The monitoring and enforcement of labour standards when services are contracted out

Abstract

This article demonstrates that by contracting-out government services, the employment relationship has changed: workers' labour standards are now regulated through the combination of traditional labour law mechanisms and lesser understood contract law mechanisms. This has changed the regime of regulation and enforcement of labour standards for employees performing services that have been contracted out, in ways that deserve more attention. Evidence is drawn from a case study of New South Wales (NSW) government school cleaners, conducted between October 2010 and April 2011, which finds that cleaners' labour standards are regulated predominantly through commercial contracts for services. This is concerning because contracts are designed to facilitate commercial objectives such as competition and efficiency, and are poorly designed to protect labour standards. When used as a mechanism to enforce labour standards, contracts fail to meet the requirements of responsive regulation; contracts have limited enforcement tools and a weak credible threat of a 'big stick' style of punishment for infringements.

The role of government in influencing labour conditions through the procurement of services: Some political challenges

“…(p. 34) As consumers of goods and services in many sectors, the state could leverage its power to enhance and protect labour standards from its suppliers. The concept of government being in the position of lead supplier is alluded to in Holley's (2014) discussion of the changing role of governments in public procurement. Indeed, Holley (2014) argues that government has defaulted in its role as 'regulator' and in doing so has changed to 'contractor' of public services.…”

“…This neoliberal shift (Anderson and Quinlan, 2008;Markey, 2008) has been remarked on elsewhere as part of a shift to new public management where business trumps the 'public sector ethos' of the public service (Hebson et al, 2003: 482). Tendering processes have thus focussed more on presumptions of contractual processes as vehicles for efficiency rather than enhanced labour standards (Holley, 2014;. This poses problems for the inclusion of 'social aims' in publicly funded supply chains.…”

“…is the actual or perceived conflict between these standards and the main drivers of corporate business activity: profit-seeking and shareholder value. (p. 330) Contextualising governments' role as a significant market power (Donaghey et al, 2014) and as an indirect employer in procurement (Holley, 2014) highlights the ways in which the fracturing of direct employment relationships changes the level and nature of the regulation of labour standards by the state (Holley, 2014;Howe, 2010;Howe and Landau, 2009). Gahan and Brosnan's (2006) typology of regulation is instructive in conceptualising the ranges and interrelationships of regulatory forms involving the state.…”

“…Indeed it could be contended that the idea of using the economic weight of the state to influence labour conditions in supply chains is an aspirational ideal. In reality, neoliberal business practice has influenced government procurement to adopt a businessfocussed style of contracting, with disregard for the social role of the public service (Hebson et al, 2003;Holley, 2014;Howe, 2010).…”

Quality, qualifications, and the market: Procuring interpretation services in the context of the “refugee crisis”

“…Research on contracting out and public contracting of services has suggested that these developments have important implications for working conditions and the quality of services (Benjamin, ; Dube & Kaplan, ; Engström & Axelsson, ; Flecker & Hermann, ; Grimshaw, Cartwright, Keizer, & Rubery, ; Vrangbæk, Petersen, & Hjelmar, ). With the growing importance of public contracting, public contracts increasingly act as tools for defining standards of services (Lahat & Talit, , p. 336) and regulating labour standards and working conditions (Holley, ). Yet, despite their importance as a regulatory tool, little is known about public authorities' strategies to warrant decent working conditions and a high quality of services when tendering.…”