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Concerns have been raised by the Council of Trade Unions (CTU) as the Greater Wellington Regional Council (GWRC) seeks to secure a new contract for the bus services in the Wellington region.
The GWRC has spent more than $5 million of its $7.7 million budget for use of outside contractors in the tendering process for new contracts. A preferred tenderer has not yet been selected.
Six law firms, including two firms specialising in employment law, have been employed by the GWRC to oversee the process.
Tramways Union President, Kevin O’Sullivan, and CTU President, Richard Wagstaff, have expressed concern that the process will compromise the wages and working conditions of bus drivers and staff. Wagstaff stated, “I think the council is deliberately arranging things so that they can reduce costs by cutting wages of bus drivers.”
The GWRC refused an Official Information Act (OIA) request made by Wagstaff in 2016 requesting access to the relevant tender documentation, on grounds of privacy and confidentiality.
In an email between Wagstaff and GWRC Chief Executive Greg Campbell on August 26, 2016, Wagstaff stated that “I do not accept that a confidential viewing by me of these [tender] documents, especially if it is only the segments of the documents that related to the conditions for bus drivers and staff, could in some way jeopardise the tendering process. […] The fact that the council has refused to be open and transparent with the CTU about the provisions in the tender documents or the criteria developed for assessing the merit of tenders gives us cause for concern.”
A further request to view the tender documentation on was made on December 7, 2016, after the documentation had been circulated to the bus operator market.
This request was refused on grounds of privacy, confidentiality, and public interest concerns.
Wagstaff spoke to Salient about the stipulations in the tender process, and said “I understand that the tenders are extremely specific in terms of the types of buses, the numbers of buses, the routes, the times, even the fabric on the seats is stipulated. The most important, single thing which is not regulated is the cost of labour. So they are creating an equation where they hope bus companies will tender by being competitive at lowering the cost of labour.”
When asked to respond to allegations that the council was seeking to cut the wages and conditions of bus drivers, Barbara Donaldson, chair for the Regional Transport Committee, said, “who has made this story up?”
“We don’t actually set [bus driver and staff] rates or conditions, so we can’t determine the mix of wages […] but we would expect whoever wins the tender to have good quality systems, good employee practices, and that will be considered as part of the tenders.”
This differs from the most recent tender process for the rail service in the region. A letter to Annette King from Wayne Hastie, the General Manager for Public Transport, responded to queries about labour force issues on August 1, 2016: “Unlike the rail process, GWRC plans not to directly intervene in the bus labour market by prescribing staff transfers or labour rates and conditions. […] Our employee interventions in the bus tender does differ to the approach taken in the rail tender process which required the transfer of certain staff from Kiwirail to Transdev.”
When questioned about the employment law firms involved in the process, Donaldson said, “two employment lawyers were used to answer questions the Union had asked us. […] That’s the only thing they were employed for.”
Stuff reported that the CTU had offered to sit down with the regional council, at no expense to ratepayers, to work through the process.
Wagstaff is concerned that the two employment law firms involved were hired in pursuit of the best tender process to reduce wages and conditions in new contracts.
“This has been happening in other parts of the country — and the result has been that companies are winning these tenders off the existing companies, because they can bid with much lower estimated wage costs […] whereas the current company already have collective agreements in place with the staff and the Union, so they can’t cut [these costs].”
Wagstaff suggested the “cost cutting exercise” is at odds with the expenses involved in the tendering process itself.
“If you divide the number of bus drivers by the amount they are spending on this tender process, it comes to over $10,000 a bus driver. It’s crazy.”