Month: September 2019

Blog: A history of unions and contractors in the public hospital system

The issues of low pay and poor conditions are very familiar to our many members working for contractors in our public hospitals. Until recently, procurement rules encouraged contractors to bid low to win contracts.  This may change after the Government this year moved to broaden the criteria for selecting contractors.

But familiarity with the history of contractors in our public hospitals presents a big red flag. From the first encroachment of contractors in our hospitals during the 1940s, through the dark days of the Employment Contracts Act and the slow, steady fight since then to improve the lives of all hospital workers, the historical record shows contractors have actively resisted decent pay for their workers, using anti-worker laws to drive down wages and conditions. The paper below, by our former Assistant National Secretary John Ryall, spells this out in detail.

The Early Awards

Occupational awards (Arbitration Court-set minimum mandatory pay rates and employment conditions for occupations) were in place from the 1890s but they didn’t really take off in a big way until the 1930s with the election of the First Labour Government, which brought in compulsory unionism and encouraged the formation of new awards in places where they had not existed before.

The Hospital Domestic Workers Award, first negotiated in 1940, covered orderlies, food service workers, cleaners, sewing room workers and male nurses, who were employed in public hospitals. At that time, they were all employed by Hospital Boards, but in the 1940s the first of the contractors started creeping into public hospitals.

Both the Canterbury and Wellington Hospital Boards contracted out their cleaning to Crothalls, which set off a tug-of-war between the Canterbury and Wellington Hotel and Hospital Workers Unions and the Canterbury and Wellington Cleaners Unions as to who covered these workers and under which Award (Hospital Domestic Workers Award or Cleaners Award).

Luckily for the cleaners, the Hotel and Hospital Workers won a case before the Arbitration Court in 1946 and at that point Crothalls and other contractors, who gained contracts in public hospitals, were covered by an award where pay rates and employment conditions were largely dictated by the Hospital Boards.

Pressure on Hospital Boards

In the early 1980s there was increased financial pressure placed by Government on the Hospital Boards and, as well as getting rid of continuing care beds to the private residential care sector, they also became more cost-conscious with changes of contract.

There were a number of disputes from 1981-85 (a big one in Wellington in 1981 and another in Auckland in 1983) regarding changes of contract and the cuts in hours of existing workers during these processes. Because the Award conditions were minimum industry conditions (including for any business, such as retail food stalls) that set up on a hospital premise, there was no room for a contractor to cut these conditions, but they could cut the hours of work of the cleaners.

At the time the Award had a provision that required the union to approve the appointment of any part-time worker through a permit system. This was used to control the cuts.

Later in the 1980s the part-time permit system was weakened (as most parts of the smaller unions were not using it) although this was replaced with a better provision to maintain hours of work if the contract changed and the workers were taken over.

The Dark Ages

The 1991 Employment Contracts Act broke up all previous arrangements and the national award broke up into site-based collective employment agreements.

In the periods 1992 (when the Hospital Domestic Award expired) and 1996, large parts of the public hospital system were contracted out as the Area Health Board system was broken up into competitive Crown Heath Enterprises, who were run by commercial, government-appointed directors and were expected to make a profit.

P&O Services (formerly Crothalls and now Spotless) were the dominant player and they took over all services at Counties-Manukau, Waitemata, Bay of Plenty, Mid-Central, Whanganui, Tairawhiti, Nelson-Marlborough and Southland. They already had cleaning services at Wellington, Hawkes Bay and Lakes.

The other contracting group that emerged was called Tempo and it started a cook-chill system and took over the food services at Taranaki, Lakes, Northland, Wellington, Canterbury and Wairarapa. Tempo, which was bought out by the US Delaware North Corporation also gained cleaning contracts in Wellington, Hawkes Bay and Auckland before it collapsed in 1995 leaving P&O Services (later bought by Spotless) to take over most of its contracts.

Because the Employment Contracts Act allowed employers to set up non-union collective agreements, P&O would do this and then employ all their new staff on these collective agreements despite a union collective agreement being in existence. If they wanted to cut conditions even further, they would set up a new non-union collective agreement while the others were still in existence and employ new staff on even lower conditions.

In Mid-Central Health, P&O Services had some existing workers on the old Award, some on the union collective agreement and others on collective agreements going from A to G, each with different cascading sets of employment conditions.

In the late 1990s there was a struggle at Mid-Central to get rid of all these collective agreements and force the company to offer all new workers the union collective agreement before other agreements.

The Victory Fund and the Fight for the DHB MECA

While a Labour-Alliance Government was elected in 1999 and the Employment Relations Act was introduced in 2000, it still took the unions time to adjust to public hospital organising and collective bargaining.

There were 45 separate collective agreements existing in the public hospitals and some of these local site-based agreements were so weak that their pay rates were very close to the minimum wage; the weekend, public holiday and night penal rates had been reduced to very low levels; and sick leave and other leave arrangements had been reduced in many parts of the country.

The union began a “Healthy Hospitals” campaign in 2006, focussed on the lowest paid workers in the public hospital system, moving the nearly 2000 SFWU members into one national Multi Employer Collective Agreement (MECA), and delivering a big lift in the wage rates and employment conditions of our members.

The DHBs were opposed to a National MECA, arguing that our members’ pay rates were determined by local labour markets rather than a national one (nurses) or an international one (doctors) and to complicate this the DHBs would not sit in the same room as the contractors (Compass, Spotless, ISS and OCS).

After nearly 12 months of bargaining, stopwork meetings and rallies, the Labour Government told the DHBs to conclude a MECA, although not with the contractors included. A case in the Employment Court arguing the DHBs had a duty to conclude a MECA was lost.

The union had discussions with the Minister of Health and the Government about funding a MECA settlement above the DHB financial allocations, including the cost for the contractors.

The Government put aside $17 million for a settlement and the union negotiators were forced to massage the conditions to meet these parameters in a settlement which was independently costed.

The DHB MECA was settled on good terms with many members getting back their weekend, public holiday and night penal rates and pay for cleaning supervisors, who had previously only been paid about 35 cents an hour above the cleaners’ rate, was boosted by about $2.00 an hour.

The base rate was set at $14.25 an hour ($3 an hour above the minimum wage) and a national service scale was introduced for the first time with a 5% increase at the second step and 3% increases up to step 5. To preserve the “local labour market” principle the DHBs managed to carve out an exception that non-metro DHB members could only progress up to step 4 and not be eligible for the top step. Current service and other allowances were incorporated into the high wage scale.

As there had previously been multiple DHB collective agreements, a standard set of conditions was negotiated into the MECA and any group that had better conditions had these preserved in separate DHB schedules.

The contractors then followed and each negotiated their Single Employer Collective Agreements on the basis that the same wage scale, progression system, penal rates and overtime rates would be applied, that the parties would try to reach agreement on a common set of employment conditions and any conditions above these would be preserved in separate schedules for each DHB group.

The implementation was mixed across contractors with resistance where contractors feared a reduction of their competitive advantage over other contractors and DHB directly employed services. Spotless members embarked on a stop-start form of strike action and Spotless responded by locking our 700 members out of their jobs until the union agreed to their terms for the collective agreement.

The Employment Court refused the union’s interim injunction application, but the members stood firm.

Eight days later, with pickets occurring daily outside each public hospital and the Auckland DHBs giving Spotless an ultimatum about fixing the dispute or having their contracts terminated, the Employment Court reversed its position and gave the union an injunction against the Spotless lockout.

Spotless had to quickly negotiate a settlement of the collective agreement and settle with the union for legal costs and back pay to the members. Over the next six months Spotless lost all of the Auckland contracts and the contract at Southland DHB.

Between 2008 and 2018 the contractors were compliant with settling for whatever the DHB offered in the MECA although the percentage increases during these years were low. The contractors also gradually all agreed to bargaining fee arrangements for their SECAs.

The 2018/19 Problem

In the 2018/19 round the union gained very large increases in wages and cemented in some strong obligations for employers around training and qualifications attainment.  However, again the problem looms that the DHBs could refuse to fund the contractor increases after signing off the SECAs and the contractors may be stuck with paying the rates but not getting the funding for them.

The struggle of these workers for stability, security and decent lives continues and the story of contractors in the DHBs will have a new chapter written in the near future.

By John Ryall

Climate Change Survey: E tū! Your voice is needed!

Climate change and its impacts are upon us. Our industries face particular challenges, yet in New Zealand we have little information on what we as a society think about this or what we should do. 

This research survey is being conducted through Auckland University of Technology and invites every union member to give their feedback on issues to do with climate change, Just Transition, and what is happening in workplaces on these issues.  This will be the largest survey to date on the issue and will provide important information that unions can use for planning and education.

Participation is voluntary and confidential, and the survey will take around 15 minutes to complete. Your union encourages all members to complete the survey. Please click HERE to start the survey and for further details on the project.

IDEA: great progress at bargaining!

Dear IDEA Services members,

We are pleased to announce that good progress has been made in bargaining over the last week and we are positive about the prospect of reaching a proposed settlement very soon for members to vote on.

This also means that the strikes notices for tomorrow until next week (14-22 September) have been withdrawn, so just work your usual hours.

We are looking forward to giving you more information as soon as possible.

Regards,
Your IDEA Services Bargaining Team

Macron for E tū a Companies Office first

E tū has welcomed the move by the Companies Office to soon enable incorporated societies like the union to use the macron when they register their names.

Since 2015, E tū has been registered as ETU because the registry system doesn’t allow the use of lower-case letters or macrons for most registered entities.

However, this will be allowed for incorporated societies and charitable trusts from the end of September, which E tū President, Muriel Tunoho says is very welcome.

“That’s great news,” says Muriel.

“Macrons change the meaning of words in te reo Māori. The absence of a macron can change the true meaning of a Māori word or it can be mis-interpreted.”

Muriel says the union had persistently sought to register its correct name – macron included since its merger in 2015 and eventually appealed to the Māori Language Commission Te Taura Whiri i te Reo Māori for help.

As a result, E tū has been issued with a special incorporation certificate with the name E TŪ – macron included – which is a first for the country.

Muriel says knowing other incorporated societies will soon be able to register using macrons as of right is cause for celebration during Te Wiki o te Reo Māori/ Maori Language Week.

“This is a win/win for everyone,” says Muriel.

“We are halfway there and it’s good we have our certificate. Hopefully others will soon as well and we’ll see the normalising of macrons, rather than just in special cases such as ours.”

The convenor of te Runanga o E tū, Sharryn Barton says it’s time the Companies Office recognised its obligations under Te Tiriti o Waitangi.

“I know we’ve got a special dispensation to have our language correctly recognised but it’s a one-off. It should be there for everyone who needs to use it,” says Sharryn.

“We need to see the guaranteed protections of taonga, which include te reo Māori under the Articles of Te Tiriti o Waitangi, are practised by the Crown and it’s entities,” she says.

ENDS

For more information, contact:

Muriel Tunoho President E tū ph. 027 618 5467

Sharryn Barton Convenor Te Runanga o E tū ph. 027 462 4390

Metals update

The employer advocate has finally signed off the Terms of Settlement for the Metals and Manufacturing MECA and the renewal document is being formatted.

The original parties’ campaign will kick off soon. Keep checking our website for updates and you can expect contact from your organiser soon regarding your ratification meetings.

As usual, the subsequent parties’ campaign will follow thereafter.

Celebrations mark Living Wage at Wreda

Wellington’s Mayor Justin Lester will today host an afternoon tea to celebrate the payment of the Living Wage of $21.15 to directly employed workers at Wreda (Wellington Regional Economic Development Agency).

More than half Wreda’s 250-plus workforce are set to benefit, including hosts/ushers, cleaners, operations staff and iSite workers.

Permanent staff moved to the 2018 Living Wage rate on 1 July and their pay will increase to the 2019 rate of $21.15 on 1 September, when casual workers will also receive the Living Wage.

The increases follow on-going campaigning with Living Wage Wellington that resulted in Wellington City Council becoming the first local body to be an accredited Living Wage Employer.

“This is another victory for Wellington workers and a step towards Wellington becoming a Living Wage city,” says Yvette Taylor, E tū’s Campaign Team Leader.

“Many of these workers were on the minimum wage or not much above, so this will be transformative for them, their families and communities. It means they can live with dignity and participate in the life of our wonderful city.

“They work in iconic venues like the Opera House and Michael Fowler Centre which are at the centre of our city’s cultural life, so all Wellingtonians have a stake in this.

“We would like to thank Wreda and Wellington City Council for coming to the table and making it happen.”

Wreda host, Liz Noone, who was an early advocate for the Living Wage at Wreda, says she’s delighted.

“For me it’s about doing what’s right, valuing your staff, appreciating what people do and making sure everyone is looked after,” Liz says.

The event coincides with the release of the 2019 Accredited New Zealand Living Wage Employers List which was unveiled in Dunedin at midday today.

ENDS

What: Afternoon tea to celebrate the Living Wage at Wreda

Where: Mayor’s reception room, Level 8, 113 The Terrace, Wellington

When: Monday, 2 September, 3pm

For further information, contact:

Yvette Taylor E tū Campaign Team Leader, ph. 027 585 6120

Workers will be available at the event to speak to media. You can check out this year’s Accredited Living Wage Employers List via this link: https://www.livingwage.org.nz/accreditedemployers