Category: Community Support

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).

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.

ERA win opens new ground for IDEA, pay rise on the way

A series of strikes by E tū members employed by IDEA Services has been critical evidence in persuading the Employment Relations Authority to accept a union application for facilitated bargaining.

The Authority ruled that seven escalating strike actions were “likely to affect the public interest” and impact on IDEA clients. That was enough for them to direct IDEA to sit down and talk.

E tū advocate Alastair Duncan says the union welcoms the decision but was disappointed that IDEA had turned down earlier attempts at facilitation, leaving staff with little option but to take industrial action.

“Now we have a decision from the Authority that cannot be ignored.  After months of stubbornness, we hope IDEA will come back to the negotiating table willing to address very real staff concerns around staffing, safety and job security.

“To date, IDEA has been unresponsive to union attempts to find a middle ground and we hope that a move into a more formal setting will assist.

“IDEA is the operation arm of IHC, which is a multimillion-dollar business dependant on public funding and public good will. We hope IDEA will now stop trying to cut the rights of the workforce.”

Meanwhile, IDEA care and support worker workers will be getting pay rises of between 50 cents and $1 an hour as a result of the ground breaking equal pay win.

“IDEA tried to undermine vocational staff when we won the case, but the good news is that every care worker at IDEA gets a pay rise from 1 July,” Alastair says.

E tū will be holding paid membership meetings in August to report progress.

IDEA strike on Sunday: info for members

Dear IDEA members,

Despite another full day of mediation on Thursday 20 June, IDEA failed to make an offer to settle your collective so Sunday’s strike starting at 9.00 am and continuing for 24 hours is on.

On Tuesday 25 June we’re going to the Employment Relations Authority to argue the case that IDEA has breached the law and to see a formal “facilitation”. Your strike action is a key part of winning that hearing as it is one of the criteria that can force a decision.

We expect IDEA to try and undercut that process by making a late offer over the weekend. We are pretty sure they will continue to push their attempt to make you even more “flexible” and are confident any offer will NOT address the need to value Senior Support staff or restore the weekend rates they took off staff many  years ago. 

At the mediation it did seem they might be ready to back down on their attempt to cut the health and safety rights at work. We put that down to the action and support shown by members to date. So don’t stop now.

Click here for details about your local picket.

Full membership meetings are being planned for July, so keep an eye out for those details which will be sent to you and published on the website.

Access workers begin four-day strike

PSA and E tū members at Access Community Health have voted overwhelmingly in favour of further industrial action after their latest pay talks stalled – more than a month after members first took to the streets for better pay.

The latest round of industrial action begins today across the country, with members on strike for up to four days from today, Friday 21 June until Monday 24 June.

Access Community Health coordinators, administrators, and call centre workers held a week of partial strikes and walkouts in mid-May, with further action in early June after efforts to negotiate a new pay deal failed.

“Our members are beyond frustrated by Access’s ongoing refusal to lift the wages of those who are some of their lowest paid workers,” says Melissa Woolley, PSA assistant national secretary.

“In one month of bargaining, Access have used bullying and intimidation tactics, undermined the bargaining process, and have made offers that would see disproportionate rates of increase between members.”

“Attempts to divide and silence our members have only made them more determined not to back down, as seen by our members continuing to vote overwhelmingly in favour of taking action and by an increase in membership since industrial action began in May.”

“We urge Access to come back to the bargaining table and offer a better deal for these workers,” says E tū Home Support coordinator Kirsty McCully.

“It’s time for Access to recognise these workers as the glue that holds Home Support together in New Zealand. Access’s failure to give their workers a fair increase is disrespectful to both the members, and to Access service users.”

ENDS

Member action:

Access coordination staff in Whangarei will be gathering with supporters in the Whangarei Town Centre to distribute information to the local community at 11am today, Friday 21 June.

For further information, contact:

Kirsty McCully E tū Home Support Coordinator ph: 027 204 6354

For any local Whangarei media interviews and information please contact Moana Witehira E tū organiser ph: 027 204 6367

24-hour strike at IDEA services after mediation fails

A 24-hour strike by E tū care and support workers employed by IDEA Services will go ahead on Sunday after eight day of failed mediation talks.

The workers will walk off the job at 9am on Sunday, returning to work at 9am on Monday.

Three thousand members are affected by the dispute which has been running for eight months and has seen six previous strikes including last Sunday’s 12-hour stoppage.

The members are seeking extra pay for senior support workers, weekend penal rates and the protection of key health and safety rights. They are also resisting IDEA Services demands for more flexibility over their rosters.

“Despite another full day of mediation on Thursday 20th June, IDEA failed to make any offer to settle, so Sunday’s strike is on”, says E tū advocate Alastair Duncan.

Alastair says the strike will affect up to 600 residential homes with many unionised workers “having a well-deserved and rare Sunday off to spend with loved ones,” he says.

There will also be pickets around the country to inform the public about their concerns –

particularly IDEA Service’s insistence on being allowed to roster workers anywhere, anytime.

“Under the guise of so called “flexibility” IDEA wants to undermine the job security of the very staff who support vulnerable New Zealanders,” says Alastair.

Alastair says penal rates for weekend remains a key claim.

“IDEA’s parent company IHC took away weekend rates during the dreadful days after the Employment Contracts Act became law. It is now time to once again respect the fact that weekend work deserves an extra pay margin.”

In an effort to break the deadlock, E tū has also applied for a formal facilitation hearing by the Employment Relations Authority, which is due to be heard on Tuesday.

ENDS

For more information, contact:

Alastair Duncan E tū advocate ph. 027 245 6593

IDEA Services dispute escalates: 12-hour strike Sunday

A 12 hour strike this Sunday by care and support workers at IDEA Services will go ahead after two days of failed mediation this week.

The workers will be striking from 8.30am to 8.30pm.

Three thousand E tū members are affected by the dispute which has been running for eight months and has seen five previous strikes.

E tū union advocate Alastair Duncan says the 12-hour stoppage signals an escalation of strike action.

“To date we have held a series of one-hour stoppages in an effort to convince IDEA of the need to seriously respond to staff concerns around health and safety, workloads and job security,” says Alastair.

“At IDEA’s request we attended additional mediation this week only to find the employer had little constructive to add and only wanted to deal with ‘hypothetical’ bargaining scenarios, with no firm pay offers.”

The union has applied for a formal facilitation process, arguing the bargaining has become protracted and the employer has shown bad faith.

ENDS

For more information, contact:

Alastair Duncan E tū Industry Coordinator ph. 027 245 6593