By the Australian Financial Review:
Westfield Group is facing a challenge to its social, environmental and governance policies from a global coalition of labour and community groups. In Australia, the focus is on a dispute with the union, United Voice, on behalf of the more than 1600 cleaners in Westfield’s malls. In the US, the focus has been on Westfield’s contribution to property taxes which fund services like schools. The driving force behind the campaign is a veteran union organiser and the national president of United Voice, Michael Crosby. “Companies need to pay attention to Environmental Social and Governance (ESG),” he says. “On a tiny issue like cleaning they have blown us off and now it is coming back to bite them.” Westfield co-chief executive, Steven Lowy, dismisses the claims. On cleaning, he says Westfield has dealt in a very professional manner with an issue that is about wages being paid by contractors. On US land taxes, Lowy says his group has paid its property taxes “as assessed by the County and in accordance with California law, just like everyone else”. But that has not stopped Crosby. Last month he held a meeting in the Washington headquarters of the American Federation of Teachers to agitate for concerted action. Along with the teachers were representatives of the Teamsters, whose members include public employees like firemen who are paid by property taxes in states like Florida – and the London-based Economic Policy Group. Crosby has also commissioned a report on Westfield in Britain. And he is planning to “reach out to” environmental groups. “The result of disrespecting the cleaners is that Westfield will have problems everywhere they operate in the world,” he says. “They are not behaving rationally. If we got everything we asked for, it is only the equivalent of the depreciation on two corporate jets.”
SEIU fasting growing union in US
Crosby is a 37-year veteran of industrial action, for the past four years at United Voice and before that with the Service Employees International Union (SEIU) in the US, the Australian Council of Trade Unions and as general secretary of Actors Equity. The SEIU is a fast-growing union in the US, with over 2.1 million members including 225,000 in building cleaning and security. “In the US, Westfield has a good relationship with the SEIU,” Crosby says. (US cleaners get a fraction of the wage paid in Australia.) The cleaning of the shopping centres has been a long-running issue for owners, their contractors, the union and the cleaners themselves. United Voice aims to cover around 13,700 cleaners in Australian shopping centres. Over 1600 of them clean Westfield malls. Crosby says many take pride in keeping the malls clean and feel let down by the owner’s intransigence. Unlike the owners of the office towers, the mall managers resisted attempts to negotiate an above-award, Clean Start agreement. The Clean Start base pay is $21.17 an hour compared to $17.49 an hour under the award. Other differences include more job security, higher allowances and a “voice at work”. But there is no point in pushing the contractors. “If the contractors agreed to our demands, they would go broke,” says Crosby. One, Reflections, went into receivership in 2010. The Fair Work Ombudsman, Natalie James, is also watching the cleaning contracts.
Risks of low-cost providers
She says inspectors were focusing on the mechanisms that shopping centre owners have in place to ensure principal contractors and subcontractors with cleaning staff are complying with workplace laws. “Shopping centre owners and managers need to be alert to the risk associated with selecting low-cost providers,” she says. “It is not acceptable for organisations to outsource work to the lowest-cost contractor and turn a blind eye to any subsequent unfair treatment of low-paid workers. Such behaviour can be detrimental to an organisation’s reputation and may also be considered unlawful.” Lowy says Westfield has been instrumental in introducing a code of conduct for the fair treatment of cleaners in the shopping centres. But the group, like other mall owners, is not going to require contractors to pay over-award wages. “If, following the proper process, award rates for cleaners are increased throughout all sectors of the cleaningindustry, then Westfield will ensure that those increased rates of pay are paid by its cleaning contractors,” said a spokesman. So Crosby has looked offshore and found fellow travellers in a coalition of community groups in California. In July they rallied in front of Westfield Century City in Los Angeles, arguing that the tax base on which Westfield paid property taxes was lower than that reported, leading to a big shortfall for services like schools. Los Angeles Times journalist, Michael Hiltzik, put it succinctly. “As a California taxpayer, you should be proud of Westfield’s efforts. That’s because you’re paying through the nose for them,” he wrote. But he acknowledged, like Lowy, that Westfield is paying what it is being asked to pay. The Crosby campaign continues.