He tangata, he tangata, he tangata. The commitment of Public Servants to their work, and the skills and capabilities that they bring, make possible the aspirational vision for the Public Service that is set out in this document.

The way we treat our people matters. Terms and Conditions of Employment, opportunities for development and advancement, maintaining inclusive, respectful and enabling work environments – all these matter for how well public servants are able to serve New Zealanders.

Reform of the State Sector Act offers an opportunity to strengthen employment provisions and set the Public Service on a pathway to being an exemplar employer for New Zealand.

This section sets out proposals in relation to:

• Diversity and inclusion, and
• Providing stronger workforce provisions to enable an agile, adaptive, unified New Zealand Public Service.

In areas where we make no proposal for change, e.g. in terms of the good employer principle, the intention is that the existing provisions in the State Sector Act will carry over into the reformed legislation.

Diversity and Inclusion

The case for a diverse and inclusive workforce is well established. Greater diversity in an organisation’s workforce leads to enhanced customer responsiveness, and for the public service in particular it enhances the legitimacy of government activity. The Public Service risks losing its relevance and effectiveness if it does not value, understand and reflect New Zealand’s increasingly diverse communities and their needs.
Diversity encompasses the broad spread of experience, culture, perspective and lifestyle of those who live in New Zealand. It involves ethnicity, gender, age, disability, sexual orientation, education, national origin, and religion. Inclusion means ensuring that employees feel valued, supported, and respected in the workplace.

Inclusion means that public service staff feel valued, supported and respected.

The principle of merit selection is a fundamental underpinning of our public service model. Across the history of the Public Service the challenges of merit have encompassed gender, disability, and sexual orientation, operating in a bicultural society, and reflecting a country that has one of the world’s most diverse societies.

Building a more diverse and inclusive workforce does not mean shifting away from the principle of merit selection.

Merit is constrained when anyone is effectively excluded from applying for a position in the public service. If we are to demonstrate merit selection while building a diverse and inclusive workforce, we need to operate from a truly level playing field. This means addressing inherent barriers to achieving merit-based appointments and promotions, including:

• Conscious and unconscious bias (e.g. cultural bias)
• The consequences of an ageing population
• Inflexible work practices.

Providing for diversity and inclusion in legislation

The State Sector Act does not refer explicitly to diversity and inclusion, although they are relevant considerations in a number or provisions, for example:

1.1 Promoting good-employer obligations in the public service (s 6(g))
1.2 Stewardship of departments (s 32(c))
1.3 Provisions relating to equal opportunities programmes (s 56(2)(b) and 58), and
1.4 Appointments on merit (s 60).

We propose that the Act make explicit reference to diversity and inclusion in the Act. It would be a duty of the Commissioner to promote diversity and inclusion across the Public Service. Equally, Chief Executives would have a duty to promote diversity and inclusion within their departments.

Making explicit reference to diversity and inclusion in legislation

We propose that the Act:

• Establish a duty upon the Commissioner to promote diversity and inclusion across the Public Service
• Establish a duty upon Chief Executives to promote diversity and inclusion within their departments.

Stronger workforce provisions to enable an agile, adaptive, capable and unified New Zealand Public Service

In addition to the need to ensure diversity and inclusion in our workplaces, the Public Service also faces issues related to ensuring a sustainable workforce. At the macro level there are emerging issues around the demographic makeup of the workforce and the impact of technological change. New Zealand’s ageing population will have far-reaching effects on the labour market over the next 20-30 years, putting pressure on available capability and driving competition for highly skilled workers. At the same time, technological advances are transforming work and influencing the nature of the traditional employment relationship. Change in this area will continue to present opportunities and challenges for the development of the Public Service and the shape of its workforce. We also face a need to address long-standing issues around pay equity across the Public Service.

Within the existing workforce, the decentralised nature of the system has led to wide variation in the way in which different departments define and reward the same skills and competencies. This causes difficulties when different departments are merged, or when components of departments are brought together in to a merged entity. Moreover, the dispersal of employment conditions places barriers in the way of the flexible redeployment of skills and people between departments, including by secondments. For example, departments that are able to offer higher wages and/or better terms and conditions are able to attract high quality personnel from other, often smaller departments.

One consequence of the variability of terms and conditions is an uneven distribution of capability across the Public Service with some departments struggling to retain their best and brightest people. It also leads to wage pressures across the Public Service as departments compete with each other to attract and retain similarly skilled people.

We propose that the Commissioner, in consultation with chief executives and functional and professional leads, will have the ability to negotiate, directly or through delegation, common terms and conditions for functions or professions across existing New Zealand Public Service departments. This can occur by way of amendment to the existing State Sector Act provisions on Government Workforce Policy (State Sector Act sections 55A to 55D) and would enable:

• the introduction of standard job titles, sizing and pay bands. Placement within bands would remain a decision of the employing chief executive.
• other conditions of employment including leave entitlements.

Pay Equity

Upcoming amendments to the Equal Pay Act 1972 (the Act) will embed the Reconvened Joint Working Group (RJWG) pay equity principles, and locate the resolution of pay equity claims in the employment relations framework. The amended Act is likely to be passed in 2019, ahead of the passage of any changes to the State Sector Act.

The State Sector Act currently makes the State Services Commissioner responsible for negotiating collective agreements in the Public Service and Education Service, and enables the Commissioner to delegate this responsibility to chief executives. The Commissioner’s letter of delegation requires each Public Service chief executive to have approval from the SSC for a bargaining strategy and before making an offer for settlement. Non-public service departments and Tertiary Education Institutions must consult with SSC, and District Health Boards are required to consult with the Director-General of Health.

This enables the Commissioner to give assurance to Ministers that bargaining outcomes are consistent with their priorities.
In the same way the Commissioner will need to be able to assure Ministers that the integrity of pay equity principles are upheld across the State sector. The Commissioner will also need oversight of the likely precedents and flow-on impacts that settlements may have across the State sector and economy.

We propose that the Act gives the Commissioner the same role in respect of pay equity negotiations as the Commissioner has in relation to collective agreement negotiations. This approach is appropriate given the pay equity negotiating process is akin in nature to collective bargaining.

Proposals for strengthening workforce provisions to enable an agile, adaptive, capable and unified New Zealand Public Service

• The Commissioner, in consultation with chief executives and relevant functional and professional leads, has the ability to negotiate, directly or through delegation common terms and conditions for functions or professions across existing New Zealand Public Service departments.
• The Commissioner has the same role in respect of pay equity negotiations as the Commissioner has in relation to collective agreement negotiations.