The monitoring and enforcement of labour standards when services are contracted out

Abstract

This article demonstrates that by contracting-out government services, the employment relationship has changed: workers’ labour standards are now regulated through the combination of traditional labour law mechanisms and lesser understood contract law mechanisms. This has changed the regime of regulation and enforcement of labour standards for employees performing services that have been contracted out, in ways that deserve more attention. Evidence is drawn from a case study of New South Wales (NSW) government school cleaners, conducted between October 2010 and April 2011, which finds that cleaners’ labour standards are regulated predominantly through commercial contracts for services. This is concerning because contracts are designed to facilitate commercial objectives such as competition and efficiency, and are poorly designed to protect labour standards. When used as a mechanism to enforce labour standards, contracts fail to meet the requirements of responsive regulation; contracts have limited enforcement tools and a weak credible threat of a ‘big stick’ style of punishment for infringements.