Using Public Procurement to Promote Better Labour Standards

A Case Study of the Victorian Government Schools Contract Cleaning Program

By John Howe and Ingrid Landau

The Federal Government's Work Choices legislation has severely curtailed the capacity of State Governments to regulate labour practices directly by legislation.

Of the possible State Government regulatory responses to Work Choices, it is the use of public procurement as a means for regulating labour standards in the private sector that has been canvassed most extensively. However, there is little consensus on how this might be done most effectively.

This report is a case study of the design and administration of the Victorian Government Schools Contract Cleaning Program, which regulates the procurement of cleaning services in over 1500 schools across Victoria. This program was established in 2005 to address complaints about widespread non-compliance with minimum labour standards applicable to contract cleaners in the industry, as well as problems with the quality of services being provided to many Schools.

The study found that the program is an innovative response to the challenge of using procurement to improve labour standards in a particular industry. Drawing on program documentation and interviews with representatives of government, trade unions, and employers in the industry, we found that the program has many characteristics consistent with a model of 'responsive regulation'.

While there are some areas where the design and administration of this program could be improved, the report concludes there is enormous potential to extend this model to other areas of government procurement. If State Governments in Australia are to respond to Work Choices in a way which addresses both minimum labour standards and employee 'voice' in the workplaces of government contractors, then the Victorian Government Schools Contract Cleaning Program provides an excellent starting point.

Centre for Employment and Labour Relation Law, The University of Melbourne. Report March 2007