MBIE eyes cleaning sector following govt procurement changes

Ministry of Business, Innovation and Employment labels commercial cleaning industry a "priority sector”.

The Ministry of Business, Innovation and Employment (MBIE) has labelled the commercial cleaning industry a “priority sector” following the release of the government’s new procurement rules.

Speaking at the BSCNZ conference, MBIE’s Tania Donaldson said the Ministry is starting to see traction in the commercial cleaning sector following several high-profile cases of wage theft and worker exploitation,

Most recently, Auckland-based Clean Master (NZCM) and its company director were ordered to pay more than $123,000 by the Employment Relations Authority (ERA) for underpaying staff.

In March two Timaru cleaning businesses and their owners were penalised $55,000 for treating permanent staff as casuals following a Labour Inspectorate investigation.

“Every time someone puts an unsustainable practice in place, it’s putting compliant businesses at risk and driving a race to the bottom,” Donaldson said.

“Government has seen this happen and [the MBIE] is interested in the cleaning sector because we see it as a priority sector.”

The Government Procurement Rules, 4th Edition was released in June following a four-week consultation process earlier this year.

Government agencies spend approximately $41 billion each year buying goods and services from third-party suppliers and providers, accounting for around 18 per cent of New Zealand’s GDP.

Changes to the 4th Edition of the Government Procurement Rules included Rule 19: Improving conditions for New Zealand workers, whereby:

  • Agencies should ensure their contracts set out the expectation that suppliers and subcontractors comply with employment standards and health and safety requirements.
  • For designated contracts, agencies must require their suppliers to ensure and demonstrate that they, and their domestic supply chain, comply with all relevant employment standards and health and safety requirements.
  • Agencies must have regard to guidance published by MBIE on ensuring compliance with employment standards and health and safety requirements in government contracts.
  • Agencies must conduct sufficient monitoring of designated contracts to ensure that commitments made in contracts for ensuring good conditions for workers are delivered and reported on.

Donalson said the MBIE is confident the procurement changes, specifically noting Rule 19, will create “a more level playing field” for government contracts in the cleaning sector.

“If a government agency is procuring cleaning services, they must require their suppliers to demonstrate and ensure that those in their domestic supply chain all [adhere] to relevant cleaning standards, and health and safety requirements.

“If you have been doing the right thing by your employees and have been undercut [by a competitor], this will take those undercutting out of business in terms of government contracts.”

Donaldson also discussed the government’s Supplier Code of Conduct, which is currently in draft form and seeking public comment.

It is understood NZ Government Procurement and Property has been working on a Supplier Code of Conduct since late 2017/early 2018.

The Supplier Code of Conduct will set out the government’s expectations of suppliers to government, including expectations on ethical behaviour.

It will apply to government suppliers, rather than to individual public servants, which is governed by the existing State Services Commission’s Code of Conduct.

“What the cleaning industry is going to increasingly see is the need for these codes to be referenced by agencies in tender documents, [tender] responses and in contract management discussions,” Donaldson said.

“[Government] want to know [businesses] are treating employees fairly and that any other workers in the supply chain are being treated fairly as well.

“Demonstrating your business meets employment standards is becoming business as usual for New Zealand.

“The cleaning industry is in a really strong position to take a significant leadership role in this space and get ahead of the opportunities.”

INCLEAN NZ attended the BSCNZ conference as a guest of BSCNZ 

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