to enable systems and processes to be aligned so that the relevant leave entitlements referred to in clause 90(1)(a) and (b) can effectively be transferred between public service agencies.

When this clause comes into force it will replace clauses 85(4) and 87(2), which will be repealed (see clause 110(2)).

Clause 90 is new and applies to employees as set out in clause 89. It provides that the employee’s employment (in the agency the employee moves from and in the agency the employee moves to) is treated as continuous in relation to the statutory entitlements to leave described in clause 90(1)(a) and (b) and the KiwiSaver scheme ( see clause 90(1)(c). Subclauses (2) to (5) set out details of how this works. This clause is also subject to any regulations made under clause 93.

Clause 91(1) provides that where clause 90 applies the agency an employee moves to is not liable for any failures by the agency that the employee has moved from (agency A) to comply with requirements about statutory entitlements to leave and the recovery of holiday pay or leave pay. Subclause (2) provides that the requirements of clause 90(2) about the transfer of leave entitlements do not affect the right of an employee to take action in respect of a failure by agency A to comply with the requirements described in subclause (1). The intention is that the obligation to remedy any failure by an agency to comply with the requirements specified in subclause (1) is intended to lie with that agency.

Clause 92 provides that the provisions of the Holidays Act 2003 restricting payment of annual holiday pay do not prevent payments of annual holiday pay if that payment is required by regulations made under clause 93(1)(b).

Clause 93 is a regulation-making power. Subclause (1)(a) and (c) authorise regulations to be made to effectively provide for the administration of the continuous employment requirement as set out in clause 90(1). Subclause (1)(b) provides for regulations to specify amounts of the annual leave entitlement in clause 90(1)(a)(i) (that is, annual leave under section 16 of the Holidays Act 2003) at or above which leave cannot be transferred under clause 90.

Responsibility of departmental agency for health and safety

Clause 94 provides that a departmental agency (and not its host department) is responsible under the Health and Safety at Work Act 2015 in relation to workers who carry out the functions of the departmental agency.

Part 4Government workforce policy

Part 4 is based on sections 55A to 55D of the Act and continues the Commissioner’s ability to address workforce matters in the State services.

Clause 95 sets out the functions of the Commissioner in relation to workforce policy. These are—

  • providing advice and guidance on workforce matters to the agencies described in clause 97(4):

  • drafting and submitting a government workforce policy for approval by the Minister as a Government Workforce Policy Statement:

  • advising affected agencies on the operation of a Government Workforce Policy Statement:

  • facilitating the operation of a Government Workforce Policy Statement in conjunction with affected agencies.

Clause 96 provides that the Commissioner may draft government workforce policy and, after consulting affected agencies, submit it for ministerial approval as a Government Workforce Policy Statement.

Clause 97 relates to the content of government workforce policy. Subclauses (1) and (2) specify the matters government workforce policy may relate to. Subclause (3) has no counterpart in the Act. It allows government workforce policy to provide for the Commissioner to request information on the workforce matters specified in subclause (2)(a) to (e) from the agencies specified in subclause (4). Subclause (4) specifies the agencies to which a government workforce policy may apply.

Clause 98 provides that a Government Workforce Policy Statement must not affect other legal rights or obligations or determine or alter the content of the law applying to employees or chief executives or the Commissioner.

Clause 99 provides for the approval by the Minister of a government workforce policy. If approved, it becomes a Government Workforce Policy Statement. The statement is neither a legislative or disallowable instrument for the purposes of the Legislation Act 2012.

Clause 100 requires the Commissioner to make the Government Workforce Policy Statement known to affected agencies and available to the public.

Clause 101 sets out the obligations of the various agencies to which a Government Workforce Policy Statement may apply to implement the statement and to respond to any request for information made under it. The degree to which an agency is required to give effect to the Statement and to comply with information requests depends on the nature of the agency.

Clause 102 provides that nothing in a request for information by the Commissioner made under a Government Workforce Policy Statement limits any Act that imposes a prohibition or restriction on the availability of any information.

Part 5Offence, immunity, responsibility of departmental agencies under Privacy Act 1993, and public service reorganisations

Offence to solicit or attempt to influence public service leaders

Clause 103 says that a person commits an offence if they directly or indirectly solicit or attempt to influence a public service leader or a delegate of a public service leader. The offence is committed only if the leader or delegate is making a decision relating to duties to act independently in employment matters and when making decisions about individual chief executives. The offence is punishable by a fine not exceeding $2,000. In certain specified circumstances actions that would otherwise be an offence will not be an offence. This offence is currently contained in section 85 of the Act. A new aspect of the offence in the Bill is that it extends to public service leaders (instead of applying only to the Commissioner or a chief executive). Public service leader is defined as including a Deputy Commissioner (but only if they are carrying out functions of the Commissioner), interdepartmental executive boards, and the boards of interdepartmental ventures.

Immunity from liability

Clause 104 says that public service chief executives and employees are immune from liability in civil proceedings for good-faith actions or omissions when carrying out or intending to carry out their functions or responsibilities.

Responsibility of departmental agencies under Privacy Act 1993

Clause 105 provides that in relation to its functions a departmental agency has the responsibility under section 23 of the Privacy Act 1993 (which relates to the responsibility of an agency to ensure that the agency has 1 or more privacy officers).

Reorganisations within public service

Clause 106 allows savings and transitional matters connected with reorganisations of public service agencies to be dealt with by an Order in Council. Clause 106 is also the operative provision for other provisions relating to reorganisations in the public service that are set out in Schedule 9.

Part 6Amendments to enactments, repeals, and revocations

Clauses 107 to 112 amend, repeal, and revoke enactments.

Amendment to Crown Organisations (Criminal Liability) Act 2002

Clause 107 amends the definition of Crown organisation in section 4 of the Crown Organisations (Criminal Liability) Act 2002. The effect of the amendment is that interdepartmental ventures and departmental agencies are Crown organisations for the purposes of that Act.

Amendments to Privacy Act 1993

Clause 108(2) amends the definition of agency in section 2(1) of the Privacy Act 1993. The effect of the amendment is that interdepartmental ventures and departmental agencies are agencies for the purposes of that Act. Subclause (4) amends section 3 of the Privacy Act 1993 to provide that information that is held by an employee of a department carrying out the functions of a departmental agency must be treated for the purposes of that Act as held by the departmental agency.

Repeals and revocations

Clause 109 repeals the State Sector Act 1988 and the Civil Service Act 1908.

Clause 110(1) repeals a section, Parts, and schedules in this Bill relating to repeals, revocations, and amendments that implement changes made by the Bill across the statute book. Commencement of clause 110(1) is delayed to 1 January 2021 to allow those repeals, revocations, and amendments to happen or be made before the operative provisions for them are then removed from the Bill.

Clause 110(2) provides that clauses 85(4) and 87(2) are repealed on the date on which clause 89 comes into force. Clause 89 will replace the effect of clauses 85(4) and 87(2) (see clause 89(2)).

Clause 111 is the operative clause for Schedule 10, which lists legislative instruments to be revoked.

Consequential amendments

Clause 112 is the operative clause for Schedule 11, which sets out consequential amendments to enactments.

Part 7Amendments to Public Finance Act 1989

Part 7 sets out amendments to the PFA.

The PFA sets out Parliament’s requirements for the Government’s budgeting and reporting cycle. Among other things, the PFA—

  • sets out the process by which the use of public money by or on behalf of the Crown and Offices of Parliament is authorised:

  • requires departments, departmental agencies, and Offices of Parliament to periodically provide information on their strategic intentions:

  • imposes annual reporting requirements on departments, departmental agencies, and Offices of Parliament (both in relation to the use of public money and more generally).

Amendments to the PFA are required to reflect—

  • the increased flexibility in the working arrangements of departmental agencies; and

  • the 2 new organisational forms in the public service (interdepartmental executive boards and interdepartmental ventures).

The amendments in Part 7 add departmental agencies, interdepartmental executive boards, and interdepartmental ventures to the definition of department in section 2(1) of the PFA. As a result, the provisions of the PFA that apply to departments will also apply to those other agencies. The amendments in Part 7 make further modifications throughout the rest of the PFA to reflect the particular circumstances of those other agencies (including, in relation to departmental agencies, the working arrangements that apply in accordance with clause 22). For example,—

  • where a departmental agency operates within the strategic and policy framework of its host department, it is not required to provide information on its own strategic intentions under Part 4 of the PFA; and

  • the content required in an annual report under Part 4 of the PFA changes according to whether the departmental agency, interdepartmental executive board, or interdepartmental venture manages assets and liabilities or administers an appropriation; and

  • the provisions that apply to intelligence and security departments also apply in certain circumstances to departmental agencies, interdepartmental executive boards, or interdepartmental ventures that are connected to intelligence and security departments.