Senate

Explanatory Memorandum

(Circulated by authority of the Attorney-General, Senator the Honourable George Brandis QC)

Schedule 3 - transitional arrangements

66. Schedule 3 to this Bill makes transitional arrangements in relation to AGS operational matters. The Schedule is intended to ensure that there is minimal disruption to AGS's services during the consolidation's transition period.

Part 1 - Preliminary

67. Item 1 sets out various definitions for the purposes of this Schedule, including:

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AGS agreement means the enterprise agreement known as the Australian Government Solicitor Enterprise Agreement 2012 approved on 29 June 2012 in decision [2012] FWAA 5568

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former AGS means the Australian Government Solicitor established under the Judiciary Act (as in force immediately before the commencement time), and

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new AGS means the Australian Government Solicitor mentioned in section 55J of the Judiciary Act (as in force on and after the commencement time).

Part 2 - Activity of AGS

68. Item 2 provides that the new AGS is taken to be substituted for the former AGS in relation to any matter that the former AGS was acting in just before the commencement time, and which continues after that time. Further, under the item all references to the former AGS in relation to the matter are taken to be references to the new AGS.

69. This amendment ensures that the new AGS can continue to act in relation to ongoing matters. It also ensures that any references to AGS in relation to ongoing matters (such as references to AGS in court documents) are taken to be references to the new AGS. A consequence of this is that the AGS does not need to take any steps (such as filing a notice of change of solicitor) to notify courts about AGS being consolidated into AGD.

70. Item 3 ensures that any requests or determinations made under subsections 55N(3) or 55N(4) of the Judiciary Act as in force immediately before the commencement time for the AGS to provide services to certain persons or bodies continue to have effect from the commencement time. This amendment ensures that the new AGS can continue to act in relation to ongoing matters.

71. Item 4 ensures continuity of appointments to receive service for legal matters in which the Commonwealth is a party. Under section 63 of the Judiciary Act, the Attorney-General has appointed particular AGS lawyers to receive service of process in matters in which the Commonwealth is a party. This item is intended to clarify that those AGS lawyers will continue to be able to receive service of process in matters in which the Commonwealth is a party after the commencement time.

Part 3 - Transfer of assets and liabilities

Division 1 - Transfer from AGS to the Commonwealth

72. Item 5 subitem (1) transfers all of the assets (including money) and liabilities of the former AGS to the Commonwealth at the commencement time.

73. Subitem (2) ensures that no income tax (and, in particular, capital gains tax) consequences would arise as a result of the transfer of the former AGS's assets to the Commonwealth.

Division 2 - Instruments, legal proceedings and records

74. Item 6 applies to any instruments that refer to the former AGS and are in force at the commencement time.

75. If any such instrument relates to an asset or liability that is transferred to the Commonwealth under item 5, the instrument is taken to refer to the Commonwealth on and after the commencement time. The purpose of this provision is to ensure that existing 'instruments', including things such as agreements, undertakings, legislative instruments and other instruments made under an Act or regulations, continue to operate as intended after the transition.

76. Subitem (3) puts beyond any doubt that instruments to which the item applied can still be varied or terminated after the commencement time.

77. Item 7 provides that if the former AGS is a party to any legal proceedings immediately before the commencement time, the Commonwealth is (from the commencement time) to be substituted for the former AGS as a party to the proceedings.

78. This provision ensures that any existing litigation that AGS is a party to is not affected by the former AGS becoming part of the Commonwealth.

Division 3 - General provisions

79. Item 8 enables a certificate to be made that allows an asset vested in the Commonwealth under the Bill to be registered (on the relevant register of assets of that kind) as an asset belonging to the Commonwealth.

80. Item 8 specifies that such a certificate is not a legislative instrument. This provision is designed to assist readers, by making clear that the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. Instruments made under this provision will be administrative in character.

81. Item 9 provides for any current contract, agreement, arrangement or understanding entered into by the former AGS to have effect as if the Commonwealth had entered into it.

82. This would ensure that all contracts, agreements, arrangements or understandings entered into by the former AGS continue in force, and are deemed to have been entered into by the Commonwealth.

83. AGS currently has a number of legally binding contracts with clients that form part of the Commonwealth. Once those contracts are deemed to have been entered into by the Commonwealth they would no longer be legally binding (because the Commonwealth cannot legally contract with itself). Those types of contracts are treated as an agreement, arrangement or understanding between parts of the Commonwealth that, although not legally binding, evidenced an understanding between each of the Commonwealth parties.

84. Item 10 ensures that the vesting of assets and liabilities of the former AGS in the Commonwealth does not result in any stamp duty or other tax liability under a law of a State or Territory. It also provides a mechanism for the Minister to certify (under subitem 10(3)) that a particular matter is an 'exempt matter' that does not attract taxation under a State or Territory law.

85. A certificate under subitem 10(3) is not a legislative instrument. This provision is designed to assist readers, by making clear that the instrument is not a legislative instrument within the meaning of section 5 of the Legislative Instruments Act 2003. Instruments made under this provision will be administrative in character.

86. Item 11 creates a presumption that a certificate issued under items 8 or 10 is valid, unless the contrary is established. This enables people to rely on such documents unless there is evidence to the contrary.

Part 4 - Books, reports, returns etc.

87. Item 12 provides for the custody of records or documents to be transferred from the former AGS to the Commonwealth.

88. Item 13 deals with reporting requirements for the former AGS. It requires the Secretary of AGD to meet any reporting requirements that were previously imposed on the CEO of AGS.

89. This item applies, for example, in relation to annual reports and financial statements that the CEO of AGS is currently required to prepare under the Public Governance, Performance and Accountability Act 2013.

Part 5 - Staff

90. This part modifies the operation of the Fair Work Act 2009 in relation to employees of the former AGS, and employees of AGD, who ordinarily perform work under the supervision or direction of the AGS. The Fair Work Act otherwise applies on its terms.

91. The modifications are:

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the Bill will deem a connection to exist for the purposes of paragraph 311(1)(d) of the Fair Work Act

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the AGS agreement is the only transferable instrument

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the AGS agreement covers and applies to any employee engaged in AGD who ordinarily performs work under the direction or supervision of the AGS, and

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the AGS agreement will no longer cover any employee when a new enterprise agreement is made that covers AGD employees.

92. Subitem 14(2) provide that when determining if there is a transfer of business for the purposes of section 311 of the Fair Work Act from the former AGS to the Commonwealth, that the requirement in paragraph 311(1)(d) of the Fair Work Act is taken to be met. Subitem 14(1) provides that subitem (2) applies if immediately before the commencement time a person was an employee of the former AGS and at the commencement time the person becomes engaged as an APS employee in AGD under section 72 of the Public Service Act. However, in order for there to be a transfer of business under the Fair Work Act the requirements in paragraphs 311(1)(a)-(c) of that Act must also be met.

93. Subitem 14(3) ensures that the only transferable instrument in relation to such a transfer of business is the AGS agreement. The effect of subitem 14(3) is that no other instrument that covers the AGS, including the Australian Government Solicitor Award 2001 [AP814283], is capable of being a transferable instrument for the purposes of section 312 of the Fair Work Act.

94. Item 15 provides that the AGS agreement will, after the commencement time, cover and apply to the Commonwealth, the Community and Public Sector Union and a person if the person:

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is not otherwise covered by the AGS agreement, for example, because of section 313 of the Fair Work Act

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is engaged under the Public Service Act in AGD, whether they were engaged before or after commencement, and

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ordinarily performs work under the supervision or direction of the AGS.

95. Subitem 15(1) modifies the ordinary rules in the Fair Work Act. It ensures that for all employees who perform work under the supervision or direction of the AGS, including employees engaged at SES classifications, the AGS agreement would apply rather than the AGD agreement. So, for example, employees engaged following the commencement time who work as AGS lawyers or in support of the functions of the AGS will have the same remuneration and conditions as their colleagues who are transferred at the commencement time.

96. Subitem 15(2) makes clear that references in the AGS agreement to the AGS CEO are taken to be references to the Secretary of AGD and references to the AGS become references to AGD following the commencement time.

97. Subitem 15(3) makes clear that this item is subject to item 17.

98. Item 16 makes clear that the guidelines and policies relating to employment conditions, administrative process and employment related matters that had effect for the purposes of the former AGS will continue to have effect following commencement. The intention is that terms and conditions determined by the AGS agreement will continue to be administered in accordance with the policies that applied to employees in the former AGS, while the AGS agreement is in operation. However, those guidelines and policies will still have force as administrative instruments; the preservation of the guidelines and policies by this item does not change their legal status.

99. Subitem 16(2) makes clear that references in the relevant guidelines and policies to the AGS CEO are taken to be references to the Secretary of AGD and references to the AGS become references to AGD following the commencement time.

100. Subitem 16(3) makes clear that subitem 16(2) does not prevent the subsequent variation, withdrawal or replacement of any of the guidelines or policies preserved by that subitem by the Secretary, for example, in reliance of his or her common law powers under section 20 of the Public Service Act.

101. Subitem 16(4) makes clear that this item is subject to item 17.

102. Item 17 provides that the AGS agreement ceases to operate when a new AGD enterprise agreement commences operation.

103. The effect of item 17 is that the AGS agreement will no longer cover any employee, regardless of whether they are SES or non-SES employees, once a new AGD enterprise agreement commences operation (after the commencement time). This is the case even if the new AGD enterprise agreement would not cover all of the employees covered by the AGS agreement.

104. Item 18 preserves various entitlements of employees of the former AGS who become APS employees in AGD by virtue of a determination made by the Australian Public Service Commissioner under section 72 of the Public Service Act at the commencement time ('transferring employees').

105. Subitem 18(2) preserves the accrued entitlement to benefits of transferring employees. The effect of subitem 18(2) is, for example, that a transferring employee's accrued annual and personal/carer's leave at the commencement time will be recognised by the Commonwealth in relation to that employee's employment in AGD.

106. Subitem 18(3) deems the service of a transferring employee in AGS to be continuous with their service in AGD.

107. For the avoidance of any doubt, subitem 18(4) ensures that a transferring employee's service in AGS is treated as service in the Commonwealth for the purposes of the Long Service Leave (Commonwealth Employees) Act 1976.

108. A transferring employee was not covered by the Maternity Leave (Commonwealth Employees) Act 1973 in relation to their employment in the former AGS. Subitem 18(5) provides that a transferring employee's service in AGS is treated as service in the Commonwealth for the purposes of the Maternity Leave (Commonwealth Employees) Act.

109. Item 19 provides that the Safety, Rehabilitation and Compensation Act 1988 (the SRC Act) applies to an employee of the former AGS, who suffered an injury before the commencement time, as if the employee had been an employee of the Commonwealth in AGD. This is the case even if the employee is not employed in the former AGS at the commencement time.

110. The item ensures that AGD is the relevant employer of employees of the former AGS (including employees who ceased employment with the former AGS before the commencement time) in respect of an injury within the meaning of the SRC Act sustained before the commencement time.

111. Item 20 provides for the making of rules, under item 25, dealing with additional transitional matters relating to staffing procedures of former AGS employees who become APS employees in AGD through the Public Service Act.

112. Subitem 20(2) makes clear that the rules may modify the operation of the Public Service Act. This subitem allows maximum flexibility to ensure staffing procedures for former AGS employees can be fairly delivered regardless of the timing of commencement. Its purpose is to provide a means of varying the operation of provisions relating to staffing procedures for the former AGS or AGD in this Schedule in a timely way to avoid any results that were not intended to apply to former AGS employees.

113. Item 21 provides that nothing in Schedule 3 will cause the appointment, engagement or employment of former AGS staff to have effect as if it were an appointment, engagement or employment of the person in relation to the Commonwealth.

114. This item makes it clear, for example, that item 6 in Division 2, Part 3 of Schedule 3 does not have the effect of requiring a reference in an instrument relating to the engagement or employment of an employee of the former AGS to be read as a reference that relates to the Commonwealth.

115. Subitem 21(2) provides that, to avoid doubt, if a person ceases to be an employee of the former AGS and becomes an APS employee because of a determination by the Australian Public Service Commissioner under section 72 of the Public Service Act, the person is not entitled to receive any payment or other benefit merely because he or she ceased to be an employee of the former AGS.

116. It is intended that the employment of such people will be continuous, regardless of the fact that they move from being employees of the former AGS to being APS employees in AGD. The continuity of the employees' employment is achieved by the operation of item 18.

117. Section 72 of the Public Service Act provides for the Australian Public Service Commissioner, amongst other things, to engage persons, including non-APS employees, as APS employees in a specified Agency. In this case, the specified Agency would be AGD. It is intended that the staff of the AGS will be moved to AGD through a section 72 determination.

Part 6 - Other transitional matters

118. Item 22 provides that any reference in a current law of the Commonwealth to the Australian Government Solicitor or to the AGS is taken to be a reference to the new AGS on and after the commencement time.

119. This item will avoid unintended consequences arising from the Bill by ensuring that any reference to the former AGS in other Commonwealth legislation (including delegated legislation) is deemed to be a reference to the new AGS. However, it is still necessary to correct references as set out in this Bill to ensure they are appropriate, given the former AGS was a statutory corporation and the new AGS will be an individual engaged in AGD under the Public Service Act.

120. Item 23 is intended to ensure that if any acquisition of property arose in relation to the operation of Schedule 3, the Schedule would not contravene section 51(xxxi) of the Constitution (which requires that an acquisition of property under a law of the Commonwealth be on 'just terms').

121. Although the operation of Schedule 3 is unlikely to result in any acquisition of property, this item has been included as a precautionary measure to ensure the validity of the Bill.

122. If the operation of Schedule 3 resulted in an acquisition of property otherwise than on just terms, item 23 requires the Commonwealth to pay a reasonable amount of compensation to the person whose property was acquired.

123. Subitem 23(2) provides that if the Commonwealth and the person cannot agree on the amount of compensation, the amount may be determined by a court.

124. Item 24 enables the Minister to delegate, in writing, any or all of his or her powers and functions under Schedule 3 to the Secretary of AGD, or to an employee who is a substantive or acting Senior Executive Service employee in AGD.

125. Subitem 24(2) provides that, in exercising powers or functions under a delegation, the delegate must comply with any directions of the Minister.

126. Item 25 confers a time limited transitional rule making power on the Minister. The purpose of this item is to ensure that transitional arrangements can be made in the event of unforeseen circumstances or unintended consequences arising from the consolidation of AGS into AGD over the period in which the consolidation is intended to take place.

127. Subitem 25(1) enables the Minister to make transitional rules by legislative instrument relating to the Judiciary Amendment Act. This power includes the ability to make rules relating to staffing procedures, as set out in item 20.

128. Subitem 25(2) enables the Minister to prescribe matters of a transitional nature relating to amendments or repeals made by the Act or the enactment of the Act.

129. Subitem 25(3) enables the making of rules to modify the provisions of Schedule 3 to the Bill. This subitem has been included address any unforeseen circumstances or unintended consequences that may arise in relation to the complex transitional matters dealt with in the Schedule.

130. Subitem 25(4) provides that any rules cannot be made later than 12 months after the commencement time. By this time, the consolidation of AGS into AGD is intended to have been completed and the power will no longer be necessary.

131. Subitem 25(5) makes clear that the Minister is only limited in making rules by subitems 25(4) and 25(6) of this Schedule. No other provision in Schedule 3 of the Bill is intended to limit the rule making power. This will give appropriate scope for unforeseen circumstances or unintended consequences to be addressed in the rules.

132. Subitem 25(6) sets out a standard limitation on what can be prescribed by the Minister in the rules under this item. This provision is in accordance with Office of Parliamentary Counsel Drafting Direction 3.8.

133. Subitem 25(6)(e) prohibits the making of rules that directly amend the text of this Act. "Directly amend" means make an amendment that would need to be incorporated in any reprint of the Act by the Government Printer (see section 2 of the Acts Publication Act 1905). The subitem does not prohibit a rule that modifies the effect of a provision, such as by providing that a provision has effect as if it had been amended in a specified way, as long as it does not make a direct amendment of the Act.