The state’s private contract cleaning sector is bracing itself for an expected 30 per cent plus downturn in business activity after Christmas 2005.
The state’s private contract cleaning sector is bracing itself for an expected 30 per cent plus downturn in business activity after Christmas 2005.
The looming slump comes in the wake of last month’s announcement by Education Minister Ljiljanna Ravlich that principals at 285 state schools must ensure classrooms are cleaned by government workers.
Her directive was carried in a letter dated March 22 to tendering contractors, and stated: “I wish to advise you on the above Tenders which were advertised on 15 December 2004 and closed on 20 January 2005.
“Following the Government’s decision on the future of contract cleaning in schools, the Department of Education and Training is declining all offers.
“The department would like to thank you for partaking in the tendering process for contract cleaning in schools.”
Although the directive represents a major victory for Liquor, Hospitality and Miscellaneous Workers Union state secretary David Kelly, it is only the opening gambit in the union’s ongoing campaign to remove contract cleaners from all government premises.
The loss of school cleaning contracts will mean private cleaners stand to lose about 15 per cent of their business, with a further 20 per cent expected to be lost when other government contracts are made off limits as expected.
Both losses come on top of a 15 per cent cutback since 2001 since over 400 schools have re-instituted in-house cleaning.
The union has opposed the use of contract cleaners in government schools since the policy was first introduced in the 1970s by the government of Sir Charles Court.
Former union state secretary, and now Attorney-General, Jim McGinty, failed in his bid to eject contractors from schools in the early 1980s because the industry launched a concerted campaign against moves by the Labor government of Brian Burke to revive the in-house approach to school cleaning.
According to Ian Westoby, spokesman for the Building Service Contractors Association, the peak body representing the state’s contract cleaners, the union has set its sights on replacing private contractors from within all government-owned premises.
And the MWU’s David Kelly has confirmed this to WA Business News. “We’ve already raised the issue with the premier and treasurer,” Mr Kelly said.
He said his stand was based on two Labor Party state conference resolutions that called for the re-introduction of in-house cleaning, and because contract workers were paid below the rates earned by equivalent public sector employees.
“They earn two to three dollars an hour less than government cleaners,” he said.
Mr Westoby said the union’s across-the-board displacement policy meant private cleaning of TAFE colleges, trains, buses, police and railway stations, courts, and all other government-owned premises would only be allocated to in-house government cleaners.
He said the locking out of private cleaning contractors in schools meant the sector would lose about $22 million in turnover over the next eight months and more as the union’s policy was applied across other government premises.
And the turnaround will mean the standing down of about 1,200 cleaners and supervisors by year’s end.
However, many of these will be hired by school principals and go on the government payroll.
Currently, the employees of 11 local contracting firms clean 285 of the government’s 780 high, junior and primary schools.
Estimates provided by Mr Westoby showed the new policy would result in an additional cost to taxpayers over four years of $100 million.
This is in addition to another $100 million lost because of the Gallop Government’s introduction, soon after gaining power, of the policy of permitting principals to directly hire in-house cleaners rather than use private contractors.
Mr Kelly said the disparity between private contractors and in-house cleaning was due to the Education Department’s formula that resulted in the hiring of more workers than utilised by contractors, which made the comparison unfair.
Under that policy, principals could hire 30 per cent more labour than departmentally contracted cleaners employed, Mr Westoby said.
He said private cleaners also contracted to clean entire classrooms, including ceilings and windows, not just surfaces such as walls to 2.5 metres above floor level, as was required of government cleaners.
“The new policy has also set a new precedent that business should take note of,” Mr Westoby told WA Business News.
“At the beginning of this year the Education Department called and let a number of three-year school cleaning contracts in line with State Supply Commission requirements.”
In April, Mr Westoby said, after a meeting with the union, Ms Ravlich instructed her department to change the three years to a one-year term.
“All the contracts are held by small to medium local enterprises and one wonders if the Government would have had nerve to do likewise to national companies or multinationals without offering compensation,” he said.
The Opposition’s Education spokesman, Barry House, said an independent audit, funded by the BSCA and the Education Department, showed in-house cleaners costs were significantly more.
Deloitte Touche Tohmatsu was hired to determine the cost of the Education Department’s in-house cleaning costs compared with contract cleaning covering the fourth term in 2001 at four Wanneroo schools.
“It revealed that it would cost $72,752 per term to use in-house cleaners, which did not include payroll tax, GST and workers compensation,” Mr House said.
“This compared with $62,127 per term for contract cleaners, a figure which took into account payroll tax, GST and workers compensation.”
Mr House said Ms Ravlich had not allocated extra funding to help schools pick up the additional cost, and local schools would have to meet the burden.
“She has failed her first test as the new education minister,” he said. “The former education minister, Alan Carpenter, resisted pressure by the union bringing school cleaners in-house over the past four years, but Ms Ravlich has caved in to the union’s demands within her first two months in the job.
“She has canned the existing system, which gives principals the option of employing in-house or contract cleaners, despite the obvious cost savings.”
Mr House said the Education Department called for tenders from contract cleaners late last year, but withdrew the offer on March 22.
“Small business operators had geared their businesses for these jobs, only to be denied the work by Ms Ravlich and the union,” he said.
“These businesses have been hung out to dry with this minister’s decision, some serving only a third of their granted tender, not because they haven’t done the job, but because the Labor Government would rather support its union mates than use common sense business practices.”
Mr House said the union had been extending the reach over the government cleaning sector since 2002.
“In January 2003 minister Sheila McHale was directed to tell the head of the Maritime Museum to hire in-house cleaners at an addition cost to taxpayers, over four years, of $275,000 plus payroll tax and GST,” Mr Westoby said.
“She did likewise in the Department of Disability Services, at a cost to taxpayers of $1.6 million plus payroll tax and GST over four years.”
He said that, although the board of the WA Museum refused to abide by Ms McHale’s instruction, then health minister Bob Kucera, after discussions with the union, directed Sir Charles Gardiner Hospital’s chief executive to take cleaning in-house.
The move cost taxpayers $1.8 million plus payroll tax and GST over four years.
Mr Kucera did likewise with Royal Perth and Fremantle hospitals, with the total additional cost to taxpayers being $14.8 million plus sundries.
Ms Ravlich to parliament: “We made a commitment before the election that all school cleaning will be done in-house.
“That change to the policy will be implemented progressively as the existing cleaning contracts expire. I pride myself on that decision.”
Mr Kelly said his union’s moves against school contract cleaning had run alongside its efforts to ensure hospital non-medical activities were serviced only by government employees.
School Cleaning Contractors
- Albany Delron
- ALLclean
- Airlite Cleaning
- Arrix
- Bunbury Delron
- Busselton Delron
- Cleandustrial
- Charles Service Co
- Geraldton Delron Geraldton
- GWC Management
- Jasneat
- Metro Delron
- OCS Pty Ltd
- Quantum Contract Services
- Southern Cross Cleaning
- WA Tempo Prestige
