Fragmented employment chains and ultra competitive contracting arrangements leave workers unable to negotiate wages ©123RF
Fragmented employment chains and ultra competitive contracting arrangements leave workers unable to negotiate wages ©123RF

‘Total disregard’ of ethics in government cleaning contracts

posted by Francis Churchill
19 November 2018

A senate committee has raised concerns government procurement of cleaning services mirror unethical practices in the private sector.

In a report, the Senate Standing Committee on Education and Employment said the Department of Finance (DoF) showed “a total disregard” for its ethical responsibility in the way it contracted out cleaning services.

It added the “fragmented employment chains and ultra competitive contracting arrangements” that exist in the private sector were mirrored in public sector, leaving workers at the bottom powerless to negotiate wages.

The review into private sector contracting practices was launched earlier this year following an ombudsman’s report in February that found “serious exploitation”, including wage theft, in Woolworths’ cleaning supply chain.

The committee took the decision to expand its investigation to look at public sector contracts after receiving evidence of unethical contracting practices from workers’ membership organisation United Voice.

DoF let a cleaning contract through the cross-government Property Services Coordinated Procurement (PSCP) with a firm called Broadspectrum. This contract was used for a number of government offices, including the offices of the Department of Jobs and Small Businesses (DJSB), for which Broadspectrum subcontracted the service.

But United Voice told the committee that under the subcontractor, nine of the 24 workers that were previously employed to cleaned DJSB offices lost their jobs while those remaining suffered a 6% pay cut and lost a substantial number of hours’ work.

In evidence to the committee, DoF said it was not aware workers’ pay was cut under the new contract because it felt “there was no need to ask” DJSB what workers were being paid under the previous contract.

DoF told the committee it had based its contract with Broadspectrum on Commonwealth Procurement Rules (CPR) – however the committee raised concerns the department had “effectively outsourced its ethical procurement responsibility to contractors”, despite ethical considerations being part of CPR.

While DoF included contractual workplace obligations for Broadspectrum and subcontractors, the report said the committee saw “no evidence that [DoF] sought to understand the workplace conditions of the cleaning workers who would be directly impacted by the new contracting arrangements”.

“In this regard the committee considers that the Department of Finance has shown a total disregard for the ethical responsibility it holds in its role of ‘price maker’, demonstrating no care for the welfare of those individuals performing the cleaning services.”

The committee investigation also found Broadspectrum were subcontracting to a company that had links, including identical addresses and shared directors, to a firm that had been found guilty of wage theft.

The report recommended the Australian National Audit Office, the government spending watchdog, conduct a performance audit to find out which departments are procuring services ethically.

It also recommended CPR be changed to bar departments from contracting with any firm or associated entity that has been penalised twice for non-compliance with any employment law.

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