A contractor employed by the then NSW DPE was paid what would have amounted to a yearly salary of almost $400,000 – about $80,000 more than the minimum amount someone employed full time under public sector employment laws would have received.

The NSW Public Service Commissioner will consider whether there’s a need for better guidance about using contractors to fill senior public sector roles after the matter was investigated by the NSW Ombudsman.

The case involved the recruitment of an acting executive director of governance and performance at the Department of Planning and Environment (DPE) between 2017-18.

The ombudsman’s report tabled last week found the DPE had engaged in wrong conduct in relation to the contractor, identified in the report as ‘C’, who was engaged to act in the Band 2 senior executive role for 11 months.

Overpaid

Ombudsman Paul Miller found the department ended up paying much more for C than it would have for someone employed under the Government Sector Employment (GSE) Act.

Employing C for 11 months cost the DPE $341,360, which would have amounted to an annual salary of $390,857.

A full-time role under the GSE Act would have been paid between $261,450 and $328,899 per annum.

“DPE paid the contractor’s company substantially more than a person employed in the role under the Government Sector Employment Act 2013 (GSE Act) would have been entitled to,” the report says.

My findings are that … the DPE’s conduct was contrary to law or unreasonable, unjust, oppressive or improperly discriminatory, or otherwise wrong.

Paul Miller

DPE also extended C’s original six month contract for five months by contracting with a labour hire firm, which increased the cost by about $170 a day and was inconsistent  with DPE procurement policy because it didn’t represent value for money.

Broader issues

The report says the department treated C’s employment as an emergency procurement, even though it wasn’t an emergency, which enabled the DPE to sidestep usual Procurement Board policies and requirements.

The department also didn’t notify the board of the procurement and provided inaccurate information in response to ICAC enquiries.

“Based on the available evidence, my findings are that …DPE’s conduct was contrary to law or unreasonable, unjust, oppressive or improperly discriminatory, or otherwise wrong,” Mr Miller concluded.

Mr Miller says the investigation highlighted broader systemic questions about the use of contingent labour and contractors to fill senior management roles, because legislation precludes them from making decisions about staffing or spending, which would normally be part of the job.

“The NSW Public Service Commissioner has agreed to consider these issues, and whether any further action is required, including whether enhanced guidance is required about if and when it is appropriate for contractors to ‘act in’ senior public sector roles.”

Treasury figures show that the use of contractors and contingent labour hire in the NSW public sector has increased from $503 million in 2011–12 to $1.38 billion in 2020–2021.