House of Representatives

Explanatory Memorandum

(Circulated by authority of the Treasurer, the Hon Scott Morrison MP)

Chapter 4 - Chief Executive Officer, staff, consultants and committees

Summary of new law

4.1 Division 1 of Part 4 of the Bill establishes the CEO of the NHFIC, including setting out:

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procedures for appointment and resignation;

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functions;

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remuneration;

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terms and conditions; and

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acting appointments.

4.2 Division 2 of Part 4 deals with the recruitment of staff and consultants and committees.

Detailed explanation of new law

CEO

Establishment

4.3 Division 1 of Part 4 of the Bill establishes the CEO of the NHFIC. [Clause 35]

Functions

4.4 The CEO is responsible for the day to day administration of the NHFIC, and has power to do all things necessary or convenient to be done for or in connection with the performance of his or her duties. [Subclauses 36(1) and (2)]

4.5 The CEO is to act in accordance with policies and strategies determined by the Board, and in accordance with the Board's written directions to the CEO. The CEO must comply with such directions, which must not be inconsistent with any direction given to the Board under Division 2 of Part 2, about the performance of the CEO's duties. [Subclauses 36(3), (4) and (5)]

4.6 A direction by the Board to the CEO is not a legislative instrument within the meaning of section 8 of the Legislation Act. This is appropriate because such directions are administrative in character, and facilitate the carrying out of the CEO's powers and functions without altering their scope or effect (Legislation (Exemptions and Other Matters) Regulation 2015, subsection 6(1)). [Subclause 36(6)]

Appointment

4.7 The CEO is to be appointed by the Board on a full time basis, by written instrument of appointment, and holds office for a period specified in the instrument (but not for a period of more than five years). The Board must not appoint a Board member as CEO. [Clause 37]

Acting appointment

4.8 The Board is empowered to appoint, by written instrument, a person other than a Board member to Act as CEO during a vacancy in the office (whether or not a CEO has previously been appointed), or during any period when the CEO is absent from duty or from Australia or is for any reason unable to perform the duties of CEO. [Clause 38]

4.9 Sections 33AB and 33A of the Acts Interpretation Act referred to in Chapter 3 above contain rules that apply to appointments that are made on an acting basis.

Remuneration and allowances

4.10 The CEO is to be paid remuneration that is determined by the Remuneration Tribunal, or, if no such determination has been made, the remuneration prescribed by rules made under section 58 of this Bill. The CEO is also to be paid allowances as set out in the rules made under section 58. The remuneration and allowances payable to the CEO are subject to the Remuneration Tribunal Act. [Clause 39]

Leave of absence

4.11 The CEO is entitled to the recreation leave entitlements determined by the Remuneration Tribunal, as well as such other leave entitlements (other than recreation leave) as granted by the Board. [Clause 40]

Outside employment

4.12 The CEO must not engage in paid work outside the duties of his or her office without the Chair's approval, and the Chair must notify the Minister of any such approval. [Clause 41]

Other terms and conditions

4.13 The CEO holds office on the terms and conditions determined by the Board, to the extent (if any) that such matters are not covered by this Act. [Clause 42]

Resignation of CEO

4.14 The CEO may resign his or her appointment by giving the Board a written resignation. Such resignation takes effect on the day it is received by the Board, or, if a later day is specified in the resignation, on that later day. The Chair must notify the Minister of the CEO's resignation. [Clause 43]

Termination of appointment of CEO

4.15 The Board may terminate the appointment of the CEO:

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for misbehaviour; or

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if the CEO is unable to perform the duties of his or her office because of physical or mental incapacity; or

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if the CEO:

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becomes bankrupt, applies to take the benefit of any law for the relief of bankrupt or insolvent debtors, compounds with his or her creditors, or makes an assignment of his or her remuneration for the benefit of his or her creditors; or

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is absent, except on leave of absence, for 14 consecutive days or for 28 days in any 12 months; or

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engages, except with the Chair's approval, in paid work outside the duties of his or her office; or

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fails, without reasonable excuse, to comply with section 29 of the PGPA Act (which deals with the duty to disclose interests) or rules made for the purposes of that section; or

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if the Board:

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is satisfied that the performance of the CEO has been unsatisfactory for a significant period.

[Subclause 44(1)]

4.16 The Board's assessment that the CEO's performance has been unsatisfactory for a significant period will depend on the circumstances, however unsatisfactory performance for a period of three months or more would generally be sufficient for the Board to exercise its powers to terminate the appointment of the CEO.

4.17 If the Board terminates the appointment of the CEO, the Board must notify the Minister of the termination. [Subclause 44(2)]

Staff and consultants

4.18 Division 2 of Part 4 of the Bill provides for the NHFIC to employ staff and consultants.

Staff

4.19 The NHFIC may employ such persons as it considers necessary for the performance of its functions and the exercise of its powers. An employee is to be employed on the terms and conditions that the NHFIC determines in writing. [Subclauses 45(1) and (2)]

4.20 In addition, the NHFIC may make arrangements for the services of officers or employees of the following to be made available to the NHFIC:

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the Commonwealth, a State or a Territory;

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an authority of the Commonwealth or of a State or Territory;

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any other organisation or body.

[Subclause 45(3)]

Consultants

4.21 The NHFIC may engage consultants, on the terms and conditions it determines, to assist in the performance of its functions. [Clause 46]

Committees

4.22 Division 3 of Part 4 of the Bill provides for the NHFIC Board to establish committees to advise or assist in the performance of its or the NHFIC's functions. [Subclause 50(1)]

Constitution

4.23 A committee may be constituted by Board members, non-Board members, or a combination of the two. [Subclause 47(2)]

Terms of reference

4.24 The Board may determine, a committee's terms of reference, the terms and conditions of appointment of the members of the committee, and the procedures to be followed by the committee. [Subclause 47(3)]

Status of members

4.25 The members of the committee (other than Board members) are not officials for the purposes of the PGPA Act. [Subclause 47(4)]