Principal Executive Offices
Background
The Government first created the
Principal Executive Office (PEO)
Structure when it introduced reform measures for Government Business
Enterprises (GBEs) in 1988. The designation of the Chief Executive as a PEO
allowed the Board of a GBE to set remuneration for that office. Boards were
expected, however, to consult the Remuneration Tribunal before any
remuneration changes were implemented.
The Governor-General declared such offices to be PEOs by way of regulations.
Subsequently these offices were listed in Part II, Section 3 of the
Remuneration Tribunal Act 1973 (the Act) as meeting the definition
of a ‘principal executive office’.
The passage of the Public Employment (Consequential and Transitional)
Amendment Bill 1999 provided for a decentralised wage fixing system for the
Australian Public Service, allowing APS employers to negotiate individual
employment conditions with employees.
However, remuneration (including some entitlements such as travel, annual
leave and compensation for loss of office) for public office holders was
still fixed by the central body, the Remuneration Tribunal. In moving to a
decentralised remuneration system for some of these office holders, the
Government saw the original PEO Structure
as a suitable vehicle to effect the necessary reform
measures, with some amendments to strengthen the existing legislative
framework.
In December 1999, the Remuneration Tribunal created the PEO Structure,
contained in Determination
1999/15 - PEO Classification Structure and Terms and Conditions. In
May 2001 the Act was amended to strengthen the integrity of the PEO
Structure and to ensure that employing bodies were bound by advice provided
by the Remuneration Tribunal.
An office can be designated as a PEO, through a declaration made by the
Minister responsible for the administration of the Act, the Minister for
Employment and Workplace Relations. Those offices suitable to become PEOs
have been progressively moved into the
Structure.
Legislation
Definition
The Act defines a ‘principal executive office’ to include certain named
offices (the original GBEs) and ‘any other office or appointment declared by
the Minister’…’ (Section 3).
Role of the Tribunal
 To
determine, and maintain, a classification structure for PEOs (Sections 5(2A)
and 7(3D);
To
provide advice to the Minister for Employment and Workplace Relations
(Section 3A(6)) about:
- whether an office is suitable to be a PEO;
- the Total Remuneration for the PEO;
- the appropriate classification Band; and
- to make recommendations on any matters relating to PEOs (Section
7(3E)).
Role of the Minister
Under Sections 3A, 3B and 3C of the Act the Minister may, after taking
account of the Tribunal’s advice, make the following declarations which will
be published in the Commonwealth of Australia Gazette:
an
office is to be a PEO;
an
office is to be assigned to a specified classification within the
classification structure determined by the Tribunal. The assignment may be
permanent or temporary (a special case may arise where an office holder
receives a personal loading that will apply only to that person and not to
successive occupants); and
a
specified person, authority or body is to be the employing body.
The Minister may also fix the commencing Total Remuneration for the
office by advising the employing body in writing (this is not published in
the Gazette).
Role of the Employing Body
Under Section 12C of
the
Act the employing body for a PEO may determine terms and conditions
(including remuneration and allowances) applying to the office, providing
that such terms and conditions are not inconsistent with the PEO framework
determined by the Tribunal (Determination 1999/15).
Guide to the
Principal Executive Office (PEO) Structure
 (72kb)
DOC
(108kb)
PEO-Declaration of Remuneration Form
(24kb)
DOC (132kb)
PEO-Performance Remuneration
Guidelines
(30kb)
DOC
(50kb) In addition, the Tribunal may
issue guidelines on matters within its jurisdiction. Relevant guidelines
are:
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