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11 December 2018
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WOULD A JOINT EMPLOYMENT LAW HELP OR HINDER FM?


Join the Think Tank to have your opinion reflected here — 
editorial@fm-world.co.uk


p26_Men-stack-of-dices-Ikon
Image credit: Ikon

08 January 2018 | FM World team

newsdesk@fm-world.co.uk


This month we asked you whether a joint employment law would help or hinder the FM sector. Herpreet Kaur Grewal presents the findings.


A worker’s union is filing a landmark test case against the University of London that could broaden the trade union rights of outsourced workers. The law to date has been interpreted as only allowing workers to collectively bargain with their direct employer. 

The union will be arguing for a joint employment law to recognise that the de facto employer is the one calling the shots on pay and conditions and should be considered a joint employer alongside the contractor. So, is a joint employment law a good idea for FM?


Lucy Jeynes

the elephant in the room

If we move towards recognising that end clients are the ‘de facto employer’ of outsourced staff, it certainly raises some interesting issues. Not so much for the FM service providers – who have proved themselves to be adaptable to the many changes the last 10 years have thrown at them.  The big issue will be for clients themselves.


The elephant in the room in this debate, let’s be honest, is that some of the clients thought their operational staff would perform better under a tougher regime, with more robust HR processes and less generous benefits. But they didn’t want to do it themselves. They wanted to treat ’em mean to keep ’em keen – but at arm’s length and under someone else’s brand.

  

Sadly, I am old enough to remember the days of the first-time outsources in the early 1990s, and one of the reasons often given (by banks, and by public sector bodies) was that the pensions and benefits they offered to all staff were disproportionate to the value added by the operational FM staff.  


We don’t talk about this very often nowadays, because we like to pretend that TUPE has taken care of this issue.  

The salaries of outsourced cleaners at a university (to use the example of the test case) may be similar to those within other public bodies – as they will settle around the local labour market rate. However, the terms and conditions are likely to differ very widely, in respect of amount of paid sick leave and pensions, in particular. 


Client organisations will have to consider very carefully their motives for outsourcing if this test case goes through.  


Lucy Jeynes, managing director, Larch Consulting



Tar Tumber 

Better ways to address disparity

If you are a porter employed by a service provider, and they place you in a college working alongside a porter employed by the college, is it fair that they should be paid more than you are for doing the same job?


On the face of it, the concept of the service provider and college being your ‘joint employer’ seems like an attractive way of addressing an imbalance of this kind.


What’s good about it is that it seeks to create a more level playing field from the outset. Clients and service providers – and their respective employees – would know where they stood when a contract for services was negotiated. For workers, it would seek to ensure fairness.


There are dangers in such a simplified approach, however. The application of law in the US regarding joint employers is far from straightforward. It introduces more cost (more bucks for the lawyers); more complexity (deciding who is the primary and who is the secondary employer, and where their responsibilities lie); and more confusion (where employers are joint and severally liable in the event of disputes).


None of this will necessarily benefit workers in terms of improving rewards and benefits, and for clients it could negate many of the advantages of outsourcing work to specialist service providers in the first place.


Our view is that joint employment is not a good idea. We believe there are better ways to address disparity. Clients and contractors working together to pay the national living wage have been shown to create happier and more productive workforces, and this is a good place to start.”

 

Tar Tumber, director of employment relations, International Workplace 



Julian Fris

There could be ‘losers’ across the board 

This is technically not a new development as we have previously seen healthcare PFI projects where staff were retained by the trust, but employed by the service provider. This was a ‘Retention of Employment’ model where staff received NHS terms and the trust had to pay for any further ‘top-up’. This eventually lapsed, principally because of affordability. 


From our experience, we believe that if staff were paid a fair wage, such as the Living Wage Foundation rate, then this is a good start.


The danger of increased labour costs is that clients could reprioritise the work, seek higher productivity, divert money from frontline services etc, to remain within a particular budget. There could be ‘losers’ across the board. 


We have also seen that more organisations, such as universities and hospitals, are struggling to stay afloat particularly with the effective devaluation of the pound through Brexit (so products costs are higher) and this just puts them under further pressure. Whilst it won’t solve everything, paying a consistently fair wage would help to eradicate some of these issues but not where it puts organisations and livelihoods at risk.



Survey Results Jan 2018

Julian Fris, director, Neller Davies