Work More, Paid Less The Absurdity of Government Outsourcing Policy

In fighting for their severance payments in arrears, cleaners from Hoi Lai Estate, a public housing project in Hong Kong, went on a 10-day-strike last December. The strike not only exposed many bad practices exercised by the subcontractors involved, namely Man Shun Hong Kong & Kln. Cleaning Company Limited (alias: Man Shun) and Hong Kong Commercial Cleaning Services Limited (alias: Commercial Cleaning), it is also an insult to the workers when the employer offered just HKD100 per year of service as severance compensation during the strike. It is the dignity that the workers deserved drove them to launch the strike.

The work ethic for the grassroots workers is simply, “work more, paid more”. However, under the Government outsourcing policy, 60,000 outsourced cleaners and security guards in 4 major departments, Housing Department (alias: HD), Food and Environmental Hygiene Department (alias: FEHD), Leisure and Cultural Services Department, and Government Property Agency, are, in fact, “working more, but paid less”.
 
According to a survey done by the union, more than 80% of the Government outsourced cleaners are only receiving minimum wage, which is lower than the cleaners who work in shopping malls. But the work load for the cleaners under the FEHD is considerably higher as it involves a great deal of outdoor duties. Thus, Government outsourced cleaners work harder but paid less.

Presently, when evaluating tenders from subcontractors, the considerations put on wage levels and working conditions are insignificant. Although the Government introduced wages and working hours as part of the marking scheme, such factors only accounted to around 2.25% to 4.8% of the total score, which is much lower than that of the service cost (60-70%).
 
Even after the introduction of the wage level and working hours into the marking scheme, there is still no significant growth in wages. For example, subcontractors usually freeze the workers’ salaries during the 2-year contract period, resulting that the workers’ wages are perpetually lagging behind inflation. Moreover, there are some cases that the salaries of the workers remains unchanged even after the change of hands in service providers, illustrating that the marking scheme becomes ineffective when subcontractors are colluding with one another.
 
As a matter of fact, the introduction of wage level and working hours in the marking scheme is inadequate to safeguard the working conditions of the outsourced workers to a respectable standard. The Government should consider other methods, rather than relying on the current marking scheme. Especially when public funding are spent on procuring such services, social responsibilities are not to be ignored and the Government should take the lead to eliminate the working poor issue in Hong Kong, instead of perpetuating it.
 
The Toronto Government established the Fair Wage Policy to ensure outsourced workers are entitled to reasonable wages, so as to create a stable relationship between the workers and employers, while setting up a fair bidding platform among the contractors and protect the reputations of the Government. A number of researches showed that the stipulation of living wage in government outsourcing contracts can help to improve workers’ income, urban poverty and service quality. The Hong Kong Government should take reference of other city governments’ experiences, by establishing living wage as the minimum requirement for outsourcing tenders, in order to ensure that the wage level is sufficient to support the workers’ basic living standards.
 
Going back to the core issue of the Hoi Lai Cleaners Strike—severance pay; taking advantages of the workers unwillingness to transfer to another locations due to family duties, transportations costs or other practical reasons, subcontractors often claim that suitable post is not available after the outsourced contracts expire to force or deceive the workers to sign voluntary resignation agreements, so that they can avoid paying severance payments. As the outsource contracts are up for renewal every 2 years, the seniority of workers are often discontinued in between contracts. Therefore despite the same outsourced workers may have worked in the same position for many years, they are not entitled to many service seniority related benefits such as long service payment, severance payment, annual leave and sick leave accumulation etc. Thus, the structural disadvantages of outsourced workers are not only attributed to the contractization and casualization of services initiated by the Government, the loopholes in the outsourcing policy also presents subcontractors with the opportunities to evade various responsibilities during contract renewals.
 
Therefore, it is necessary for the Government to take reference of the non-civil service contract staff scheme, by stipulating a contract gratuity of no less than a specified percentage of the total wage, in order to compensate workers for their loss of seniority and to avoid recidivism similar to the Hoi Lai dispute.

Workers bear the cost of Government’s cost cutting

Over the years, by outsourcing regular services, the Government has been able to cut costs by an average of 30%.  However, much of this cutback is attained at the expense of workers rights, including the drop in wages, deterioration in job security and enhanced risk in occupational safety. Therefore, in addition to the suggestions as mentioned above, the Government needs to review her outsourcing policy as a whole in order to eliminate the structurally violation of workers’ rights and interests. In the long run, the Government should gradually refrain from outsourcing and directly employ workers to carry out regular services such as cleaning and security, whereas employees in these industries are especially vulnerable to exploitation.