PACC Committee Report

Government Response to the Twelfth Report of 
the Standing Committee  on Public Accounts with respect to
 “Streamlining the Human Resource Management Regime: 
A Study of Changing Roles and Responsibilities”

 

Introduction

 

The Government has considered carefully the Twelfth Report of the Standing Committee on Public Accounts tabled on December 6, 2001.  The Twelfth Report comprises the Standing Committee’s findings on the recommendations from Chapter 9 of the April 2000 Report of the Auditor General of Canada, and related recommendations arising from the Standing Committee’s hearings in 2000 and 2001 on modernizing human resources management in the public service. The Government has responded to the 14 recommendations in the report.

 

Response to the Recommendations of the Standing Committee’s Report

 

This response addresses each recommendation made by the Standing Committee on Public Accounts.  In two instances, recommendations that share a common theme have been grouped together and a single response provided, as noted below.

 

Eight of the recommendations - numbers 1, 2, 3, 4, 5, 11, 12 and 13 - refer to matters covered by the ongoing work of the Task Force on Modernizing Human Resources Management in the Public Service established by the Prime Minister of Canada in April 2001. These recommendations have to do with: improving labour relations (1); the need for a streamlined human resources management model (2); the need for a legislative review related to the human resources management (3); the need to better define responsibilities and accountabilities between central agencies and departments (4); the need for clarification of the role of the Public Service Commission (5); a timetable for modernization (11); the need for legislative amendments to enhance mobility (12); and a proposed lifelong learning institution for the public service (13).  A single response is provided to these recommendations.

 

Two of the Standing Committee’s recommendations - numbers 6 and 9 - address issues related to departmental and agency reports to Parliament concerning human resources management issues.  A single response is provided to these recommendations.

 

The remaining recommendations - numbers 7, 8, 10 and 14 - are responded to individually.

 

Recommendations 1, 2, 3, 4, 5, 11, 12, and 13

 

Recommendation 1

 

That the Government of Canada immediately address the outstanding labour-management issues in order to remove any potential obstacles to the undertaking of a comprehensive legislative review of the human resource management regime.

 

Recommendation 2

 

That the Government of Canada initiate consultations with all key players regarding what type of human resource management model should be adopted for the federal government, and, once completed, report their findings and recommendations back to Parliament.

 

Recommendation 3

 

That once the type of human resource management model is established, the Government of Canada, and in particular, the Clerk of the Privy Council, initiate a comprehensive legislative review of the human resource management regime.

 

Recommendation 4

 

That the legislative review, at the very least, consider the streamlining of the public service staffing function, together with the formalization of responsibilities and accountabilities of deputy ministers in the management of the human resources with their respective departments. Once the review is completed, the government should report back to Parliament so that its recommendations are considered in order to improve the federal government’s human resource management regime.

 

Recommendation 5

 

That the Public Service Commission together with all stakeholders, including parliamentarians review and clarify its roles and responsibilities, particularly with regards to the protection of the merit principle in the public service.

 

Recommendation 11

 

That the Treasury Board Secretariat and the Privy Council Office clarify their respective roles and responsibilities in executing the modernization of the human resources management regime and that they prepare a detailed action plan of the current initiative together with a timetable of implementation, and that they table both the action plan and implementation schedule to Parliament no later than 31 March 2002.

 

Recommendation 12

 

The Task Force on Modernizing the Human Resources Management in the Public Service consider legislative amendments to the Human Resources Management Framework that would enhance and facilitate the mobility of public servants across departments and agencies.

 

Recommendation 13

 

That the Treasury Board Secretariat, the Public Service Commission and the Privy Council Office consider the establishment of a lifelong learning institution within the federal public service that would devote its activities to the continuous training and development of federal public servants.

 

Response to Recommendations 1, 2, 3, 4, 5, 11, 12, and  13

 

The Government is committed to modernizing human resources management in the public service of Canada.  There is a strong consensus among public service employees, managers, leaders, unions and stakeholders that the human resources management culture needs to be modernized - substantially in some areas - to keep pace with the changing business environment of government and the needs and expectations of citizens as well as public service employees.  The Government has identified human resources management modernization as a priority for the public service and has committed to making the necessary reforms in recent Speeches from the Throne.

 

Many of the approaches to human resources management in the public service have not changed significantly over the last three decades even though the business of government and therefore the public service itself have evolved substantially.  Human resources management systems have grown complex and difficult to adapt to the changing business environment of the public service.  A number of studies over the years, especially in the last decade, have diagnosed weaknesses and recommended change to the human resources management laws, systems and processes.  

 

In line with the guiding principles established by the Prime Minister for the human resources management modernization, the Government strongly re-affirms its commitment to the principle of merit to ensure that the public service of the future will remain competent, non-partisan, representative and bilingual. Further, the Government agrees with the Standing Committee that change is needed to ensure that public service managers have the tools to retain and develop the people who are already in place, and attract the talented individuals we need to meet the demands of the future.  We need to make changes to ensure that employees continue to regard the work they do with pride, and do so in workplaces that are supportive, innovative, healthy and safe.  We will make these and other changes to ensure that, in the spirit of the Standing Committee’s recommendations, the public service of Canada continues to provide excellent programs and services to Canadians.

 

Many modernization projects are already being implemented or planned throughout the public service.  However, action or detailed planning activity on the Standing Committee’s recommendations 1-5 inclusive and 11-13 inclusive will depend on the measures that the Government proposes and implements following the work of the Task Force on Modernizing Human Resources Management in the Public Service. The Task Force is mandated “to recommend a modern policy, legislative and institutional framework for the management of human resources, to enable the Public Service to attract, retain, and develop the talent needed to serve Canadians”.

 

The Task Force is reviewing in particular the Public Service Employment Act, the Public Service Staff Relations Act and relevant sections of the Financial Administration Act, recommending as well any consequential amendments to other legislation.

 

Changes to these aspects of the human resources management in the public service will therefore flow as the Task Force completes its work and the Government tables new legislation.

 

With specific reference to recommendation 13: While new institutional arrangements for human resources management will be reviewed in the Task Force process, overall policy authority for learning is vested in the Treasury Board. In this role, the Treasury Board Secretariat is developing the first continuous learning policy for the public service.

 

Recommendations 6 and 9

 

Recommendation 6

 

That the Treasury Board Secretariat and individual departments strengthen the content of their accountability documents, notably their plans and priorities and performance reports to Parliament, with respect to human resource management matters, and that these reports contain information about results expected and achieved.

 

Recommendation 9

 

That the Treasury Board Secretariat ensures that all departments and agencies clearly understand their responsibilities and accountabilities with respect to reporting human resource management issues to Parliament. That the Treasury Board Secretariat work with departments and agencies to ensure the proper reporting on the quality and effectiveness of human resource management regime to Parliament.

 

Response to Recommendations 6 and 9

 

The Government agrees with the Standing Committee on Public Accounts that providing Parliament with a complete and integrated view of human resources within the public service would be desirable. 

 

The Treasury Board Secretariat provides statistics on the federal Public Service Workforce such as the size and the composition, types of employment (e.g. number of indeterminate, term, casual, seasonal employees), regional distribution, voluntary and involuntary departures (e.g. turnover), mobility data and statistics for employment equity groups. 

 

Departments are encouraged to report on the status of their modern management initiatives in their Departmental Performance Reports (DPR).  In its annual DPR Guide, the Treasury Board Secretariat has identified human resources management as one of the key management initiatives to be covered in accordance with the results-based management framework for the Government of Canada laid out in Results for Canadians (President of the Treasury Board, 2000).

 

The joint Centre for Demographic Analysis (Public Service Commission and Treasury Board Secretariat) will continue to provide pertinent information to departments and agencies in support of human resources planning.

 

The Treasury Board Secretariat reports annually on the state of employment equity in the federal public service.  It covers progress toward becoming a more representative workforce in all departments and agencies for which the Treasury Board is the employer.

 

Recommendation 7

 

That the Treasury Board Secretariat complete its review of options to replace the current universal classification system as quickly as possible and, once completed, present the results of its review to Parliament, together with the associated costs and benefits of implementing the new job classification system.

 

Response to Recommendation 7

 

The Government agrees that the current job classification system is out of date, does not reflect the current nature of public service work, and is cumbersome to administer. The Government is committed to achieving the benefits of modernizing its classification system, which is viewed as a foundation for improving human resources management in the public service.

 

Significant work has already been accomplished. The Treasury Board Secretariat has designed and tested a new classification standard that is capable of measuring the full range of public service work in a gender-neutral manner. The Treasury Board Secretariat has redefined occupational groups in order to improve employee mobility and managerial flexibility and reduce the administrative complexity associated with some groups.  Work descriptions for all public service positions have also been updated.

 

Most recently, the Treasury Board Secretariat has been conducting analyses and consulting senior public service leaders to identify the most effective means of implementing classification reform. The Government’s goal is to identify an approach that supports and facilitates the wider reform of human resources management in the public service of Canada while supporting a competitive, equitable and affordable compensation strategy. 

 

Recognizing that classification reform is an important element in a modernized human resources management system, the Government is nearing the end of its decision-making process and expects to make its intentions known in the coming months.

 

Recommendation 8

 

That the Treasury Board Secretariat explore the feasibility of introducing a merit-based remuneration system to the human resource management regime and, once completed, present the results of its review to Parliament, together with the associated costs and benefits of implementing such a remuneration system.

 

Response to Recommendation 8

 

Merit-based remuneration/compensation, or “performance pay”, are terms that are used interchangeably within the core public service.  Currently, variations of merit or performance pay provisions, as add-ons to base salary, apply to all levels of the Executive Group, senior levels of un-represented occupational groups and some senior excluded levels of represented groups.  The Performance Management Program for Executives uses the terms variable compensation and “at-risk pay” to refer to that portion of cash compensation that is additional to base salary and awarded based on performance related to the achievement of key objectives. 

 

As part of modernizing the human resources management regime, merit/performance pay continues to undergo scrutiny.  Changes have been made or are being proposed in those occupational levels to which such pay plans apply, and other compensation incentives are being introduced.  This is to ensure that the government recruits and retains top performers. 

 

An important compensation-related initiative for the Executive Group is the recommendations of the Advisory Committee on Senior Level Retention and Compensation, an independent advisory body, comprised of private and public sector

leaders.  Four significant reports have been produced by the Advisory Committee to date, resulting in the federal government adopting lump sum at-risk performance payments from 10 to 15 per cent for the Executive Group to align more closely with private sector trends.  These payments must be re-earned each year, based on achievement of key business results, and are in addition to in-range merit pay increases of 5 to 15 per cent based on achievement of on-going business results. 

 

For most employees who are not part of the Executive Group, compensation issues are determined through the collective bargaining process and fall under a set lock-step system of salary increases, with no provision of variable pay as an add-on to base salary. For employees at most senior levels of various groups, variations of merit or performance pay plans apply, with in-range increases dependent on annual performance results.  Lump sums are awarded where employees have reached the maximum rate of pay.  In some occupational levels, double increments are awarded to employees with superior or outstanding performances. Other variations are being

introduced as well, such as an output incentive allowance that was recently awarded to the Translation Group.

 

The Treasury Board Secretariat is reviewing the various models of merit/performance pay for the above groups for their effectiveness in achieving the purpose for which they were established, the advantages and disadvantages of merit/ performance pay and the potential application of this concept to other groups and levels. Any analysis of the feasibility of introducing a merit-based compensation system to the human resources management regime must be undertaken in full consultation with bargaining agents.  To this end, the Treasury Board Secretariat will discuss with bargaining agents and other stakeholders to explore the feasibility of introducing a merit-based compensation system to the human resources management regime, together with associated costs and benefits of such a system.

 

Recommendation 10

 

That the Treasury Board Secretariat, once it has received all departmental action plans on recruiting and promoting visible minorities, prepare a summary report on the overall progress in the implementation of the “Embracing Change” Action Plan, and that it table the summary report to Parliament no later than 31 March 2002.

 

Response to Recommendation 10

 

The “Embracing Change” Action Planhas as its foundation, the goal to build a representative and inclusive public service - one that represents all Canadians and is responsive to their needs.  Given the Government’s endorsement of the action plan, departments are expected to integrate the elements of the “Embracing Change” Action Plan into their employment equity human resources and corporate business plans.  

 

The action plan sets out a blueprint for good human resources planning and helps the public service to become a representative and inclusive national institution. “Embracing Change” is about changing and enhancing human resources practices to ensure equitable participation of all Canadians in the federal workplace.

 

The action plan sets out a 1 in 5 benchmark of visible minority appointments for external recruitment so that the federal public service can better reflect the diversity of Canadian society.  It also prescribes various strategies and support tools to promote the public service to visible minorities. But this is only part of the contribution towards recruitment.

 

On-going performance monitoring instruments of the “Embracing Change” Action Plan include: status reports, progress reports (for projects funded under the Embracing Change Support Fund), and a results-based management and accountability framework.

 

Each year, the Government tables in Parliament its annual report on the situation with respect to employment equity in the federal Public Service, as required under the Employment Equity Act.  When the “Embracing Change” Action Plan was adopted in 2000, the President of the Treasury Board committed to including in the annual report information on progress in implementing the plan.  This year’s annual report, tabled in March 2002, includes a chapter specifically devoted to implementation of the “Embracing Change” Action Plan.

 

Recommendation 14

 

That the Treasury Board Secretariat completes the review on the policies and procedures dealing with the reporting by public servants of fraudulent and unethical activities against the Crown. That the Treasury Board Secretariat prepare an interim report of its observations and recommendations on this issue and table it to Parliament no later than 31 March 2002.

 

Response to Recommendation 14

 

On June 28, 2001, the President of the Treasury Board announced a new Policy on the Internal Disclosure of Information concerning Wrongdoing in the Workplace.  This policy, which became effective on November 30, 2001, directs departments to put in place the appropriate internal mechanisms to receive, review and, when required, investigate disclosures of wrongdoing.   The objectives of the policy are to allow employees to bring forward information concerning wrongdoing and to ensure that they are treated fairly and are protected from reprisal when they do so in good faith.  Wrongdoing refers to illegal and unethical activities such as fraud or misuse of public funds or assets; gross mismanagement; or a substantial and specific danger to the life, health and safety of Canadians or the environment.

 

The policy also creates the position of the Public Service Integrity Officer.  The mandate of the Integrity Officer is to act as a neutral entity on matters of internal disclosure of wrongdoing when employees believe that issues cannot be disclosed within their own departments; and when employees have raised disclosure issues in good faith through departmental mechanisms but believe that the disclosure was not appropriately addressed.  Dr. Edward Keyserlingk was appointed in November 2001 to be the first Public Service Integrity Officer.  He will provide an annual report on the activities of his Office to the President of the Privy Council for tabling in Parliament.