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Cleaning companies say long-term contracts hurt operations

Locking in a price makes it harder to adjust for rising costs, firms say

Published on Feb 4, 2014 8:18 AM
 
From September, cleaning firms will be required by law to pay cleaners using a wage ladder that sets minimum basic salaries according to the jobs they do. This is expected to raise the price of cleaning services, since manpower makes up as much as 80 per cent of the costs, firms say. -- ST PHOTO: DESMOND FOO

Cleaning firms are urging the Government to do something about long-term contracts which some town councils insist on.

Such deals mean that companies are locked into a price for their services over a long period, which makes it harder for them to react to rising operating costs, especially when it comes to raising wages for their cleaners.

"These fixed-price contracts lock a company in and some firms will struggle when costs (of) labour and materials go up," said Mr Milton Ng, president of the Environmental Management Association of Singapore, which represents cleaning firms, told The Straits Times last week.

From September, cleaning firms will be required by law to pay cleaners using a wage ladder that sets minimum basic salaries according to the jobs they do. This is expected to raise the price of cleaning services, since manpower makes up as much as 80 per cent of the costs, cleaning firms say.

 
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