Cleaning Modern Award - the good and the bad

Dateline: 23.06.2009
Author: Lorraine Day

With only six months remaining before the new Cleaning Services Award 2010, part of the Federal Government’s Awards Modernisation Program, is due to be phased in from 1 January next, cleaning contractors are concerned and frustrated that the award details have still not been finalised.

One South Australian family-owned business, Longford Cleaning, which employs about 70 permanent part-time and casual staff, fears it will lose up to half its clients if the proposed spike in wage costs of up to 25 per cent is passed on.

Longford’s operations manager Dominic Gibbie (pictured) said the change in the definition of ‘casual’ workers will mean they will be forced to change their entire casual workforce, about half, to permanent part-time employees.

“We will only be able to employ casuals for irregular work, such as filling in for someone taking leave,” Gibbie said. “Many of our casual cleaners actually prefer to be employed as casuals. From January next year all our casuals will have to be permanent part-time. This will mean a sharp rise in our wages bill and we won’t be able to afford to sell it to our customers to work after 6 pm. Why would they want to pay that extra money?

“Also, the changes in the minimum time of work for a standard shift will limit everyone’s ability to be flexible, both employers and employees,” he noted. “This will depend on the cleaning area of a client’s premises, with a minimum of two hours for a small area, a minimum of three-hour shifts for areas of 2000 to 5000 square metres, and a minimum four-hour shift for sites more than 5000 square metres in area. While none of this applies to existing contracts, it does come into effect in 2015.”

Longford Cleaning cleans about 15 schools, as well as commercial offices, employing from one to nine cleaners per site each night.

“Because the majority of our work entails cleaning schools, usually between the hours of 3.30 pm and 6.30 pm, we estimate it will cost us almost 30 per cent more with minimum hours and penalty rates,” Gibbie stated. “It’s just not practical to start earlier.

“There are also task specific penalty rates such as an extra 1.77 per cent where a cleaner’s duties are majority toilet cleaning, and 0.456 per cent for rubbish removal. In addition, supervisors’ allowances will go up, as will travel allowances.”

Gibbie believes Workplace Agreements are not an option either because workers can’t be disadvantaged. “It’s a can of worms,” he surmised.

“We’re actually investigating the feasibility of sub-contracting. We’re looking at all options.

“We believe we will lose several small cleaning jobs to franchises; they work differently. It will be a boom for franchises.”

The Australian Fair Pay Commission is already in the process of its annual Minimum Wage Review and will be handing down its Wage-Setting Decision in July, to be implemented from October this year.

Gibbie expects the commission to hand down a 2 to 3 percent increase, separate from award increases. This will mean at least 17 percent more in wages than last year for some.

Workplace Relations Minister Julia Gillard has ignored a request to explain to Longford Cleaning’s management how the Federal Government’s awards modernisation program would not increase business costs.

“We’ve sent numerous letters to government ministers of both parties plus independents,” Gibbie said, “and the only replies we’ve had have come from Liberal Party members.”

The BSCAA is taking a national focus on the issue and has made several submissions, the most recent one being a joint submission with ACCA on 29 May regarding change of contracts, and advocating that where current employees’ rates, penalties and allowances exceed that proposed in the Cleaning Services Award 2010, that the terms of the new award will not apply until 2010.

Business SA has also made a submission seeking more clarification of the term ’casual’, saying that the current draft clause would lead to unnecessary disputes and conflicts regarding whether an employee working on an ‘intermittent’ or irregular basis’, or ‘uncertain hours’ does in fact meet the definition of a casual employee

A MORE ATTRACTIVE INDUSTRY FOR EMPLOYEES

Brandon Petty, managing director of Southern Cross Cleaning, and vice-president of the SA division of the BSCAA, said, “It (the new award) is going to be financially beneficial for our staff, but we also understand there could be overall about 15 per cent increase in costs for employers in South Australia, although it is unclear at this stage how it will be phased in over the five years.”

Southern Cross Cleaning, the largest South Australian-based commercial cleaning organisation, employs more than 550 people including highly-trained cleaners, supervisors, administrative and management staff.

“There are going to be changes with regard to penalty rates, as well as increases in the standard rate,” Petty explained. “We are obviously competing against all industries to get staff, so this could be advantageous for us,” he added.

“However, as our clients work to a budget, it could force some clients to go to day time cleaning, or reduce hours. Instead of vacuuming an office every night, based on their budget, we may only be able to vacuum three times a week.

“I look at it as a good and bad thing, if we could pass the increase on to clients.

“Our industry is so labour intensive that the new award could kick the whole contract up 15 per cent. We’ll be trying to do more homework ourselves. It’s a new award, not only rates of pay, but also conditions. A client may have to accept increases or lose cleaning hours.

“From a HR point of view, it if means employees get more money, it will encourage more people to join the industry and we’ll have a bigger pool to choose from, but there are also negative points to be worked through.”

Cleaning Modern Award - the good and the bad