Government policy paved way for low wages for hospital cleaners and dietary workers

Backgrounder 2
News release

Backgrounder (2/2) to March 27, 2008 news release Make hospital contractors pay family-supporting wages to cleaners and dietary workers - poll

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  • About 3,500 HEU members are employed as cleaning and dietary staff by Aramark, Sodexo and Compass Group (the 'Big Three') in B.C. hospitals and care facilities.
  • The Big Three hold commercial contracts worth approximately $643 million with four of B.C."s public health authorities to clean health facilities and feed patients and residents.
  • Health authorities used the B.C. government's 2002 legislation, The Health and Social Services Delivery Improvement Act (Bill 29), to fire thousands of directly employed cleaning and dietary staff (and others) and contract out the work to these multinational companies.
  • As a result, wages were slashed to between $9 and $10 an hour, along with benefits.
  • HEU organized most employees and reached first collective agreements with the Big Three between 2004 and 2007 that brought hourly wages to about $13 an hour for most workers, by the end of the three-year contracts. All three collective agreements expire September 30, 2008.

The 'Big Three"

  • London-based Compass Group currently has five-year contracts to provide cleaning and dietary services to both the Vancouver Island Health Authority ($100 million) and the Provincial Health Services Authority ($40 million). Compass Group CEO Richard Cousins pocketed more than C$4.5 million in salary and benefits in 2007. The company reported just under C$21 billion in revenue and more than C$1 billion in profits in 2007.
  • Paris-based Sodexo holds a 10-year, $330 million food services contract with Vancouver Coastal Health Authority and a five-year, $73 million cleaning contract with the Fraser Health Authority. Sodexo CEO Michel Landel reported more than C$3.5 million in salary and benefits in 2007. Sodexo reported more than C$21 billion in revenue and more than C$551 million in profits.
  • Philadelphia-based Aramark has a five-year, $100 million contract with the Vancouver Coastal Health Authority to provide cleaning services. CEO Richard Neubauer took in C$8.3 million in salary and other benefits in 2007. ARAMARK went private in 2007, but in 2006 it reported sales of C$11.8 billion and profits of more than C$265 million.

What are living wages and living wage policies?

  • A living wage is a rate of pay that allows a full-time worker to provide a safe and healthy standard of living for themselves and their family. A living wage allows families to participate in their communities in meaningful ways and allows them to save for future needs and goals.
  • Over 130 U.S. cities and counties have enacted local living wage laws that tie wages and working condition requirements to government contracts. In the UK, the greater London Authorityintroduced a fair employment clause into its contracting procedures in 2002. Several of London's large financial institutions and hospitals have also implemented fair wage policies or practices covering contract workers in their facilities.