Victorian Public Service Executive Bonuses

Message from the Secretary to Victorian Public Service (VPS) executives - changes to remuneration arrangements

The VPS Executive Officer (EO) cohort is critical to leading our public institutions and supporting the delivery of high quality services for Victorians. It is therefore important that employment arrangements for VPS EOs reflect best practice and enable EOs to continue the high quality work and leadership for which Victoria is renowned.

The Victorian Public Sector Commission (VPSC) has recently conducted a review of current executive workforce arrangements and found that VPS EO bonuses are generally not effective in driving performance and that the global provision of bonuses to public service executives is unique to Victoria amongst the Australian jurisdictions.

Consistent with the VPSC's review, the Premier has approved the removal of bonuses from the VPS EO employment and remuneration policies. This will affect both existing and new VPS EOs.

The change will not immediately affect EOs in Victoria's broader public sector and it is intended that employment and remuneration arrangements, including bonus arrangements, in the broader public sector will be further reviewed on a sector by sector basis over the coming 12 months.

For existing EOs, the change means that human resources representatives will be in contact to agree the removal of bonus provisions from existing employment contracts.

Eligible VPS EOs will receive a uniform increase to their Total Remuneration Packages (TRP) of four per cent, effective 1 July 2015, for the removal of bonus provisions from their contracts. This increase is in addition to:

  • two and a half per cent discretionary annual TRP adjustments already approved by Government for the 2015-16 and 2016-17 years; and

  • two per cent discretionary annual TRP adjustments for which EOs will be eligible to be considered in 2017-18 and 2018-19.

This amounts to TRP increases of potentially up to 13 per cent over four years from 1 July 2015. This is consistent with wage increases for the VPS non-EO workforce, agreed as part of the 2016 VPS Enterprise Agreement.

Secretaries of Victoria's seven departments, the Chief Commissioner of Victoria Police and the Victorian Public Sector Commissioner will implement the policy change for their EO cohorts and Secretaries will support other VPS employers in their portfolios to implement the change in policy as well.

The VPS EO employment handbook and standard VPS EO contract have been amended to reflect the removal of bonus provisions and are available on the Victorian Public Sector Commission's (VPSC's) website. New VPS EO contracts will not include bonus provisions.

The VPS EO remuneration bands, which are published on the VPSC's website and set minimum and maximum VPS EO remuneration for each level, will be adjusted annually in line with the 13 per cent increase over four years that may be offered to existing EOs.

Secretaries, the Chief Commissioner of Victoria Police and the Victorian Public Sector Commissioner have been provided with detailed information to assist them in implementing the policy change by the end of 2016 and human resources representatives will be in touch with affected EOs shortly about how this change will impact their remuneration arrangements.

Last updated on Thursday, 04 August 2016