THE EMPLOYMENT IMPLICATIONS OF GOVERNMENT POLICY: A CASE‐STUDY OF PUBLIC SECTOR CATERING
| Date | 01 February 1988 |
| Published date | 01 February 1988 |
| Pages | 8-13 |
| DOI | https://doi.org/10.1108/eb055118 |
| Author | Clare Kelliher,Steve McKenna |
| Subject Matter | HR & organizational behaviour |
THE EMPLOYMENT IMPLICATIONS
OF GOVERNMENT POLICY: A CASE-
STUDY OF PUBLIC SECTOR CATERING
by Clare Kelliher and Steve McKenna
School of
Hotelkeeping
and
Catering,
and School of
Business
Administration,
Ealing College
of Higher Education
Introduction
In our previous article "Contract Caterers and Public Sector Catering" [1], we outlined the early developments
in competitive tendering for catering services in the NHS and the school meals service. The main focus of
the article was on the initial reactions of the contract catering companies to the opportunities opened up
to them for involvement in this new area of the provision of public sector catering services. Our particular
concern was to examine their employment policies and the way in which they proposed to deal with various
aspects of employment on winning a contract. Readers may recall that the early results of the research indicated
some hesitation on the part of the major contract catering companies to get involved in this exercise. Many
expressed concern about the basis on which contracts were being offered and felt unwilling to allow themselves
to be used as efficiency bench-marks for the public sector operation. In this article, we intend to look at what
changes in the employment environment have in fact occurred as a result of the competitive tendering process.
Although involvement of catering companies in tendering for public contracts has continued to be slow, some
progress has been made, in particular, where changes have been made to the manner in which contracts
have been offered, for example, putting contracts up for tender on a district rather than individual hospital
basis or offering contracts on a management fee basis. For more detail, see previous article[1].
However, the situation still remains that, despite having
gone through the competitive tendering process, the
vast majority of catering operations are still run by the
in-house, public sector operator. Clearly, therefore, any
examination of the employment implications of the
competitive tendering process in public sector catering
must necessarily involve both situations where the
contract has been contracted out and where it has
remained in-house.
The second stage of the research on which we report
here involved a number of case-studies designed to do
just that. The studies were concerned with examining
the changes in substantive terms and conditions, work
methods and organisation for catering workers, which
resulted from the competitive tendering process. In
other words, we were concerned to identify the
employment implications of the shift from a climate of
relative stability and regulation (public) to one of
competition and uncertainty (private or cost-aware
public).
Eight case-studies were carried out, five of which were
in the NHS and three in the school meals service. They
involved in-depth, semi-structured interviews with
managers, staff and, where appropriate, trade union
representatives.
Before examining the results of the case-studies, it is
intended briefly to review the environment, including
legal developments in which these changes took place.
Those areas which were designated for competitive
tendering (refuse collection, cleaning, laundry, catering,
etc) are in the main highly labour-intensive tasks, and,
consequently, labour costs make a substantial
contribution to total operating costs. Thus, any
competitive strategy (developed either by private firms
or in-house operators) is likely to involve labour cost
reduction as an important element. This can be
achieved in two principal ways: simply cutting costs (e.g.
reducing rates of pay and conditions, reducing staffing
numbers, etc) and/or by using the existing resources
more effectively (reorganisation of work, introduction
of new technology, greater flexibility). Evidence from
our research and other studies [2] indicates that both
methods have been used, and the primary areas where
savings have been made include reduced employment,
increased use of part-time staff, lower rates of pay, fewer
fringe benefits, modern equipment and better
management and organisation.
At the same time, a number of restrictions have been
removed from employers who contract for the provision
of government services. In 1982, the Government
withdrew the Fair Wage Resolution which obliged
private firms to observe nationally agreed rates of pay
and conditions for employees working on government
contracts. As a result, private firms are free to set wages
and conditions as they see fit, whilst in-house operators
are still bound by the nationally agreed terms and
conditions. Further to this, the Government has issued
instructions in the form of DA(83)40 preventing tender
specifications making stipulations about pay and
ER 10,2
1988
8
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