July depaNews

Sack councillor Jilly Gibson

Local government is an industry with a significant focus on regulation. That’s what our members do. If councils didn’t properly regulate, if they sat on their hands or looked the other way, communities and the government would be up in arms and do something.

The Minister for Local Government and the Office of Local Government have, since 2013, been sitting idly by as spectators and watched the unfolding dysfunctional fiasco at North Sydney Council. A mayor elected by the electorate rather than by the council, Jilly Gibson, has one supporting councillor and nine councillors who are opponents. If “irretrievable breakdown” is a suitable ground for the dissolution of a marriage, it should also be suitable grounds for the suspension or sacking of a Council. Or one or more of its councillors.

The risk with a mayor elected by the entire electorate, as opposed to a mayor commanding the support and respect of a majority of the councillors, is that there may well be occasions when the mayor simply doesn’t have the numbers. At North Sydney, the mayor never has the numbers - whether that’s an issue about relocating and renovating offices, mentoring programs for young people, representing the Council on regional boards, keeping a mayoral car, the appointment of the general manager or whatever, it’s normally 8 - 2 with the mayor the loser.

A mayor elected by the electorate commands no greater authority nor respect than one elected by the other councillors. Yet councillor Gibson behaves otherwise – asserting that there is some greater authority, or credibility, that derives from getting a majority of those who can be bothered to vote. The Act doesn’t support councillor Gibson’s opinion.

We’ve had far too much involvement in the breakdown of the relationship between the mayor and the councillors and the mayor and the general manager. It’s a mess, we’re mad as hell, and we’re not going to take it anymore.

But not so the Minister or those in the Office of Local Government, who sit and watch the debacle unfold - happily comfortable on the fence with the pickets in places that most of us would find unpleasant and unbearable.

In 2014 the Minister required the Council to show cause why they should not be suspended. The competent, rational and effective majority got their individual acts together and were able to convince the Minister that they shouldn’t be suspended and, as a fall-back, the Minister issued a Performance Improvement Order under section 438A of the Local Government Act. Things should have been done by April but the Minister begrudgingly agreed to an extension of time.

Amongst other things, the PIO required two conflict resolution processes to be undertaken - one between the mayor and the councillors and one between the mayor and the GM - the two key relationships that have broken down. And it won’t escape observation that the only thing common to both dysfunctional relationships is Jilly Gibson. A timeframe was provided, the processes began but no resolution or compromise could be agreed in either.

So, when the Minister’s deadline expired on 22 June, the Council advised the Minister that the requirement to conduct the process had been satisfied but the processes themselves had failed.

That’s five weeks ago and in the intervening weeks these things have happened:

• The mayor had two Code of Conduct findings of misconduct made against her. The first related to defamatory allegations and the investigator found, and the council required, that the mayor apologise. The deadline for the apology has expired and there is no apology.
• The second of the Code of Conduct misconduct findings related to confidential information and resulted in the council censuring the mayor on 19 July.
• The council also resolved to note other things as well - expressing their “increasing concern” that this was the third finding of a significant breach of the Council’s Code of Conduct by the mayor and their “grave concerns” that the OLG “has failed in the past to provide serious sanctions”.
• The resolution at part 5 deals with the “duty and obligation of the Office of Local Government to promote public confidence in the Code of Conduct, the Local Government Act and good governance in local government generally”, something which is clearly not evident at North Sydney.
• That week the local rag, a compliant conduit for the mayor, announced under the heading “Mayor shoots back at council” that the mayor would now seek whistle-blower protection after the two misconduct findings against her – claiming there was a “vexatious political campaign against her” and “misuse of the council’s code of conduct provisions for political purposes”.

North Sydney finds itself in a dreadful position. It is already, by statistics compiled by the Office of Local Government, the second most complained about Council in New South Wales, the relationships between the mayor and the councillors and the mayor and the GM are dysfunctional, the conflict resolution processes required by the Minister under the performance improvement order have failed and findings of misconduct and breaches of the code of conduct continue.

The Mayor has borrowed the Emperor’s new clothes. There is no cloak of respectability or authority provided by “popular” election and the democratic process means that if you don’t have the numbers on the Council you don’t have the numbers on the Council. Behaving otherwise puts all of local government, those who are elected to it and those who work for it, in disrepute.

The Minister under section 440I can suspend councillor Gibson and should do so immediately.

While the rest of the industry is jumping through narrowly-focused fiscal hoops to survive to the future, councils are given 40 days to comply with a variety of directions from the Minister, instant action to restore the credibility of local government at North Sydney must be taken now.

This is the third article in eight months resulting from the glacier-like, sloth-like, snail-like pace of modernising the City’s approach to critical human resources issues. First as a candidate in our Worst HR in Local Government issue in December, then in reporting on a dispute we had filed about two issues where the Council had simply failed to respond in anything remotely approaching a reasonable time frame.

Our dispute was about two issues. First, their policy on “Other Work”, regulated under section 353 of the Local Government Act where the Council, contrary to and exceeding the intention of section 353 had been requiring employees wanting to do work in addition to their council job to declare and seek approval for anything, whether it “relates to or conflicts with” the Council job or not. Micro-managing, prurient, invading of privacy and then seemingly incapable of meeting, discussing, reviewing and getting it right in a reasonable time frame. And second, the old-fashioned and discredited approach to putting people at a certain salary level on term contracts, whether they are permanent employees or whether they are employed conditional upon grant funding or projects.

In the dispute reported in January, the President of the IRC Justice Boland, never one to tolerate dawdling and a lack of application, directed that there be an agreed policy between the Council and the unions by 10 March - an eight week timeframe where we observed that the people we deal with in HR couldn’t get a lunch ordering by that date. At the same time we discovered that Sydney had this inappropriate policy, we also discovered that so did Wyong. But unlike Sydney, Wyong was able to discuss, comprehend, identify the problem and resolve it in a bit over four weeks.

The President directed that the City have an agreed policy with the unions on term contracts by 21 April, only three months away - enough to cause apoplexy for those bureaucrats getting in the way of resolving the matter and, for want of a better image, far too interested in slowing down the snail than doing things in a timely way. “Whooa, not too fast there”.

The President’s rocket and valuable assistance from LGNSW meant that a new section 353 policy, consistent with the legislation and satisfying our needs, was developed and only a month late. But things didn’t go so well with the review of term contracts.

The Local Government (State) Award in 2010 recognised the risks for councils in employing people on term contracts where that is inappropriate. A range of decisions in industrial tribunals had found that rolling over contracts or artificially creating terms for people whose employment is ongoing and continuous is inappropriate. The 2010 Award identify the areas in which Councils could employ people on term contracts - generally when people are employed to do work of a fixed duration, or on funding for a fixed duration.

Our interest had been pricked by the City’s treatment of one of their most valuable and entrepreneurial employees. A member of ours who had one three-year term rolled over, and at the end of the second three-year term was told by his director (a person who should know) that he would get a third term. They even sat down to work out what he would do over that period. Unfortunately, the director was out of the loop on funding issues and, after offering a three-year term, the City reneged on it. We contested it, the three-year term was offered but the City was always going to terminate it after 12 months.

It’s now terminated and we have an agreed termination payment for the member concerned but this also highlighted the City’s total failure in managing valuable human capital. Being astonishingly and painfully slow is one thing, but wasting and mismanaging talent and skills is worse. Our member was responsible for establishing the world-renowned Small Bars Program, the Food Trucks program and the app and he developed and presented Small Business 101 - an overwhelmingly popular monthly event where up to 160 people would come along from small and medium business wanting to know how they can work with the City and what the City could offer. That sounds like valuable human capital (as the HR professionals (sic) describe it), however you look at it.

Bloody hopeless is a reasonable way of describing their treatment of this valuable entrepreneur - and in a climate where the NSW Government wants to nail the current Lord Mayor and her regime by compelling business owners to vote, removing this connection and service to business won’t do the Lord Mayor and her regime any favours. The programmes Richard instituted and ran are iconic achievements that define the City. What a waste of a great talent.

In the Commission last week we could report that the Council has all but agreed by policy to introduce similar restrictions to those which operate in the State Award - something which will have immediate implications for a substantial proportion of the 400 employees on term contracts. The contracts will be reviewed as they fall due and, if they don’t satisfy the tests in the State Award, then the employees will be acknowledged to be permanent employees and that status will operate from the first contract with the City. This is a significant change for the better – benefitting employees and the City.

All that it needs now is for the City’s Executive to endorse the settlement on 13 August. This is a significant modernising change in the Council with advantages for both the City and the employees. Sure, the President of the IRC wanted it done by 21 April, but it’s taken more than double that period of time and we await, with high expectations, the snail to deliver the agreement next month.

The Legislative Council has established a General Purpose Standing Committee to enquire into Fit for the Future and the potential for local government reforms including compulsory boundary changes. The final report is due on 24 August.

The Committee will consider a range of issues which are relevant to the interests of employees in the industry - including “evidence of the impact of forced mergers on municipal employment, including aggregate redundancy costs”.

This is a perfect opportunity to develop and enhance our policy view in an expanded version of the article we ran in May’s depaNews. And a good opportunity to get our Dirty Harry/Mike Baird image and mischief to a wider public.

Here is our submission.

We like to run a pretty tight ship in the depa office that we spend a lot of time chasing members who disappear and go to another Council or just disappear generally or go off on parental leave. We know that when women are about to give birth, one of the last things they would be thinking about would be contacting the union to put their membership on hold. But we have an arrangement where women on parental leave can put their membership on hold until a return to work because we have found a large percentage of members doing this need help on their return to ensure suitable part-time working arrangements.

We have strict rules about unfinancial members and the main reason that members become unfinancial is that they leave to take parental leave and payroll deductions stop.

We would be eternally grateful and would save a lot of time if you could please let us know if:

• you are going on maternity leave/parental leave and would like to put your membership on hold
• you have returned from maternity leave/parental leave and are resuming payroll deductions 
• you are moving to another Council
• you are leaving the industry entirely.

Please don’t disappear on us.

Not yet but, leaving that aside for a moment, LGS has continued its high reputation as a responsible investor. Again this year it was the top rated fund internationally in the Asset Owners’ Disclosure Project which ranks institutional investors across the world on the disclosure of carbon risk and steps they are taking to manage it.

The Fund has just won Super Ratings Infinity Award for leadership in sustainable and responsible investment for the fourth time. The $9 billion fund now has more than $5 billion of members’ savings in sustainable and responsible investment strategies, including shares, private equity and direct property assets, the largest commitment of any super fund in Australia.

The Sustainable Australian Shares option in the fund returned 20.87% in the 2013/14 financial year until May – partially because the fund was an early adopter of moving out of the mining industry which, shortly thereafter, became an underperforming sector.

LGS is the only superannuation fund to win the Infinity Award four times and ranking number one in the world again in the Asset Owners’ Disclosure Project remains its most significant and international achievement.

But sadly the fund retains its new commitment to nuclear and uranium stocks. Our representative director on the LGS Board Sam Byrne is monitoring the returns as they may be affected by this unpleasant investment category and while LGS satisfied a couple of zealot board members fascinated with nuclear energy, it doesn’t mean LGS will always be committed to that energy source.

It’s hard to regard nuclear energy as a “clean” alternative energy option. Certainly Germany doesn’t - regarded as the “Green superpower” of Europe, they are phasing out nuclear power stations and anticipate that all will be closed around 2022.

If Germany can slash its greenhouse gas emissions by 40% on 1990 levels by 2020 (and by 55% by 2030 and 80-95% by 2050) and replace them with renewable energy, there is a lesson here - not only for Australian policymakers, but for the investment strategists within our own super fund.

It’s now 330 days since the fund resolved to lift the screen preventing investment in nuclear and uranium that had been in place for a decade. While this was done under the illusion that nuclear power generation resulted in zero carbon emissions, and that was all that mattered, (apart from the astonishing emissions involved in the construction of power stations) our director on LGS Board Sam Byrne, is monitoring how the removal of the screen affects returns and whether this compensates for the reputational damage already done.  And there is always the unmanageable risk.

As Chernobyl and Fukushima showed, you never know …