Chapter One: path to reform

Chapter at a glance

In June 2013, the NSW Parliament passed the Government Sector Employment Act 2013.

The Act will modernise and simplify the employment framework of the government sector and establish a single Public Service senior executive structure.

The reforms will help attract and retain talented people who are well equipped to deliver the best service to the people of NSW.

The Act will reinforce the sector’s existing Ethical Framework by making leaders legally responsible for operating and managing their agencies in accordance with the framework.

In June 2013, the NSW Parliament passed the Government Sector Employment Act 2013 (GSE Act). The Act will replace the Public Sector Employment and Management Act 2002 (the PSEM Act). It represents the most significant and thorough reform in decades of the legislation underpinning employment and workforce management in the NSW public sector.

The passing by Parliament of the GSE Act in June 2013 was a major milestone in the NSW Government’s program of public sector reform. The Act is intended to provide a foundation for an innovative, professional, capable, diverse and accountable government sector that encourages and recognises performance, delivers better front-line services for local communities, and creates a competitive landscape for investors, economic growth and job creation in NSW. The GSE Act is expected to come into effect in the first half of 2014.

The need for change

In January 2012, the NSW Commission of Audit Interim Report: Public Sector Management[1] recommended sweeping changes to workforce employment and management practices in the NSW public sector. The Commission of Audit saw a need for improvement in almost every aspect of employment in the sector. For example, it made recommendations about the design and structure of public sector organisations, the performance of executives and flexibility in staff employment and deployment.

The Public Service Commissioner agreed to lead the implementation of the Commission of Audit’s workforce-related recommendations. The Commissioner’s focus has been on ensuring the NSW public sector has the structures and culture appropriate to a 21st century service operating in a Westminster system of government.

The first step was to examine the sector’s executive structure and management arrangements, given the critical role of the executive in leading service delivery and managing the workforce reforms. Having the right structures, people and capabilities in this executive group is fundamental.

The examination confirmed there were many elements that needed addressing, including:

  • limited staff mobility within and between agencies
  • a narrow and uncoordinated approach to employee management and development
  • inefficient and ineffective recruitment and selection practices
  • inconsistent performance management and capability development
  • agency cultures that were inward-looking and risk-averse.

Based on these findings, the Public Service Commissioner developed a comprehensive suite of proposals to reform NSW public sector executive structures and employment and broader workforce management practices. The proposals considered the Commission of Audit’s recommendations and drew widely on information and advice from other sources, such as the results of the 2012 People Matter Employee Survey[2] and the PSC’s Executive Development Program (see page 20).

In February 2013, the NSW Government announced its intention to make major legislative changes in line with these proposals. The GSE Act is the centrepiece of those changes.

Government Sector Employment Act

The GSE Act will bring far-reaching, generational change in the employment and management of the state’s public sector workforce. Two of the Act’s key reform areas are the structure of the sector’s executive, and the employment arrangements and management practices that apply to both executive and non-executive employees. Another key aspect is the manner in which the Act will enable agencies to determine the detail of how they manage their workforces within the parameters of broad, centrally defined requirements.

Combined with a number of complementary and interrelated initiatives described further on in this report, the GSE Act will provide the foundation for a modern and effective workforce, attracting and retaining talented people who want rewarding careers and who are well equipped to deliver the best service to the people of NSW.

The Act will establish two main employment structures: the government sector and, within that, the Public Service. The government sector will comprise most NSW government employees, including the Public Service, the NSW Police Force, the Teaching Service, the Health Service, the Transport Service and other services of the Crown. The Public Service will comprise Departments, Public Service executive agencies related to Departments, and separate Public Service agencies.

State-owned corporations will be outside the government sector (as defined by the GSE Act) for most purposes but subject to some requirements of the Act. The Act will not apply to staff of the Independent Commission Against Corruption, the Audit Office or the Judicial Commission, or to Judicial Officers or employees of either House of Parliament. Staff who assist members of Parliament in their electorate or parliamentary duties will be covered under a new separate Act, the Members of Parliament Staff Act 2013.

In addition to these structural changes, the GSE Act makes the Secretaries of Departments (currently known as Directors General) and heads of agencies responsible for the conduct and management of their agencies in accordance with the sector’s core values, and for integrating workforce diversity into strategic workforce planning.

Implementing the GSE Act reforms

To prepare for the commencement of the GSE Act, the PSC is developing a Government Sector Employment Regulation, and the Public Service Commissioner will make a set of ‘government sector employment rules’. These rules will replace a plethora of policies, guidelines and circulars that currently govern employment arrangements. They are intended to set broad, overarching requirements rather than prescribe procedural details. This will give agencies the flexibility to manage matters in ways that suit local circumstances while ensuring consistency in key areas.

The PSC is supporting Departments and agencies to manage the transition to the new legislative landscape, such as by providing policies and guidelines to help them design and implement the changes to the senior executive structure. It has a team dedicated to providing practical support and advice to Departments and agencies as they implement the changes and is regularly briefing human resources practitioners and other managers and staff. It is also providing a wide range of information materials via its website.

There is more information about the impact of the GSE Act later in this report, particularly about how it aims to facilitate high performance, excellent customer service delivery and rewarding careers. Further details about the Act can be found in a range of materials the PSC has published about the reforms, including an information booklet about the Act and a series of ‘Q&As’. These are available on the PSC’s website at

This infographic is a timeline depicting significant milestones in the reform of NSW public sector workforce management along a horizontal axis. The timeline begins with 1988 as the last major overhaul of the NSW public sector workforce management legislation and concludes with a final milestone in the first half of 2014 which is the anticipated commencement of the Government Sector Employment Act.


[1]     NSW Commission of Audit (2012), NSW Commission of Audit Interim Report: Public Sector Management, NSW Government, Sydney

[2]     All references to the 2012 People Matter Employee Survey data in this report are taken from the following data source: NSW Public Service Commission (2012), 2012 People Matter Employee Survey. Additional information can be obtained from the NSW Public Service Commission (2012), People Matter Employee Survey 2012 Main Findings Report


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