Author: E tū

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

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

IDEA update: ERA responds

The Employment Relations Authority has rejected IDEA’s attempt to force flexibility onto staff and a lock workers into a three year term.

In a recommendation released Friday 23 August, the Authority says the flexibility change should not go ahead and any new collective agreement should expire in July 2020. IDEA had wanted an agreement that didn’t expire until some time in 2021 and the right to force staff to change workplaces.   The bargaining team sees this as a major step forward.

However, the Authority recommendation does not support the union’s call for weekend pay and higher rates for all SSWs and RIDSAS workers. The decision is not binding and with targeted strike notice going in this week, we expect to return to the Authority in the next two weeks to try and settle this long running dispute.  

For more information contact E tū Union Support on 0800 1 UNION (0800 186 466).

E tū calls on the PM to do more for equal pay

E tū joins the Council of Trade Unions and others in calling on the Prime Minister to make fixing a gender pay imbalance more of a priority.

Statistics released today reveal that the ‘gender pay gap’ has decreased slightly since last year, demonstrating both some good progress and remaining room for improvement.

Wellington caregiver Marianne Bishop knows that E tū members like herself and Kristine Bartlett winning the Care and Support Pay Equity Settlement has made a lot of difference, but there’s more work to do.

“Our equal pay win has helped us progress, but now we need the government to fix the Equal Pay Act so that it’s easier for other claims to be processed,” Marianne says.

“We need to reduce the gap even further, and we need everyone working together to make this happen.” 

E tū Assistant National Secretary Annie Newman says that the Prime Minister has been a great supporter of the equal pay campaign for years and now can make a huge difference.

“It’s been great to have to support of the Prime Minister and the coalition government parties at many crucial points in our fight for equal pay,” Annie says.

“We now need to see her take that to the next step, by making a personal commitment to fixing the problematic Equal Pay Amendment Bill.”

ENDS

For more information and comment:
Annie Newman, 027 204 6340

Unions are calling on Kiwis to sign the petition to the Prime Minister, which outlines what needs to happen from here: http://www.together.org.nz/jacinda-you-can

1) The law shouldn’t delay access to the courts when bargaining doesn’t go well.

2) The law should give more support to sector-wide equal pay settlements, compared to settlements that go employer-by-employer.

3) The law needs to follow existing rules about collective bargaining – not add new ones.

4) The law should support a process where equal pay settlements can be checked to make sure they are up to scratch.

5) The law shouldn’t make women who already have equal pay claims in progress go back to the beginning and start again.  

IDEA Services stop-work meetings

Dear IDEA members,

Three days of formal hearings in the Employment Relations Authority concluded on Wednesday and we are now awaiting the formal recommendation of the Authority. The hearing was only granted because of your strike action. So well done!

However, no progress was made on our claim for weekend and SSW rates and the employer is still pushing ‘flexibility’. The good news is your strike action and the three day hearing did result in IDEA  backing down on their attempt to gut the health and safety clause and stop their cutting your rights around service reviews. We expect the Authority recommendation early August. This will be considered, along with more strike action at a national series of paid stop-work meetings in August.

Click here to view the meeting schedule.

Free Auckland measles immunisation clinic 20 July

Free measles immunisation clinic, for people who don’t know or who haven’t been vaccinated against measles before.

Clinic details:

Date: Saturday 20th July

Time: 9.00am to 3.30pm

Venue: Waitakere Union Health Centre, in Waitakere Hospital grounds, Lincoln Road, Henderson

Parking: on site, free

Registration (preferred but not essential):  https://whoozin.com/GH4-TRQ-W7T3-KRAQ

There is a Measles outbreak in Auckland with more than 185 cases since February. Don’t be a victim of this highly infectious illness which can be very serious. If you, or anyone in your whanau, aged between 1 – 49 years and have not had one MMR vaccination, come get one FREE.

If you think you have measles, stay home and call your doctor or Healthline on 0800 611 116.

This free community health initiative is provided by Primary Health Organisations: Comprehensive Care, National Hauora Coalition, ProCare.

Links to measles information:

Auckland Regional Public Health Service (ARPHS): http://www.arphs.health.nz/public-health-topics/disease-and-illness/measles/

ARPHS Quick guide to measles: http://www.arphs.health.nz/assets/Uploads/Resources/Disease-and-illness/Measles-Mumps-Rubella/Quick-guide-to-measles-20190619.pdf

Ministry of Health: https://www.health.govt.nz/your-health/conditions-and-treatments/diseases-and-illnesses/measles and https://www.health.govt.nz/your-health/conditions-and-treatments/diseases-and-illnesses/measles/2019-measles-outbreak-information

NZI misses the blindingly obvious

E tū is annoyed by the deliberate misrepresentation of collective bargaining in relation to Fair Pay Agreements by the New Zealand Initiative (NZI), in a report they released today.

The report purports to make the case against the findings of the Fair Pay Agreements Working Group, which was a group of union and business representatives, academics and experts, chaired by former Prime Minister Jim Bolger.

However, as meticulously detailed by the Council of Trade Unions, NZI has cherry-picked claims, ignored crucial evidence, and has not contributed constructively to the discussion on the issue.

E tū National Director of Campaigns Annie Newman said that NZI had completely ignored the main issue.

“Tens of thousands of working New Zealanders are living in poverty, working in industries where tendering processes mean a race to the bottom on wages,” Annie says.

“Fair Pay Agreements will set minimum standards to make sure that paying people poorly is not the way to be competitive. It really is as simple as that.”

Annie pointed to the recent Care and Support (Pay Equity) Settlement Agreement, which won equal pay for everyone in the industry.

“Carers in New Zealand won equal pay through an industry-wide agreement, similar to a Fair Pay Agreement. It was negotiated by unions, businesses, and government, and has lifted over 50,000 people off poverty wages.

“The facts are on our side – even the OECD now officially acknowledges the importance of collective bargaining. International evidence is clear that countries with mechanisms for industry-wide bargaining have better social and economic outcomes.

“However, even when proper analysis is in our favour, the most important thing for E tū members is that they are lifted out of poverty. That means proper wages and conditions, which is exactly what Fair Pay Agreements are all about.”

Annie says that people shouldn’t be tricked into thinking the debate is about different interpretations of economic analysis.

“Our priority areas for Fair Pay Agreements are cleaning and security, where it is blindingly obvious that we need better wages and conditions. Any argument against that, especially one that offers no meaningful solutions, doesn’t deserve the attention of New Zealand workers.”

ENDS

Media enquires: Sam Gribben, 027 204 6329

E tū & Chorus contractors discuss contract cuts

E tū union met today with Visionstream and UCG contractors to discuss big cuts by Chorus to payments for maintenance work on its copper and fibre network north of Auckland.

The changes affect the codes which determine what the contractors are paid, and these have been slashed by almost a third, says E tū Industry Coordinator, Joe Gallagher.

“The contractors were presented with new contracts and told to sign. The rates that determine their pay are set to drop by 30 percent, and they’re not happy,” he says.

“The new contracts also require they are available for work but there is no guarantee they’ll get any.”

Joe says the contractors are already struggling with rising costs and issues with mental health because of the pressures they face.

“All the costs and risks sit with them but many lack the capital to ride out a lean patch.”

Joe says Chorus committed to improving conditions for its contractors and subcontractors after an investigation found many were in breach of minimum employment standards.

He says in the wake of the investigation, Chorus did its own report, which recommended changes to ease pressure on its contractors, but “that’s not what’s happening here”.

“This latest move flies in the face of Chorus’s commitment to ensure the contractors receive a sustainable income.”

Joe says the meeting, which was hosted by the Telecom Contractors Association of New Zealand (TCANZ) discussed how the contractors and the union can work together to achieve better outcomes.

ENDS

For more information, contact:

Joe Gallagher E tū Industry Coordinator ph. 027 591 0015

Auckland: free measles immunisation clinic, 29 June

There is a measles outbreak in Auckland, with more than 126 confirmed cases this year. Don’t be a victim of this highly infectious illness which can be very serious. If you or anyone in your whanau is aged between 1 – 49 years and has not had one MMR vaccination, come get one FREE.

If you think you have measles, stay home and call your doctor or Healthline on 0800 611 116.

  • Date: Saturday 29 June
  • Time: 9.00am to 3.00pm
  • Venue: Waitakere Union Health Centre, Waitakere Hospital grounds, Lincoln Road, Henderson
  • Parking: on site, free
  • Registration (preferred but not essential): https://whoozin.com/FQH-73A-AHAE-9MG3

This free community health initiative is provided by Primary Health Organisations: Comprehensive Care, National Hauora Coalition, ProCare.

Links to measles information: