Is it fair to pay less than minimum wage?

A recent investigation by Dispatches exposed how room cleaners at Premier Inn were being paid less than the National Living Wage, at £7.50 per hour.
Date: 21 February 2018

Cleaners were expected to arrive at work up to an hour early each morning to attend team meetings and prepare their trolleys. Management also set a productivity rate of three rooms per hour – just 20 minutes per room, and cleaners were expected to work unpaid overtime in order to meet this. This did not factor in variations in the length of time it would take to clean different rooms. A family room (or one inhabited by a stag party!) would take much longer, sometimes over 30 minutes.

You might ask why do cleaners ‘put up’ with this? The problem is that for many of these workers there is little scope for something better. The cleaning workforce is heavily represented by women and migrant workers who potentially have language barriers. They also tend to be low qualified – 27% have no qualifications compared to just 7% nationally. This leaves them open to exploitation by unscrupulous employers.

But who is to blame in this? Premier Inn have already issued a statement that they ‘do not set a target of three rooms cleaned per hour’. This puts the blame firmly at the door of the contract cleaning company (ISS) who directly employ these cleaners (from a legal standpoint).

The question is whether companies can take such a ‘hands off’ approach when contracting out services? The answer is they can do but they risk suffering the negative consequences in the same way as Premier Inn. There are also potential issues around poor worker commitment, high turnover of staff, difficulties operationalizing the contract, and ultimately poor customer service.

In some research I conducted with colleagues at the University of Manchester, we examined the role of procurement and contracting practices on employment conditions in the outsourced cleaning sector. We found that hotels often paid fees on a ‘room by room’ basis which led cleaning companies to set individual worker productivity rates in line with this in order to make a profit from the contract.

Our study did not find any evidence of non-payment of the minimum wage but we did find evidence of discipline and dismissal if productivity rates were routinely not met. The key issue we can learn from this is that there is a clear relationship between the contracting arrangements and pay and working conditions in this sector.

Clearly Premier Inn (and other large hotel brands) are likely to review their contracting arrangements, because of the potential backlash and implications for their reputation and brand. But what can management do when contracting out low wage services to ensure satisfactory employment conditions are being met?

  • An obvious suggestion is for Premier Inn to review its decision to outsource some of its housekeeping services. The vast majority of its housekeeping is performed in-house, where HR can ensure that staff are treated fairly and with dignity. Premier Inn might decide a more effective longer-term approach is to directly employ its entire workforce.
  • If management are clear that they want to outsource low skilled services, then it is important for HR to have a role in the procurement and contracting process who should consider the following:
  1. Longer-term contracts (over three years) should be used to encourage investment in skills training and development on the part of the cleaning company.
  2. The contract specification and fee should particularly question whether a contractor should win the contract simply on the basis of the lowest price, or whether other factors should be recognized too. For example, whether a Living Wage clause is included, non-acceptance of zero hour contracts or investment in training.
  3. There should be some demonstration that ‘wiggle room’ has been factored into the contract, in recognition of the aforementioned issues faced by cleaners operationalizing the contract in practice.
  4. Importantly, there needs to be more formal monitoring by HR of pay rates and working hours. Line managers working on site may be informative in this regard. Could there not be some facility for upward communication, to facilitate ISS workers communicating with Premier Inn management? This may have provided Premier Inn an insight into some of the issues revealed by Dispatches.

For further details, please see a copy of the report.

A copy of a journal article based on these findings is also in press: Grimshaw, D, Cartwright, J, Keizer, A and Rubery, J. (forthcoming) ‘Market exposure and the labour process: the contradictory dynamics in managing subcontracted services work’, Work Employment and Society.

Dr Jo Cartwright is a senior lecturer in Human Resource Management MA and Human Resource Management PG Dip at London Metropolitan University. She is available for further commentary.

Please contact Charlotte White on 020 7133 2467 or c.white1@londonmet.ac.uk for further commentary or for an interview with Dr Cartwright.

London Metropolitan University has been a London Living Wage employer since 2014. All University staff and contractors are paid at least the London Living Wage.