When to walk away from a cleaning contract

There is a superstition in this trade that any contract is better than no contract, and that resigning a building is a kind of failure. The firms that last treat it the other way. A bad contract is a standing instruction to donate labour, carry risk you cannot insure, or send people into a site you would not work yourself. Walking away is how you stop.

The decision shows up at three moments: before you bid, before you sign or renew, and when a live job has gone sour. The paperwork is different. The test is the same. Can we staff this under the Cleaning Services Award 2020, under the WHS law of the state, at a price that still exists after chemicals, supervision and the time you will spend arguing? If the answer is no, the rest is theatre. That is a contracts and tendering skill, not a motivational speech.

Red flags in the specification and the draft contract

Some documents tell you to leave before you have costed a single hour. A specification that is all outcomes and no exclusions, with “as required” on the lines that cost money, is one. A draft agreement that gives the buyer unlimited indemnities, uncapped liquidated damages, and a variation process that is “at the principal’s absolute discretion” is another. A pack that refuses a site inspection and asks you to price from a brochure is a third.

Read the hours against the building. If the specification implies a continuous standard — presentation at all times, hotel finish in a public concourse — and the pricing schedule is a night shift, someone is hoping you will not notice. If consumables are silent, you will fund the paper. If periodics are buried in the daily page, you will fund a strip-and-seal program you never sold. Reading the specification properly is how you see this in week one of the tender, when walking away is still cheap.

Insurance and entity tricks belong on the same list. A request that the bidding company indemnify the buyer for the buyer’s own negligence, or that a two-van firm carry a professional-indemnity limit designed for an engineer, is not “standard”. It is a risk transfer. If your broker cannot place it, that is a no. If your broker can place it only at a premium that destroys the job, that is also a no.

Government packs can be cleaner than commercial ones, or worse. A government response with honest criteria is worth the effort. A government pack that adds local-content promises you cannot keep, a modern-slavery questionnaire you would have to invent, and a commencement date six days after award is a mobilisation fantasy. Decline it in the portal. Do not decline it by lodging a bid you will later try to renegotiate in a panic.

The price that cannot pay the people

Race-to-bottom pricing is not a market mystery. It is a bid that cannot pay Award wages, penalty rates, superannuation, workers compensation, leave and a supervisor who is not also the only pair of hands. You will be shown that number by a buyer who says the incumbent is “comfortable” at it, or by a competitor who will not be there in eighteen months. Matching it does not make you competitive. It makes you the next incumbent they will replace.

Do the arithmetic in the same way you would price any square-metre job. Hours from the specification. Hours from the inspection — the ones the specification forgot. Award classifications and penalties for the actual clock, including weekends and public holidays. Then the on-costs, the periodics, the consumables, the access delays. If that number is above the budget the buyer announced at the briefing, you have learned that the budget is the problem. Telling them so, once, in writing, is professional. Cutting the hours until the number fits is how people get hurt and how Fair Work gets involved.

Sham subcontracting to “make the rate work” is not a workaround. If the people on the tools are employees in everything but the invoice, you have a Fair Work problem and, in several jurisdictions, a labour-hire licensing problem. Walking away is cheaper than a later audit.

Portable long service leave in the contract-cleaning industry applies in some jurisdictions — Queensland and the ACT among them. If the job is in one of those places, the levy is not optional colour. It is a line in the cost. Forgetting it is not a competitive strategy.

Unpaid variations and the slow bleed

Most live contracts do not explode. They leak. A café tenancy arrives and “someone” has to do the front. Construction occupies the loading dock for a month and the crew is told to manage. An event schedule appears that was not in the tender. The building manager asks for a day cleaner “just while we recruit”. Each item is small. Together they are a second job.

The walk-away test on variations is not the first extra. It is the pattern. If you have confirmed extras in writing and they are being paid, you have a messy building and a functioning contract. If you have confirmed extras and the invoices are being short-paid, contra’d, or “taken to the next meeting”, you have a buyer who is using your cash flow as a facility. Use the contract: interest where it exists, suspension rights where they exist, and a stop on further extras until the account is current.

Security of payment legislation in the states and territories is built around construction work. Ordinary ongoing commercial cleaning is often outside it. Do not assume you have a statutory payment claim unless someone who knows that jurisdiction’s Act has said you do. The practical tools are still the ones you already have: a written variation, a clean invoice, and a willingness to stop doing free work.

A buyer who disputes every invoice as a negotiation tactic is telling you the relationship. Believe them before the BAS is due.

Safety is a sufficient reason on its own

You do not need a spreadsheet to leave a site that will injure someone. Recurring sharps with no waste procedure, a dock that reverses trucks through the only path the night crew can use, a chemical the buyer insists on that you cannot get a current safety data sheet for, a lone worker in a public building with no duress arrangement, a roof or atrium job they want done from a ladder because the elevating work platform is “too much” — these are WHS failures. The model Work Health and Safety laws, and Victoria’s Occupational Health and Safety Act, do not care that the contract said you would “make it work”.

Stop the task, write the incident or the refusal, and take it to the contract manager. If the response is a shrug, or a threat to deduct the SLA, you are no longer arguing about cleanliness. Remove your people. The commercial conversation happens after they are off the floor.

Keys and after-hours access sit next to safety. A building that will not control fobs, that asks you to prop a fire door, or that expects a cleaner to reset an alarm they have not been trained on is not a quirky site. It is a liability. So is a buyer who wants you to clean around an active fitout without induction into the builder’s site.

This journal’s editorial standards require Australian regulators to be named as they are. Your exit letter should do the same. Cite the duty, the date, the area, and the instruction you would not follow. Do not write a novel about “culture”.

Exit clauses, notice and the way out that you already signed

Walking away mid-term is a contractual act. The agreement will say who may terminate, for what, and on how many days’ notice. Convenience termination is sometimes available to the buyer and not to you. Breach termination usually requires a notice and a cure period. Non-payment may have its own clause. Read the one you signed, not the one you wish you had signed.

If you are at renewal, the walk-away is simpler. Serve whatever notice the option clause requires, in the form it requires — often written notice to a named address, not a text to the building manager. Keep the proof of delivery. Buyers who are surprised by a non-renewal will sometimes claim they never received it.

If you are still at bid stage, the walk-away is a no-bid or a withdrawn tender before closing. After closing, public processes will rarely let you withdraw without looking like a firm that wastes panels’ time. That is why the go/no-go in the tendering piece sits at the front, not the back.

Handover obligations survive a resignation. Keys, fobs, chemicals you stored on their site, waste from your work, and the last periodics they have paid for all need a list. So do any of their assets that have been living in your shed. A clean exit is how you keep the referee you may still need.

The people on the roster are not a footnote

Cleaning contracts end. Crews do not evaporate. The Fair Work Act has rules about transferring employees when work moves between contractors. Whether a particular handover is a transfer of business depends on the facts: the work, the connection between the outgoing and incoming firms, and what the incoming firm offers. Do not give staff a lecture on Part 2-8 from memory. Get advice for that building, then tell people what you actually know.

Tell them early. The rumour will reach the amenities before your email does. Say the end date, what you will pay out, how unused leave will be handled, and whether the incoming contractor has asked for a meeting. Do not badmouth the buyer in the tearoom. Do not promise jobs on a building you have not won yet. Do not ask people to work out their notice unpaid because “the invoice is in dispute”. Their wages are not a bargaining chip.

If you are the incoming contractor on someone else’s exit, do not pretend the roster is a greenfield. Ask who has been in the building, what they were paid, and what the buyer expects you to do with them. A cheap takeover that ignores the people already on the tools is how you buy an industrial problem with the keys.

Labour-hire and subcontractors need the same conversation, in writing, with enough notice that they can move people. If you have been using a licensed labour-hire firm to cover the site, ending the contract does not end your duty to pay for hours already worked.

How to leave without making the next job harder

Write a short internal note on why you are leaving: specification, price, safety, payment, or a buyer you will not work for again. The next estimator, who may be you on a Saturday, will thank you when the same building comes around on a panel refresh.

Write the external notice to the contract. One page. The clause you rely on, the date, the handover offer, and the final invoice timetable. If safety is the reason, attach the earlier refusals. If money is the reason, attach the statement. Do not copy the term “gross misconduct” from an employment template. It is the wrong legal family.

Offer a sensible handover: joint inspection, remaining periodics, a list of outstanding variations. You are leaving the building, not scoring a point. The facility manager you are angry with today will sit on an evaluation panel in two years. The supervisor you treated decently will take a job with you when this buyer’s next contractor fails.

Then stop bidding the work that looks like this. The habit of saying yes is how firms accumulate a book of jobs that all need to be walked away from at once. A smaller book of contracts you can staff, inspect and get paid for is not a retreat. It is the business.

If you want a rule that fits on a van door: do not take a building you would not send your best leading hand into, at the hours you priced, for a buyer who pays on the terms you signed. Everything else is a story you will tell later, after the overtime.