HC Deb 13 November 1996 vol 285 cc320-9 12.57 pm
Mr. Jeremy Corbyn (Islington, North)

Thank you very much, Mr. Deputy Speaker. I am pleased that we have an extra three minutes for the debate, because it is about a matter of great importance. I should say that I have corresponded with the hon. Member for Uxbridge (Sir M. Shersby) on the matter, and I am glad that he is in the Chamber today. In accordance with previous rulings from Madam Speaker, I sent him a note last night to confirm that I would be speaking in the debate.

I should also say that I am a member of Unison, which is the union involved in the dispute. I am a former official of Unison, and was supported by it in the most recent general election. I am very proud to be a member of Unison and to be involved with it.

The dispute has been going on for just over a year. A group of women and one man, who are cleaners at the Hillingdon hospital, have been trying to get back their jobs. They have stood outside the hospital in foul, wet weather and in fine, dry weather, suffering harassment, abuse and abominable behaviour by passers-by. They have also suffered at the hands of the obdurate management of a very large, wealthy and powerful company, known as Pall Mall Services.

The background to the dispute is that, in October 1994, Pall Mall, Healthcare Support Services won a contract to provide cleaning services at the Hillingdon hospital. It sent all staff a letter, on 3 October 1994, which stated: Re: Transfer Of Contract—Initial Healthcare Services to Pall Mall Healthcare—Hillingdon Hospital, 17.10.94. We are delighted to have won the contract to provide support services at Hillingdon Hospital and are pleased to confirm, following our presentation and individual meeting, your transfer from Initial Healthcare Services to Pall Mall Healthcare on 17th October 1994. We will shortly be completing a contract of employment for you, but as you are transferring under the Transfer of Undertaking Regulations, your terms and conditions will remain the same. I would like to take this opportunity to thank you in advance for your help in making the transfer as smooth as possible and look forward to a successful working partnership as part of the Pall Mall team. Those were high hopes indeed.

One year later, a number of staff received a letter saying: We wrote to you on 30th June 1995 giving you notice that your contract of employment would terminate on 30th September 1995 and confirming that a new contract of employment was on offer from 1st October. We wrote to you again on 29th August once again to offer you the opportunity to accept the new contract of employment. We are sorry that you have chosen not to accept our offers of a new contract and confirm that accordingly your contract of employment terminated with effect from Saturday 30th September 1995. If you wish to accept our offer it remains available for acceptance at the moment but will expire without further notice when we have no further vacancies. There is an entire story between those two letters. Pall Mall took over the cleaning of Hillingdon hospital and, in accordance with the law, maintained the staff under the conditions set out in the Transfer of Undertakings (Protection of Employees) Regulations 1981, and confirmed in writing that they would continue to be paid properly. Yet a very short time into the contract, Pall Mall did what it has tried to do in a number of hospitals—indeed, unfortunately, contract cleaners across the national health service too often try to do it—by introducing new pay and conditions, abolishing London weighting and forcing wage cuts of between £25 and £35 a week on people who were already receiving very low wages. The women concerned quite rightly said that they were not prepared to sign the new contracts of employment. They had been taken on in good faith by Pall Mall and had good faith in the company. Pall Mall broke that faith and tried to force the women to accept lower wages and worse working conditions, which is absolutely disgraceful.

Accordingly, Pall Mall took the opportunity to dismiss the cleaners. I have a list of some comparisons between the former terms and conditions and the new ones which shows, for example, that London weighting is no longer applicable, holidays are reduced, sick pay is likely to be reduced and basic wages are lowered. Indeed, the whole gamut of working conditions has been made considerably worse for the women employed at the hospital.

We must ask what is the Pall Mall group and why is it behaving in such a way. It is a very large organisation; it employs more than 10,000 people. Its turnover is more than £70 million a year. Its profits are more than £2 million a year. In 1994, it recorded a profit of £2.2 million, yet the giant organisation is built on sweat, low wages, poor working conditions and aggressive management techniques. The average pay of those in Pall Mall employment is not much more than £5,000 a year. Six Pall Mall directors pay themselves more than £300,000 a year. In other words, they consider themselves more valuable than 63 cleaners. That is the sort of organisation with which we are dealing.

Although the company was forced in 1994 to accept the TUPE regulations, it has not tried to adhere to them. Indeed, it has constantly harassed and lobbied the Government in its efforts to amend or renegotiate its way out of them because, when it wins a contract to take over cleaning in a hospital or any other place, it does not like to have to honour existing terms and conditions or take on the existing staff. It is not a model employer by any means. It has been found against in disputes on a number of occasions—most prominently and recently in a case of persistent sexual harassment against one woman employee, for which it had to pay out £10,000.

The purpose of today's debate is to bring to the attention of the House and—I hope—a much wider public what is going on in Hillingdon and many other hospitals. People who work for the NHS do so because they believe in it; they believe in universal health care. Some of the women at Hillingdon hospital have given 30 years' service to cleaning it. People might ask what is a cleaner. If one wants an efficient hospital that is properly run and managed, one needs managers, doctors, nurses and technicians, but one also needs catering staff, cleaners and maintenance workers. One needs people who are properly employed and treated in order to run a hospital.

The women concerned have given 30 years to ensuring that the hospital is a decent, clean and safe place to work. The huge, very profitable organisation of Pall Mall came along and took over the contract, probably realising fully that the price that it had offered for the takeover was unsustainable and that it would therefore cut the women's wages. In other words, it conned people in order to get the contract in the first place. It is abominable that the women were thrown out of their jobs as a result of the way in which Pall Mall behaved and are campaigning for their reinstatement. They are strongly supported by my union in the campaign.

Sir Michael Shersby (Uxbridge)

As the hon. Gentleman has pointed out, Hillingdon hospital is in my constituency. I am sure that he knows that about 200 of the 230 members of staff accepted the conditions offered by Pall Mall Services. Those who did not have been engaged in the industrial action to which he has referred, although, happily that has not had an impact on the service provided by the hospital to patients. The hospital's trust has, with my full support and in response to my urging, attempted to bring both sides of the dispute together and to reach a settlement. Earlier in the year, the Advisory, Conciliation and Arbitration Service brokered an agreement, which I believe was recommended by Unison but rejected by the staff concerned. It appears that the next step in the saga will be for the matter to go before an industrial tribunal. Will the hon. Gentleman comment on the agreement that Unison tried to broker and why it was rejected? He has told the House that he is a member of Unison and it may be valuable for him to comment.

Mr. Corbyn

I would have been happier if the hon. Gentleman had said that he supported the women's predicament and recognised the injustice that they feel. People do not reject offers of jobs without having very strong reasons for doing so. I think that they were absolutely entitled to reject the offer. The women have been wrongfully dismissed by Pall Mall and, as the hon. Gentleman pointed out, their case is to be taken to a tribunal.

Sir Michael Shersby

I was present at the hospital's annual general meeting and listened to the views expressed by the staff who were not offered new contracts under Unison. I have had further meetings with the hospital management as a result. One of the reasons why I am present is to tell the House that. I think that the hon. Gentleman will be assured of my concern.

Mr. Corbyn

Unfortunately, the hon. Gentleman's comments do not reassure me at all. He has said that he has met the hospital management and other staff who, for their own reasons, fears or whatever else, accepted new contracts and conditions, but has not said whether he supports the women who have been thrown out of their jobs by the wealthy Pall Mall company. Does he think that it is right that women cleaners should work for less than £3 an hour?

Sir Michael Shersby

I made it clear that I listened to the staff who had lost their jobs as a result of the events that the hon. Gentleman has described. It was as a result of listening to them that I immediately asked for further meetings with the hospital staff in an effort to bring to an end the regrettable dispute. There is no lack of sympathy or understanding on my part with the staff concerned.

Mr. Corbyn

I am glad that that is so. Given that, I am sure that the hon. Gentleman will give his support to the women who have been standing outside the hospital for a year trying to get their jobs back and to ensure that all cleaners in all hospitals are paid a decent living wage. He and I would not like to work for, or try to live on, £3 an hour; we probably could not. Why should they or anybody else have to do so? Ancillary staff are treated disgracefully in the health service anyway, but those employed by contractors are considerably worse off. I hope that the hon. Gentleman will recognise the absolute justice of the women's case and the wide support that they enjoy in the local community, from my trade union, Unison, and from a number of other unions.

People have had enough of this cavalier, anti-trade union approach to management which says that it does not matter how low the wages are provided that somebody can be found to do the job. In a time of high unemployment, it is possible to get people to do jobs for disgracefully low wages. That does not make such practices right, happy or just. I want to draw attention to the plight of the workers at Hillingdon hospital.

The Minister has a trade union background, even though he turned his back on it some years ago. Perhaps he can tell us why the national health service internal market deliberately encourages contractors to cut costs, to worsen conditions and to treat contract workers in that way. We would be far better off if we ended the principle of the internal market and instead started treating all national health service staff as crucial parts of a team that ensures that we have good-quality hospitals and working conditions.

The Minister must recognise that all is not well in this dispute any more than all is well in the current dispute in Northern Ireland. He should intervene to ensure that Pall Mall takes the staff back and employs them under conditions no less favourable than those that they were given in writing when the contract was taken over in 1994.

We should go a stage further than that. When contracts come up for renewal, we should end the principle of contracting out cleaning services and take staff directly into national health service employment so that they can be assured of good-quality working conditions and training.

There are problems and dangers for us all in the employment of contract workers. There have been many contract failures in the national health service, with cleaning being inadequately or badly done, staff being badly trained or untrained and incoming staff not being given health checks. Many issues need to be addressed.

The purpose of the debate is to draw attention to what has happened at Hillingdon hospital and the way in which those women have been treated. The wider community, particularly the Government, must intervene to stop the abuse of power by Pall Mall and the Pontius Pilate attitude of the hospital trust, replicated by the Department of Health, which is saying, "It is nothing to do with us. It is all a matter for the market."

Imagine the situation of people whose jobs have been sold to another employer over their heads and who are told a few months later, "Sorry. We did not really mean the promises that we gave you. We did not really mean to give you the undertakings that we gave six months ago. That was all window dressing to get the contract. Would you kindly accept a cut in wages, worse working conditions and less holiday pay? Would you kindly accept less enhanced pay for overtime, night time and weekend working? In other words, would you kindly do whatever we want you to do?" What would any of us do if faced with such a situation?

I do not blame those women for what they did. I have the deepest admiration and support for them, as, I believe, do many other people in hospitals, even those who felt that they had no alternative but to accept the unbridled power of the marketplace which forces them into worse working conditions.

My plea is for the Government to intervene to ensure that everybody working in a national health service institution enjoys conditions at least as good as nationally negotiated and agreed NHS conditions. The Minister must recognise that this obscenity can be put right only when proper national conditions are applicable to all workers.

The women are fighting a battle of enormous principle that will go down in history as such, akin to the current dispute at the Liverpool docks and other episodes in the great history of trade union struggles in this country when workers have stood up and said that they are not prepared to allow employers to ride roughshod over them and destroy a lifetime's gains in working conditions. Pall Mall should have some respect for 30 years' service in the NHS rather than casting those women out on the stones outside in the freezing air to campaign for their reinstatement.

I am proud to be associated with the trade union that supports those members. I very much hope that, soon, those women will be back in work in that hospital, able to continue the dedicated service that they have given to the national health service, rather than suffering disgraceful treatment at the hands of Pall Mall. We need to get a grip on the power of cleaning companies and their awful treatment of so many of their staff. Will the Minister explain why he has apparently been unable for so long to do anything and what he will do to ensure justice for these women?

1.14 pm
The Parliamentary Under-Secretary of State for Health (Mr. John Horam)

It is most regrettable that the dispute has remained unresolved for more than a year. I know that my hon. Friend the Member for Uxbridge (Sir M. Shersby) has made extreme efforts, which he has mentioned during the debate, to bring it to a resolution. However, it has not been resolved.

I sympathise with the predicament of those involved, but the parties to the dispute are a private company and a number of cleaning workers who parted with that company last year. I stress that the workers were not national health service employees at the time. The hon. Member for Islington, North (Mr. Corbyn) may have given the contrary impression. Many of them had not been employees in the national health service for more than six years. Neither the national health service managers at Hillingdon nor I have any jurisdiction over the matter. Furthermore, given that industrial tribunal proceedings are now in progress, with the aggrieved workers claiming unfair dismissal by Pall Mall, we should be particularly careful to avoid any comment that might prejudice the case.

I must make one other point clear from the outset. The hospital has at all times during the dispute continued to provide its customary excellent service to patients. At no time has the quality of cleaning at the hospital been compromised and the contractor has continued to fulfil all its contractual obligations at the hospital. Patients, their relatives and friends and the residents of Hillingdon can be assured of the quality of health care provided by the hospital. I know that my hon. Friend the Member for Uxbridge will want to endorse that, particularly considering last week's debate on another matter.

Before discussing the circumstances of the dispute at Hillingdon, I should like to comment generally on the Government's policy on market testing—an issue that the hon. Member for Islington, North raised—particularly as it relates to non-core NHS services. By testing services through competition, we seek to ensure that the support services provided to national health service hospitals are the best available and provide the best value for money. Whether a support service is provided by the public or private sector depends solely on who best satisfies the criteria of quality and value.

As a result of the market testing initiative, the national health service has saved more than £1 billion since 1983. That means that £1 billion for investment in patient care has been made available. Apart from the cost savings achieved, market testing has also led to greater innovation, better specification of service needs and improved management, releasing resources from non-core support services and making them available for the core business of improving health and patient care, which is what the national health service is all about.

We estimate that the service contracts currently in place in the national health service are achieving an annual saving of between £100 million and £150 million. Again, that is money for use in direct patient care.

Mr. Corbyn

The Minister is keen to quote savings of between £100 million and £150 million on NHS contracts. Does he recognise that that saving comes straight out of the pockets of the lowest-paid people in the national health service, creating more poverty, worse working conditions and worse living conditions for many people? Is he proud of that?

Mr. Horam

The hon. Gentleman is wrong. The service improvement has come from a reconfiguration of services and greater efficiency by the providers. There has been no loss of quality in the service and, often, pay has not been reduced. The hon. Gentleman mentioned pay at Hillingdon. The rate for cleaners there is £3.69 an hour—one of the best in the area according to the Uxbridge and Hayes job centres. General airport cleaners at Heathrow—broadly comparable with Hillingdon staff—earn £3.50 an hour. The pay conditions implemented by Pall Mall at Hillingdon are no worse than is general for the area. Not only that, the hon. Gentleman failed to mention that, when the changes in the TUPE arrangements were negotiated, the workers were offered compensation of between £400 and £1,000. The hon. Gentleman cannot, therefore, say that the provider has behaved badly in this case.

Mr. Corbyn

I am glad that the Minister has given way on that point. He failed to say that the overtime and weekend rates were cut as a result of the change. Does he recognise—it is important that he does—that Pall Mall had a contractual agreement with the cleaners which it unilaterally broke in 1995? That is the nub of the argument. The company gave a solemn undertaking in October 1994 that the staff would be employed, under TUPE, on existing conditions of service. It broke that undertaking and subsequently dismissed the women from their jobs.

Mr. Horam

If the hon. Gentleman is reasonable, he will recognise—

Mr. Corbyn

I am.

Mr. Horam

I am glad to hear it. The hon. Gentleman should recognise that the changes were a result of renegotiation—for which compensation was paid—which was part of a change in the services that the provider wished to make.

Mr. Corbyn

I do not accept that.

Mr. Horam

Well, the fact is that the hon. Gentleman's own union negotiated an agreement which the workers did not accept. The hon. Gentleman made great play of the point that we should stand up for workers' rights and so forth, but when the union of which he is a member said to the workers in the dispute, "We advise you to settle on the terms that Pall Mall is willing to offer", they refused. Where does the hon. Gentleman stand? Is he in favour of trade union members accepting what has been negotiated by their officers or not?

Mr. Corbyn

The Minister and I both have a background of trade union negotiation and activity. The difference is that he pretends to forget it, whereas I do not. He knows perfectly well that, on many occasions, a union recommends something to its members which they subsequently do not accept. The duty of the union is then to continue to represent those members until they are satisfied with what is on offer. Unison has continued to represent those members, and it continues to campaign for their reinstatement and to try to force Pall Mall to keep to the agreement that it made in October 1994. What the public need to know from the Minister is whether he supports the Pall Mall group in its unilateral reneging on the conditions under which it employed the women in October 1994.

Mr. Horam

The hon. Gentlemans acknowledged the point that, unlike some of my colleagues, I have particular experience of trade unions. What that taught me was the realism that trade union negotiators often bring to situations where two sides may be very divided on what they wish to achieve. The practical negotiating skills that trade union negotiators often deploy should not be ignored. The fact is that Unison negotiators achieved an agreement which was then unilaterally turned down by the workers in question. One has to question why that was. I take no side on the issue, but I merely point out the facts. An agreement was brokered by Unison which the workers felt it right to turn down, for whatever reasons.

Before I was slightly sidetracked by the hon. Gentleman—quite reasonably, and I am not complaining about that—I was justifying the Government's approach to market testing. Market testing offers a practical and proven way in which to determine the best way in which to meet support service needs, in terms of both quality and value for money. It also gives local managers opportunities regularly to review support services in the light of market developments and in response to local circumstances and needs. Legislation ensures that employees' rights are protected when there is a transfer of an undertaking and guidance on market testing incorporating advice on the legislation has been issued to the national health service generally.

If a contract is awarded under the Transfer of Undertakings (Protection of Employment) Regulations 1981, which we all know as TUPE, staff transfer to the new contractor. Under TUPE, the new service provider, who is usually an incoming contractor, takes over the contracts of employment of all employees who were employed in the undertaking at the time of the relevant transfer. It is then up to him after a suitable period, if he wishes to do so, to renegotiate the contracts in the light of the situation as he sees it. It is not unusual to find that, in such a situation, the new provider offers compensation for any changes that he may wish to make in the contracts.

It is interesting that, of the people working for Pall Mall, as my hon. Friend the Member for Uxbridge said, 200 accepted all the changes. The only people who did not do so were a particular group of workers who decided to go against the views of their own union and not to accept the position.

I shall now return to the position at Hillingdon. Hillingdon hospital market tested its hotel services in 1994 and awarded a five-year contract to Pall Mall in October of that year. The hotel services concerned were catering, sterile services, laundry and portering, as well as cleaning, which had originally been contracted out to a different firm in the late 1980s.

The estimated savings achieved against previous costs were £500,000 on a contract for hotel services worth about £4 million. The contract won by Pall Mall at Hillingdon hospital was one to which TUPE applied. As a result, both the national health service workers affected and the domestic staff, who were already privately employed, became employees of Pall Mall, keeping their existing terms and conditions of employment.

Pall Mall spent six months in negotiation and consultation over new contracts for the transferred staff. The package included new shift patterns and rates of pay comparable with other employees in similar jobs in the area. I have spelled out the exact figures for the hon. Gentleman. More than 90 per cent. of the transferred work force signed the new contracts in autumn 1995. Regrettably, 30 domestic staff refused to accept the new contract and their existing contracts were terminated by Pall Mall on 31 October last year. A further 22 staff signed the new contract but never went back to work and were deemed by Pall Mall to have dismissed themselves.

Earlier this year, ACAS brokered an arrangement between the parties in the dispute which was recommended by Unison, as I mentioned, but which its members unfortunately rejected. The reasonableness or otherwise of that arrangement is not something on which I wish to comment, given the current industrial tribunal hearing.

The fact is that Pall Mall employs approximately 210 staff at Hillingdon hospital. None is on strike and Pall Mall is meeting its contractual obligations at the hospital under the contract for the hotel and cleaning services.

What concerns me is the action taken by some of the more vociferous individuals involved in the dispute. I understand that at one point, pickets using loudhailers were causing such a commotion that the hospital was concerned for the treatment of patients in intensive care. Hospital management pleaded with the pickets to moderate their behaviour. There are, therefore, questions about the behaviour of the pickets and not only about the behaviour of the management.

Mr. Corbyn

I have been waiting for the Minister to get on to smearing people who have lost their jobs as a result of a contract granted to a wealthy multinational corporation. Can the Minister now tell us—I have asked him this three times already—whether he approves of Pall Mall's action in imposing new conditions of service on staff in breach of its undertaking in October 1994? An important principle is involved. The Minister should recognise the justice of the workers' case and the strong passions aroused by the company's behaviour instead of attacking people who are trying to defend their existing conditions of service.

Mr. Horam

I was pointing out that I am responsible for the health service. I was also pointing out that some patients at Hillingdon were being seriously inconvenienced and that their health may have been detrimentally affected by the behaviour of the pickets outside. I deplore that, and I hope that the hon. Gentleman does too. Whatever he may feel about the rights of the pickets in question, he should realise that they should not interfere with the provision of health care at Hillingdon hospital. Does he accept that? The hon. Gentleman says nothing, but I feel as strongly about that point as he does about his case.

Mr. Corbyn

Those women gave 30 years to the national health service. They have shown a greater commitment to the national health service than the Minister and his Government have ever shown. He should intervene in the dispute to ensure justice for the women rather than raising what are, in effect, red herrings surrounding the serious issue of the disgraceful treatment of the employees concerned.

Mr. Horam

Interfering with the proper treatment of health service patients is not to be taken lightly. I am disappointed by the hon. Gentleman's attitude.

The fact is that Pall Mall took over and ACAS brokered an agreement which was agreed to by Unison, of which the hon. Gentleman is a member, but the workers in question did not choose to accept it, for whatever reasons. I am not commenting on those reasons; the workers obviously feel that they have justice on their side. Others may take a different view. Those are the facts of the matter. I hope that, when the industrial tribunal looks at the case, it will take all aspects into account and will come to a reasonable conclusion. That is the right and proper thing to do and I am sure that that will be done.

In the mean time, Pall Mall continues to fulfil all its contract requirements to Hillingdon hospital. It is regrettable that a few of Pall Mall's workers came to be in dispute with the company and, as I have said, it is now for the industrial tribunal to consider the rights and wrongs of the case. The dispute is not a matter for the health service or for me. There is no suggestion that Hillingdon hospital has not acted properly at all times. On the issue of market testing, which the hon. Gentleman raised more generally, the Government do not intend to change a policy that has saved the national health service more than £1 billion. Market testing of national health service support services is not about contracting out services; it is aimed at producing more cost-effective services and better value for money from whatever source. That is precisely what has been achieved at Hillingdon and countless other hospitals. We certainly intend to continue what is an extremely sensible policy for the health of the nation.