Local Government Super appoints a new Chief Executive Officer

LGS has announced the appointment of a new Chief Executive Officer, Phil Stockwell. Phil is a highly regarded person from financial services with whom I had the pleasure of sitting on the Regnan board a decade or more ago. Welcome Phil.

In the last issue we expressed our surprise at a report in the Sydney Morning Herald, ostensibly to announce the appointment of an independent Chair of LGS, that said “the $12 billion fund amended its constitution in June to make board changes following a probe into its governance by the Australian Prudential Regulation Authority (APRA)”

A probe? This was a surprise, given the careful language we needed to use trying to explain to members why, despite our historic opposition to the concept of “independent” directors, LGS had decided to do it. Apparently it was the Herald’s word, it wasn’t provided in the media release by LGS.

In June, unknown to us, LGS in an earlier media release announced they were going to reduce the size of the board and appoint an “independent” Chair and two “independent” directors “to more effectively meet APRA’s requirements around superannuation governance”. The media release acknowledges “APRA’s recent guidance and expectations”.

Well, that was more than I could tell you. And I couldn’t tell you that I had carefully drafted advice to members seeking the approval of the  █████████ ██████████ ██████████ █████████ ██████ before ██ ██████ ████ ███ ███████ ██ █████ ███ ███ ████ ████████████ ████ ██████ ███ █████ ██████ ███ █████ ██ ██ ████████ █████ ████ ███████ ████ █████ ██ ██ ████, ████ ██ ████ ███ ██████, ███████ ██ ███████ █████ █████ █ ███ ███████

Or anything else about the regulator, whether they have done anything, or haven’t done anything, ███████ ██ ███ ██████ ██████████ ██ ███████ ██ ██ ███ ████ ███, one dare not speak its name.

Local Government Super appoints a new Chief Executive Officer (2)

LGS has announced the appointment of a new Chief Executive Officer, Phil Stockwell. Phil is a highly regarded person from financial services with whom I had the pleasure of sitting on the Regnan board a decade or more ago. Welcome Phil.

In the last issue we expressed our surprise at a report in the Sydney Morning Herald, ostensibly to announce the appointment of an independent Chair of LGS, that said “the $12 billion fund amended its constitution in June to make board changes following a probe into its governance by the Australian Prudential Regulation Authority (APRA)”

A probe? This was a surprise, given the careful language we needed to use trying to explain to members why, despite our historic opposition to the concept of “independent” directors, LGS had decided to do it. Apparently it was the Herald’s word, it wasn’t provided in the media release by LGS.

In June, unknown to us, LGS in an earlier media release announced they were going to reduce the size of the board and appoint an “independent” Chair and two “independent” directors “to more effectively meet APRA’s requirements around superannuation governance”. The media release acknowledges “APRA’s recent guidance and expectations”.

Well, that was more than I could tell you. And I couldn’t tell you that I had carefully drafted advice to members seeking the approval of the  █████████ ██████████ ██████████ █████████ ██████ before ██ ██████ ████ ███ ███████ ██ █████ ███ ███ ████ ████████████ ████ ██████ ███ █████ ██████ ███ █████ ██ ██ ████████ █████ ████ ███████ ████ █████ ██ ██ ████, ████ ██ ████ ███ ██████, ███████ ██ ███████ █████ █████ █ ███ ███████. 

Or anything else about the regulator, whether they have done anything, or haven’t done anything, ███████ ██ ███ ██████ ██████████ ██ ███████ ██ ██ ███ ████ ███, one dare not speak its name.

Narrabri GM wants more bloodshed

What kind of GM would want to prevent the Supreme Court exercising jurisdiction to review the standard senior staff contract to test whether it is “unfair, harsh or unconscionable or against the public interest”?

What kind of GM hasn’t been horrified at the “no reason” 38 week payouts used to remove a succession of competent and successful colleagues, whether they be sacked as general managers or other senior staff?

What kind of GM wouldn’t know that the ICAC in their report after investigating Mid-Western in 2016 recommended that something be done about “no reason” termination for senior staff?

And what kind of GM wouldn’t know that these issues are still the focus of the ICAC in their investigation of the former Canterbury, and the smart money is that they will do something in their final recommendations about how the “no reason” termination can allow councils to bully the GM, a GM to bully directors and generally create a lack of confidence in local government management?

Stewart Todd, is that kind of GM.

On 15 November the Supreme Court will consider his objection to our section 106 application that the standard contract is unfair and that the Court should step in and vary it. Mr Todd’s response as the GM who sacked our member at Narrabri, is to try to avoid the matter being dealt with on its merits by arguing the Court doesn’t have the jurisdiction. And if he is right, then no one has the jurisdiction to deal with a contract and employment arrangements that were abandoned by the New South Wales Government for their senior executives in 2013. More bloodshed ahead.

When the Local Government Act 1993 was made, it introduced an arrangement to employ senior staff based on the model operating in the New South Wales public sector - term employment creating vulnerability for employees when it comes time for the contract to be renewed and good employees can find themselves with the Council, for no good reason, simply not renewing. A termination of employment by any other name.

But in 2013 the NSW Government of Mike Baird announced fairer and more secure employment for the State’s Senior Executive Service by transitioning most of them to ongoing employment. And while there remained the possibility for a public authority to terminate one of these executives with 38 weeks’ pay, this required a written report to the Public Service Commissioner, detailing the steps that had been taken and the reasons for the termination. And by amendment later, a requirement that the Public Service Commissioner consent as the technical employer.

But the Government, having renounced these historic and unfair practices didn’t do anything at all to change the model operating in local government - to the detriment of many senior staff.

We can blame the Government generally, and a number of ministers for Local Government in particular for retaining this anachronistic approach. We would have preferred to see them take the “necessary decisions” (OLG joke) to retain parity with practices in the Government Sector.

Local government employment for senior staff should be fair, transparent and sackings examinable. What kind of GM, coming up through the ranks, would not want that?

Stewart Todd, is that kind of GM.

That’s not a monumental step, this is a monumental step

When NSW Better Regulation Minister Kevin Anderson announced the Design and Building Practitioners Bill last week he said it was a “monumental step in the reform of the building and construction industry”.

Oh, please, no it isn’t. Many critics responded that it was more likely the first step of 100 necessary to restore confidence but a monumental step would have been rolling back the option for a developer to pay their own certifier and restoring building and development control solely to local government.

The Minister’s announcement entirely ignores the steps that could be taken to ensure that buildings are built properly - right from the moment construction begins - that there can be proper inspection and control all the way through the construction, that there can be on-site quality control people like the old-fashioned clerk-of-works, and that a properly resourced and massively funded Building Commission could make sure it all worked.

Ignoring the construction and focusing on the potential that at some stage in the future, consumers who have bought something that turns out to be flawed or requiring remedial action or falls down, will have a range of people against whom they can initiate legal action doesn’t really help.

Interestingly, while legal action can be taken against a range of “building practitioners”, they don’t include the developer, who escapes (again) unscathed.

When the Premier Gladys Berejiklian announced on 10 July that private certification “hasn’t worked” and conceded “there’s a gap in legislation. We allowed the industry to self-regulate and it hasn’t worked. There are too many challenges, too many problems and that’s why the government is willing to legislate”, she could have done something about the adequacy of construction so that at the time someone buys a property, or an apartment, there can be absolute certainty about the quality of its construction and whoever built it, fixes it. But she didn’t. The developers win again.

More a monumental fail, than a monumental step.

Oh no, more “independent” LGS directors

In November last year we emailed members to explain how an “independent” Chair would be appointed to the LGS Board. Historically we’ve made our view known in depaNews that we don’t believe there is a role for directors on the board other than representing the employers and the employees in the industry. The Superannuation Industry Supervision Act 1993 requires that directors act independently (so what’s the point?) but the major regulator of superannuation funds, the Australian Prudent Regulation Authority (APRA) despite getting a bit of a serve from the Royal Commission, sees it as desirable. And if APRA thinks it desirable, funds had better get with the program.

In November last year we stressed to members that our director on the LGS Board at the time Sam Byrne had opposed this, as had I at the meeting of the shareholders, both Sam and I being rolled 7-1.

For reasons that can’t be explained fully, the expectation that this “independent” person would be appointed Chair of the Board by February 2019 was not realised. Only last week were members advised that two “independent” directors had been appointed, one as Chair, Kyle Loades, and one other as a director, Sandi Orleow. In the material sent to members and shareholders, there was no reference made to whether these directors had any interest, experience or passion for the concepts of responsible and sustainable investment that underpins LGS and its reputation.

During the year, and again being careful, there was a majority view of the Board and the Shareholders that there should be three employer directors and three employee directors, meaning that one employer director and one employee would need to resign. In the circumstances, the depa Committee of Management accepted that we’d had enough and our director Sam Byrne resigned effective 31 July .

We thank Sam for his service on our behalf and his commitment to responsible and sustainable investment.

The LGS Board will now be comprised of three employer representatives, three employee representatives and three “independent” representatives, one of whom will be the Chair. Someone’s mission is accomplished.

But despite our reluctance, the Sydney Morning Herald today announced these appointments in its Money section, under the heading “Local Government gets new chair, director”. Significantly, the article said:

The moves come after the $12 billion fund amended its constitution in June to make board changes following a probe into its governance by the Australian Attentional Regulation Authority (APRA).

And the incoming chair (incorrectly described as a “chairman”) is quoted as saying:

The board sees opportunity to enhance member value in the future. In line with APRA’s expectations, this will be an active consideration for the board and the leadership team.

We will provide an explanation for this next issue.

Finally, on the crisis in construction...

Last month we provided a report on our evidence to the Legislative Council Public Accountability Committee into the regulation of building standards etc. You know, the David Shoebridge Committee.

We had an outstanding obligation to provide a written response to two questions provided on notice that day and you can see our response here.

Uh oh, time to change feet

On Monday night, 30 October, the Public Accounts Committee grilled the Building Commissioner, David Chandler, about his role and expectations.

As he disclosed that he had identified another 200 apartment building with “significant issues” which remained “incomplete” despite being certified for occupancy and another two yet to be announced , he said it was the purchaser’s responsibility.

He said people “should go and spend a little more time having a look (at their apartment) before they settle” and “if people were prepared to do a little bit of research to work out who might be risky and who is less risky” there would be fewer problems. One of the members of the Committee Courtney Houssos MLC described his observations as “remarkable” and pursued Mr Chandler to confirm if his “advice is that homeowners become experts themselves” and whether there was a role for government to regulate.

(Ms Houssos is also an ALP member of the Shoebridge Committee and, from our experience, well-informed on the extraordinarily well-funded and well-staffed Building Commissions in Queensland (in particular) and Victoria.)

Mr Chandler responded to Ms Houssos there was “a role for everyone to do what would be appropriate”.

That includes you, Building Commissioner.

So, buyer beware, if you buy an apartment, it’s all down to you and your judgement.

Evidence to the Legislative Council Public Accountability Committee into the regulation of building standards, building quality and building disputes.

 

The PAC invited depa to give evidence and be examined by the Committee on our submission - which we forwarded to you all on 29 July. We did this on 27 August, invited to start with an opening statement and then to answer questions of members of the Committee, which happened in a pleasant process with even a joke or two.

Here is a transcript of the evidence. It is marked “Uncorrected” but those who give evidence are allowed a week to correct errors but restricted from making themselves sound better than they were or more articulate. Or for the AIBS and AAC representatives, when questioned about penalties, or the appropriateness of struck off certifiers still running a business employing other certifiers, a little less evasive.

So the link is to our suggested corrections in red pen (as suggested) which are things that were not properly transcribed. For example, when one of the members of the Committee pointed out that Mascot Towers was certified by the Council, I described it as a nya, nya, nya moment for private certifiers and not, as the transcript showed, naa naa naa. Given the way politicians behave in what they still like to call the Bear Pit of the Legislative Assembly, you would have thought those responsible for transcribing the recording would have heard nya, nya, nya before.

It’s clear already from that experience that the representatives of the Government, both Liberal and National party and the representatives of the Labor are more interested in applying more lipstick to the pig and are likely to be recommending a bigger, better funded, better staffed Building Commission than one bloke as a Building Commissioner and a few helpers. You never really know how courageous the representatives of political parties are in examining something their forebears did which is turned out to be hopeless and unmanageable.

But you never know, there is considerable merit in recreating the role of the Builders Licensing Board within a properly staffed and funded Building Commission and seeing how it goes. A more attractive looking pig.

Not as good as our submission to return it all to local government.

More good directors sacked - a real bloodbath at Snowy Valleys

We’ve reported already to members about the decision by Narrabri GM Stewart Todd to sack our member Tony Meppem from his position of Director of Development and Economic Growth in February this year - another victim of the dreaded “no reason” termination with 38 weeks’ pay in lieu of notice.

It is poor public policy, dreadful opaque governance and a waste of public money to have an employment arrangement that allows a GM to sack other senior staff without reason. We’ve been arguing this with the Government for decades now and it’s unarguable now that the standard contract allows employees to be unfairly sacked. We’ve lodged an application under section 106 Unfair Contracts of the Industrial Relations Act in the Supreme Court, listed for hearing on 15 November.

The first argument will be a challenge by the GM at Narrabri of the Supreme Court’s jurisdiction to hear our application. The GM is an all-or-nothing kind of bloke but you do have to wonder why a first-time GM who has come up through the ranks, would want to deny senior staff the capacity to challenge their contract or their sacking.

And as the GM is also the President of Local Government Professionals (sic) it’s hard to imagine that they don’t believe there should be some jurisdiction somewhere to test the fairness of contracts and the appropriateness of sackings. LGPA is the old Local Government Managers and an organisation we’ve ridiculed over the years for not really knowing whether it’s an industrial organisation when it wants to dabble in award negotiations, or a professional lobby group when it wants to do something else.

The unions have more members who are general managers than LGPA and general managers themselves are in a distinct minority within the organisation and make up only four of the ten positions on the Board of Directors. We wonder, again, how this reflects on any policy positions about fairness in employment and job security. Time will tell but we see a potential conflict of interest here, don’t you? It is an important issue, because they will lobby the Minister and OLG about employment arrangements if they want to and they will be conflicted in developing a policy approach with GMs potentially wanting to retain unfair sacking of those below them, and those below them thinking it is appalling…

This is the GM’s quandary - wanting fair treatment of senior staff (and particularly GM’s) but at the same time wanting to retain the right as a GM to sack other senior staff unfairly and without reason.

Then, only in the last two weeks, Snowy Valleys GM Matthew Hyde (and surely it can’t be just a coincidence that he is also on the LGP Board) sacked all three directors, appearing on local television with some bushie councillors justifying the sackings on the basis that at some stage in the next nine months they will have a new structure to replace them. Blood everywhere and lots more than $300,000 spent with three lots of 38 week payments.

There are complications with Snowy Valley - there is a serious rift between councillors from former Tumbarumba and others on the merged body, there are public meetings at Tumbarumba (the last attracted more than 300 locals) calling to secede and the Council with a vast capital works budget will find doing it properly without three directors and their history and corporate knowledge will be a challenge.

We’ve had unfortunate experiences before with Mr Hyde. We had to file a dispute for a member with pre-merger entitlements on training from his days at the former Tumbarumba. It was a totally unnecessary dispute with totally unnecessary pressure (and even oblique threats from an acting Director) but Mr Hyde was not prepared to resolve it by making one phone call or email.

All he needed to do was contact the former GM of the former Tumbarumba and ask her about the entitlements of staff to training. She would have told him she developed a policy that provided serious funding of all costs of traineeships which meant that Tumbarumba may well have been the only Council in the state without any vacancies in its professional positions. Snowy Valleys were unable to find any of the multitude of documents about our member’s entitlements, the agreement signed with the GM, memoranda from the director supporting the arrangements or anything else.  

A simple phone call would have done it, but the GM wouldn’t. And then when we did and the former GM provided us with a letter endorsing our member’s entitlements, Mr Hyde lived up to his name and got all stroppy with the former GM about breaching confidentiality (which she hadn’t done) because the policy and processes were transparent and available. Threatening confidentiality of documents and processes when they are no such thing must be close to the last refuge of the scoundrel.

No Matt, it was a public policy available for everyone and a simple question would have saved the discomfort and angst for the employee, our time, your time with those ludicrous letters getting longer and less comprehensible every time, and the time of the IRC. For a bloke whose “Vision” on the LGP website is that he wants to “give back” to the industry and the profession, he wasn’t trying very hard.

So when our Director at Snowy Valleys was invited to meet with the GM, who is going to travel from Tumut to Tumbarumba, at 6pm on 13 August, and asked to bring his laptop, he asked what the meeting was about. He was told “various or a number of matters”, he asked again and he was told it was about his “future employment”. That’s always a warning, when someone who can sack you wants to meet and talk about “your future employment”, what they really mean is “your future unemployment”. Beware.

And then bang, at about 6pm he was provided with a letter terminating his employment under the dreaded 38 weeks and no explanation. An option available for the GM only because the unfair contract provided for it.

Both the sacking GMs appear to relish the process and emphasise they can do it, so they will.

The next day he sacked the other two directors, one at a time, and again without reason. There is a hostile way, and a less hostile way of going about a process like this, and when you sack your three directors, with no notice or discussion and don’t tell them that you’re doing it to the three of them, and why you’re doing it, Mr Hyde chose the hostile approach. The directors discovered they’d all been sacked when it was announced to staff and became a hot item on ABC Local Radio and then Prime7 Local News. Totally unnecessary for three good directors.

We are about to start renegotiating the current 2017 Local Government State Award and the three unions have included in their logs of claim the return of senior staff (other than general managers) to proper protection under the Award and the abolition of term employment. This is something that has been discussed with representatives of LGNSW and the Office of Local Government, and even raised with the office of the Minister for Local Government, and there is general consensus not yet formalised but the time is ripe. Everyone is recognising the unfairness of some of these sackings and regretting that while the system was always modelled on how the NSW SES operated, when the SES changed four years ago to transition the overwhelming majority of senior staff to continuing employment, no one flowed this into local government. It might have been the model when it was set up, but the model has changed to remove term employment.  

Yet, the relevant Minister for Local Government at the time and the OLG haven’t reflected the widespread transition to continuous employment in the State, to local government. They should have done that already.

And when the ICAC in their report into Mid-Western Council in October 2016 raises their concern about “no reason (that is terminated by the councillors without a reason being given to the employee”) creating the possibility of GMs being forced to do things or be compromised by councillors and, equally, senior staff being forced to do things or compromised by the GM, that should have given the OLG a nudge.

Everyone’s expectations are that when the ICAC hands down its report into the former Canterbury in Operation Dasha later this year, they will address the corruption and compromising risks that accompany contracts that allow termination with “no reason”.

It’s time this was fixed.

We start negotiating a new Local Government State Award this month

Yes, it’s that time again. Every three years it’s here before we know it, another seven to nine months of negotiation between the three unions and LGNSW and the normal posturing to get things started by LGNSW with a range of issues they raise every time including wanting indoor staff to work a 38 hour week. This claim gets dragged up each award from either their HR/management consultative group, or some of the members of their Board who want to demonstrate their interest in stripping away entitlements and conditions of employment.

We like Delacroix’s 1830 depiction of “Liberty Leading the People” in the battle against the forces of reaction and privilege to remind us that the forces of reaction need to be dealt with in these discussions as well.

Given that the original Award was made in late 1991 by agreement between LGNSW and the three unions, and has been varied every three years or so since by agreement, those kind of claims get pushed aside fairly quickly so we can get on with those things where it’s possible to reach agreement. This year will be no different.

You may see petitions around the place being circulated via the USU urging signatures to protect employment and while we ignore the posturing by the bosses, we encourage you to sign the petition.

Here’s a link to the LGNSW log of claims and here’s a link to our log, endorsed by the Committee of Management this week. You will see we’ve incorporated in it some suggested changes to the Award based upon experiences we’ve had in disputes with councils over the past few years.

Like the other parties, we reserve our right to any other claims as well, so if there’s something you’d really like to see added, let us know.

As a procedural step LGNSW filed an industrial dispute to allow a role for the IRC when we come down to those issues we are struggling to resolve. It was listed before Commissioner Murphy on 28 August and we agreed that we would start negotiating for a day on 23 September at the USU office, 28 October at the LGNSW office (after some good-natured banter about whether they could afford to provide lunch given their embracing of a new austerity) and back to the USU on 2 December.

Commissioner Murphy set eight days starting on 6 November and with a final date of 22 June where, all things being equal, the 2020 Award will be made by consent of the parties to operate from 1 July. And, because optimism is always a good thing to embrace going into an exercise like this, 9 June has been set as well - and wouldn’t it be nice if the bosses drop off their stupid claims and we reach agreement on a new improved award and have it made nice and early in June.

More Articles ...

  1. Senior Staff are being invited to respond to some questions about their job security
  2. A hapless of Building Ministers announcing bugger all in Sydney
  3. Prime Minister announces IR reform - oh no, here we go again
  4. A new Minister for Local Government - let’s see what we can do about those unfair standard contracts
  5. Look out if your Council wants to review your nine day fortnight
  6. Shellharbour shows why you need to be a member of a union
  7. And we’re in dispute with another Council too
  8. Super dispute in the Commission as well
  9. NSW election means we’ll be bashing our heads against the wall with the Coalition Government
  10. We still hate term contracts for senior staff
  11. NSW Government doesn’t understand why they lost the High Court case
  12. We file our first dispute of the year with Snowy Valleys Council
  13. "Roll out those lazy, hazy, crazy days of summer; You'll wish that summer could always be here"
  14. Kaldas review released in December
  15. Opal Tower fiasco raises opportunity to review everything
  16. How's HR been this year?
  17. Richmond Valley is the winner
  18. What about the High Court challenge?
  19. And that’s it for 2018, but here’s some good advice
  20. Neither snow nor rain nor heat nor gloom of night stays depa from the swift completion of depaNews …
  21. Speaking of issues of principle, the Government appreciates us, but doesn’t want to meet with us
  22. High Court to hear union challenge to electoral funding laws next week
  23. How has HR gone this year?
  24. Oh no, now the NSW Government has asked whether we think "there is a greater risk for conflicts of interest to arise in private certification work and result in poor certification …"
  25. NSW unions challenge NSW Government in the High Court
  26. Slowly getting somewhere on “superable salary” dispute
  27. No wonder this lot didn’t want a Banking Royal Commission
  28. Don’t think banks should be involved in Super?
  29. But what do the regulators do?
  30. Nick Kaldas to audit corruption risks in New South Wales planning
  31. “I need to see you at the gym”
  32. Councillors on interview panels
  33. The BPB is not just using “intelligence”, it has “intelligence cells”
  34. Next time you have a disagreement about professional opinion …
  35. Look out the BPB is coming after you
  36. We make a submission to ICAC Operation Dasha
  37. You’ve moved house or Council? Don’t let it be a secret
  38. Farewell Ernie, thanks for everything
  39. Former Canterbury demonstrates to ICAC why councillors should be removed from development assessment
  40. We may find ourselves in an unusual position
  41. Government sends IRC to Parramatta
  42. Electoral Commission declares 2018 depa elections
  43. Okay, we don’t mind a challenge, but …
  44. Going down like dominoes at Tweed
  45. Some people think they can get away with anything...
  46. Government decides to move the IRC out of the Sydney CBD
  47. How to not lose your leaseback car
  48. 2018 depa elections – lucky Lord Buckethead isn’t a member
  49. Welcome back
  50. Well, that’s it for us
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