This document is part of the Victorian Public Entity executive employment resource.

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 Department of Premier and Cabinet (DPC) and VPSC are the key advisers to Government on executive employment matters. VPSC provides advice on executive employment to departments and agencies and publishes resources to support executives and employers.

The Victorian Independent Remuneration Tribunal (the Remuneration Tribunal) will determine executive remuneration bands for public sector executives and may issue guidelines on the placement of executives within remuneration bands.

All remuneration enquiries should be directed to the Remuneration Tribunal.

Portfolio departments can assist public entities with executive employment queries. If an executive is unsure whether they are employed as a public entity executive or public service executive, they should contact their employer in the first instance. Executives should contact the public entity’s human resources unit on matters relating to their employment contract. If required, HR units can contact VPSC via email at info@vpsc.vic.gov.au.

It should be noted that the executive remuneration function for the public sector was previously administered by the Office of Public Sector Executive Remuneration (OPSER). This ceased to exist in March 2019.

Table 1: Roles and responsibilities for executive employment.

Entity Roles and Responsibilities
Premier and Special Minister of State (supported by DPC) Primary responsibility for whole of government executive workforce policy, including with respect to remuneration, classification, employment, and performance management.
Remuneration Tribunal Primary responsibility for remuneration:

  • Determine the remuneration bands and annual adjustments for executives employed in prescribed public entities.
  • Issues guidelines on the placement of executives within remuneration bands.
  • At the request of the Minister, inquire into and determine the remuneration package for a Chief Executive Officer employed in prescribed entity.
  • Oversee the administration of the Public Entity Executive Remuneration Policy.
VPSC Primary responsibility for employment, classification and performance management policies and frameworks:

  • Set the standard executive contract of employment.
  • Produce executive employment handbooks and guidance materials.
  • Set frameworks for executive classification and performance management.
  • Provide tools and materials for executive work value assessments and performance management.
  • Provide materials and programs to improve employers’ capability and awareness of public sector requirements.
  • Monitor the operation and effectiveness of the contracts, handbooks and frameworks, and identify improvements.
  • Collect and share data to support the functions of the Remuneration Tribunal, DPC and departments.
  • Advise employers on more complex employment, classification and performance matters.
Departments Provide advice and support to public entity employers in their portfolios on executive workforce matters across remuneration, classification, employment and performance.