The department shall be classified into two divisions—namely, First Division and Second Division—with their respective subdivisions, classes, subclasses, and grades, as set forth in the Schedule hereto, and such classification shall come into force on the thirty-first day of March, one thousand eight hundred and ninety-seven.

On and after the coming into force of the said classification the rates of pay, and of increment thereof, in each division shall be as mentioned in the said Schedule, and shall be regulated by the minimum and maximum limits therein mentioned, in so far as such limits are therein expressed to apply:

Provided that, with respect to all persons who are members of the department at the time of the coming into operation of this Act, nothing in this Act contained shall be construed to reduce the pay of any such member below the rate actually received by him at the time of the coining into force of the said classification, or to prejudicially affect his right to any increases of pay provided for by any regulations now in force:

Provided further that, with respect to every person who enters the service of the department between the coming into operation of this Act and the thirty-first day of March, one thousand eight hundred and ninety-seven, the Schedule hereto shall apply in lieu of any regulations for the time being in force relating to status, pay, or increment:

Provided further that, with respect to every member, the right to receive any increase of pay in any year shall in each case depend upon the efficiency and good conduct of the member to whose pay such increase is attached in the Schedule hereto, and no such increase shall be payable unless the permanent head of the department certifies in writing that such member is entitled thereto.

For the purposes of the last-preceding section hereof the Minister, on the thirty-first day of March, one thousand eight hundred and ninety-seven, shall cause all members then in the service of the department to be classified according to the classification set forth in the Schedule hereto, and shall fix each member’s rate of pay and the date on which his first annual increment (if provided by the said Schedule) begins to be payable: Provided that in no case shall such increment begin earlier than twelve months after the date on which his last previous increment began to be payable.

From such classification there shall be prepared and laid before Parliament each year a list setting out in order of classification the names, status, and pay of each member, and the number of years be has been in the service of the department.

It shall be the duty of the permanent head of the department to annually certify respecting each member to whose pay an increase is attached whether be is or is not entitled thereto, and he shall also furnish without comment thereon a copy of all entries in the conduct-book relating to such member.

Any member who is dissatisfied with such certificate respecting himself may appeal to the Appeal Board hereinafter referred to.

Notwithstanding anything elsewhere contained in this Act, the following special provisions shall apply:—

All sums payable under this Act shall be payable out of moneys appropriated by Parliament.

Before transmission of the message accompanying the estimates in any financial year in respect of the department, the Governor may recommend, by message to the House of Representatives, a rateable reduction or increase, according to a specified rate, in the pay of each member.

If such rateable reduction or increase is adopted by the House, then the respective rates of pay and increment thereof, as set forth in the Schedule hereto, shall be deemed to be modified accordingly, and shall so continue until again modified in manner aforesaid.

The Minister shall at such times as may be convenient grant to each member leave of absence. Such leave of absence shall be for not less than one week in each year, and shall be given to the member at one time.

Any member who commits any breach of any regulation hereunder, or any rule or by-law of the department, or who is guilty of any other misconduct, shall be liable to one or more of the following penalties:—

Suspension; or

A fine, not exceeding five pounds; or

Reduction in status and pay; or

Dismissal.

Subject to prescribed regulations, the permanent head of the department shall in respect of any member thereof, and the officer at the head of each branch thereof shall in respect of any member in that branch, have power to suspend, fine, or reduce any member, but no member shall be dismissed except by warrant of the Minister: Provided, that any such member shall have the right of appeal, as hereinafter provided.

For the purpose of the department an Appeal Board is hereby constituted for the North Island and the Middle Island respectively, each of which Boards (hereinafter called “the Board”) shall consist of the following persons, that is to say:—

A Judge of the District Court, or a Stipendiary Magistrate, to be appointed from time to time by the Governor, and to be the Chairman of the Board;

One person to be elected by the members of the First Division in the North Island and Middle Island respectively from among their number; and

One person to be elected by the members of the Second Division in the aforesaid Islands respectively from among their number.

The Appeal Boards constituted under “The Government Railways Act, 1894,” shall be deemed to be constituted under this Act, and the members thereof in office at the time of the coming into operation of this Act shall be deemed to be elected and appointed under this Act, and shall continue in office until the first Monday in November, one thousand eight hundred and ninety-eight, on which day, and triennially thereafter, the members of the respective Boards who are then in office shall retire, and their successors shall come into office.

With respect to each Board the following provisions shall apply:—

For the purpose of the ordinary election of the elective members of the Board, a ballot shall be taken on the first Monday in October, one thousand eight hundred and ninety-eight, and on the same Monday in every third year thereafter.

If any member of the Board dies, or, by notice in writing addressed to the Minister, resigns his office, or, being an elective member of the Board, ceases to be a member of the department, then and in any such case his seat shall become vacant, and a successor shall be appointed or elected, as the case may require, who shall hold office for the residue of the period during which his predecessor would have held the same if he had remained a member of the Board:

Provided that in any case where the seat of an elective member becomes vacant within three months of the ordinary election, a ballot shall not be taken, but, in lieu thereof, the Governor may appoint to such vacancy.

The ballot shall be taken in manner prescribed by regulations, and if any question or dispute arises as to the regularity or validity of any ballot or the voting thereat, such question or dispute shall be determined by the Minister in such manner as he thinks fit, and his decision shall be final.

Notice of every appointment or election of a member of the Board shall be gazetted.

Every member who is aggrieved with any decision of his superior officer may appeal therefrom in manner hereinafter provided.

Every appeal shall be instituted by notice of appeal, which shall, within one month after the date of the decision appealed against, be lodged in the prescribed form with the Minister, or with some member appointed by him for that purpose, and every such appeal shall be heard within three months after the date of the lodging of such notice.

Appeals against fines imposed on members by their superior officers under the provisions in that behalf hereinbefore contained shall be made to the Minister when the fine does not include two pounds, who shall determine the same in such manner in all respects as he thinks fit.

All other appeals shall be made to and determined by the Board for the Island in which the appellant was employed at the time when the decision appealed against was given:

Provided that if the appellant is a member of one of the Boards, his appeal shall be made to and be determined by the other Board.

With respect to the procedure on appeals heard by the Board the following provisions shall apply:—

The Board for each Island shall hold its sittings in such town in that Island as the Chairman from time to time appoints.

In order to lessen the expenses of appeals the evidence of witnesses resident more than twenty miles from the place of the sittings of the Board may be taken and used in the prescribed manner; and for that purpose the Governor may by regulations adopt such of the provisions of sections ninety-one to ninety-five of “The Magistrates’ Courts Act, 1893,” with such modifications thereof or additions thereto, as he thinks fit.

No solicitor, counsel, or agent, other than a member of the department, shall appear or be heard on any appeal; but the appellant shall appear in person or by another member, and the department by some member appointed by the Minister in that behalf.

All evidence shall be taken on oath, and the Chairman may administer an oath.

Subject to the provisions of this Act, and the regulations hereunder, the Board may regulate its own procedure.

The Minister, in respect of appeals to him, and the Board in respect of appeals to it, shall have full power to confirm, modify, or disallow the decision appealed against, in such manner in all respects as is deemed just:

Provided that every decision of the Board shall be submitted to the Minister, and that no such decision shall take effect unless and until be signifies his approval thereof:

Provided further that in no case shall any person who has been dismissed for peculation or drunkenness be again appointed on the permanent staff of the department.

With respect to the costs of appeal the following provisions shall apply:—

In disposing of an appeal the Board may fix the costs thereof and direct by whom and in what proportions they shall be payable; and they shall be payable accordingly:

Such expenses shall be regulated according to the scale for the. time being in force under “The Magistrates’ Courts Act, 1893,” in the case of witnesses who are not members of the department; and in the case of witnesses who are members, according to the scale of travelling expenses for the time being in force in the department.

For the purposes of this section, the agent appearing for either of the parties to the appeal shall be deemed to be a witness, and shall be entitled to expenses accordingly.

Costs awarded to the appellant shall be payable out of moneys to be appropriated by Parliament.

Costs awarded against the appellant shall be recoverable as a debt due to the Crown.

The decision of any two members of the Board shall be the decision of the Board.

The Governor in Council may from time to time make regulations not inconsistent with this Act for all or any of the following purposes:—

Determining the mode, terms, and conditions on which candidates for employment in the department may enter the service thereof:

Prescribing the times and places at which examination of candidates shall be held, the subjects of examination upon entrance or on promotion, the conduct of such examinations, the appointment and remuneration of examiners, and the granting of certificates as to the result of examinations:

Prescribing fees to be paid by candidates prior to any such examination:

Prescribing the respective duties to be performed by members, and the discipline to be generally observed in the performance of such duties:

Determining the grounds upon which and the mode in which members may be promoted in the same class or to a higher class in the same division or subdivision, or may be transferred from one division or subdivision to another: Provided that in no case shall any member be promoted except with the previous approval of the Minister:

Determining the nature or character and extent of qualifications, examinations, or tests, according to the requirements of each of the higher branches of the department, which members in lower branches shall possess or undergo for the purposes of promotion:

Charging rent for house-accommodation provided by the department and used or occupied by members for domestic purposes, and fixing, reducing, or abolishing any allowance for rent in lieu of house-accommodation:

Providing for the temporary employment of any person in any branch of the department, and providing that any person so employed who possesses expert or technical knowledge or skill may be appointed permanently, but subject to his compliance with the regulations then in force:

Providing for the conduct of the elections of the Appeal Boards, and for facilities to be given to members for voting thereat, and to the elected persons for attending the sittings of the Board:

Providing how and by whom charges of inefficiency or misconduct may be made against any member, and for the conduct of inquiries into any such charges, and for appeals:

Prescribing in what manner and to what extent such charges, if proved, may be punished, and whether by suspension, fine, reduction of pay or of status, or by dismissal from the service:

Regulating the procedure of Appeal Boards and the conduct of appeals, including the method of taking evidence at a distance:

Regulating the terms and conditions on which leave of absence, passes, privileges, and allowances may be granted:

Fixing the ages at which members shall retire in the different branches of the department:

Generally providing for any other matters that by this Act are expressed to be prescribed or that may be deemed necessary in order to give effect to this Act:

Affixing to breaches of regulations under this Act, or of any rules or by-laws of the department, according to the nature of the offence, penalties of such nature as are authorised or contemplated under this Act:

Provided that nothing in this Act shall control or restrict any powers conferred upon the Governor in Council to make regulations under “The Government Railways Act, 1894,” or “The Public Works Act, 1894,” save in so far as any such powers are expressly repealed by this Act.

Sections six to ten of “The Government Railways Act, 1894,” are hereby repealed:

Provided that all regulations made or deemed to be made thereunder and now in force shall continue in force until revoked under this Act.

Subsection four of section six of “The Public Works and Government Railways Acts Amendment Act, 1895,” is hereby repealed.