This scenario provides additional information on the creation of a new APS entity, which can include a new department. It should be read in conjunction with all Key Topics in this guide.
A Machinery of Government (MoG) change can lead to the creation of a new APS entity operating under the Public Service Act 1999 (PS Act).
Entities are expected to implement the MoG change in a way consistent with the MoG principles and operational protocols outlined in the Executive Overview.
Further guidance on setting up a new APS entity can be found in the Entity Start-up Guide.
As soon as a new APS entity is proposed, responsible officers are encouraged to consult the Australian Public Service Commission (APSC) and the Department of Finance (Finance).
Newly created entities will need the support of portfolio departments. Assistance could include lending employees to assist in the establishment of the entity, for example, employees with expertise in corporate functions.
Urgent action
This section outlines urgent action that may be required upon the creation of a new entity.
The new entity cannot use annual appropriations provided for an abolished entity. Such appropriations must be legally transferred to the new entity under section 75 of the Public Governance, Performance and Accountability Act 2013 (PGPA Act), consistent with policy authority.
As the final amounts to transfer are unlikely to be known until after the abolishment of the old entity, an interim transfer of appropriations is likely to be required on the commencement date of the new entity, with a second transfer to occur once amounts have been finalised.
Entities should contact Finance if their entity is affected.
Annual appropriations should be legally transferred from the existing entity to the new entity under section 75 of the PGPA Act, consistent with policy authority.
As the final amounts to transfer may not be known before the commencement date of the new entity, an interim transfer of appropriations may be required on the commencement date of the new entity. A second transfer would then occur once amounts have been finalised.
Generally, a new entity would not require the Minister for Finance’s approval if it receives the transferring entity's outcome statement without any amendments (that is, an entire outcome statement which has already been approved is transferred).
The Minister for Finance’s approval would be required to establish a new outcome statement if the entity cannot receive the outcome statement of the transferring entity without any amendments.
For example, where only some functions within the transferring entity’s outcome statement are being transferred.
If an entity is created due to a MoG change, consideration should be given to what delegations will be required to be in place immediately at the time of establishment so that appropriate officials (such as a Chief Financial Officer or a Chief Operating Officer) can undertake financial activities and make human resources decisions on behalf of the new entity.
In deciding to delegate certain powers, functions or duties, the accountable authority should consider their duty to establish and maintain appropriate systems of risk management and internal control.
Further information on the delegation of powers under the PGPA Act, including delegable and sub-delegable powers, is available on PGPA legislation, associated instruments and policies.
The PGPA Act authorises accountable authorities under section 20A to give instructions to officials in their entities on any matter necessary or convenient for carrying out or giving effect to the finance law.
To help accountable authorities develop appropriate controls, Finance has developed model Accountable Authority Instructions.
For further information, see RMG-206 Model accountable authority instructions.
If a new entity is established due to a MoG change, a corporate plan for that entity must be published as soon as practicable after the plan is prepared.
For further information see:
- sections 16E and 16F of the Public Governance, Performance and Accountability Rule 2014
- RMG-132 Corporate plans for Commonwealth entities.
Movement of people
Legislative basis
The PS Act gives the Commissioner, under section 72, the authority to move employees following a MoG change. The Commissioner can:
- move APS employees to another APS entity without anyone’s consent by a determination in writing
- determine in writing that APS employees cease to be APS employees and become non-APS employees of a specified Commonwealth body or Commonwealth authority
- determine in writing that non-APS employees cease to be employed as non-APS employees and become engaged as APS employees in a specified APS entity
- on behalf of the Commonwealth, engage any person as an APS employee in a specified APS entity.
For more information see People Management.
Responsible officers should determine the need for additional legislation to facilitate the movement of employees into a newly created entity.
For further information on people management issues when setting up a new APS entity, please refer to the Entity Start-up Guide.
Terms and conditions
The Public Service Regulations 2023 prescribe the terms and conditions for employees moved into an APS entity from another APS entity or from a non-APS Commonwealth entity. See Pay and Conditions.
It is likely that the newly created entity will not have an industrial instrument in place.
Terms and conditions in the new entity may be set under enabling legislation or a determination made under section 24 of the PS Act. Interim measures setting terms and conditions under enabling legislation or a determination made under section 24 of the PS Act operate until employees bargain for a new enterprise agreement.
Where the new entity is established by legislation, it may be possible to preserve an enterprise agreement applying to employees at the previous entity for employees of the new entity. Entities should contact the APSC early in the legislative process to consider this option.
A section 24 determination made following a MoG change can preserve some, or all, of an employee’s pre-existing terms and conditions. It cannot be used to introduce a new regime.
The receiving entity’s agency head/accountable authority or the Minister is not obliged to carry across any, or all, of the terms and conditions that previously applied. In some cases, it may not be practical to preserve particular conditions.
For example, access to work-based childcare may not be available in the new entity or it may not be possible to preserve ordinary time earnings (OTE) as the method of calculating superannuation.
A section 24 determination is subject to assessment against the Government's workplace relations policy for the Commonwealth public sector, as amended from time to time.
Entities should contact the APSC in relation to any proposed section 24 determination as soon as possible.
Excess employees
Where the newly created entity considers that it will require fewer employees to perform a function, it may be appropriate to facilitate redeployment within the current entity or to other APS entities before the completion of the MoG change.
Working in the APS
Records management
Responsible officers must take immediate steps to establish a means to record important initial decisions about the legal warrant for the entity, its functions, policy scope and structure. The National Archives of Australia can provide specific advice and assistance with systems required for these steps via its Agency Service Centre. See Information Assets.
Governance & financial management
For advice on governance, funding, banking and financial reporting arrangements, please contact Finance.
Property, procurement & grants
For advice on:
- property, please contact Property and Construction Division in Finance.
- procurement, please contact the Procurement Agency Advice Team in Finance.
- grants, please contact the Grants Policy team in Finance.
