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13 Nov 2020

HHG Legal Group’s Director Murray Thornhill and Lawyer, Julia McCullagh discuss the latest development in local government legislation and governance and the differing roles of local government council vs administrative staff.

 20201113 LG

 

Earlier this week a successful motion was passed in the Legislative Council, by cross-benchers and the Opposition, disallowing the Local Government (Rules of Conduct) Amendment Regulations 2020.  These regulations are subsidiary legislation under the Local Government Act 1995 and set out the rules of conduct for council members.

 

What instigated the amendment to the regulations

Following the inquiry and report on the operations and affairs of the City of Perth in 2019, it was found that there was an absolute necessity for a clear delineation and separation between the roles of council members and administrative staff.

The role of Council is to govern a local government’s affairs and ensure that it carries out its functions under the legislation. Council’s role includes the allocation of finances and resources and the determination of policy.  It is the responsibility of the CEO and staff to implement this policy. The CEO and staff undertake administrative functions which, includes engaging external consultants and procurement generally.  Clear delineation of roles is considered essential to the good governance of a local government

This issue has caused controversy in the past, as in 2018 when it emerged that Herbert Smith Freehills was paid $25,000 by the City of Perth Council to investigate the then CEO, which resulted in no findings  of misconduct but caused the CEO to take stress leave alleging bullying and an unsafe work environment.,

The point of contention

The amendment to rule 9 of the Rules of Conduct, stipulated that prior to the adoption of the revised code in August 2020 (reversed by this week’s motion) a councillor could undertake a task that contributes to the administration of the local government provided that they were authorised by the council or by the CEO.  The amended code removed this exemption and provided a blanket prohibition on elected members undertaking administrative tasks.

It has always been clearly understood that individual councillors are to keep out of the administrative tasks of local government unless invited to do so by a CEO or authorised by a council resolution. However, rule 9 enables Council as a whole to endorse procurement and other administrative decisions by councillors and circumvent the CEO.

The key argument for disallowing the amendment was that there are circumstances where it is appropriate for Council to be involved in an administrative decision. For example, when a council needs to obtain legal advice without the CEO’s direct involvement, such as where the CEO has a clear conflict of interest or his or her actions are in issue.

Cross bencher, the Hon Aaron Stonehouse (who brought the motion), called the government’s reassurance that councils could   still be able to obtain legal advice without the CEO’s direct involvement (by  authorising a staff member to procure a consultant or lawyer on the council’s behalf)  “complete rubbish”

Parliament’s disallowance of the amendments to the regulation means that the situation is now back to where it was in August and councillors can still make procurement decisions (such as engaging a lawyer) provided that such a decision is authorised by the council.  A full-scale review of the Local Government Act 1995 is currently underway and managing the delineation of powers between Council and the CEO is certainly one of the many issues it will have to address.

How can HHG Legal Group assist?

Our Local Government team will continue to monitor this situation and to provide updates as they come to hand, however, should you require any advice relating to the potential effect of any orders made by the Minister or measures that can be taken by Local Governments, please fill in our contact form or call us on 1800 609 945.

*This is general information only, and does not constitute specific legal advice. Please consult one of our experienced Legal Team for specific advice relevant to your situation.

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