You win the contract to clean the local hospital. You succeed because you are good at your job and have a good crew.
The previous contractor was slack and expensive. The hospital gives him one month’s notice. It’s a good result for you. And a good result for the hospital.
But then Part 6A of the Employment Relations Act kicks in. Part 6A enables the existing cleaners to transfer your business. The purpose of this provision is to protect “vulnerable workers”.
Part 6A defines the vulnerable workers by the work they do and where they do it. Essentially, it covers industries such as cleaning and food and laundry services. The real protection is to existing contractors.
Indeed, the previous contractor told the hospital it was no use dropping him in your favour because Part 6A means nothing much would change. It would be the same crew on the same wages and conditions doing the same job.
Part 6A locks in existing workers and sloppy work practice. It doesn’t protect “vulnerable workers”.
It protects slack businesses and poorly trained and managed workers. It’s anti-competitive. It drives up the cost of cleaning and laundry services including for government, which is the major country’s buyer.
I regard it as horrific that a winning contractor has to keep on the staff of the losing contractor, and the same terms and conditions. It destroys their ability to be more innovative and flexible.
National rightly slammed the Labour government for introducing Part 6A in 2006. But National in government has done nothing.
There has been a required statutory review of Part 6A in 2009. But then nothing. The minister is still sitting on the result.
The evidence is clear. Part 6A can’t be amended. It should be repealed.
I agree. No employer should be forced to employ staff from a competitor. It also destorys any incentive for staff to perform well for their employer, if they know that even if their employer loses the contract they are guaranteed jobs with the next employer.