15 May, 2016
What you need to know
- This Alert provides an overview of the Commonwealth caretaker conventions
- The caretaker conventions come into effect when the House of Representatives is dissolved, and while they do not have the force of law, they can operate to limit the Government (and in turn the public service) from making certain decisions and taking certain actions
- Broadly, the conventions dictate that Ministers should not promote their party with public resources or commit an incoming government to a course of action that it may not agree to
What you need to do
- Keep an eye on the announcement of the election so you know when the caretaker period starts
- Make sure you understand how to manage your workload during the caretaker period
- Seek further advice if you are unsure about your obligations during the caretaker period
Introduction
The Commonwealth government enters into a caretaker period ahead of each election. In a nutshell, the caretaker conventions are rules that formalise the rights of the opposition as a potential future government, and restrain the government from exploiting the advantages of incumbency in an election. Further, the caretaker conventions acknowledge that, in the absence of the House of Representatives, there is no body of review for decisions made by the Executive. The conventions are an integral part of good government, as they fill in the "gaps" in the formal rules set out in the Constitution and various pieces of legislation.
Our Commonwealth Alert dated 11 March 2016 which provided a chart that gave an overview of the conventions can be viewed here.
What are the caretaker conventions?
The caretaker conventions apply to Ministers and public servants, and can extend to Commonwealth authorities and companies. Actions taken by public servants in breach of the caretaker conventions could, in turn, breach the Australian Public Service (APS) Values or Code of Conduct. The Public Service Commissioner has issued guidelines on some of these matters to assist public servants.
It is important to note that the caretaker conventions, of themselves, are not legally binding. Breaches of the
caretaker conventions cannot be judicially assessed, and instead often play themselves out in the court of public opinion.
Fundamental principles
There are many practical examples of the impact that the caretaker conventions have on the actions of the executive and the public service. Put more simply, the conventions dictate that government Ministers should not:
- promote their party with public resources; or
- "shackle" an incoming government to a course of action that the opposition may not agree to.
Where did they come from?
The caretaker conventions arise out of the doctrine of parliamentary government in the Westminster tradition. This includes:
- the belief in the accountability of the elected government (and hence the executive) to Parliament; and
- the belief that the opposition party is a legitimate alternate executive, and is entitled to a smooth transition should it win an election.
The first public record of caretaker conventions in Australia was a letter from then Prime Minister, Sir Robert Menzies, to his ministers at the outset of the 1951 elections, requiring his Ministers not to make any policy decisions of a contentious nature without first clearing those decisions with him. This practice was continued by successive governments and the conventions were gradually refined over the years.
The first written, detailed outline of the caretaker conventions came in 1987 in the Department of Prime Minister and Cabinet's Annual Report. The conventions have developed over time, and will continue to be developed and refined.
The Department of Prime Minister and Cabinet generally publishes guidelines on the caretaker conventions each election year. It also publishes the Cabinet Handbook, now in its 8th edition, which provides some further guidance on the conventions.
When do the caretaker conventions apply?
The caretaker conventions take effect when the House of Representatives is formally dissolved. The 7th edition of the Cabinet Handbook stated that "some care should be exercised in the period between the announcement of the election and dissolution", but this statement has been deleted from the 8th edition of the Handbook that was released in March 2015. It is still good practice to consider the caretaker conventions if an election has been announced, but the House of Representatives has not yet been dissolved.
Example – Clean Energy Finance Corporation and the 2013 Election
On 30 January 2013, then Prime Minister Julia Gillard announced an election almost 8 months in advance, with the intent that Parliament would continue to sit until closer to the election date.
After the announcement, the shadow Finance Minister and the shadow Environment Minister wrote to the Clean Energy Finance Corporation (CEFC) requesting that CEFC make no funding commitments prior to the election.
Media reports reported that CEFC was of the view that it was obliged under legislation to continue with its investment decisions and it continued to do so. On 5 August 2013, the same day that writs were issued to dissolve Parliament, the then leader of the opposition, Tony Abbott, wrote to CEFC requesting that it immediately cease to assess or make any further approvals or payments. CEFC responded, stating that it would not approve any new investments during the caretaker period, but that it would continue to meet all existing legal and contractual obligations, including payments.
This example demonstrates not only the timing issues present in the lead up to an election, but also the differing interpretations of the conventions that exist.
When do the caretaker conventions end?
If a new government is elected, the caretaker conventions end when that new government is properly appointed by the Governor-General. If the government does not change, the caretaker period ends when the election result is clear, regardless of any pending cabinet reshuffle.
The caretaker period could be extended in the case of a hung parliament, or a close count that leads to delays in the election result being released. In this case, the incumbent government continues to act as caretaker until the result is clear and, if necessary, a new government is sworn in.
Example – Gough Whitlam's first Cabinet
Generally, a change of government will lead to a somewhat longer caretaker period while arrangements are made for the executive to be sworn in. In 1972, Prime Minister Gough Whitlam sought to minimise this delay by having himself and his deputy sworn in as soon as possible, with the remaining cabinet members sworn in at a later date.
What do the caretaker conventions mean for Commonwealth agencies?
Major policy decisions
The caretaker conventions state that, during the caretaker period, the government should avoid making major policy decisions that are likely to bind an incoming government. This reflects that these policy decisions cannot be the subject of questions and debate in the Parliament, and avoids public servants being drawn into politically charged issues.
All sides of politics will make various policy announcements and promises during an election campaign, but these are promises about future policies should they be elected government. There are no rules against making such announcements, but the announcements cannot be made on departmental, agency or ministerial websites.
The concept of a policy decision being "major" is open for interpretation, and is a matter of judgment for the relevant decision maker. The conventions state that, in making this decision, the decision maker should have regard to:
- the significance of a decision from a policy and resourcing perspective; and
- whether the policy is a matter of contention between the government and the opposition.
Policy decisions made prior to the dissolution of parliament may be announced during the caretaker period, though, where possible, any such announcement should occur prior to dissolution of the House of Representatives.
If a major policy decision needs to be made during the caretaker period, the conventions suggest that the Minister should consult the relevant opposition spokesperson prior to making that decision.
Major contracts or undertakings/ procurement
In relation to procurement, the caretaker conventions state that the government should avoid entering into "major" contracts and undertakings during the caretaker period. As with policy decisions, the concept of "major" is a matter of debate.
The significance of the procurement, and how contentious the procurement is, will again be relevant. If a decision has to be made, the government should consider conferring with the appropriate opposition spokesperson in an attempt to reach bipartisan agreement.
Example – Defence Procurement (Headquarters Joint Operation Command)
During the 2004 caretaker period, the government announced a shortlist of tenderers for the construction of the Headquarters Joint Operation Command building in Bungendore in the marginal electorate of Eden- Monaro. The announcements were posted on the Defence Minister's website. The opposition argued the announcement should have been published on the Liberal Party's website as an election announcement. The Secretary of Defence noted that the decision had been made before the caretaker period, consistent with the conventions and thus that the announcement was proper. Regardless, in an effort to minimise the risk of controversy, the Secretary then directed all media generated by the Minister to be put on the Liberal party website rather than the Ministerial website.
It is important to recognise that in addition to compliance with the caretaker conventions, major contracts legitimately signed before caretaker period commences can still attract significant controversy in the context of elections. Such scenarios give rise to a different set of risks that need to be managed. The East West Link in Victoria stands as a cautionary tale to both business and government about the risks involved in major contracts that do not enjoy bipartisan support. In this Victorian example, the previous Liberal government executed a contract to build this road extension shortly before the election being called in late 2014. A Labor government was elected. In accordance with its election promise, the new government negotiated a termination of the contract.
Significant appointments
Generally, the government should avoid making significant appointments during the caretaker period. Only those appointments that are essential should be filled, and preferably this should be done on an acting basis. The government should also avoid making appointments that will not come into effect until after the election, even if the caretaker period has not yet begun.
Again, what is considered as a "significant appointment" is subject to interpretation. As a guide, the importance of the
position should be considered, as should any potential controversy that may arise. Relevant positions could include appointments to boards, diplomatic postings and leadership positions. While the caretaker conventions primarily affect Ministers, practice dictates that significant Senior Executive Service appointments should also not be made.
Where absolutely necessary, an appointment can be made for a short term, or following consultation with the relevant opposition spokesperson. Historically, there have been incidents where senior diplomatic appointments made during the caretaker period have been reversed by an incoming government on the basis the appointment was made without opposition consultation and represented a breach of the conventions.
International negotiations and visits
The government should avoid committing to international agreements during the caretaker period. If possible, major international negotiations should be deferred, or the government should adopt observer status for the duration of the caretaker period. It may be necessary to explain the impact of the caretaker conventions to foreign counterparts.
If commentary is required from the government, it should restrict itself to its past position, and not commit any incoming government to that position. Relevantly for a number of Commonwealth agencies, international visits may also need to be rearranged.
APS role in election activities
While business as usual should continue during the caretaker period, the APS is restricted in some ways. This generally relates to the use of agency resources to promote a political cause or agenda. The APS must remain impartial and continue to provide government with frank, honest, timely and evidence-based advice.
At an individual level, APS employees are bound by the APS Values, and notably the Code of Conduct that extends to conduct "in connection with" employment. This means employee conduct outside of work may be subject to greater scrutiny.
Practically, APS employees should avoid conflicts of interest. APS employees may wish to get involved in election campaigns, by volunteering for candidates, handing out how-to vote cards and joining political parties. The APS Values and Code of Conduct do not restrict an APS employee from doing these things. However, there is potential for a conflict of interest between taking a position on issues and impartially performing their official duties. Employees could resolve conflicts by:
- taking leave;
- rearranging existing duties;
- transferring to other duties; or
- agreeing to take a less significant role in the political campaign.
Where an APS employee is involved in political campaigning, it is important they make clear that they are not undertaking the activities as part of their official duties. Similarly, employees should not use government resources including email, telephones, photocopies, and facsimile machines for any political activity.
Employment issues
There are a range of employment issues that could impact on Commonwealth agencies in an election period.
Firstly, the Constitution prohibits any person who "holds any office of profit under the Crown" from being elected to parliament. This means that Commonwealth employees and members of the Australian Defence Force (ADF) are generally prevented from running for election unless they resign.
This was in issue in Free v Kelly (1996) 185 CLR 296, in which Jackie Kelly's election to the seat of Lindsay in Western Sydney was challenged in part on the basis that she was still employed by the RAAF (and also that she still held New Zealand citizenship). Her election was declared void, but she won the seat at the subsequent bi-election after resigning from the RAAF (and renouncing her New Zealand citizenship).
Section 32 of the Public Service Act 1999 provides a limited right of return to the APS for employees who resign to contest an election, but fail to get elected.
There is also a possibility that an application may be made by an employee if action is taken against them due to their participation in a political cause. Section 351 of the Fair Work Act 2009 prohibits an employer from taking adverse action against an employee because of the employee's political opinion. There is an exception in the Fair Work Act, however, which provides that an employer does not discriminate against an employee if the action taken is necessary because of the inherent requirements of a position – which could be relevant if an employee's participation in election activities impedes or undermines the performance of their duties or role as a public servant. Relevantly for members of the ADF, the Federal Court has clarified in C v Commonwealth of Australia [2015] FCAFC 113 that members of the ADF are not "employees" for this purpose. However, we would still stress that prudence should be exercised by ADF members who are involved in political campaigns or political causes.
Legal matters – litigation, legislation and legislative instruments
The caretaker principles do apply to litigation, meaning that the government should attempt to avoid any action associated with litigation that could bind an incoming government. The Attorney-General's Department has issued Guidance Notes on handling litigation and alternative dispute resolution during the caretaker period. The guidance reminds agencies that the conventions are not legally binding, and that the conventions do not displace the overarching obligation to act in the best interests of the Commonwealth. This is particularly relevant in litigation, where limitation periods and court timetables may require particular action occur during the caretaker period.
The dissolution of Parliament necessarily means that legislation (Bills) can no longer be passed until a new Parliament is introduced. However, government agencies and entities must continue to fulfil their responsibilities under the relevant legislation which applies to them.
This was at issue in relation to the operation of CEFC following the early announcement of the 2013 election, but not the early dissolution of Parliament. The public exchange of letters between the opposition leader and the chair of the CEFC board highlights the position that government entities must continue to undertake their duties during caretaker period but should not make any new binding decisions. In that case it meant CEFC continuing to fulfil its obligations under legislation (including the making of payments), however, not approving any new investments during the caretaker period.
The position in relation to legislative instruments (including all forms of delegated legislation such as regulations and instruments) is slightly more nuanced. Many legislative instruments have effect as soon as they are tabled in Parliament, subject to a disallowance period. If Parliament has been dissolved, then the legislative instrument cannot be tabled and therefore cannot have effect. Legislative instruments with immediate effect tabled prior to the caretaker period will continue to operate throughout the caretaker period. If a disallowance motion has been filed prior to the caretaker period, the legislative instrument is taken to be tabled on the first day that the government sits after the election, and the disallowance period restarts.
Emergency situations
Should a state of emergency arise, caretaker conventions will not apply so as to prevent the government of the day from responding to the emergency. This would be especially relevant to national security or natural disasters. The opposition may be consulted on some issues, however, the government can respond to the emergency situation as required and in order to protect Australia's national interests.
For further information, please contact:
Sarah Ross-Smith, Partner, Ashurst
sarah.ross-smith@ashurst.com
