1.1 Background

The Victorian Public Sector Commission (VPSC) completed a review of executive employment and remuneration arrangements in the public sector in June 2018. The review indicated that, to reduce the risk of inappropriate practices and enhance accountability of the public sector, a dedicated Victorian Public Entity Executive Employment Handbook (the Handbook) should be developed.

The Handbook was released in July 2019. The Handbook enhances awareness of public sector standards and obligations that relate to executive employment in public entities. Taken together with the VPSC’s Standard Public Entity Executive Employment Contract (Standard Contract), the Handbook will promote executive employment arrangements that are clear, consistent, effective, and transparent to ensure appropriate use of public funds and the minimisation of integrity risks.

The Handbook is managed by VPSC and questions about its content should be directed to info@vpsc.vic.gov.au.

1.2 Purpose of the Handbook

The Handbook will:

  • assist public entities to manage employment contracts, remuneration and employment matters relating to executives
  • inform executives, or those contemplating executive employment, about working conditions and responsibilities in the public sector
  • provide guidance to executives and employers in public entities on executive employment and remuneration policy.

1.3 Scope of application of the Handbook

The Handbook provides guidance for employing executives in public entities. Public entities are defined in Part 1 Section 5 of the Public Administration Act 2004 (PAA) and include statutory authorities, state-owned corporations and advisory bodies that exercise a public function. Some public entities are excluded from the scope of the Handbook, as they have been designated as public service employers by specific legislative reference or an Order in Council. The State of the Public Sector in Victoria Report provides further detail on which entities have been designated as public service employers.

Some Victorian public health entities are also not covered by the remuneration arrangements in this Handbook, listed in Appendix 6. These employers can contact the Department of Health and Human Services for further advice on health services executive employment by email: executive.employment@dhhs.vic.gov.au.

Executive employment arrangements differ between the Victorian public service (VPS) and public entities due to the differences between how they are established in legislation. The Handbook provides the general employment conditions for executives in public entities. Executives should contact their employer if they are unclear on whether they are employed in the VPS or a public entity. Information on the standard employment conditions for VPS executives is available in the Victorian Public Service Executive Employment Handbook.

1.4 How to use the Handbook

The interpretation of the Handbook is subject to an executive’s employment contract. The Standard Contract contains mandatory terms (which must be included in all public entity executive employment contracts) and non-mandatory clauses (provided as model clauses). Mandatory requirements have been highlighted in the summary boxes at the top of each chapter. The Handbook should be read in conjunction with an executive’s employment contract and relevant legislation. The Handbook does not form part of an executive’s contract.

Employers

The Handbook will help employers with policies that are relevant to executive employment in public entities. Employers should seek information relating to tax matters from the Australian Tax Office (ATO) or another expert advisor.

Executives

The Handbook sets out executive employment arrangements. It explains the benefits and responsibilities of working in public entities. Executives should seek information relating to tax matters from the ATO or another expert advisor. The ATO website is also a good source for publications on tax matters, and the ASIC Money Smart website has information on superannuation.

1.5 Roles and responsibilities

The Victorian Public Sector Commission (VPSC) provides advice on executive employment (excluding remuneration matters) to public entity employers and departments and publishes resources to support executives and employers.

This includes a standard contract for employing public entity executives, the executive vehicle cost-to-package calculator and publications on a range of topics including work/life balance, codes of conduct, standards and governance.

The Victorian Independent Remuneration Tribunal (the Remuneration Tribunal) determines executive remuneration bands for executives in prescribed public entities and has issued guidelines on the placement of executives within remuneration bands.

The Department of Premier and Cabinet is responsible for whole-of-government executive workforce policy, including the Public Entity Executive Remuneration (PEER) policy.

Table 1 provides an overview of the division of roles and responsibilities. If an executive is unsure whether they are employed as a public sector or public service executive, they should contact their employer.

Table 1: Roles and responsibilities for executive employment

Entity Roles and responsibilities
Departments Provide day-to-day advice and support to public entity employers in their portfolios on executive workforce matters across remuneration, classification, employment and performance.
VPSC

Primary responsibility for executive classification and performance management policy, standard executive contracts and data collection.

Responsible for executive employment handbooks and guidance materials.

Provides tools, materials and support for executive work value assessments and performance management.

Remuneration Tribunal

Determines the remuneration bands and annual adjustments to remuneration bands for executives employed in prescribed public entities.

Issues guidelines on the placement of executives within remuneration bands.

Provides advice about requests to approve remuneration which is above the relevant remuneration band.

At the request of the Minister, inquire into and determine the remuneration package for a Chief Executive Officer employed in prescribed public entity.

Department of Premier and Cabinet (DPC)

Primary responsibility for whole of government executive workforce policy.

Responsible for the Public Entity Executive Remuneration (PEER) policy.

Communicates Premier’s annual remuneration adjustment guideline rate.