How an Industry Known for Exploiting Workers is Cleaning Up its Act

The cleaning industry has long had a reputation for exploiting workers, as cut-throat competition delivers contracts with profit margins so thin there’s little room to pay cleaners their legal entitlements.

The Cleaning Accountability Framework, with the help of a group of business, law and IT researchers, is making inroads into what has seemed at times an intractable problem.

Dr Martijn Boersma, who lectures in industrial relations and business ethics at the University of Technology Sydney Business School, has been working with CAF and says non-compliance with labour standards has been a big issue in the cleaning industry.

That’s because of the extensive use of casual employment and subcontracting, and labour cost minimisation among other factors. The result is that cleaners – numbering about 150,000 in Australia – are one of the most vulnerable sectors in the labour market.

“The Fair Work Ombudsman has performed a number of audits over the years. Unfortunately, this has done little to address structural issues. Trade unions have campaigned actively, again with mixed results,” Dr Boersma says.

In 2013, the CAF emerged as a body to bring together business, the union representing cleaners, and the Fair Work Ombudsman with the aim of lifting standards, initially via a framework for best practice and more recently with a voluntary certification scheme.

Its mission is to end exploitation in property services and improve work standards by supporting sustainably priced and efficient cleaning services. It aims to ensure compliance with workplace laws and regulations, engage workers and contractors, foster accountability and transparency in supply chains and recognise stakeholders who implement best-practice standards.

In 2018, CAF and UTS joined forces as part of an Australian Research Council grant to review and contribute to development of the now widening scheme. Academics specialising in labour standards, supply chain regulation, multi-stakeholder frameworks, accounting and digital solutions have worked with the group in the years since. Initially, the researchers assessed the strengths and weaknesses of the framework that had evolved over the preceding years.

“We then looked very closely at the supply chain structure,” Dr Boersma says. “And when I say, ‘Australian cleaning industry’, I mean ‘Australian commercial real estate supply chain’.

“It’s a very specific supply chain involving building owners, facilities managers, cleaning contractors, and layers of subcontracting.

“In taking a strategic enforcement approach, we tried to find those places in the supply chain where you have leverage.”

It turned out the best place to start was at the top, with the building owners – often large investment or superannuation funds – who might actually want to do the right thing, or at least would be more sensitive to the reputational risk of being seen to be doing the wrong thing.

The message to owners is that when they put out a tender for a cleaning contractor, it’s their responsibility to ensure the contract they accept is one where cleaners can still be paid their entitlements and not be overworked, Dr Boersma says.

A key step was redevelopment of the CAF’s pricing tool with help from accounting specialist associate professor David Bedford of UTS Business School. CAF had an existing pricing data set, but Professor Bedford refined it so it could provide benchmarks for the cost of cleaning various types of buildings and depending on facilities – bathrooms and lunchrooms, for instance.

The pricing schedule increases transparency for contracting parties by explicitly accounting for the minimum wages and entitlements of cleaners. It also makes visible expected cleaner productivity rates, with CAF enforcing a maximum.

The tool can now flag for building owners whether a cheap contract may in fact be too cheap – signalling potential worker exploitation.

“This is a very proactive approach towards enforcement in supply chains [rather than waiting for a breach and acting then],” Dr Boersma says. And it’s no longer in contractors’ interests to undercut because they may not win the contract. “They have to make a realistic offer,” he says.

The pricing schedule has already been implemented by major property management firms and cleaning contractors in the retail and commercial sectors. As of mid-2020, building owners must use the revamped pricing schedule if they want to achieve CAF certification.

About 20 commercial buildings across Australia – nominated not just by owners but also by tenants – have received certification so far. CAF certification is recognised by real estate sustainability frameworks such as the Green Star Performance Rating Tool, which assesses the operational performance of buildings, and the Global Real Estate Sustainability Benchmark.

“Over time, as this certification becomes established, being socially responsible will become a competitive feature in the cleaning industry,” Dr Boersma says.

Looking ahead, the researchers hope to expand their work into other sectors, to solve problems for industry and improve conditions for vulnerable workers. In the meantime, it is supporting the wellbeing of a group of workers Australians have come to better appreciate amid the COVID-19 pandemic.

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