Secondment arrangements and procedures for Commonwealth employees (RMG 121)

The Public Service Act is the principle Act governing the operation of the APS. Under the Public Service Act, APS entities can temporarily move employees between entities using a range of mechanisms.

In 2020, a number of APS employees were redeployed to other Commonwealth entities and state and territory governments, in accordance with the Prime Minister’s direction under subsection 21(1) – 2020 (No. 1) under the Public Service Act.

A temporary move can involve the movement of an employee from their substantive employer (the home entity) to another employer within the APS, a state or territory government entity, private company or community organisation (the host entity) to undertake specific activities or work that:

• supports a critical need at the host entity
• develops the employee.

In this RMG, secondment arrangements refer to the following types of temporary moves:

• temporary transfers – the employee moves from one APS entity to another APS entity under section 26 of the Public Service Act. The host entity temporarily employs the seconded employee and pays their salary and on-costs. The seconded employee may retain an ongoing position with the home entity.
• secondments provided free of charge – the employee is moved from one APS entity to another APS entity or to a non-Commonwealth entity (such as a state or territory government entity) while remaining an employee of their home entity. The home entity pays the employee’s salary and on-costs and will not seek reimbursement of these costs from the host entity.
• secondments provided under a reimbursement or recovery arrangement – the employee is moved from one APS entity to another APS entity or to a non‑Commonwealth entity (such as a state or territory government entity) while remaining an employee of their home entity. The home entity pays the employee’s salary and on‑costs but seeks reimbursement of these costs from the host entity.

Continuity and conditions of employment

APS employees seconded to a non-Commonwealth entity remain APS employees for the duration of the secondment. In some circumstances, employees may take leave without pay from their APS employer to work at a non-Commonwealth entity, with the host entity paying the employee’s salary and on-costs. As the impact of a leave without pay arrangement will differ based on the entity’s policy and legislative framework, entities may seek legal advice on this.

Seconded non-APS employees are required to comply with any applicable legislation relating to their home organisation.

The PGPA Act provides flexibility for an accountable authority to delegate powers and issue instructions to seconded officials. When doing so, accountable authorities must consider their duties under sections 15 to 19 of the PGPA Act.

Delegating PGPA Act powers to seconded officials

Section 110 of the PGPA Act provides for an accountable authority of a non‑corporate Commonwealth entity (NCE) to delegate to an official of an NCE, by written instrument, any powers, functions or duties under the PGPA Act or Public Governance, Performance and Accountability Rule 2014 (PGPA Rule). Such delegations:

• can be made to officials of their own entity and of another NCE, including officials seconded to their entity that remain officials of another NCE
• cannot be made to an official of a corporate Commonwealth entity (CCE).

Issuing instructions to seconded officials

An accountable authority of a Commonwealth entity (NCEs and CCEs) may give instructions, by written instrument, (i.e. accountable authority instructions) under:

• Subsection 20A(1) of the PGPA Act, to an official of the entity about any matter relating to the finance law
• Subsection 20A(2) of the PGPA Act, to an official of another Commonwealth entity in relation to:
  • approving the commitment of relevant money
  • banking and dealing with relevant money
  • debiting or crediting appropriations
  • other matters prescribed by the PGPA Rule relating to the official dealing with public resources for which the accountable authority is responsible.

While employee expenses are generally funded from an entity’s departmental appropriation, some entities:

Departmental appropriations can be used for any expenditure classified as ‘departmental in nature’, such as employee and supplier expenses. Expenditure that is classified as:

• 'departmental in nature’ does not need to be tied to the entity’s outcome statement
• 'administered in nature’ must have a connection to the entity’s outcome statement.

Special appropriations are established in primary legislation. Operational costs can be funded from a special appropriation where they are expressly referenced in the legislation and have a connection to achieving the objectives of that primary legislation.

Special accounts are established by either a determination by the Finance Minister (under section 78 of the PGPA Act) or by legislation (under section 80 of the PGPA Act). The determination or Act will include the purpose and both crediting and debiting clauses that outline the way revenue and expenses can pass through the special account.
 

The PGPA Act (section 21) requires NCEs to comply with Australian Government policies, including the Charging Framework.

Entities need to consider how the secondment impacts on their expenses and revenue where the seconded employee is usually funded via external charging revenue, either:

• directly through retaining receipts (i.e. under section 74 of the PGPA Act or a special account), or
• indirectly through a departmental appropriation, which is recovered from industry and returned to consolidated revenue as administered receipts.

The two broad types of charging activities (each with differing implications) are:

• regulatory charging activities – where charges are based on the efficient costs of delivering a regulatory activity to an individual or organisation. Revenue must only be used to fund the costs of delivering that activity, to avoid any cross subsidisation
• non-regulatory charging activities – where the relationship between revenue and expenses does not need to align (e.g. revenue can be greater or less than expenses) and revenue generated can be used for other activities.

Transfers of leave entitlements

If the host entity receives seconded staff via a temporary transfer, depending on the term of the transfer, some or all of the employee’s accrued leave entitlements can be transferred as part of the move. For short-term transfers, entities may agree to the home entity retaining the leave entitlements.

When deciding whether leave entitlements should transfer to the host entity, consideration may need to be given to whether the employee:

• will undertake higher duties at the host entity
• is likely to take leave during the period of the secondment.

Services received free of charge

If an entity receives services free of charge through seconded employees that it is not paying for (i.e. volunteer services under AASB 1058 Income for Not-For-Profit Entities (AASB 1058)), the amount recorded is the amount that the host entity would have paid for the services of these people.

AASB 1058 requires this amount to be recorded at fair value. This is the value for the services actually provided to the host entity – not what the seconded employee would have earned for services provided in their home entity. The assumption is that the host entity pays its people at market rates.

Resources received free of charge are only recorded in financial statements if the host entity would have paid for the services (i.e. if it had not received the services for free). 

The home entity continues to record the salary expense at the actual amount paid to the employee. No change in accounting is required.

Recording employee expenses and reimbursements

For secondments provided under a reimbursement or recovery arrangement, the home entity is recompensed by the host entity for the employee’s salary and on-costs. The home entity records the:

• employee expenses at each pay cycle, including accrued employee provisions
• revenue received from the host entity.