The inclusion of non-core services in social infrastructure PPPs may impact on an agency's existing workforce, where the non-core services are proposed to be provided by the private sector. The NSW Government has used Labour Service Agreements (LSA) to facilitate the change to a PPP model, in order to minimise the impact on existing staff.
When a PPP company takes over a function that was formally the responsibility of Government, it is of upmost importance to ensure a smooth transition for the existing workforce, taking into account the rights of current staff, while at the same time aiming to increase productivity. In attempting to reach the right balance, the Mater Hospital PPP formulated an LSA that had the following principles:
■ the provision of non-core support services, as set out in the contract, is to be carried out by Government Health employees
■ the PPP company manages the Government Health employees
■ Health employees remain public sector employees with continuity of all entitlements.
The right to manage the Health employees covers:
■ the day to day management, discipline and performance
■ the Area Health Service (AHS) can step-in if they become aware of circumstances endangering any employee.
A PPP company has the right to terminate employees, however, this must be in consultation with the AHS such that:
■ an AHS can accept or reject a termination recommendation; and
■ if a termination recommendation is not accepted by the AHS, the Health employee can be redeployed elsewhere.
It is believed that LSAs strike a balance between increasing productivity and addressing the legitimate concerns of existing employees, by directly and openly engaging with employees and their representatives.