[jimmyjames]

Have a large cleaning contract employ 3 full time and 3 part time cleaners at 1 site.This is the only work they do for me.Client has asked me to come up with a way to cut costs by 50%
( Joke I Think ) I will not put forward labour cuts. I think if he asks me to cut the work force
he is liable for redundancy payouts as he is forcing me to lay off staff.Have requested legal advice from BICS but was wondering if anyone else has had the same problem ?

[Robert Parry]

Can't see your are going to win this one Jimmy, client would only ask for cuts for two reasons -
1. Client is struggling themselves financially.
2. Your staff are doing a really good job, and the client believes that this gives them a good opportunity to cut their own costs.

I do not think that your client would yank your chain on this!
Regarding redundancies, I think that you will find that this is your responsibility, after all, they are employed by you, not your client.

If this was happening to me, I think that I would ask the client to work with me in implementing these cuts, you of course know that the building will not be able to be cleaned to the present standards with less hours spent on the job, so you should explain this to your client.

If your client knows and accepts this, try to work out the minimunm acceptable level of cleanliness with your client, you could for example do a full clean 3 times per week, and just bins and walkway for the other two days, or other permutations such as polishing/dusting every other day etc.

Yes your staff are not going to be happy, but then again that is your problem, not your client's, just be honest and straight with them, hopefully they will realise that you have very limited choices in this matter, after a while, perhaps your client will realise that the "New Way Of Doing Things" does not work, and they will go back to the original contract hours, which I assume that they have been happy with, not many clients understand the cleaning needs of their own buildings, and because of this, the cleaning is one of the first things to get cut when budgets are stretched, just look at what happens in hospitals.

You cannot ignore your clients request, after all, they are the ones in charge, however you should also check out the legal position of your contract with your client, as they surely must give you some notice before they change the contract in such a radical manner, however if you can work with your client, remain objective and act in a professional manner, you could do yourself a huge favour in the future, as the client will remember that you tried to understand their needs and behaved in a professional way, whilst still trying to get the job done.

best of luck on this mate.

[jimmyjames]

Hi
Thanks,something to think about. Had this with them at another site of theirs that shut down 3 years ago.Then they payed out and even a loyalty bonus to my staff if they stayed until the end.This time they say thats history,although the seperate terms and conditions in the contract state they are responsable for sick pay,maternity leave,agency costs and redundancy and equipment.We only provide labour basicly on their behalf and charge a management fee and order cleaning materials,chemical etc on their behalf which they pay for.This was a way to cut costs in the past.

[leuthedog]

Forgive me, but couldn't you just reduce your profit margin? Would this not be more financially rewarding than having to lay someone off? I guess a lot does depend on how you've priced up the particular contract, I had given thought to situations just as this only a day or so ago - if a client wished to make changes they may do so but I would also change the contract stating it would simply be for a short period - six months to a year - and have it reviewed after that year with your client.

If after that time the situation hasn't changed I would, personally, either extend that contract for another year or suggest they may be better off seeking a new cleaning company since you would not want to compromise the standard of your cleaning by cutting any further costs.

I'm fairly new to this and learning along the way, so I'm sorry if the above seems a little to simple - Just some thoughts.

[jimmyjames]

Hi
Thanks,have the contract until October 2007 with no option to give notice by either party exept 90 days prior to contract end date.Have no problem helping to cut costs but anoyed when talking to them about what they see as a way to reduce costs was told to look at it and see what I came up with befor they will state what they see as a way to cut costs.
Catch 22 I think.

[Mr BSF]

If you employ the staff, which you have stated you do, you pay any ssp, smp (if entitled) as they are employed by you, your client cannot pay your staff in any way shape or form.

Any redundancy payment to your staff is also your responsibility, the legal minimum is 1 weeks pay for each year employed.


Regards


BSF     

[jimmyjames]

Hi
Ssp,smp are payed by client along with all other costs in running the contract and redundancy ( in the past )as stated in terms and conditions.I invoice for these along with wage costs and management fee each month.They do not pay direct but through my company invoicing for these costs.
They pay agency cover direct to cover holidays,sick leave etc. Basicly I have employed these people on there behalf because they dont want to employ them themselfs.

[Mr BSF]

 Can I ask a simple question Jimmy, are they your employees?

[jimmyjames]

Yes,my employee's.

[Mr BSF]

Like I said Jimmy if they are your employees it is you that has to pay smp ssp redundancy etc, this is your legal duty under employment law.

Regards

BSF

[jimmyjames]

Hi
Have no argument with this.
The question is as terms and conditions state they will pay running costs inc ssp,smp,redundancy through my company invoicing them ( which they have paid in the past ) can they get out of this.
Also as I asked befor if they say get rid of staff  that are employed at their site only and I can not re-locate them are they liable not taking into account terms and condition.
As stated I have asked BICS for assistants with this so will also post there responce to this as Im sure this affects others as well.

[Mr BSF]

Hi Jimmy,

Don’t get the wrong end of the stick by my reply, I’m not being hostile in any way.

But: I cannot make head nor tail in what you are trying to say

If you employ someone and they earn enough and have worked for you for long enough, it is you who has to pay ssp/smp not your customer, also if you loose the job or have to lay staff off for whatever reason and its not covered by tupe, it is you that will pay any redundancy payments.

Because you employ them….

Why would one of your customers agree to pay the above? Its not their problem, that is why they have chosen to use you.

Regards

BSF 

[jimmyjames]

Hi
Yes,but they have agreed by signing the contract and accepting the term and conditions that My company charges for costs in running the contract.This means reimburseing me for all costs ie ssp,smp,and redundancy which is stated in my term and coditions and which they originaly accepted and are now going back on.
I have to actualy pay my staff and have never stated otherwise, its down to my compensation
if they force me to lay off staff that Im questioning.
Will let you know what BICS legal say as Im sure this may affect others at some time.
 

[Mr BSF]

If they force you to lay off your staff, you let them work the notice, which you will be charging the customer for and paying your staff for... so what is the problem?

[jimmyjames]

Not the notice,but the redundancy as some of the staff I TUPE'd over and some go back 10years.Thats why the concern if they try to go back on what they signed and what they have paid out on in the past.
Anyway thanks for you input,what would you do if a client said go away and come back with away to save 50% on his over all bill.
I no the right answer but would get chucked out the building.Seen your other comments and think you may offer a realistic answer.
Ta
Jim

[Mr BSF]

Hi Jim,

The job is going to run for another year or so, if the client insists on cutting the hours supplied and your willing to go with it, there is enough time to sort out any long notice periods, all my jobs have a minimum of 3 months notice, this enables me to give long term staff the required notice if the job come's to an end and isnt taken over.

It sounds to me that the company in question is in some trouble.

regards

BSF

[Mr BSF]

Sorry Jim, another main point I forgot to make clear was: with regard to any redundancy payments owed, I would also seek proper advice on if you are liable for any redundancy payments that may be owed, sorry but I am inclined to think you are.

regards

BSF

[jimmyjames]

Thanks
Will post comments of legal advice once recived.
Jim

[Fox]

Hi

If your contract runs until Oct 2007 without a clause for 3 months notice by either party then this is what will bind the client to you.  A major change can not be made in the contract without you agreeing to it otherwise this consitutes them being in breach and you would then be entitled to seek compensation for costs incurred and loss of earnings.

I would point this out to the company and tell them the only way to deal with it is to give you three months notice which you would be agreeable with (it is not breech if both parties agree) however they will have to get another company in or take on the staff directly with TUPE in position - then it is up to them to sort out the staff cuts by way of economics (which is entirely above board in TUPE).

Like BSF - it doesn't really matter what your contract states about the employees, you pay their wages you have to, by law, do things right and it would be down to you to pay redundancy, notice, sick pay etc, with the contract you have though, it sounds like you can claim it back from the client, however if they refuse to pay you have to be prepared to take them court and as you can't withold the money from the employees until you got it from the client, you would be out of pocket either for the period of time it took to claim or if you lost the case.

Fox

[jimmyjames]

Legal Advise:
If I put forward ideas to cut costs that would affect the ammont of labour required then, I would be accepting a change of term and conditions reguarding the contract and would be liable to pay out of my pocket.
If I let the client ask to cut costs in the form of labour he is then in breach of contract in that he is changing the terms and conditions in respect to who I employee on site. He is then open to be taken to court for conssequential cost incured by my company in laying off staff who are employed at his site on a permenant basis.
As stated befor I am aware that my company has to pay, to my staff notice and redundancy and all wage related matters.The sticking point was reclaiming those costs by charging the client for those costs that I would incure by his request for me to reduce his expences by 50%.
Thanks for all your help and comments in this matter.
Jimmy