research-report-96-coming-clean-contractual-and-procurement-practices.doc

2 a college in scotland with a contract for cleaning

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2. A college in Scotland with a contract for cleaning services since 2008 when 30 staff were transferred. 3. A hotel in Wales that outsourced in 2004 to the present company and has since agreed three contract renewals. 4. A hospital in England that outsourced in 2001 as part of a large Private Finance Initiative to construct and service new buildings, involving 500 transferred staff. 5. A local authority in London that transferred around 75 staff in 2012 on a four-year contract, which included a requirement to pay the London living wage. 6. A bank in London that outsourced in 2010 on a three-year contract, extended to four, and included a requirement to pay the London living wage. The intention was to illuminate key features of contractual and procurement practices that can have a positive effect on HR practices and employment conditions experienced by the cleaning workforce. In each case we endeavoured to interview a senior procurement manager, contract manager and HR manager in both the client organisation and the cleaning company, as well as one supervisor of cleaning workers. The report presents the six case studies as sketches that follow a similar template: sector and case study background; procurement characteristics; and implications for employment practices and working conditions. Thematic analysis of the issues arising in the case studies was also conducted; the key findings and resulting implications of this analysis are summarised below. vii
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COMING CLEAN: CONTRACTUAL AND PROCUREMENT PRACTICES Identifying better procurement & employment practices o Improving pay Cleaners’ pay varied across the six cases from the minimum wage, £6.31, to the London living wage, £8.80. Only one case paid more for experience or qualifications and payment of enhanced rates for unsocial hours was mixed. Contracting practices exerted both downwards and upwards pressures. Intensive market competition drives pay downwards both at the bidding stage of procurement and successive renewal and break-point stages, which provide for renegotiation by both parties part way through a contract. Clients tended to exert strong cost pressures (formally and informally) in all six cases, with clear evidence of a deterioration of conditions in some. Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) protect pay from downwards market pressures; five of the cases had some staff on TUPE protected pay, creating problems of inequality in the three cases where cleaning firms had not adjusted pay of non-TUPE staff upwards. Unions played a significant role in the two London living wage cases and the hospital case as part of a wider initiative across the NHS to agree the Two Tier Code. 1 The two London client organisations committed to a living wage in procurement. The hospital, council and bank cases all attributed low staff turnover to the relatively high rates of pay.
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