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Government agencies tend to steer clear of public servants who are declared "excess" because they believe they are poor workers. Photo: Phil Carrick

The Canberra Times reported today that some government agencies are loath to hire retrenched public servants because "they regard them as duds rejected by their previous workplaces". Public service commissioner Stephen Sedgwick responded this morning, telling the ABC that the "colourful term" dud was certainly not his and that he thought the article grossly overstated the problem.

I'm happy to own the succinct word "dud"; as an editor, I much prefer it to Sedgwick's preferred term "lower-quality employee".

But, to return to the more important matter: do Australian Public Service agencies use redundancies to get rid of poor performers (which may be illegal), rather than to abolish a job that is no longer needed or affordable (which is the supposed purpose of a redundancy)?

We've all heard anecdotes that suggest agencies take advantage of redundancies to shed dead wood, but until now there was no formal indication this was happening. I obtained some documents under freedom of information law from the Public Service Commission about how agencies choose which staff to declare excess (you can read them in full here). This is what they say:

From a Public Service Commission briefing to the Department of the Prime Minister and Cabinet in April 2009 (page 7, paragraph 35 in the documents):

Use of VR payments can be part of an effective strategy to target lower-quality staff at a time of downsizing, providing longer-term benefits to the agency.

Based on past experience, agencies are more likely to formally identify lower-quality employees for redeployment to other agencies (i.e. maximum efforts are made to place highly valued employees within the agency). Consequently, agencies with vacancies will be reluctant to participate in arrangements where they feel that they are only being offered employees that remain after the better-quality people have been placed by the other agency. Early involvement in redeployment efforts, as well as capacity to participate in any general assessment, would reduce this concern.

And from a Sedgwick briefing to the Special Minister of State, Gary Gray, in April this year (page 21, paragraph 16):

In the past where there has been large-scale reduction of staff across the APS, arrangements (such as the [Career Transition and Support Centre]), have been put in place to strengthen redeployment options. As demonstrated with the CTSC, these arrangements have met with mixed success. There are a number of reasons for this:

  • the difficulty in matching the skills of excess employees with the vacancies available;
  • the reduced numbers of vacancies available in tightened budgetary environments; and
  • it is often the case that staff of lower calibre are made excess, given the need to retain highly skilled staff. Other agencies (and other areas within agencies) are therefore cautious of accepting exempt staff.

In the same briefing, Sedgwick also described failures in the 1980s and 1990s to encourage agencies to employ staff who had been declared excess (page 24):

Staff that had been excess for an extended period were not seen as being of the calibre required by an agency, leading to manoeuvring by agencies to avoid placing the excess staff. Good-calibre staff were typically placed quickly through centralised arrangements, or found themselves a job without going through a formal redeployment process.

Why does this matter? Surely it's good for everyone if agencies rid themselves of poor performers and low-skilled staff? Perhaps - but not if they pay through the teeth to do it.

Source: Federal budget papers.The federal government's spending on redundancy and separation payments tripled in the five years to 2011-12. It's likely to rise again this financial year due to the extra redundancies brought about by the government's latest economy drive.

But while paying underperformers to leave may be the simplest way to get rid of them, it's poor management and it's costly. It's also a handy way to demotivate other staff, who see their less-than-capable colleagues pocket a tidy sum as a reward for their ineptitude or unwillingless.

The Public Service Commission knows this is a serious problem; it highlights it regularly in its State of the Service reports. The APS retrenched 1788 staff in 2010-11, but sacked only 186 (71 for misconduct, the rest for underperformance). I'd be willing to read that as a sign that most public servants do their jobs well, but even public servants doubt that. The latest State of the Service report said two in five staff believed their agency failed to deal with underperformance effectively, while less than one in four thought it did a good job.

The report also said some managers complained that dismissing staff was "time-consuming and resource intensive", and as a result they were "becoming more risk averse". No one said managing staff was easy; indeed, I think it's the toughest job in any workplace. But that's no excuse for wasting public money, as seems to happen regularly during APS redundancy rounds.

Nonetheless, the Public Service Commission has a different take on this issue. Here's its response in full:

The APSC’s firm view (and long-standing advice to agencies), consistent with the government’s APS redeployment policy released in April 2011, is that excess staff processes should not be used to deal with underperformance issues. Underperformance is best addressed under the agency’s performance management policies. The commission’s guidance to agencies about performance management is updated from time to time. Work is currently in hand to refresh our guidance.

However, we also consider that where an excess staff situation arises an agency should approach the matter having regard to its workforce planning needs. A key consideration is the scale and range of skills required to perform the continuing tasks the government requires of the agency. Where programs are discontinued or scaled back it would be natural to focus most attention on staff associated with that work.

Nevertheless, where there is discretion in the matter, the agency may also reasonably have regard to ensuring that it retains the workforce best placed to enable it to meet its total obligations to government and the community. In that context an agency might reasonably seek to retain its highest performers with skills still in demand and those with critical skills. In cases where there is discretion available to the agency, redundancy is typically voluntary for the individual(s) concerned. This was the intent of the language of the essentially internal documents to which you refer.

Enterprise agreements set out the grounds under which excess staff procedures can be invoked. Government policy requires that each agency’s agreement must comply with the APS bargaining framework and the redeployment policy. Each APS enterprise agreement is reviewed for compliance by the APSC and we are unaware of any that provide for targeted retrenchment of underperformers.

Over to you. Does your agency use redundancies to target dead wood or to identify the positions (as opposed to the people) it can do without?

Markus Mannheim edits The Public Sector Informant. Send your tips to aps6@canberratimes.com.au.