The state government plans to halt three major contracts at Fiona Stanley Hospital held by Serco Australia, resulting in 650 jobs moving back to the public sector at a cost of $93 million over 10 years.This adds to similar moves in the water and corrections portfolios.
The state government plans to halt three major contracts at Fiona Stanley Hospital held by Serco Australia, resulting in 650 jobs moving back to the public sector at a cost of $93 million over 10 years.
The Serco decision adds to similar moves in the water and corrections portfolios, where contracts held by Programmed, Suez and Sodexo have all been terminated over the past six months.
Premier Mark McGowan said today the hospital services should always have been delivered by public sector employees.
“Having these services and jobs run in-house is the right thing to do, we never believed they should have been privatised,” he said.
Opposition spokesman Zak Kirkup said the government had the wrong priorities.
“The premier remains a lapdog to the union bosses of Western Australia,” he said.
“The government favours a union deal when really it should be making sure there is a full focus on responding to the coronavirus.”
It is anticipated that many of the workers returning to public sector employment will join the powerful United Workers Union, which is led by Labor’s WA president Carolyn Smith.
The three contracts coming back to the public sector cover cleaning, patient catering and internal logistics such as hospital orderlies, domestic assistants and cleaners.
They will be operated by the South Metropolitan Health Service from August 2 2021.
The government said the cost of bringing an estimated 650 jobs back into the public sector was an additional $8 million a year, on top of a one-off transition cost of $12.9 million.
In addition, the government will also lose some of the payroll tax payments currently made by Serco.
Serco Australia will continue to deliver 21 other services at Fiona Stanley Hospital after signing a six-year contract extension with an estimated value of $730 million.
The six-year extension will commence in August 2021, at the completion of the first 10-year term of the contract. The original contract also allows for a further extension of up to four years, to 2031.
It will employ about 350 people to deliver these continuing services, which include ICT, security, training, human resources, helpdesk, reception, waste management and linen.
Serco Asia Pacific chief executive Mark Irwin put a positive spin on the government move, saying the extension of 21 contracts reflected the ongoing importance of its partnership with South Metropolitan Health Service.
“I am very proud of the work we have done to initially transition a greenfield site into the State’s leading public health facility,” Mr Irwin said.
“This extension recognises the exceptional work of our team to initially stand up the hospital and ensure its strong operations since 2013.
“Our immediate focus remains on continuing to deliver high quality services for patients and visitors to the hospital while supporting the establishment of the COVID-19 Clinic at Fiona Stanley.”
In August last year, the government announced that maintenance and operations work across Water Corporation’s Perth and Mandurah networks would return to state control.
About 250 maintenance jobs moved from contractor Programmed to the Water Corporation as a result of that decision.
In November last year, the government said services delivered by Suez Water and Broadspectrum through the Aroona Alliance would also be brought back in-house.
That decision affected 190 jobs.
Water Minister Dave Kelly claimed both decisions would save money but neither he, nor the Water Corporation, released details.
Mr Kelly is a former state secretary of the United Workers Union, formerly known as United Voice and before that the Miscellaneous Workers Union.
According to Suez’s website, the Aroona Alliance had exceeded the contractual savings requirement each financial year.
