Legal Insights

The new ‘Local Government Act 2020' - What does this mean for employment at Councils?

By Lindy Richardson, Ross Jackson

• 19 June 2020 • 7 min read

Introduction

Described as the most comprehensive reform to local government in Victoria for 30 years, the Local Government Bill 2019 was passed by the Victorian Parliament on 17 March 2020 and has become law in the form of the Local Government Act 2020 (LG Act 2020).

The LG Act 2020 will replace the current Local Government Act 1989 (LG Act 1989), which was described in Parliament as ‘outdated, incoherent and enmeshed in prescriptive detail.'[1]

When will the LG Act 2020 be implemented?

The LG Act 2020 came into operation on 25 March 2020, but the commencement of a range of provisions is staggered across various dates from 6 April 2020 onwards.[2] This approach is intended to ensure councils have sufficient time to understand and comply with the new statutory requirements, and for supporting resources such as guidelines to be developed.

Until specific provisions of the new LG Act 2020 commence, councils are to continue to comply with the LG Act 1989. Where the LG Act 2020 requires a council to develop a new policy or plan, councils will, as a general rule, have six months after the commencement date to comply with that statutory obligation.

What changes will the LG Act 2020 introduce?

From an employment perspective, key changes can be found in Part 2, Division 7 of the LG Act 2020, and can be summarised as follows:

Requirement

Description

Commencement date

CEO Employment and Remuneration Policy

Councils must develop a Policy (with the assistance of an independent, professional adviser) that:

  • provides for the recruitment of a CEO;
  • imposes key contract provisions, an annual review and performance monitoring; and
  • caps the period of appointment at 5 years (although reappointment under a new contract is permitted).[3]

1 July 2021

Workforce Plan

The CEO must establish a Plan that:

  • describes the council’s organisational structure;
  • importantly, requires the CEO to inform the council and consult with affected employees before implementing a proposed restructure;
  • specifies the projected staffing requirements for a minimum of 4 years; and
  • sets out measures to ensure gender equity, diversity and inclusiveness. This includes CEOs specifying gender equity targets for the employment of all senior staff.[4]

1 July 2021

Recruitment Policy

A Policy must be enacted to ensure all recruitment decisions:

  • are made on merit;
  • support transparency; and
  • have regard to the gender equity, diversity and inclusiveness measures specified in the Workforce Plan.[5]

1 July 2021

Code of Conduct

The CEO must implement a Code of Conduct that is applicable to all members of staff. The Code must include:

  • capacity for disciplinary action when employees are in breach of the Code; and
  • a policy on disclosure of gifts.

In keeping with the transparency principles, all councils will be required to make their Codes of Conduct public.[6]

1 July 2021

Indemnity

Council must indemnify the CEO and all staff against any actions or claims that arise during the performance of their duties which were performed in good faith.[7] (This is essentially unchanged from the position under s 76 of the LG Act 1989.)

1 May 2020

Taking of affidavits in Victoria and powers to administer oaths and affirmations

The Oaths and Affirmations Act 2018 is amended to provide that a ‘senior officer’ (who currently has the power to administer an oath or affirmation and is an authorised affidavit-taker) will be a senior member of council staff who is authorised in writing by the CEO to administer an oath or affirmation or as an authorised affidavit taker.[8]

1 July 2021

What has been repealed?

Senior Officer provisions

Importantly, the category and regulation of 'senior officers', a feature of the LG Act 1989 since the early 1990s, will cease to exist once the employment provisions of the LG Act 2020 come into operation on 1 July 2021.[9]

Senior officer contracts entered into before 1 July 2021 will remain in full force and effect under ordinary principles of statutory interpretation and contract law until their termination or expiry, but councils will need to start thinking about how they wish to employ their most senior staff after 1 July 2021. For example, will councils wish to attract candidates by moving to ongoing permanent employment? Or is the capacity to go to market at regular intervals more attractive? How will the policies referred to above engage with this issue? Does your enterprise agreement restrict your council from engaging temporary/maximum term employees?

And what about enterprise agreements that contain provisions or carve-outs affecting a category of employee that no longer exists after 1 July 2021? This issue will of course vary from council to council depending on the wording of the enterprise agreement.

Complaints

Sections 103 to 110 of the LG Act 1989, dealing with complaints against the CEO and the appointment of a probity auditor, were repealed on 6 April 2020.[10] Interestingly, there are no provisions in the LG Act 2020 that replace these obligations, although councils may choose to make similar provision in their Complaints Policies (to be adopted under s 107 of the LGA 2020) and Regulations may also be made in this regard in due course.

Confidentiality of personnel matters

Under s 89(2)(a) of the LG Act 1989, a council or special committee was able to resolve that a meeting be closed to members of the public if the meeting was discussing ‘personnel matters’. Section 89 was repealed on 1 May 2020[11] and no equivalent head of ‘confidential information’ is included in the LG Act 2020. Councils will therefore need to consider the manner in which personnel matters are reported under the new confidentiality regime.

Under the LG Act 2020, from 24 October 2020, a member of council staff, a councillor, or a member of a delegated committee who intentionally or recklessly discloses confidential information will commit an offence be liable to pay a significant penalty of 120 penalty units (approximately $19,800).[12] There are limited exceptions to this, such as where the council determines that the information should be publicly available. Importantly, this offence does not currently apply to members of council staff.

[1] Second Reading Speech, 28 November 2019 per Gavin Jennings, p 4497.

[2] Victorian Government Gazette, No. S 148 Tuesday 24 March 2020.

[3] LG Act 2020, s 45.

[4] LG Act 2020, s 46(4)(a).

[5] LG Act 2020, s 48(2).

[6] LG Act 2020, s 49.

[7] LG Act 2020, s 52.

[8] LG Act 2020, ss 48(4) and (5)

[9] LG Act 2020, s 362(1).

[10] LG Act 2020, s 359 (f).

[11] LG Act 2020, s 360(b)

[12] LG Act 2020, s 125.

Looking for more information on the proposed reforms?

Get in touch with Lindy Richardson or Ross Jackson.

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