Health Services (General) Regulations 2019

Transaction. The regulations give content to the term “transaction” as used in section 38 of the Act, which deals with the requirement for health service providers to obtain ministerial approval before entering certain transactions. The three thresholds operate as a filter: transactions for capital works, property, plant, equipment, or intellectual property are caught above $50 million; operating procurements are caught above $100 million; and any transaction below $250,000 is automatically excluded. The 2023 amendment lifted the lowest threshold from $100,000 to $250,000, which increases the number of small contracts that can be entered without triggering the approval process.

Health executive. Parts 3 and 4 of the regulations repeatedly refer to health executives, who are the senior managers employed under the Act. The payments in lieu of notice or reappointment are calculated by reference to their remuneration. The regulations do not define “remuneration” but it would ordinarily include salary, allowances, and other benefits.

Former employee. This is a critical concept in Part 4 Division 1. A former employee is someone who has ceased employment with a health service provider but who may have committed a breach of discipline while employed. The regulations prescribe the circumstances in which that former employee is treated as still being an employee for disciplinary purposes, and the actions that can be taken.

Current State employee. This is a subcategory of former employee: one who now works for another health service provider or a public authority (excluding local government). The significance is that differing procedural requirements and disciplinary actions apply.

Public interest consideration. This is a non-exhaustive list of eight factors that the former employing authority must consider before deciding to discipline a former employee. The factors include the seriousness of the breach, whether it was an isolated incident, the employee’s status and position, the likelihood of re-employment within the health system, the time elapsed, the impact on public confidence in the WA health system, mitigating personal circumstances, and the likely cost and administrative burden. The list is explicitly inclusive and does not limit other relevant factors. Its breadth gives the decision maker substantial discretion but also creates uncertainty and potential for challenge.

Applied regulations. Part 5 imports the Public Sector Management (Redeployment and Redundancy) Regulations 2014 but modifies them for the health context by substituting definitions of “Department”, “Department CEO”, “employee”, and “employing authority” with the equivalents from the Health Services Act 2016. It also updates cross references so that executive officer redundancy provisions refer to health executives and the Health Services Act sections on termination and discipline.

The regulations directly affect four groups within the Western Australian public health system. First, health service providers - entities established under the Act such as hospital boards, health networks, and possibly the Department of Health itself. They must apply the transaction thresholds when deciding whether to seek ministerial approval, comply with the one month deadline for the first statement of performance, and follow the disciplinary procedures for former employees. The compliance cost here is not trivial: contracting officers need to be trained on the thresholds, and the consultation requirements under regulation 10 add administrative steps when disciplining someone who has moved to another public sector employer.

Second, health executives - senior managers whose employment is governed by the Act. The regulations set the dollar amounts they receive if dismissed without notice or if not reappointed. These amounts are calculated as 12 weeks of their previous remuneration, which can be substantial. Executives also face the risk of disciplinary action even after leaving the health service, although the actions available are limited if they have no current State employment.

Third, former employees generally - anyone who has worked for a health service provider and is suspected of a breach of discipline committed while employed. The regulations create a regime that can follow them into retirement, private sector work, or unemployment. The practical effect is that a person could receive a reprimand or fine years after leaving, subject to the vague public interest test. This expands the state’s reach over individuals and may deter future candidates from accepting employment in the health system, particularly in senior or sensitive roles, because the risk of future disciplinary proceedings persists.

Fourth, current State employees who are former health service employees. They are subject to a fuller range of disciplinary actions (reprimand, fine, transfer, reduction in salary, suspension, demotion, dismissal, or reduction in classification) if their former employing authority decides to act, after consultation with their current employing authority. The consultation requirement imposes a duty on the current employer to decide whether to treat the matter itself. This creates a coordination cost between agencies.

The regulations also indirectly affect the Department of Health, which operates the redeployment and redundancy framework adopted from the Public Sector Management regulations. The modifications in Part 5 mean the department must apply different definitions than those used in the general public sector, increasing the risk of misapplication.

Duty to obtain ministerial approval. For health service providers, the regulations indirectly create a duty: if a transaction exceeds the prescribed thresholds, the provider must obtain approval under section 38 of the Act. The thresholds create a bright line, but there is still judgement in characterising a transaction as relating to capital works versus operating activities, since the thresholds differ by $50 million.

Duty to deliver first statement of performance within one month of establishment. Section 47(1)(a) of the Act requires the provider to give a statement of performance to the Minister. Regulation 4 makes that due one month after establishment, which is a tight timeline for a newly created entity that may not yet have financial systems in place.

Entitlement to notice or payment in lieu. A health executive whose employment is terminated has a right to either the notice provided in their contract or the prescribed amount under regulation 5, which is 12 weeks’ remuneration. Similarly, if a health executive is not reappointed, they are entitled to a payment between one day’s remuneration (the minimum) and 12 weeks’ remuneration (the maximum). The executive’s right is to at least the minimum and up to the maximum, though the Act itself may cap it.

Right to refund of compensation. A person who received compensation under section 133 of the Act (compensation for loss of office) may be required to refund it if later re-employed. Regulation 7 sets the refund period as the same period used to calculate the compensation. This is a formula rather than a fixed number: if compensation was calculated on a six month salary basis, the refund period is six months. The person’s right is to know the period and plan accordingly.

Rights of former employees in disciplinary proceedings. Former employees benefit from the procedural safeguards embedded in the regulations. For a current State employee, the former employing authority must consult with the current employing authority and the current employer must have decided not to treat the matter itself before the former employer can proceed. For a former employee not currently employed by the State, the decision must be made with regard to public interest considerations, which include mitigating personal circumstances and the cost and administrative burden of proceeding. The employee also has the right to be subjected only to the prescribed disciplinary actions - if not a current State employee, only reprimand and a fine are available. This protection limits the consequences but does not prevent the process itself, which can still be stressful and costly for the individual.

Duty to consult before taking disciplinary action. Under regulation 10(3), if the former employing authority finds a current State employee guilty of a breach and decides to take disciplinary action, it must consult with the employee’s current employing authority before actually taking that action. This is an additional procedural step not found in the Act itself.

The regulations do not create offences or penalties directly. They operate by reference to the Health Services Act 2016, which contains the substantive disciplinary and enforcement provisions. For health executives, failure to comply with the notice or reappointment payment provisions could give rise to a civil claim for the prescribed amount. For health service providers, failing to obtain ministerial approval for a transaction above the prescribed threshold could render the transaction voidable or expose the provider and its officers to action for breach of the Act.

The disciplinary regime for employees (including former employees) under Part 11 of the Act is triggered by the regulations. For former employees who are current State employees, the full range of disciplinary actions in the definition of “disciplinary action” in section 6 of the Act apply. That definition includes (a) a reprimand, (b) a fine, (c) a transfer, (d) a reduction in salary, (e) a suspension, (f) a reduction in classification, (g) a demotion, and (h) a dismissal. For former employees not currently employed by the State, only (a) reprimand and (b) a fine are available. The fine amount is likely set elsewhere in the Act or regulations.

Enforcement of disciplinary decisions against former employees who are not employed by the State may be difficult in practice. A fine could be recovered as a debt if the person refuses to pay, but a reprimand is essentially a public or formal censure with limited practical sanction. The cost of recovery might exceed the fine itself, especially if the former employee has moved interstate or into the private sector. The regulations’ inclusion of “likely cost and administrative burden” as a public interest consideration suggests the drafters were aware of this enforcement gap.

The termination and referral periods in regulations 12 and 13 are procedural time limits that impose discipline on the employing authority. If the authority fails to terminate a health executive within 30 days after being notified of a decision to terminate under section 168(2)(a), the termination may become invalid or the executive may be entitled to continue in employment. Similarly, if a referral under section 172(5) (likely referral of a disciplinary matter to an independent body) is not made within 28 days, the authority may lose the right to refer.

The most explicit interaction is in Part 5, which modifies the Public Sector Management (Redeployment and Redundancy) Regulations 2014 for operation under the Health Services Act 2016. Those regulations deal with redeployment of excess employees and redundancy payments. By substituting definitions, the Health Services (General) Regulations ensure that the redeployment framework uses health sector definitions for “employee”, “employing authority”, “Department”, and “Department CEO” rather than the public sector definitions. This prevents mismatch where, for example, a person employed by a health service provider might otherwise be considered an employee of a different Department. The modification also aligns the grounds for termination without notice - cross references to sections on summary dismissal are updated from the Public Sector Management Act to sections 150, 163(3) or 166 of the Health Services Act.

The regulations also interact with the Health Services Act 2016 at numerous points. Each regulation cites the enabling provision of the Act. For example, regulation 3 prescribes amounts for section 38(2) of the Act; regulation 4 prescribes a date for section 47(1); regulation 5 prescribes an amount for section 125(2); and so on. The Act itself contains the substantive obligations, and the regulations fill in the gaps. Without the regulations, many of these provisions would have no operative effect because the Act uses phrases like “prescribed amount” or “prescribed period” which need secondary legislation.

There is a potential interaction with contract law and employment law generally. The payments in lieu of notice under regulation 5 may interact with contractual notice periods. If a health executive has a contract providing for longer notice, the regulation might set a floor, but the Act likely provides that the prescribed amount is in substitution for other entitlements. Similarly, the disciplinary provisions for former employees may interact with general principles of natural justice and administrative law. The requirement to have regard to public interest considerations before proceeding is a statutory duty but its content is broad and could be challenged as unreasonable or procedurally improper if applied carelessly.

The regulations may also interact with the State’s industrial relations framework. Health executives are likely covered by employment contracts rather than industrial awards, but the definition of remuneration and the calculation of 12 weeks’ pay could raise questions about what counts as remuneration - whether it includes allowances, bonuses, or superannuation. The regulations do not clarify this, leaving it to general law.

The Health Services (General) Regulations 2019 were originally made on 7 November 2019 and published in the Gazette on that day. Part 1 commenced on the publication date; the remainder commenced the next day, 8 November 2019. The regulations have been amended once.

The Health Services (General) Amendment Regulations 2023 (SL 2023/94) were published and gazetted on 30 June 2023. The amendment changed regulation 3(2), which sets the de minimis threshold for transactions under paragraph (c) of the definition of “transaction” in section 38(1) of the Act. The original amount was $100,000; the amendment raised it to $250,000. The amendment took effect on 1 July 2023. This was a significant change because it reduced the number of low value transactions that require ministerial approval, thus lowering compliance costs for health service providers. The other thresholds in regulation 3(1) ($50 million and $100 million) were not changed.

The compilation table indicates that the amendment regulations came into operation with r.1 and 2 on 30 June 2023 (the date of publication), but the substantive amendments (other than r.1 and 2) commenced on 1 July 2023. This delayed start gave health service providers one day to prepare, which is effectively no preparation time at all, but the change is favourable to them so no transitional hardship is likely.

No other amendments have been made. The regulations therefore remain substantially as originally enacted, with only the one threshold increase.

There is no reported litigation under these regulations as of the date of the source. The regulations are relatively new and highly technical, dealing with thresholds and procedural steps rather than creating rights that individuals are likely to litigate directly. However, litigation could arise in a few scenarios.

First, a health executive who is dismissed and receives the prescribed 12 weeks’ payment might challenge the adequacy of that payment if their contract provided for more, or if the calculation of “remuneration” is disputed. For example, if the executive received a performance bonus in the 12 weeks before termination, does that count as remuneration? The regulation does not define remuneration, and the Act may not either. A court could be asked to interpret the term.

Second, a former employee who is subjected to disciplinary action could challenge the decision on the ground that the former employing authority failed to properly consider the public interest factors in regulation 9. The factors are broad and subjective, but a failure to consider them at all, or a decision that is manifestly unreasonable given the factors, could be judicially reviewed. Similarly, a current State employee might argue that the consultation with their current employer was inadequate or that the current employer did not properly decide not to treat the matter itself.

Third, a health service provider might litigate over whether a particular transaction exceeds the prescribed threshold. The classification of a transaction as capital versus operating could be disputed. For example, a contract to maintain existing equipment might be characterised as operating expenditure (threshold $100 million) or as maintenance works for equipment (threshold $50 million). A provider that entered a $75 million contract without approval might argue it fell under the operating threshold, exposing the provider to penalties under the Act.

Fourth, disputes may arise over the application of the modified redeployment regulations. If a health service provider uses the wrong definition (e.g., the public sector definition rather than the health sector definition) when redeploying or terminating an employee, the affected employee could bring a claim for unfair dismissal or breach of award.

No cases are cited in the regulations themselves, and no judicial consideration of these provisions is publicly noted. The regulations are likely to be litigated only if high value disputes arise.

The one month deadline for the first statement of performance is very short. Regulation 4 requires a health service provider to deliver its first statement of performance under section 47(1)(a) of the Act within one month of being established. A newly created entity may not have a board in place, financial systems running, or even an appointed CEO within that time. Failure to comply could put the provider in breach of the Act, though the Minister may grant extensions under the Act itself. Providers should prioritise this deadline and consider seeking an extension before the month expires if they cannot meet it.

The 12 week calculation period uses the period “immediately preceding the day on which remuneration ceased to be payable”. For a health executive who had a period of leave without pay, or who was suspended without pay before termination, the 12 week period may include weeks with zero or reduced remuneration. The regulation does not provide for this; the amount would be based on what was actually paid, not what would have been paid had the executive been working normally. This could result in a very low payment in lieu of notice, which may be challenged as unfair.

Former employees can be disciplined years after leaving. The public interest consideration includes the length of time elapsed, but does not set a maximum period. A person who left employment ten years ago could theoretically be reprimanded or fined if the former employing authority still considers it appropriate. This creates ongoing legal risk for individuals and may be difficult to administer as records are lost or witnesses leave.

The disciplinary actions for a former employee not employed by the State are limited to reprimand and fine, but the process still requires the authority to conduct an investigation and make findings. This could be a significant drain on resources for what is ultimately a minor sanction. The cost and administrative burden factor in the public interest list is meant to deter frivolous proceedings, but the authority still bears the cost of assessing that factor. In practice, it may be cheaper to proceed than to decide not to proceed.

The consultation requirement under regulation 10(3) is mandatory before taking disciplinary action against a current State employee. If the former employing authority fails to consult, the disciplinary action may be invalid. There is no exception for urgency, and no implied or automatic consent if the current employer does not respond. The authority must affirmatively consult and receive a response before acting.

**The modification of the applied regulations in Part 5 only substitutes definitions and cross references; it does not modify the substantive provisions. Therefore, provisions that refer to the Public Sector Management Act’s definitions of “employee” or “employing authority” are overridden, but any other references not caught by the modifications will cause confusion. For example, a provision that refers to “the Act” without specifying which Act could be ambiguous. The drafter attempted to catch all necessary references, but there may be gaps.

Health service providers should take several steps to comply with these regulations. First, establish internal policies and thresholds for the transaction approval process. The compliance officer or finance team should know the $50 million and $100 million thresholds and the $250,000 de minimis. Any proposed contract or acquisition that exceeds these amounts must be referred to legal and to the Minister for approval. The 2023 amendment increased the lowest threshold, so procedures should be updated to reflect $250,000, not the previous $100,000. Providers should also develop a decision tree for categorising transactions as capital or operating, since the thresholds differ.

Second, for new health service providers, the board or interim management must calendar the obligation to deliver a statement of performance within one month of establishment. The CEO should instruct the finance department to prepare the statement as soon as the entity is legally formed. If this timeline is impractical, the provider should seek an extension from the Minister under the Act immediately.

Third, human resources departments must be aware of the payment obligations for health executives. The contracts for health executives should be reviewed to ensure consistency with the regulation’s formula. Payroll systems should be able to calculate “12 weeks of the amount of remuneration payable … for the 12 weeks immediately preceding the day on which remuneration ceased to be payable” - note that this is not simply the last pay multiplied by 12; it is the total earned in the preceding 12 weeks, which may vary if the executive’s remuneration fluctuates. Similarly, for reappointment, the minimum is one day’s remuneration (the last day’s pay) and the maximum is 12 weeks.

Fourth, disciplinary processes need updating. Any employing authority that discovers a potential breach by a former employee must follow the steps in Part 4 Division 1. This means determining whether the former employee is a current State employee (employed by another health service provider or a public authority excluding local government). If yes, consult with the current employing authority; if the current employer decides to treat the matter itself, the former employer must step back. If the current employer declines or does not respond, the former employer may proceed only after considering the public interest factors. If the former employee is not a current State employee, the former employer may proceed directly after considering public interest. The public interest consideration should be documented in writing, addressing each factor listed in regulation 9. The decision to proceed or not should be recorded.

Fifth, when disciplinary action is proposed against a current State employee, the former employing authority must consult again before taking the action (regulation 10(3)). This is a second procedural step that should not be conflated with the initial consultation.

Sixth, the time limits in regulations 12 and 13 must be observed. Under regulation 12, if a health executive is to be terminated under section 168(2)(a) of the Act, the termination must occur within 30 days. Under regulation 13, any referral under section 172(5) of the Act must be made within 28 days. HR and legal should track these deadlines meticulously.

Finally, for redeployment and redundancy matters, the health service provider must apply the modified Public Sector Management regulations using the health sector definitions. The HR team should have a copy of the applied regulations with the modifications written in. Training should ensure that staff do not inadvertently use the standard public sector definitions for terms like “employee” or “employing authority”. The modified regulation 5 excludes certain categories - chief executives and health executives - from the redeployment provisions, and instead provides compensation under section 133 of the Health Services Act. This must be understood to avoid double payment or incorrect termination.