London fights 'two-tier' workforce

16 July 2003
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17 July 2003 | Robin Parker

The mayor of London has urged public-sector purchasers to take up a pioneering scheme to ensure fair employment terms in outsourced service contracts.

At a meeting of 50 London local councillors and purchasers at the Greater London Authority's (GLA) headquarters last week, Ken Livingstone said that getting service suppliers to treat their employees fairly was an important step towards ending the "two-tier" workforce common to outsourced services.

"If we have to use external contractors, the terms and conditions of staff employed should be no less favourable than they would be if employed directly by us," he said.

Welcoming the initiative, a Local Government Association spokesman said he believed it was the first time that such conditions were an explicit part of outsourced public-sector contracts, and urged other authorities to follow the GLA's lead.

The regeneration of London's Trafalgar Square, which reopened this month, was the first GLA project to make these demands of external contractors.

Two outsourced catering and cleaning services contracts for the square's café had built in specific equal opportunities requirements from the pre-qualification stage.

The clauses ensure that staff receive employment conditions, including working hours, salary scales, holiday rights and anti-discriminatory measures that are no less favourable than if employed directly by the GLA.

Catering and cleaning were chosen to test the clauses because these sectors were believed to be among the worst paid and lacking in other benefits.

The GLA was impressed that OCS, the winning bidder, was able to commit in full to the fair employment clauses without unduly raising its prices.

The initiative marks the first time that the GLA has incorporated clauses that commit external contractors to its own employment terms and conditions from the outset.

The employment rules were also introduced, at a later stage in the tender negotiations, into the GLA's facilities management contracts for the authority's City Hall headquarters.

Manny Lewis, director of corporate services for the GLA, said that getting the service suppliers to commit to fairer employment terms had resulted in fewer sick days and 5 per cent lower staff turnover.

The success of the initiative has persuaded the GLA to use it in further contracts, and a spokesman confirmed it is weighing up ways of enforcing it to subcontractors further down the supply chain.

"If we can get this into the public domain more, we can begin to roll back some of the appalling wages and conditions that have now become the norm," Livingstone said.


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