The Local Government Legislation Amendment (Stronger Communities) Bill proposes a number of amendments to the Local Government Act 2020 (Vic) dealing with governance and employment in the sector.
The Bill represents something of a paradigm shift. The 2020 Act replaced some of the more prescriptive content in the 1989 Act with a framework of principles, granting Victorian councils more autonomy to govern themselves within that framework. The new Bill introduces a greater degree of regulation, reducing that autonomy in some areas in favour of greater consistency across councils.
In this article, we break down the key consequences of the proposed amendments for Victorian councils.
The power to declare the office of Mayor or Deputy Mayor vacant
The Bill proposes to enable councillors to resolve to declare the office of Mayor or Deputy Mayor vacant regardless of whether the Mayor or Deputy Mayor has been elected for a 2 year term. The Bill also incorporates elements of procedural fairness, with the reasons for the notice being provided to the Mayor or Deputy Mayor at least 14 days before the vote, giving them an opportunity to respond in writing.
Conflicts of interest
Where a councillor or member of a delegated committee has disclosed a conflict of interest in relation to a matter, it will be unlawful for them to direct, influence, or attempt to influence or discuss the matter with another relevant person who is participating in, or is expected to participate in, the decision-making process in relation to that matter.
The Bill creates a new obligation for a CEO to notify the Chief Municipal Inspector on becoming aware that a councillor has failed to disclose a conflict of interest, or to exclude themselves from the decision-making process. It will no longer be up to councillors to apply to a councillor conduct panel to address a failure to comply with conflict of interest requirements; this will now be the role of the Chief Municipal Inspector.
Procedures for dealing with serious misconduct
The Bill increases the focus on the internal resolution of serious misconduct matters and disputes between councillors, through:
- requiring councils to implement procedures for dealing with alleged serious misconduct and disputes between councillors (in addition to the existing procedures dealing with alleged misconduct); and
- giving the Minister the power to request that a council deal with such a dispute.
Councillors running for Parliament
The Bill includes new rules for councillors who wish to run for Parliament.
- A councillor who nominates for election is taken to be on a leave of absence from the day after they nominate until the election result is declared, or alternatively the day after they withdraw their nomination.
- While on leave:
- they must not perform any functions of a councillor, which includes attending meetings and even extends to attending council premises;
- they are not entitled to receive their allowance or be reimbursed for expenses; and
- any councillor conduct process involving their conduct is suspended.
- Councillors must notify their CEO as soon as they are preselected, or (if they are not a member of a political party) as soon as they publicly announce their intention to be a candidate.
- After that notification, a councillor is not entitled perform the functions of a Mayor, Deputy Mayor, or Acting Mayor, nor to receive a mayoral or deputy mayoral allowance.
Standing down of councillors charged with offences
The Act currently requires a councillor to stand down if they have been charged with certain criminal offences. Recognising the increase in private prosecutions, the Bill will provide that a councillor can only be stood down if the criminal charges are driven by a law enforcement agency, which includes the Chief Municipal Inspector.
Model Governance Rules
New model governance rules are being developed, and there is expected to be a public consultation process before they are published. The Bill will require councils to incorporate the model governance rules into their own governance rules. A council’s governance rules cannot be inconsistent with the model rules.
CEO employment
The Bill formally requires councils to establish a Chief Executive Officer Employment Matters Committee to provide independent professional advice regarding the Chief Executive Officer Employment and Remuneration Policy. While most councils have had such a committee for some time now, the Bill makes this a legal requirement.
The Bill also provides that CEO employment contracts will need to contain certain prescribed clauses and deal with certain prescribed matters. These will be set out in the regulations, but it is realistic to anticipate that the requirements will reduce flexibility.
Fair Jobs Code
The Bill provides for the creation of a Local Government Fair Jobs Code, which will be prescribed in regulations. The available information suggests that the purpose of the Code is to promote secure employment rather than filling gaps with external consultants or casuals. CEOs will be required to comply with the Code and conduct an annual assessment of compliance. Compliance will be overseen by the Local Government Fair Jobs Code Regulator, who will have broad powers to refer breaches of the Code or the Act for investigation by the Chief Municipal Inspector.
What does this mean for Local Government?
The Bill goes back before Parliament in the week commencing 28 July 2026. If it is passed, councils will need to review existing policies and procedures, and introduce new policies and procedures, to comply with their new requirements. Councillors will also need to receive training and guidance as to the changes to their obligations.
Several of the key changes are heavily dependent on regulations which are yet to be published, so we will all need to watch this space as it develops.
How we can help
If you are interested in learning more about how these changes may impact you or your organisation, please contact Anthony Massaro.
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