Principles
1. The government contracting policy applying in respect of all contracts for services in the homecare, residential care and commercial cleaning sectors should be based on principles of fairness, equity and responsibility. This policy should apply whether the government itself is a party to the contract or is merely the funder, as in the case of contracting by District Health Boards (DHBs).
NACEW has concentrated its research on these three sectors. So while the underlying reasoning behind our recommendations to the Minister appear equally applicable to other areas of public contracting NACEW stops short of making recommendations beyond its focus. NACEW also considers that these three sectors could act as a pilot for a more general public contracting policy.
NACEW's recommendations are a principled and pragmatic response to the changed nature of the state, including in the provision of public health services, over the past two decades or so. It recognises that improving the very low pay of many of its most vulnerable citizens who provide essential services to others of its most vulnerable citizens is an investment in human resources with positive economic effects. Put into effect, NACEW's recommendations will improve the quality of services; will improve the self-esteem and well-being of staff; will improve efficiency and productivity through increased skill levels, reduced turnover and the elimination of any discrimination and/or barriers to equality of opportunity; and will lessen the need for state support to workers in these sectors. The NACEW model also maintains the role of the state primarily as an enabler or facilitator of such services, rather than as a direct provider and employer of staff.
2. The government will only contract (directly or indirectly) with a provider of services (in those three sectors) if that provider:
- pays a living wage (as opposed to a minimum wage) to those who perform those services; and
- (as far as is practicable) provides regular and standard hours notified in advance; and
- pays travel time and expenses for those who are required to travel to different places of work within the working day; and
- demonstrates a commitment to good labour relations; and
- demonstrates a commitment to pay and employment equity; and
- demonstrates a commitment to paid training and skill development for all staff.
The public contracting policy for these sectors must meet two main concerns. First, it must address the chief causes of precariousness for these sectors: the very low pay, the non-standard hours as well as other incidents of "casualness" such as travel between assignments. Secondly, it must demonstrate that the government does not intend to use public contracting as a way of divesting itself of the responsibility of ensuring that good labour relations prevail in those sectors; that the economic and social justice imperatives for pay and employment equity are supported; and that training is in place to support the expectations of the consumers of the services provided, as well as to contribute to the upskilling of the workforce for the benefit of those workers and the economy as a whole.
3. The government, in response, will sufficiently fund the provision of services to enable all providers to pay a living wage. Further funding to reflect increased skill levels/transport etc will also be made provided there is transparent basis for this. Where appropriate the government will also contribute by way of funding for paid "on the job" training provided there is appropriate tripartite agreement to this.
While there are some not-for-profit providers operating in these sectors increasingly the services are provided by for-profit providers. NACEW does not seek to change that through this policy. The government, however, is entitled to be sure that the additional money provided in the contracts is fully used for the purposes in which it was given and therefore there needs to be a mechanism to provide for this transparency. As will be seen below, NACEW suggests that one way is through collective bargaining.
4. Before contracting with a provider, the appropriate unions will be consulted as to the providers commitment to good labour relations. Further, the terms of the contract in so far as they relate to staff will be disclosed to the appropriate unions who will expressly be empowered to enforce the contract for the benefit of its members if necessary.
At the moment it is very difficult to ensure that additional funding which the government intends should be used for higher wages is in fact fully directed to that. Further, the sheer number of contracts in these sectors adds to the burden of monitoring. For these reasons, it is sensible to permit unions who have a direct interest in ensuring that money earmarked by government for improved wages is used for that purpose, are expressly permitted to enforce that aspect of the contract between providers and government. Enforcement of contracts by third party beneficiaries is permitted by s 4 of the Contracts Privity Act 1982.
5. To support the new contracting requirements, the government will provide financial and other assistance to providers, their industry organisations, unions and relevant ITOs in order to build capacity and facilitate the development of new and improved relationships.
An increased emphasis on skill development, pay and employment equity, and good labour relations may require some support from government to providers, to unions and also to ITOs. This may take the form of technical support to ITOs in developing new training modules and national qualifications, as well as assisting capacity building within unions and providers to enable pay and employment equity audits to be carried out. In those sectors (or parts of sectors) such as homecare, where union density is very low and where there is no current established relationship between employers and unions, support to develop a working relationship should also be provided.
