Local Government Act 1995 reforms: are you ready for changes to CEO recruitment, performance and termination?

4 Jul 2019

The amendments to the Local Government Act 1995 (WA) (the Act) aim to improve governance within Western Australian local governments and increase their accountability to the wider community.

The amendments to the Act are expected to come into effect in the next couple of months. One of the areas of focus is the employment of CEOs. Let’s take a brief look at some of the changes we can expect.

Model standards for CEO recruitment, performance and termination

The reforms will introduce minimum standards in relation to CEO recruitment, performance and termination.[1] The regulations will set out in detail ‘model standards’ which must be adopted by all Western Australian local governments.

Local governments will need to adopt standards which incorporate the model standards within three months of the day which the regulations come into effect.

If a local government wishes to amend the model standards to ensure they suit local circumstances, it can do so. However until a local government adopts the amendments, the model standards will apply.

Any amendments which are inconsistent with the model standards will be invalid. Therefore local governments should take care when drafting amendments to ensure that there is no conflict with the model standards. Any conflicting provision would be effectively invalid.

Website publication

The CEO must publish the adopted standards on the local government’s website, as well as the policy in relation to temporary or acting CEOs.

“Local governments should ensure the model standards are appropriately adapted to their own unique organisations”

 

What else can we expect from the regulations?

We also expect the regulations to make provisions in relation to how compliance of adopted standards will be monitored, and how non-compliance will be dealt with.

What about a temporary or acting CEO?

The reforms will also require local governments to have a policy that sets out the process for dealing with the employment or appointment of a temporary or acting CEO.[2]

The regulations may set out specific requirements in relation to the form or content of the policy. So we will have to wait for further details.

Key points

Local governments should take action now to:

  • collect and review any existing policies
  • be ready to review the model standards
  • amend the model standards, if required
  • adopt the standards within the three month timeframe

Can a temporary or acting CEO be appointed as a contractor?

The wording of the amendments support Civic Legal’s view that temporary or acting CEO appointments must be by way of an employment relationship, and be paid in accordance with the bands set by the Salaries and Allowances Tribunal.[3]

Local governments should therefore not engage a temporary or acting CEO under a contract for services with a specified fee under invoices rendered by him or her to the local government.

Annual performance review

A CEO employed for more than one year must have their performance reviewed by the council at least annually.[4]

The CEO must ensure that all other employees employed for more than one year must also have their performance reviewed at least annually.

This entrenches in law what is perhaps good management practice anyway, making clear that such reviews are a necessary element of a CEO’s performance.

What does this mean for local government?

The reforms will introduce minimum standards in relation to the recruitment, performance and termination of the CEO.

Local governments are able to amend these model standards to ensure that they are appropriate for their unique local government.

Local governments may therefore wish to take action now to:

  • collect together any existing policies relating to the CEO;
  • review those policies to identify any areas that appear to address local circumstances;
  • be ready to review the model standards under the regulations when they are published
  • carefully attend to any amendments to the model standards that may be required to tailor them to local circumstances; and
  • adopt the standards within the three month timeframe

Care should however be taken in drafting such amendments since any inconsistency will make the amendment invalid.

Contact

For more information please contact: Anthony Quahe

 

 

1. S 5.38A and s 5.39B to be inserted into the Act.

2. S 5.39C to be inserted into the Act

3. See article https://www.civiclegal.com.au/how-to-appoint-and-remunerate-acting-ceos/

4. S 5.38 to be inserted into the Act.

 

Disclaimer: This article contains references to and general summaries of the relevant law and does not constitute legal advice. The law may change and circumstances may differ from reader to reader. Therefore, you should seek legal advice for your specific circumstances. The law referred to in this publication is understood by Civic Legal as of publication date.