"New labour hire regulations are about to change the cleaning industry in Australia forever, and during the industry shake-up that follows, many reputable businesses will find themselves with cleaning agreements that are non-compliant under the new laws, and risk embarrassing prosecutions and significant fines, because they are completely unaware of the implications of the new regulations!"
Nicholas Pastras, CEO, Smart Cleaning Solutions
If you are a business owner or senior executive in an industry with outlets in Queensland, Victoria or South Australia; and you are currently using a contract cleaning agreement to keep your business clean, then you need to be aware of impending legislative changes that relate to labour hire laws in the cleaning industry.
"New labour hire legislation is about to introduce changes to the cleaning industry that are so significant, they are going to create a never before seen upheaval in the commercial cleaning industry, and as this process plays out, many businesses of good corporate standing are going to unwittingly find themselves caught up in unforeseen prosecutions for being in breach of these new labour hire laws."
Nicholas Pastras, CEO, Smart Cleaning Solutions
Beware The 30th October 2018 & 1st November 2019
In a famous play by William Shakespeare, Julius Caesar is warned by a Sooth-Sayer to ‘beware the ides of March.’ Echoing this famous warning now, Nicholas Pastras, the CEO of Smart Cleaning Solutions, (a man with more than 30 years experience in the commercial cleaning industry in Australia) wants to warn business leaders in Victoria and South Australia to beware the 30th October and the 1st of November 2019, because the new labour hire laws are scheduled to come into effect on these dates, and if you’re in Queensland they have already come into effect, and prosecutions are already underway!
What’s The Future We Are Predicting, And Why it May Be A Risk To Your Business
Smart Cleaning Solutions are aware of these impending changes and have obtained legal advice with regard to the implications, and it is our view that, once in effect, these laws will see a raft of high profile prosecutions take place that will put an end to the commonly reported practice of cleaners being paid below award rates through the use of sub-contract agreements.
We also foresee that in this process, many honest and well-meaning businesses with otherwise outstanding corporate reputations, who are currently unwittingly using contract cleaning services that are exploiting cleaners, are in danger of suffering embarrassing prosecutions and fines!
That’s why we recommend that all businesses using contract cleaners take urgently action to audit their current commercial cleaning agreements!
What’s The One Thing Every Business Using Contract Cleaning Services Should Know?
"As things currently stand, when the new labour hire laws are gazetted in late October, any business or individual with an existing contract arrangement with a company to supply cleaning services in S.A. and Victoria, is at risk of being in breach of the new laws, because if their supplier is non-compliant (that means their contracted cleaning company), they, the client, are also non compliant and face the risk of prosecution and potential fines ranging from $120,000 (for a person) to $500,000 (for a corporation). It is even possible to be jailed for up to 3 years in both Qld and SA."
This Means Many Clients Of Non-Compliant Cleaning Companies Will Be Currently At Risk Of Prosecution Come The End Of October!
As the pyramid diagram below demonstrates, under the new Labour Hire Laws, all parties that enter in a contracted cleaning service agreement share EQUAL responsibility to ensure that their contracts are compliant, which means done at a rate that allows for each level of the service to be delivered in accordance with award rates.
Legally speaking, that means the bottom line for businesses hiring contract cleaners is as follows… You, the host/customer, are party to an agreement and therefore also liable for any breaches of the law, and ignorance is no excuse.
(Please note this is not legal advice, this is our understanding of the situation and we encourage any reader to contact their own solicitor and get their own independent legal advice.)
Get A Free Assessment Of Your Current Cleaning Agreements Compliance Status
As experts in Commercial Cleaning, Smart Cleaning Solutions can, and are offering free assessment of current contract cleaning agreements, to help businesses assess whether their current contract cleaning agreement is compliant with new labour hire laws. Simply give us a call or send us an email via our contact us page.
How Did We Get Here? A Quick Background On The Use Of Subcontract Agreements In The Commercial Cleaning Industry
The alleged underpayment of cleaners in the commercial cleaning industry has received a lot of press in the past few years, with various investigations and reports in multiple states and industries repeatedly revealing that cleaners have commonly been underpaid as much as $100 a week through the use of sub-contracts. Just a few examples can be found here, here, and here.
Indeed, it appears that regulators in Victoria have considered the practice of using subcontracts to underpay cleaners so rife, one particular element of the labour hire licencing scheme specifically singles out the cleaning industry, i.e. the fact that the scheme includes a requirement that cleaning businesses be licenced, even if they are not strictly providing labour hire services.
Why Businesses Using Contract Cleaners May Unwittingly Fall Foul Of The New Labour Hire Laws
The nature of contract cleaning market and the way agreements are tendered is the mechanism that has allowed this practice (underpaying cleaners) to occur, because the tender process naturally sees businesses that would never attempt to flout award payments, unwittingly choosing suppliers that purposely choose to flout award rates so they can win competitive tenders.
This means many reputable businesses of good corporate standing currently unwittingly hold non-compliant cleaning services agreements and run the risk of being in breach of the new laws because their current existing contracts, under the new legislative regimen, will clearly be deemed as ‘sham contracting’ and open both the client and the cleaning company up to prosecution and significant fines.
"But in most cases these breaches won’t have happened on purpose, it will simply be the result of their regular commercial tender process. Which is the very reason why I believe legislators drafting the new labour hire laws have seen the need to make it incumbent upon businesses hiring cleaning companies to be sure that the contractor they choose to engage is paying their cleaners, and indeed all staff involved, according to award rates."
"As the CEO of a Cleaning Business and a person with over 25 years’ experience in the industry, I can personally attest to the fact that, in my experience, this practice has been so widespread, it has undermined the entire industry. In effect it has encouraged unscrupulous operators to flood the market and pushed out many reputable contractors, by exploiting cleaners and undercutting legitimate quotations that ensure award rates of payment for all cleaners. From personal experience I can say that this has left many cleaners feeling exploited and abused and has forced many reputable cleaning companies to walk away from jobs where it is mathematically impossible to compete, because direct competitors are clearly undercutting quotations by underpaying their cleaners."
At Smart Clean we are glad that this practice is about to end forever, and that’s why, for our part, we welcome the new labour hire law regime and believe it will be cause positive changes to the professional landscape of the cleaning industry in Australia.
Under this new regime we predict that the cowboys that have been driving wages and standards down in the industry will be weeded out, prosecuted and fined!
Are You Worried About Your Current Cleaning Contract & Whether Or Not It Leaves You Vulnerable To Prosecution Under The New Labour Hire Licencing Laws?
At Smart Cleaning Solutions we are worried that many reputable businesses are going to get caught up in these changes and inadvertently find themselves as collateral damage, involved in embarrassing breaches of the new legislation that will see them surprised and embarrassed to be charged and having to face negative publicity and the court process.
That’s why we are offering a free overview of your current scope of works, to assess whether your current contract cleaning agreement is potentially contravening the new laws and exposing you and your business to the risk of an embarrassing prosecutions.
You don’t need to be Nostradamus to predict that many high-profile businesses are going to get caught out as a result of these new law changes. So if you have any doubt about your compliance, call Smart Cleaning Solutions now and we will provide you with a fair and transparent review of the current costing of your scope of works, so you can be assured that your current cleaning contract is legal after October.