Minister throws a cat amongst the pigeons

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Published on Friday, 14 October 2011 09:04

Local Government Amendment Bill 2011 creates chaos and madness

The NSW Government introduced the Local Government Amendment Bill 2011 into the Legislative Assembly on Thursday 13 October. Part of the Bill proposes "to convert the status of councils and county councils from their existing status as bodies politic of the State to bodies corporate" and it is this object which drew a dramatic response yesterday from the United Services Union. 

Apparently this part of the Bill has the support of the Local Government and Shires Association and the LGSA claims that the sole purpose of this part of the Bill was to ensure that councils will once again become eligible to apply for Federal Government funding. In a Media Release by the Minister for Local Government late yesterday, the Minister claimed that this was "a move requested by the Local Government and Shires Associations."

Apparently the changes to the status of councils as part of a defence against WorkChoices created fundamental problems in making grant applications. It would have been a good idea if the LGSA told us all beforehand but apparently the LGSA wasn’t aware of the Bill until Wednesday. We knew they wanted the change – we just didn’t know that it would happen without notice and the chance to deal with any confusion.

There is a good summary of the LGSA proposal, accepting that it would not have an effect on employees without amendment to the Federal Act, in their NSW Election Priorities document put before both sides prior to the State election.  Shame I didn’t get it until 7 o’clock last night.

It would also have been nice, given the vulnerability of local government employees in the bad old WorkChoices days, for the Minister to have consulted with, or at least advised, the three unions covering employees in the industry. The assurance could have been provided that, without accompanying changes to the Fair Work Act 2009 by the Federal Government, this would not mean the bundling of local government employees out of the NSW Industrial Relations system and into the Federal system - something that none of us, including the employers’ organisations - want.

But that didn't happen and now there is a significant problem to manage. The Bill also identified as one of its objects the reduction in the special period of protection for employees of amalgamated councils. This is something introduced by the previous Government and, while that protection is comforting for vulnerable employees, it has been an impediment to amalgamations. We should have also been told about that too.

You can believe this:

1. Regardless of whether a council is a "body politic" or a "body corporate", an Order made by the Federal Government pursuant to the Fair Work Act 2009, means that local government employees in New South Wales remain protected by the NSW industrial relations system and the awards and enterprise agreements made in that system.
2. The Local Government Amendment Bill 2011 does not change this and cannot change this.
3. Local government employees remain protected by the Federal Order until a decision of the Federal Parliament (either with Labor retreating on the agreement to introduce this Order in 2009 or, perish the thought, the Opposition with sufficient support from the Independents) rescinds the Order.
4. It is impossible to believe that the current Government would rescind it - but it is entirely possible that it would be rescinded after a change of government at the next Federal election in 2013.

The failure of the NSW Government to consult - and particularly that of a new Minister in whom we had relatively high expectations - is very disappointing. It's an easy process to talk to people and, particularly where imprecision and anxiety can lead to different interpretations, it was a bad mistake. Doubly so, given the intention to remove the amalgamation protections and also make some changes to pecuniary interest declarations. A phone call or email would have done.

It was predictable that at some stage there would be amendments to the Local Government Act that may have an effect upon employment. At Destination 2036 there was discussion about establishing bodies corporate which could, for example, employ adjoining councils’ wages staff (or even planning staff or anyone else, for that matter) and depending on how that occurred, and what style of organisation that became, there could be a vulnerability under the Federal System. That needs proper thought and consultation.

The Division of Local Government on 21 September sent a circular to councils headed "DESTINATION 2036 UPDATE" which, amongst other things, asked for comments on the "draft Vision contained in the Outcomes Report" by 4 November 2011. At the very least, it makes sense for the Government to have waited until the consultation period concluded before moving on this Bill.

We will keep you briefed.

You can use the links below to read:

• Page 56 of the LGSA Election Priorities "to remove the concept of the 'body politic'" from the Local Government Act (NSW) 1993.
• The LGSA advice to General Managers and Human Resource Managers about the Local Government Amendment Bill 2011.
• The Local Government Amendment Bill 2011, and
• 21 September Circular to Councils from the DLG and the Destination 2036 Outcomes Report.