Health Services Amendment Bill 2004

New South Wales
Explanatory note
This explanatory note relates to this Bill as introduced into Parliament.

Overview of Bill

The object of this Bill is to amend the Health Services Act 1997 for the following
purposes:

(a) to provide that area health services are to be governed by their chief
executives, and consequentially to abolish the existing area health boards,

(b) to provide for the establishment of area health advisory councils to give advice
with respect to certain matters affecting the operations of area health services,

(c) to provide that statutory health corporations may be governed by their chief
executives as an alternative to their being governed by health corporation
boards, and to enable the Governor, by order published in the Gazette, to
change a statutory health corporation’s governance from one form to another,

(d) to provide for the establishment of advisory councils to give advice with
respect to matters affecting the operations of statutory health corporations that
are governed by their chief executives,

(e) to provide for the establishment of a Health Executive Service, similar to the
Senior Executive Service under the Public Sector Employment and
Management Act 2002, in which health executives of the NSW Health Service
are to be employed,

(f) to enact savings and transitional provisions consequent on the other
amendments made by the Bill,

(g) to make other minor, consequential and ancillary amendments.

The Bill also makes consequential amendments to the Public Sector Employment and
Management Act 2002.

Outline of provisions

Clause 1 sets out the name (also called the short title) of the proposed Act.

Clause 2 provides for the commencement of the proposed Act on a day or days to be
appointed by proclamation.

Clause 3 is a formal provision that gives effect to the amendments to the Health
Services Act 1997 set out in Schedules 1 and 2.

Clause 4 is a formal provision that gives effect to the amendments to the Public
Sector Employment and Management Act 2002 set out in Schedule 3.

Schedule 1 Principal amendments to Health
Services Act 1997
Control of area health services and establishment of area health
advisory councils
Under Part 2 of Chapter 3 of the Act, area health services are currently controlled by
area health boards and managed by their chief executives. Schedule 1 [2] substitutes
Part 2. The proposed Part 2, which no longer provides for area health boards, contains
the following provisions:

Proposed section 23 provides for the appointment of a chief executive for each area
health service. The chief executive will not be subject to Chapter 2 of the Public
Sector Employment and Management Act 2002, but will be an executive officer
within the proposed Health Executive Service.

Proposed section 24 provides that the affairs of an area health service are to be
managed and controlled by the chief executive, and that anything done by the chief
executive in the name of, or on behalf of, the service is taken to have been done by
the service.

Proposed section 25 provides that the chief executive of an area health service may
exercise additional functions but is, in the exercise of his or her functions, subject to
the control and direction of the Director-General of the Department of Health.

Proposed section 26 provides for the establishment of an area health advisory
council for each area health service, comprising between 9 and 13 members, roughly
equal numbers of whom are to be health professionals or community representatives,
and at least one of whom is to have expertise, knowledge or experience in relation to
Aboriginal health. Each member will have a term of office of up to 4 years, but with
a prohibition on any member holding office for more than 8 years. One of the
members will be appointed as chairperson of the council. Other provisions with
respect to the constitution and procedure of an advisory council are to be prescribed
by the regulations.

Proposed section 27 provides that the role of an area health advisory council is to
facilitate the involvement of providers and consumers of health services, and of other
members of the local community, in the development of the area health service’s
policies, plans and initiatives for the provision of health services.

Proposed section 28 provides that an area health advisory council is to have
advisory, consultative and liaison roles, with an obligation to publish reports as to its
work and activities.

Proposed section 29 provides that the Minister may establish a charter for area
health advisory councils, with the requirements of which such a council must
comply. Such a charter may include a code of conduct to be observed by members of
an area health advisory council.

Proposed section 29A enables the chief executive to establish such committees and
councils as he or she considers appropriate to assist the area health service in the
exercise of its functions.

The existing area health boards are to be abolished as a transitional matter (Schedule
1 [30]), and consequential amendments are to be made to sections 31, 32, 37, 39 and
40 of the Act. (Schedule 1 [3]–[9]).

Control of statutory health corporations and establishment of advisory
councils
Under Part 2 of Chapter 4 of the Act, statutory health corporations are currently
controlled by health corporation boards and managed by their chief executives.

Schedule 1 [16] adds a new Division 2 to Part 2. The proposed Division, which
provides for the establishment of chief executive governed health corporations as an
alternative to the existing board governed health corporations, contains the following
provisions:

Proposed section 52A provides for the appointment of a chief executive for each
chief executive governed health corporation. The chief executive will not be subject
to Chapter 2 of the Public Sector Employment and Management Act 2002, but will
either be an executive officer within the proposed Health Executive Service or else
have his or her conditions of employment determined in accordance with section
115.

Proposed section 52B provides that the affairs of a chief executive governed health
corporation are to be managed and controlled by the chief executive, and that
anything done by the chief executive in the name of, or on behalf of, the corporation
is taken to have been done by the corporation.

Proposed section 52C provides that the chief executive of a chief executive
governed health corporation may exercise additional functions but is, in the exercise
of his or her functions, subject to the control and direction of the Director-General of
the Department of Health.

Proposed section 52D provides for the establishment of an advisory council for each
chief executive governed health corporation.

Proposed section 52E enables the chief executive to establish such committees and
councils as he or she considers appropriate to assist the health corporation in the
exercise of its functions.

Schedule 2 to the Act, which lists the statutory health corporations, is to be
substituted with a new Schedule that not only lists the corporations but also indicates
whether they are chief executive governed or board governed (Schedule 1 [28]).

Under the proposed Schedule, which can be amended under section 42 of the Act,
The Royal Alexandra Hospital for Children is proposed to be chief executive
governed.

Consequential amendments are made to sections 41 and 42 of the Act (Schedule 1
[10]–[12]) to facilitate the future change of statutory health corporations from board
governed to chief executive governed and vice versa.

Consequential amendments to sections 51 and 52 of the Act are also made with
respect to the appointment and removal from office of chief executives for statutory
health corporations that are to be board governed (Schedule 1 [13]–[15]).

Further amendments to sections 53, 58, 60 and 61 of the Act provide that the powers
conferred on the Minister by those sections will in future be exercised by the Minister
(in relation to board governed health corporations) and by the Director-General (in
relation to chief executive governed health corporations) (Schedule 1 [17]–[26]).

Establishment of Health Executive Service
Chapter 9 of the Act deals with the NSW Health Service, which comprises persons
employed by area health services, statutory health corporations and affiliated health
organisations. Schedule 1 [27] adds a new Part 3 to Chapter 9. The proposed Part
contains the following provisions:

Proposed section 121A defines various expressions for the purposes of the proposed
Part.

Proposed section 121B provides that the Health Executive Service is to comprise the
chief executives of the area health services and persons holding such offices in the
NSW Health Service or the Health Administration Corporation as are designated as
executive positions by the Health Administration Corporation (referred to
collectively as health executives).

Proposed section 121C enables the Health Administration Corporation to make
appointments (including acting appointments) to executive positions.

Proposed section 121D limits the term of a health executive’s appointment to 5
years, but allows re-appointment.

Proposed section 121E provides for the employment of a health executive to be
governed by a contract of employment between the health executive and the Health
Administration Corporation.

Proposed section 121F requires a health executive’s contract of employment to deal
with the health executive’s duties, monetary remuneration and employment benefits.

Proposed section 121G requires a health executive’s performance to be subject to
review, at least annually, by a person nominated by the Health Administration
Corporation.

Proposed section 121H excludes matters relating to a health executive’s
employment from review under the Industrial Relations Act 1996 and from review
by the Government and Related Employees Appeal Tribunal or by any court.

Proposed section 121I defines certain expressions for the purposes of proposed
sections 121J, 121K and 121L.

Proposed section 121J provides for remuneration packages to be determined by the
Health Administration Corporation, for amounts not less than the minimum amounts
determinable by the Statutory and Other Offices Remuneration Tribunal for public
servants in the Senior Executive Service under the Public Sector Employment and
Management Act 2002.

Proposed section 121K entitles a health executive to monetary remuneration and
employment benefits in accordance with his or her contract of employment, the sum
of each to total the health executive’s remuneration package. The section also
provides for how the cost of an employment benefit is to be calculated.

Proposed section 121L entitles a health executive to such allowances as the Health
Administration Corporation may determine in relation to the executive.

Proposed section 121M specifies the circumstances in which the position of a health
executive becomes vacant.

Proposed section 121N authorises the Health Administration Corporation to remove
a health executive from an executive position at any time and for any or no reason
and without notice, and sets out the consequences of any such removal in relation to
a former health executive’s future employment in the Health Administration
Corporation.

Proposed section 121O entitles a person who ceases to be a health executive
(otherwise than for misbehaviour) to compensation to be determined by the Statutory
and Other Offices Remuneration Tribunal. Such compensation will not exceed 38
weeks’ worth of the person’s former remuneration package. During the period to
which compensation relates, the person will not be able to be employed in the public
sector.

Proposed section 121P deals with a health executive’s entitlements with respect to
leave that the executive had accrued while formerly employed in the public sector.

Proposed section 121Q provides that an executive position is taken to be abolished
when it ceases to be an executive position, but entitles the former holder of the
position to the same rights as to compensation as if he or she had been removed from
office.

Proposed section 121R provides that an executive position does not cease to be an
executive position merely because its name is changed.

Proposed section 121S prohibits a health executive from undertaking paid work
outside the duties of his or her executive position without the consent of the Health
Administration Corporation.

Proposed section 121T provides that the proposed Part is to prevail over any
inconsistent provisions of any other Act or law or of the terms of any person’s
appointment or contract.

An amendment is made to section 16 of the Act (Schedule 1 [1]) so as to provide that
health executives, who will be employed by the Health Administration Corporation,
will remain part of the NSW Health Service.

Savings and transitional provisions
Schedule 7 to the Act contains savings and transitional provisions. Schedule 1 [30]
inserts a new Part at the end of Schedule 7 with respect to matters consequent on the
enactment of the proposed Act. The proposed Part abolishes the existing area health
boards, abolishes the health corporation board for The Royal Alexandra Hospital for
Children (which is to become a chief executive governed health corporation) and
provides that the current chief executive officers of the existing area health services,
and current appointees to those offices, are to become the chief executives of those
services in the proposed Health Executive Service. Schedule 1 [29] allows further
provision of a savings or transitional nature to be made by regulations.

Schedule 2 Consequential amendments to Health
Services Act 1997
Schedule 2 contains a number of amendments to the Act that are consequential on
the amendments made by Schedule 1.

Schedule 3 Amendments to Public Sector
Employment and Management Act 2002
Schedule 3 [1] amends the definition of public authority in section 63 of the Act so
as to make it clear that persons in the NSW Health Service are not eligible to become
executive officers under Part 3.1.

Schedule 3 [2] amends section 77 (6) of the Act to reflect the fact that persons in the
NSW Health Service will no longer be executive officers under Part 3.1.

Schedule 3 [3] amends Part 3 of Schedule 2 to the Act so as to omit a reference to
the chief executive officer of an area health board. Pursuant to the proposed
amendments to the Health Services Act 1997 (Schedule 1 [27]), holders of that office
are to become executive officers in the proposed Health

Note: If this Bill is not modified, these Explanatory Notes would reflect the Bill as passed in the House. If the Bill has been amended by Committee, these Explanatory Notes may not necessarily reflect the Bill as passed.

 

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