The shift towards the increased participation of the private sector in municipal services is frequently concerned with the impact on existing municipal employees. Increasingly, the tendering of contracts emphasises the importance of worker re-employment and worker terms and conditions, and requests specific proposals as to how each bidder would address these issues. Depending on the arrangement, a shift to private sector involvement may result in a new management, a new employer and new roles for workers in service provision.
In many countries, there is no formal (legislative) barrier to simply discharging employees but the vast majority of municipalities still suffer from overstaffing. Most prudent municipalities, however, believe that employees deserve due consideration and fairness; in others, substantial political reasons lead municipalities to address employees' concerns. Moreover, there are simple implementation issues to factor into the decision-making process. Some current employees will have a critical role in ensuring that the process of reorganising municipal service delivery is smooth. Consequently, both private operators and municipalities are likely to want to build an agreement with employees as a prerequisite to the final contract.