3.1 Structure of the Australian Public Service

The Public Service Act

The Australian Public Service comprises some 167,000 staff, as at June 2013. In addition a further 90,000 people are employed elsewhere in the Commonwealth General Government Sector.

The Public Service Act 1999 is the principal Act governing the establishment and operation of the Australian Public Service. The Act provides a framework for employment by outlining the core principles, values and characteristics that should underpin a professional and proficient public service.

As a principles-based Act, the details of most employment processes and entitlements are left to departments and agencies. The Act’s aims are to:

  • establish an apolitical public service that is efficient and effective in serving the government, the Parliament and the Australian public;
  • provide a legal framework for the effective and fair employment, management and leadership of Australian Public Service employees;
  • define the powers, functions and responsibilities of agency heads, the Public Service Commissioner and the Merit Protection Commissioner; and,
  • establish rights and obligations of Australian Public Service employees.

Among the values included in the Act is recognition that the Australian Public Service is openly accountable for its actions within a framework of overall ministerial responsibility.

The Public Service Act does not contain any explicit references to the need to improve productivity in the public sector. However, as noted above, it does aim to establish a public service that is efficient and effective and places on secretaries of departments the responsibility of ‘managing the affairs of the department efficiently, effectively, economically and ethically’.

The Act also provides directions on the creation of an office of secretary of departments, as well as arrangements for their appointment. It provides that an agency head may terminate the employment of a public service employee, inter alia, for non‑performance or unsatisfactory performance of duties.

The Australian Public Service Commission

The Australian Public Service Commission has statutory responsibilities for leading and shaping the Australian Public Service. It falls within the Prime Minister and Cabinet Portfolio and employs some 250 staff.

The $110 million per annum it currently receives comprises $23 million of departmental appropriations and $29 million from the sale of goods and services. In addition, the Australian Public Service Commission receives a $59 million special appropriation for parliamentarians’ and judicial officer holders’ remuneration and entitlements, which is drawn on by the Departments of the House of Representatives and the Senate, and the Attorney-General’s Department.

The Australian Public Service Commission is one of the largest managers of people in the country. It supports two statutory office holders in the Public Service Commissioner and the Merit Protection Commissioner.

The functions of the Australian Public Service Commission are set out in Public Service Act 1999 and include:

  • promoting the Australian Public Service Values and Code of Conduct;
  • improving Australian Public Service people management;
  • coordinating Australian Public Service wide training and career development;
  • fostering leadership in the Australian Public Service; and
  • providing learning and development services, advice and assistance to agencies on Australian Public Service matters.

The Commission’s functions include policy and advisory responsibilities on the Australian Public Service employment framework (including workplace relations), classification, ethics and performance.

It encourages agencies to develop a more consistent approach to common terms and conditions of employment when negotiating enterprise agreements, in order to support the aim of moving towards ‘one APS’.

The current structure and role of the Australian Public Service Commission is heavily influenced by the 2010 report: Ahead of the Game: Blueprint for Reform of Australian Government Administration.

This Report sought to boost and support the Australian Public Service workforce and leadership. It included steps to reduce internal red tape, but it also introduced a degree of re-centralisation in workforce development and planning. The Public Service Commission’s mandate to lead and monitor developments in agency capacity and overall public sector performance has been strengthened as a consequence.

The Australian Public Service Commission does not have centralised control over human resources, as agency heads have managerial authority and responsibility under the Act. While agency heads retain the powers of an employer, these powers are required to be exercised within a more consistent, centrally determined and monitored framework.

Centralisation of functions such as workforce development and planning is an advantage in fostering ‘one APS’. As well as facilitating the movement of public servants between agencies, it is intended to promote more integrated policy making and service delivery.

It aims to encourage Australian Public Service staff to work across boundaries in a collegiate manner, to serve the government of the day and develop practical solutions in a responsive manner.

The Commission considers there is a trade off between centralising responsibility in an agency such as the Australian Public Service Commission and facilitating appropriate flexibility to individual agencies to manage their operations.

In particular, centralisation should not dilute the responsibility of departmental secretaries and their leadership group to strategically manage their organisations, to develop future leaders, to drive productivity, pursue innovation and better deliver on the government’s agenda.

Secretaries and other agency heads should be empowered to do so, supported by their own human resource management and corporate areas.

In some areas, standardisation may have added complexity and promoted consistency at the expense of agility.

Performance management

During consultations stakeholders suggested to the Commission that public service performance is uneven and expressed concerns about the quality of leadership and management.

A recent Australian Institute of Management survey showed public sector managers are more disengaged than those in the private sector with regard to performance management and that public sector managers should play a stronger role in increasing organisational performance.

Managing performance is a core management responsibility. Managers need to provide feedback so that good performers are motivated and understand their managers’ expectations.

Best practice performance management also requires strong processes for the difficult task of managing under-performance. Managers must be able to provide constructive criticism for poor performance and, where necessary implement processes to address it.

Common challenges that have been identified by the Public Service Commission in managing under-performance are its impact on colleagues; the time required to deal with under-performance; unwillingness of under-performers to try to improve; and dealing with health related and personal issues.

It was put to the Commission of Audit during its deliberations that the operation of the Public Service Act itself impedes improved productivity and a higher performing public sector.

Legally, there are no legislative barriers that restrict or impede addressing or managing out individual under-performance in the public sector. In practice however, it is difficult to manage under-performance.

The Act is generally performance-based, with little in the way of prescription of process. In fact, the processes related to human resources practices are generally found in either departmental policies or enterprise agreements.

The majority of Commonwealth agencies have performance management systems in place, although they vary significantly between agencies. However, the real challenge to effective individual performance management is the management of under‑performance.

A future role for the Australian Public Service Commission

The Australian Public Service is one of the largest and most complex workforces in Australia. The Commission of Audit recognises the benefits of devolving responsibilities to departmental secretaries, and supports its continuation.

That said, the Commission considers consistency in certain areas of operations will improve productivity across the public sector.

Also the Public Service Commissioner has an important role to play in supporting merit‑based appointments to maintain an apolitical public service.

A decentralised alternative to the current arrangements for Australian Public Service Commission could involve a stronger role for secretaries, coordinated through the Secretaries Board, which includes the secretaries of all Commonwealth departments as well as the Australian Public Service Commissioner. The Secretary of the Department of the Prime Minister and Cabinet chairs the Secretaries Board.

This arrangement could improve strategic focus on the future needs of the Australian Public Service and replace the Public Service Commission’s stewardship, strategy and network management functions. Residual Public Service Commission functions could be transferred to other agencies.

Alternatively, the office of the Public Service Commissioner could be relocated to the Department of Employment. The role and responsibilities of the Public Service Commissioner would be assumed by the Secretary of that Department.

Some of the existing functions of the Australian Public Service Commission would also be amalgamated into the Department of Employment. The Department of Employment has existing expertise in workplace relations matters and employment conditions. It has been responsible for these matters in the past.

The Australian Public Service Commission’s functions relating to the Senior Executive Service professional development could also be undertaken by the Department of Employment.

The Australian Public Service Commission’s responsibilities for procuring training and development services could be undertaken by the Department of Finance, as part of its coordinated procurement contract arrangements.

Other functions undertaken by the Public Service Commission could be pursued by individual agencies’ human resource and corporate areas.

The Commission considers that the position of Merit Protection Commissioner can be abolished. This Commissioner reviews various management decisions in the public service, most notably Code of Conduct and promotions for lower grades of staff. It is noteworthy that, of the 174 promotion decisions reviewed by the Merit Protection Commissioner in 2012-13, only one decision was varied.

The availability of this additional level of appeal for promotion decisions differentiates the Australian Public Service from private sector employment arrangements and is available only for junior levels in the Australian Public Service. It has the potential to make the management of staff performance more complicated.

The Secretary of the Department of Employment can take over responsibility for the Code of Conduct matters that the Merit Protection Commissioner currently oversees.

The Commission of Audit acknowledges that implementation of its recommendations concerning the Australian Public Service Commission will require amendment to the Public Service Act 1999.


Recommendation 6: Role of the Australian Public Service Commission

As one of Australia's largest workforces, it is important to improve public sector productivity and better harness talent across the Australian Public Service including by supporting merit-based appointments to maintain an apolitical public service. The Commission recommends that changes be made to the Public Service Act and associated arrangements including that:

  1. the Public Service Act 1999 be amended to ensure an overriding obligation of those working in the public service to serve the government is to be highly productive;
  2. the role and responsibilities of the Public Service Commissioner be assumed by the Secretary of the Department of Employment;
  3. existing functions of the Australian Public Service Commission be transferred to:
    1. the Department of Employment in relation to workplace relations matters and employment conditions, as well as those functions relating to Senior Executive Service professional development;
    2. the Department of Finance in relation to the operation and management of the whole-of-government training and development contracts, as part of its coordinated procurement contract arrangements; and
    3. individual departments and agencies in relation to other operational functions through their human resource and corporate areas;
  4. the role of the Merit Protection Commissioner be abolished, with the Department of Employment to undertake responsibilities on Code of Conduct matters; and
  5. removing provisions for appeal processes in relation to promotion decisions for lower level positions in the Australian Public Service.