TAFE SA (PRESCRIBED EMPLOYEES) AMENDMENT BILL

Committee Stage

In committee.

(Continued from 30 April 2013.)

Clause 1.

Mr PISONI: There are two questions I asked yesterday that the minister was going to bring back to the chamber, so I am hoping we can revisit those.

The CHAIR: Minister, the member for Unley is referring to two questions he allegedly asked you yesterday.

The Hon. G. PORTOLESI: Thank you, sir. I apologise for the delay; we were just gathering our advisers. If I recall correctly, the member for Unley asked questions about how TAFE has been operating since last year. I can report that TAFE has been operating effectively since being established as a statutory corporation on 1 November. There are some matters related to employer and employee rights that need to be resolved and will be through this legislation.

TAFE has been addressing questions of employment rights, terms and conditions, through statutory interpretation and within existing policy and procedure. TAFE SA is relying on developed policy and procedure for the management of complaints and other things. The legislative base now being relied on—which is the point—to discipline prescribed employees is the common law and the Fair Work Act 1994.

Mr PISONI: Has the minister had crown law advice as to how reliable that system is at the moment and whether it will stand any test or challenge by a disgruntled employee or someone who feels as though the process has not been dealt with properly or who disputes the fact that that is a process suitable for purpose?

The Hon. G. PORTOLESI: The fact the member for Unley does not want to acknowledge is that the Fair Work Act does not of itself provide disciplinary procedure but rather gives recourse to employees who have been dismissed or have a grievance regarding an industrial matter as defined by section 4 of the Fair Work Act 1994. I made it very clear to the member for Unley and other members in a conference recently that this is not the sector's, or even TAFE SA's, preferred method for dealing with this process. As I said, the system was not broken. It is simply an opportunity that has been taken by the opposition, and we have been managing on an interim basis but our preferred position is that which is represented in this legislation.

Mr PISONI: Have you had crown law advice as to the legal standing of the operation, the way you are managing staff and grievances at the moment?

The Hon. G. PORTOLESI: This was the same matter more or less that the member for Unley raised in the conference of managers, and again he tried to bring in the crown here. This is a policy matter, and it is my preference as the minister responsible for this policy area of government that we manage this in this way.

Mr PISONI: Has the minister had crown law advice as to whether managing this matter in the way she has described is sound?

The Hon. G. PORTOLESI: There is no problem with going forward with this piece of legislation as presented here in this parliament. What we are dealing with today was never envisaged as part of the TAFE reforms, so we are back to square one in that sense. We have been managing but it is not our preferred position and what we are proposing here is completely doable.

Mr PISONI: I do not think the minister understood the question. The question is about the interim arrangements you have in place. Have you had crown law advice about the legal standing of the interim arrangements you have in place for dealing with staff while this bill is going through the parliament and while the previous bill has been laid on the table?

The Hon. G. PORTOLESI: Whether or not I have had crown law advice is beside the point. The fact is that we have managed the interim arrangements we have—and they are interim arrangements, and we have been managing. However, they are not our preferred position. TAFE SA will tell you that they prefer the status quo which we had last year.

Mr PISONI: Can the minister then guarantee to the house that the method being used at the moment to manage employee grievances is a legal process and that it is sound?

The Hon. G. PORTOLESI: We are relying on the Fair Work Act, and I think I made that clear a moment ago. The Fair Work Act is a proper piece of legislation. I am not in any way suggesting that it is not; it is simply not our preferred method to go forward.

Mr PISONI: What advice have you received that the interim methods you have in place are, in fact, legally sound?

The Hon. G. PORTOLESI: Sorry, sir, could the member repeat his question?

Mr PISONI: My question is: on what advice are you relying to make the claim that the interim measures that you have in place to deal with employee grievances are in fact legally sound?

The Hon. G. PORTOLESI: My departmental advisers have just advised me that of course we are relying on the Fair Work Act, and that is a sound process; but this is a policy decision, and the policy preference of the government is that we go back to what was always intended. We did not envisage a change of this kind. The sector did not envisage a change of this kind. The fact is that we have been managing on the basis of what I described earlier, but that is not our preferred position.

Mr PISONI: I will just get back to the question: so, you have not sought any legal advice whatsoever as to whether the interim measures you have in place at the moment are a sound and legally safe way to manage your employees?

The Hon. G. PORTOLESI: My advice is that we did get advice that suggests that the interim arrangements that were devised in response to this, which occurred last year, are sound. Again, I repeat the point that it is the preference of the government that we proceed on a different path to that which you are envisaging.

Mr PISONI: On whose advice, minister?

The Hon. G. PORTOLESI: I am advised that the Crown provided advice, and the department.

Mr PISONI: Can the minister advise on the point that Mr Garrand made about the decision to use the Teachers Appeal Board for managing staff grievances—why that decision was made when the department's recommendation to the minister was that the Industrial Relations Commission handle those complaints?

The Hon. G. PORTOLESI: I do not have the benefit of Mr Garrand's comments; can you read them to me? Can you read to me his precise comments?

Mr PISONI: Well, the Hansard is a public document, minister, and it is available to you.

The Hon. G. PORTOLESI: I am aware of that, member for Unley, but I am also well aware of the fact that you often present material in a completely different way to that which has been presented.

Mr PISONI: Point of order, sir. I ask that that be withdrawn; 127, impugning improper motives on members. Unless you can present evidence of that claim, I ask for that to be withdrawn.

The CHAIR: Would the minister be happy to withdraw those remarks for the sake of the committee?

The Hon. G. PORTOLESI: For the sake of progressing this piece of legislation, I am prepared to withdraw that. All I am simply suggesting is that it would be helpful for the passage of this legislation to know exactly the comments to which the member for Unley is referring.

The CHAIR: I think that is legitimate. The member—

Mr PISONI: Mr Garrand told the Budget and Finance Committee on 15 April that:

Our position in the initial drafting would be to use the Industrial Relations Commission, and that is through a process of consultation as we went out and consulted on the draft legislation. There was a strong view by others to maintain the Teachers Appeal Board, but the initial advice by the department would be to use the Industrial Relations Commission.

The Hon. G. PORTOLESI: Was that so hard, member for Unley? He gave me the comments by Mr Garrand. What he is obviously reflecting is the fact that there was a proposal, as there often is, in policy development and inner proposals were put out for consultation. There was consultation and there were adjustments to those proposals.

Mr PISONI: Who was consulted and who made the decision to use the Teachers Appeal Board?

The Hon. G. PORTOLESI: I cannot comment on that because I am pretty sure I was not the minister then. I cannot comment on that, but I just understand it would have been the standard departmental policy process for consultation.

Mr PISONI: Can the minister bring that information back to the house?

The Hon. G. PORTOLESI: I can advise that consultation took place more than a year ago—from 17 February 2012 to 11 March 2012—and feedback was received from a number of organisations. In total, 28 written submissions were received, including submissions from Business SA, the Australian Industry Group and the University of Adelaide. We obviously received feedback from the Australian Education Union. The department also held consultation sessions with TAFE SA staff.

Mr PISONI: Mr Garrand told the Budget and Finance Committee that:

We are going through the process with TAFE at the moment, where that shared service agreement expires at the end of June. We are going through, with TAFE and the TAFE board, and looking at those shared services, and some of those staff will be devolved back to TAFE so that TAFE can run their own corporate services.

How many additional staff are still to move into TAFE from DFEEST?

The Hon. G. PORTOLESI: I am very keen to see the passage of this bill but I do not see how that particular question is directly relevant to this.

Mr PISONI: I have asked the question. This bill is all about employees and this question is about employees.

The Hon. G. PORTOLESI: The bill is about education employees. The member refers to the much broader issue of TAFE reforms—and the government at the time was very grateful to the opposition for supporting those reforms. However, in the interests of openness, I am happy to take that question on notice and bring back a response.

Mr PISONI: Minister, I asked questions about TAFE board fees, are you able to answer them now?

The Hon. G. PORTOLESI: Do you mind just repeating what your question was yesterday?

Mr PISONI: Mr Royle told the Budget and Finance Committee on 15 April that the basic remuneration was set out at $24,000 per annum per board member and $37,000 per annum for the chair of the board. Mr Garrand then expanded on the answer to that question and told the committee that there was a retention payment of $48,000 for the chair on top of the $37,000 and a retention payment of $23,000 for each board member on top of their $24,000, taking the chair's total remuneration to $85,000 and the total remuneration for members of the TAFE board to $47,000. Mr Garrand was asked whose direction it was to make a retention payment to board members, and he answered that it was a cabinet decision. It was the cabinet's decision for retention allowances, confirmed by the chair. Mr Garrand said:

As a department, we had nothing to do with the appointment of the board or the setting of board fees. They are decisions for cabinet.

Can the minister advise on what grounds a retention payment was established or paid to board members and the board chair, and for how long that retention payment applies? What is the process for implementing retention payments or even establishing or determining the value of retention payments in this instance?

The Hon. G. PORTOLESI: I think Raymond Garrand is correct. This was a cabinet decision, because we think that training is very important, and this was a very big reform, supported by the opposition. So, we believe that that board, which is a completely new commercial expertise-based board, needs to attract the very best people we could. I would have thought that the member for Unley would generally favour that. We think they are worth it. We think training in this state is worth it.

Mr PISONI: The question was about the establishment of the retention payments. I have asked the minister if she could explain why it was necessary and on what basis retention payments were made. For example, why was it not announced that board chair would be paid $85,000 as a board fee? Why is there a retention payment and a board fee? Why is there the split? Why did that happen and whose decision was it to pay the board in this manner?

The Hon. G. PORTOLESI: It was the usual cabinet process. There was nothing unusual about that. Cabinet appointments and remuneration associated with those appointments go through cabinet. I do not think there was anything in particular that was extraordinary. As I said, we think that the reforms that the government has embarked upon are significant. This is an area of great complexity. We wanted the best people for the board. We think we have a very good board with Peter Vaughan as the chair. I think he is worth the fees, as are the members of the board, but it was the standard cabinet process.

Mr PISONI: The minister did not answer the question. Why was there a retention payment plus a board fee paid to board members and the chair; and if it is a standard cabinet process or a standard process for board payments, can the member give some examples of other boards where retention payments are paid on top of a board fee? The question I am asking is: why was a retention payment developed on top of a board fee, and why was not simply $85,000 offered and $47,000 offered as straight board fees? Why is there a difference? Why is there a retention payment and why is there a board fee?

The Hon. G. PORTOLESI: I am not in a position to comment on other similar board arrangements, but this was a standard—

Mr Pisoni: You said it was a standard practice.

The Hon. G. PORTOLESI: It is a standard practice. The remuneration of the new TAFE SA board has been agreed in line with the standard boards and committees remuneration outlined by the Department of Premier and Cabinet. The cost has been offset in part by the savings in abolishing the councils within TAFE SA and the fact that there is a significant reduction in the number of members. TAFE SA has seven board members and a chair as opposed to what were the 35 council members.

Mr PISONI: So why is there retention payment and a board fee?

The Hon. G. PORTOLESI: Look, I think we have to agree to disagree here. They were given a very, very big job. There were a number of savings achieved simply from going to the one board. We believe that we value training in this state. We are undertaking a significant reform in relation to TAFE, and the opposition was happy to support that. I think that the opposition would support adequately remunerating these people, many of whom have outstanding private sector experience. It had to stack up; we had to stack up in line with the standard for boards and committees—and it did. I do not think there is anything extraordinary about what has occurred here.

Mr PISONI: Can the minister explain to the house why it is that the chairman was paid a retention allowance as well as a board fee and why board members were paid a retention allowance as well as a board fee, and why they were not simply paid a board fee of an equivalent value of those two fees? In other words, why was the chairman not paid $85,000 as a board fee and why were the board members not paid $47,000? Why is it split into a retention payment and a board fee?

The Hon. G. PORTOLESI: I cannot explain why what you are suggesting was not done at the time. I believe the original fees would have been done towards the end of last year. I believe that there is nothing other than something very ordinary going on here. As I have outlined before, any proposals for committees and associated remuneration needs to be approved by cabinet, and that was done. Why a larger fee in the first place was not done I am not sure, but I do not think there is anything magical or particularly relevant about that. We have been very open about the fact that we have done it in this way.

Mr PISONI: Is it because the board and committees remuneration framework that was approved by cabinet on 10 December 2007 has strict criteria for the board fee and chairman's fee for members? For example, the criteria for a level 1 chairman's fee is that a chairman would receive $70,758 for the following:

Boards of management overseeing revenue or assets over $1 billion, profit over $100 million or a combination of these criteria.

Boards of statutory authorities exercising critical governance or regulatory functions at such a high level that the Premier or Cabinet considers payment at the very highest level to be appropriate.

Does the TAFE board oversee revenue or assets of over $1 billion and a profit of over $100 million?

The Hon. G. PORTOLESI: The TAFE reforms and the job given to the new TAFE board are very significant. The task to take us to a competitive market has been a very significant one. The member need only look at other states where similar transitions have perhaps not been as successful as they should have. We are very clear about the fact that this is a significant reform. It is a significant reform in policy terms. We are very keen on getting it right. We know that you support the reforms because you supported them in this place. I am very surprised that you do not support the retention allowance being given to the chair, Peter Vaughan, and other members.

Mr PISONI: Minister, I am simply asking questions about the process. What were the board fees established based on the boards and committees remuneration framework that was approved by cabinet on 10 December 2007? Is that the framework that was used to establish the board fees and the chairman's fees for the TAFE board?

The Hon. G. PORTOLESI: I said that it went through cabinet and had to comply with the rules for appointing members to committees and remunerating them adequately. Cabinet made a decision, as it is perfectly entitled to do, that we wanted the very best people. We can stay here and argue until the cows come home, but we think the reforms are significant enough to warrant attracting the very best people we can. Quite frankly, I am a bit surprised and disappointed that the opposition sees it differently.

Mr PISONI: Is the minister able to tell the house that the board fees that were established for the TAFE SA Board were based on the board and committee's remuneration framework and, if not, to what framework is the minister referring?

The Hon. P.F. Conlon: It's a cabinet decision.

The Hon. G. PORTOLESI: That is right; it is a cabinet decision and cabinet made a very proper decision. Like I said, we can keep on arguing about this until the cows come home. Cabinet made a decision based on the fact that we think the TAFE reforms are very significant.

Mr PISONI: Does the board of TAFE oversee management of revenue and assets worth over $1 billion, or a profit of over $100 million, or a combination of this criteria?

The Hon. G. PORTOLESI: I will get back to the honourable member in relation to those details.

The Hon. P.F. Conlon: In terms of what the assets are.

The Hon. G. PORTOLESI: Yes, in terms of what are the assets. The fact is that the nature of the reforms that were supported by the opposition are so significant that it goes beyond buildings. They are so significant, and we are so determined to make sure we get it right (and other states have struggled in this area), that we believe in properly remunerating people. We feel very strongly that we are heading in the right direction with these TAFE reforms, and we are very pleased the opposition supported them.

As a consequence of that we have appointed a very strong board, chaired by Peter Vaughan. I do not have their names in front of me, but the board is comprised of people with significant commercial expertise. We value their contribution; we think it is the right team to take forward this reform and it is significant. I know that that board is working hard, and I take the opportunity to thank them for the work they are doing.

Mr PISONI: Minister, I get back to a question you still have not answered: why is there a retention payment as well as a board fee?

The Hon. G. PORTOLESI: Because we think the reforms are so significant, and we think there should be a board with significant commercial expertise overseeing these reforms. We think they are worth the allowance.

Mr PISONI: How long will the retention allowance be in place for board members?

The Hon. G. PORTOLESI: I will take that question on notice.

Clause passed.

Remaining clauses (2 to 4), schedule and title passed.

Bill reported without amendment.

Third Reading

The Hon. G. PORTOLESI (Hartley—Minister for Employment, Higher Education and Skills, Minister for Science and Information Economy) (12:44): I move:

That this bill be now read a third time.

Bill read a third time and passed.