Changes to executive arrangements: ‘Right-of-return’ and compensation payments

21 September 2017

Consistent with a significant public sector workforce renewal agenda, the Government is making changes to legislation governing executive employment.

The Government has approved legislative changes that will remove the existing ‘right-of-return’ to ongoing employment available to:

  • Senior Executive Service (SES) officers appointed under the Public Sector Management Act 1994 and
  • Health executives appointed under the Health Services Act 2016.

These changes will apply to all current and future SES and Health executive contracts, except where an officer is on their initial engagement for a period of two years or less.

Following the enactment of the legislation through the Parliament, there will be a transition period. Executives will be given six months from the commencement of the changes, to exercise their right of return to permanent tenure, should they wish to.

After this initial six-month period all existing ‘rights-of-return’ will expire. From this point on—when a contract is brought to an early end—an officer is only eligible for a compensation payment.  

Effective 1 September 2017, the associated policy under which the Public Sector Commissioner determines compensation payments will be applied on the basis of four months’ remuneration for each full year of the contract remaining—with a minimum of four months’ remuneration—or the remainder of the contract term, whichever is the lesser. The Director General, Department of Health will apply a similar approach to Health executives.

Further legislative amendments will limit the maximum compensation payable to officers whose contracts are brought to an early end to 12 months’ salary, rather than remuneration. 

Page last updated 21 September 2017