Government quietly changes secretary payout requirements ahead of Pezzullo findings

The federal government has quietly changed the financial payout requirements it owes to top bureaucrats who are sacked for breaching their duties, ahead of the findings of an investigation into stood-aside Home Affairs secretary Michael Pezzullo.

The Remuneration Tribunal, the body that determines the pay and entitlements of public office holders, published a determination on Friday that revokes the lucrative compensation obligations owed to department secretaries if they have been found to be part of an “exclusion event”.

The government has updated the severance obligations owed to public service secretaries ahead of a conduct report into Home Affairs secretary Michael Pezzullo.Credit: Alex Ellinghausen

Pezzullo has continued to collect a salary package worth more than $900,000 since standing aside in September, when Home Affairs Minister Clare O’Neil directed the Public Service Commissioner Gordon de Brouwer to investigate whether he breached the code of conduct over his dealings with Liberal Party powerbroker Scott Briggs. The inquiry was led by former commissioner Lynelle Briggs, who is not related to Scott Briggs.

Pezzullo’s term is otherwise due to end in October next year. It is unclear what impact these changes may have on any severance obligations owed to Pezzullo if he is sacked from his position. He has been contacted for comment.

However, the new tribunal’s determination appears to apply retrospectively, with the ruling stating that the new measures apply even if a report into a code of conduct breach has been given to the government before the commencement of the new tribunal ruling.

Under the tribunal determination, called “Departmental Secretaries—Classification Structure and Terms and Conditions”, secretaries are entitled to be paid 12 months of their salary if they still have at least one year left on their term when their job is terminated. If they have under one year in their term, they are entitled to one month’s reference salary for each full month of the balance of the term not served.

However, the amendment signed off by tribunal members on Friday inserts a new “exclusion event” clause, which means compensation is not owed if there has been a finding by the Australian Public Service Commissioner that a secretary breached the Australian Public Service code of conduct.

This includes a finding that the secretary’s conduct constituted “improper use of the secretary’s duties, status, power or authority to gain a benefit or advantage (whether financial or otherwise) for themselves or any other person”. Also captured is conduct found by the commissioner to be sexual harassment, bullying at work, or is likely to constitute an offence against a law of the Commonwealth, a state or a territory that is punishable by imprisonment.

Earlier this week, this masthead confirmed that the investigation into Pezzullo had been finalised, and the expectation across government was that it would recommend he go.

This masthead makes no suggestion that Pezzullo has been investigated by the National Anti-Corruption Commissioner (NACC) or has engaged in corrupt conduct.

The government ordered the investigation into his conduct after The Age, The Sydney Morning Herald and 60 Minutes exposed his dealings with Scott Briggs, detailing a cache of messages between the pair in which Pezzullo shared inside information about the federal government and sought to undermine cabinet ministers and public service enemies.

The tribunal ruling also defined an “exclusion event” to include a finding by the NACC that “the secretary had engaged in corrupt conduct of a serious or systemic nature” and “the investigation report included a recommendation to terminate the appointment of the secretary”.

In an explanatory statement accompanying the changes, the tribunal said it began reviewing the “compensation for loss of office” provisions for department secretaries in October. It sought advice from the Australian Government Solicitor and the Office of Parliamentary Counsel and feedback from current secretaries.

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