Battle for a living wage: Ghosts in corridors of power highlight disparities in pay

By Kate Shuttleworth

MPs considering a proposed law change to scrap protections for vulnerable workers such as cleaners in small businesses don't need to look far to see the effects of low pay.

Mareta Sinoti's workload cleaning Parliament has doubled since she began three years ago but there's no extra pay.  Photo / Mark Mitchell
Mareta Sinoti's workload cleaning Parliament has doubled since she began three years ago but there's no extra pay. Photo / Mark Mitchell

There are ghosts in the corridors of power - the cleaners that work in Parliament by night are largely invisible.

Mareta Sinoti, 40, cleans the offices of politicians from midnight on week nights. She has worked in Parliament for three years, and earns well below what the unions have termed a "living wage".

She is employed to work only 30 hours a week and earns $13.85, barely above the minimum wage.

Ms Sinoti needs to top up her income to support her two teenage sons and her husband, who lost his job when Woolworths in Tawa closed nearly two years ago.

She took on a second casual job cleaning a motel in Porirua for $15 an hour at the end of last year.

Ms Sinoti, who is originally from Asau in Samoa and now lives in Cannons Creek, is quick to underplay the struggles she faces.

There is only so much you can hide - Ms Sinoti is a tired woman.

She gets a ride to work and works from midnight to 6am, when she catches a bus and then a train home, arriving at nearly 7am.

By 8.30am Ms Sinoti leaves for another cleaning job, which is turning out to be six days a week while it's busy.

By the time she makes it to bed, it's 4.30pm, but she's up again by 11pm.

Ms Sinoti says the hard work isn't paying off - she is struggling to pay school fees, and buy her son rugby boots for training.

"Look at the rate; $13.85 is almost not worth it. For me the rate is very low and it's not an easy job."

Ms Sinoti is on a cleaning team working in Bowen House.

When she started three years ago six people cleaned the 22-storey office building; now there are three.

Her workload has therefore doubled and there's no extra pay, staff, or hours to get the job done.

"Either the supervisor helps; or we sometimes work overtime - or we leave when our hours are finished."

The cost of getting home from work is nearly crippling.

She doesn't own a car and spends nearly $50 a week on the combination of trains and buses.

It is easier and cheaper for her to get to her casual job in Porirua - it costs only $5 for a return bus trip.

"My job in Porirua is working for a small place, but they respect us.

"The difference is at Parliament they have decreased the cleaning budget, but the ministers got a pay rise."

She's right - at the end of last year politicians got a 1.9 per cent pay rise, which left Prime Minister John Key with $150 extra a week - bumping his salary up to $419,300 a year.

The income for Cabinet ministers increased to $262,700 a year.

Asking for more

Ms Sinoti is one of 37 cleaners who've asked the Parliamentary Service to raise their wages to $15 an hour - at an estimated cost of $50,000 a year.

They earn $13.85 an hour, supervisors get $14.60.

Parliamentary Service communications manager Diana Wolken says the service is in discussion with Spotless Cleaning Services, but says the pay rates are between the cleaners and their employer, Spotless.

The cleaners' contract says their wages will rise when the "employer's customer agrees to, and sufficiently funds, an increase to the commercial contract for the purpose of enabling an increase to that employee's hourly earnings".

Spotless declined to answer questions.

Labour, Greens, NZ First and Mana are backing the cleaners and have met with the Parliamentary Service.

The cleaning landscapeThe Ministry of Business Innovation and Employment says there are 30,000 cleaners in New Zealand's $1 billion commercial cleaning industry.

At least 40 per cent are from non-English-speaking backgrounds, nearly 50 per cent have dependent children and 33 per cent rent their homes.

Most are Pasifika women.

The cleaning industry is "large, nationwide and largely invisible", according to a 2004 Labour Department report on "precarious employment".

There are three major cleaning companies in New Zealand: United States-owned Spotless with 7000 NZ staff; British-owned OCS with 4000 staff and Danish-owned ISS with 2000 cleaning and security staff.

Cleaners often work part-time and sometimes face restructuring when a contract is lost, then won by a new contractor.

Cleaning wars

Like any war, few on the frontline know what the war is about - cleaners remain without a rise in wages and with limited information when their employer loses a contract to another cleaning company.

At the Beehive, neither the Parliamentary Service, as the client, nor Spotless, as the contractor, is advocating strongly for lifting the hourly rate to $15.

According to Deborah Littman, who led the campaign for a living wage in London, the onus should be on the client to push for a service that includes higher wages for cleaners and ultimately leads to improved productivity, morale and less staff turnover.

Building Services Contractors (BSC) president Patrick Lee-Lo, who owns ToTal Property Services, pays his cleaners $14 to $16 an hour.

BSC members adhere to a code of conduct around the rights of cleaners during contract changes, a multi-employer collective agreement agreeing to pay cleaners $13.85 or above, and a principles agreement.

"While there will always be rogue operators out there, the BSC are willing to pull any of its members into line."

The rogue operators, as he puts it, are franchised cleaning companies. He's been calling for the Government to regulate the franchise industry.

Franchise cleaning companies win a contract, then look for a new franchisee for that contract.

The franchisee will have to pay a one-off "spotting fee" of up to 50 per cent of the contract value to secure the contract. Then they will pay a monthly royalty to the franchisor which can be anything between 5 and 15 per cent.

"For the first year of a contract the franchisee may be paying 45 per cent of the contract value to the franchisor - not including the cost of the franchise licence, equipment, training and a vehicle."

Grant McLauchlan, managing director of franchising company Crest Commercial Cleaning, says Crest charges an initial or "establishment fee" of 50 per cent of any guaranteed turnover from each contract signed off.

It also charges a franchise royalty fee of 15 per cent. This means 65 per cent of a franchisee's income goes straight to Crest. That, says Mr Lee-Lo, is "simply greedy".

A vulnerable law

Last October former Labour Minister Kate Wilkinson announced that businesses with fewer than 20 employees that win a new contract would no longer be required to offer jobs to "vulnerable workers" such as cleaners who were doing the work for the previous contractor.

She had come under heavy lobbying from Crest to scrap the vulnerable workers law, calling it a "roadblock" for the industry.

She was labelled "vulnerable minister" and the company commissioned coffee mugs with a question mark hanging over a caricature of her.

The law, passed by Labour back in 2004, was up for review in 2009, but Ms Wilkinson didn't set up a review until 2010. She requested a cost benefit analysis of the provision by consultants Sapere last year and wanted to know whether small and medium enterprises should be exempted.

The report that went to the Cabinet dismissed any exemption for small and medium enterprises because "restricting the special protections to only large employers should be counter-productive and lead to even more perverse outcomes than the current arrangements".

"This is because it would result in transfer situations where one party had to be compliant and the other did not, leading in all likelihood to a breakdown in the exercising of the provisions at all."

Crest lost two cases in the Employment Court last year and had to pay Auckland cleaning couple Aisea and Manu Fotu $14,000 and a Nelson cleaner nearly $5000.

Mr McLauchlan says the vulnerable workers law created vulnerable businesses and argues that employers should be able to decide if they want to keep staff or not.

"They [the cleaners] are just being tossed around like a chattel," he says.

"The only people that are on the minimum wage are the members of the Service and Food Workers Union - our people earn substantially more than the minimum wage."

Crest employs 30 people directly and has sold 350 franchises - with 1400 people involved.

Mr McLauchlan denies there are any franchisees struggling to live.

But Service and Food Workers Union secretary John Ryall says any change to the law would further drive down wages and conditions.

BSC president Mr Lee-Lo says franchisees have to either grow their businesses or cut corners to make money.

"In Australia they are now dealing with sham contracting - people are paying cleaners under the table, in cash, literally out of suitcases in the car park.

"Most of them are illegal immigrants - this is the sort of nonsense you have when you have these models trying to take place."

Politicians take sides

Mr Ryall's union predecessor Darien Fenton, now Labour's spokeswoman on labour issues, backs Mr Lee-Lo's call for the franchise industry to be regulated, and has written to Parliamentary Service head Geoff Thorn and the Speaker seeking a wage rise for Parliament's cleaners.

"What we used to do in the union was target the contractors - they were the big bad boys. Over time we came to understand the workers were the piggy in the middle," she says.

"You've got contractors who are in a highly competitive industry competing with the likes of Crest Cleaning coming in with franchises and if they want to get business they have to compete on wages.

"I think the struggle of the parliamentary cleaners is a good example of how this whole thing works - they've been going through a retendering process so Spotless would have been under pressure to come up with a contract that delivered savings and they would have been competing with other companies and that's why the workers are on minimum wage."

Labour would reignite a call for the minimum wage to increase to $15 an hour.

Green co-leader Metiria Turei says $15 an hour isn't enough to live on and the Greens would lift the minimum to $17 to $18.

"A living wage is about the real cost of living," she says.

The series

Monday: Who earns below $18-$20 and why
Tuesday: Exploited migrants
Today: Cleaning wars
Tomorrow: Living wage unveiled.

- APNZ

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