Part 8: How the Chief Executive Manages Staff

Managing the Relationship Between a Local Authority's Elected Members and its Chief Executive.

Obligations and Responsibilities

Section 119C(2) of the Local Government Act makes the chief executive responsible for employing staff on behalf of the local authority and negotiating their terms of employment (see paragraph 4.3 on page 25).

As the person responsible for selecting and managing the local authority’s employees, the chief executive is also subject to the Act’s “good employer” obligations (see paragraphs 3.11-3.13 on page 20).

It is important to maintain a positive relationship between elected members and the chief executive in respect of the chief executive’s employment responsibilities. That objective can be undermined by:

  • lack of understanding, or acceptance, of the nature of the council’s and the chief executive’s responsibilities; and
  • elected members becoming inappropriately involved in the chief executive’s responsibilities by, for example –
    • attempting to give orders to staff;
    • trying to influence a staff appointment; or
    • publicly criticising, or expressing concerns about, staff or management.

Unclear reporting lines can lead to staff and elected members:

  • attempting to deal with or influence matters without regard to formal decision-making and management systems;
  • facing obstacles to the timely flow of information; and
  • debating aspects of the chief executive’s performance outside the prescribed performance review process.

What We Asked About Staff Management

We asked elected members how:

  • the chief executive kept the council informed on staffing matters and whether this information met their decision-making needs; and
  • they obtained information that needed to be prepared by staff, and about channels for raising issues about the performance or conduct of individual staff members.

We asked chief executives what staffing matters they informed the council about.

The Views of Elected Members and Chief Executives

Staff Remuneration

Most mayors/chairpersons – but only a third of other elected members – knew how the chief executive reviewed the performance of staff and set staff remuneration levels. Chief executives said that, generally, they informed elected members about general staffing matters such as capability and needs, and about issues concerned with industrial negotiations.

However, chief executives were less likely to inform elected members about:

  • comparisons between remuneration levels for local authority staff and other groups in the marketplace;
  • systems for determining incentive payments and bonuses; and
  • matters relating to the code of conduct and standard employment agreements.

Means of Informing Elected Members

The main channels through which chief executives informed elected members on staffing matters were:

  • informal meetings;
  • full council or council committee meetings; and
  • memos or written reports.

Most elected members told us that if they wanted to raise an issue about a staff member’s performance or conduct they did so directly with the chief executive. If they wanted information on non-staff matters that needed to be prepared by particular staff, most would either approach the staff member concerned or pursue the matter through the chief executive or second tier manager.

Our Views

Staffing is an area of administration to which the separation between the “governance” and “management” roles (see paragraphs 2.15-2.16 on page 15, and paragraphs 4.17-4.19 on page 29), and the existence of mutual trust and respect (see paragraphs 10.1-10.6 on page 79), are most necessary.

With that necessity, together with the two responsibilities mentioned in paragraphs 8.1 and 8.2 (on page 63), in mind, in our view the council can expect the chief executive to provide it with information on staff employment and management:

  • relevant to the exercise of the chief executive’s responsibility under section 119C(2); and
  • in order to enable the council to be accountable to the community for its decisions on policies, plans, and budgets.

Subjects on which the chief executive could provide useful information about the responsibility for employing and managing the local authority’s staff include:

  • staffing capability and needs;
  • planned significant changes in organisation structure;
  • the conduct of industrial negotiations and progress with such negotiations;
  • remuneration trends, such as comparisons between remuneration levels for local authority staff relative to other groups in the marketplace;
  • systems for determining incentive payments and bonuses;
  • the code of conduct and standard employment agreements;
  • health and safety (especially workplace risk management and accidents);
  • equal employment opportunities programmes;
  • risks arising from personal grievance claims; and
  • other key human resource indicators.

To meet its governance responsibilities for policies, plans, and budgets, the council should be able to express its views about staff policy and general staff management issues, and the chief executive should take account of those views. However, in purporting to meet those governance responsibilities the council should not:

  • encroach on matters relating to the employment of staff that are the exclusive preserve of the chief executive – including who is or who is not to be employed and their terms of employment; and
  • expect to be given information about the selection and management of individual employees within the chief executive’s responsibility.

The obligation to comply with the “good employer” principles rests with the local authority as well as those responsible for selecting and managing staff. As such, elected members individually must ensure that they meet the obligations of a good employer. Those obligations and the Privacy Act preclude elected members from discussing in public concerns or issues about staffing matters.

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