Mr BROWN: My question without notice is directed to the Minister for Public Works and Services. What is the latest information on the Government cleaning contract?
Mr SPEAKER: Order! Because of the interjection by the honourable member for Pittwater the Chair was unable to hear the question. I ask the honourable member for Kiama to repeat it.
Mr BROWN: My question without notice is to the Minister for Public Works and Services. What is the latest information on the Government cleaning contract? What is the latest information on the Government cleaning contract?
Mr IEMMA: I am pleased to report that the industrial dispute involving the liquor and hospitality miscellaneous workers union [LHMU], the cleaners union, and the Menzies Property Group has been resolved. This morning cleaners in the Illawarra accepted a recommendation by their leadership to return to work. That follows a recommendation that was accepted by cleaners in other parts of the State on Monday and Tuesday to return to work. Cleaners employed by Menzies were concerned about productivity changes that Menzies wanted to make under the government cleaning contracts, which are worth $762 million and involve three companies—Tempo, Broadlex and Menzies. Those contracts were let last year. They involve the cleaning of 3,200 public buildings across the State, of which 2,200 are schools, by 5,900 cleaners.
Each of the three companies proposed productivity changes under the contracts. Menzies proposed productivity changes of 33 per cent and the other two companies proposed changes that were substantially less. In November last year the union expressed its concern to the Government that the changes sought by Menzies were unreasonable. The union sought to have the Menzies targets brought more into line with the productivity changes proposed by the other two companies, Tempo and Broadlex. The union also asked for an independent review of the Menzies contract to determine the reasonableness of its proposition. The Government accepted the submission made by the union and gave the Independent Pricing and Regulatory Tribunal [IPART] a reference to examine the Menzies contract, look at the productivity targets proposed by Menzies and make recommendations.
IPART reported in February, and concluded that the Menzies productivity targets were ambitious, but that there was scope for some productivity changes. The report also called for the two parties to sit down and negotiate with each other to come up with some form of an agreement. Those negotiations have been taking place since November. It is regrettable that last week they broke down and resulted in this latest round of industrial disputation. But the parties returned to the negotiating table and reached an agreement on the Menzies contract, bringing in productivity changes of 12 per cent, which is roughly in line with what has been proposed by Tempo and Broadlex. At mass meetings on Monday and Tuesday members of the LHMU accepted their executive's recommendation to return to work.
The Illawarra members met today and voted to return to work, thus ending the dispute with Menzies. Over the remaining four years of this contract the Government will save in excess of $150 million, money that can be set aside for hospitals, schools and essential services. I congratulate the leadership of the LHMU, Eddie Owens and Ian West who were the two leading officials in negotiations; Alan Hollway, the industrial advocate for Menzies; officers of my department and others who have been involved in the long-running process of discussion and negotiation on bringing this dispute to an acceptable end. The agreement signed by the LHMU and Menzies and ratified by the Industrial Commission is a fair and reasonable outcome. It represents the sort of outcome that can be achieved when a sensible approach is taken to industrial relations, when both parties are prepared to sit down to talk and look at the problems and come up with an acceptable agreement, and when the Government is willing to facilitate that process. I acknowledge the work of all the parties involved.