Friday, 30 October 2015

Living wages - Wellington edition

Wellington Council's voted to require its security contractors to pay their employees at a higher wage rate.

David Farrar walks us through Council CEO Kevin Lavery's objections to what his Council has voted to make him do. In short, it is very likely illegal. Here's Lavery:
So my advice is simple – adopting the Living Wage for the security contract is a step too far. There is compelling evidence that you would potentially fail to meet your fiduciary duty to ratepayers. There is a serious risk that you would be acting beyond your powers. You would be purchasing the service for 19% extra without any corresponding improvement in service levels or productivity. You could also set a precedent for other contracts which would cost the Council tens of millions annually.  You would also be failing in your duty to me as a good employer. And you run the risk of tarnishing your reputation.  Could a responsible public body really make a decision against clear legal and officer advice only to be directed by a Court to reverse its decision? There is also a very real risk that your enthusiasm for expanding the Living Wage could undermine the good progress achieved with our own workforce. Remember that the WCC Living Wage adopted for our own staff and CCO staff has not been tested in a court of law. A successful judicial review on the expansion of the Living Wage to contractors may encourage further challenges on its adoption for our own workforce. A defeat here would have very serious consequences as the decision has already been implemented.
We should note further that extending the Council's mandated living wage to include all contractors skews the pitch against contractors, who might compete with council-owned suppliers on cost grounds. Mandate that everybody pay very high wages and contractors' cost advantages erode.


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