Contracts sit at the heart of every cleaning arrangement, yet too often they are treated as a formality rather than a foundation. Two recent cases, one involving a South Australian cleaner and another centred on a health and wellbeing company taken to court by the Australian Competition and Consumer Commission (ACCC), serve as sharp reminders that poorly constructed, ambiguous or one-sided agreements carry real legal and financial consequences.
When ambiguity opens the door
A recent ruling by the South Australian Employment Tribunal found that a cleaning engagement stretching back to 2008 could not be resolved by its founding document, a brief 1990 letter confirming a monthly fee that covered “all labour and materials.” The Tribunal found the letter too ambiguous to determine whether the worker was an employee or an independent contractor, opening the door to a far wider inquiry into years of tax records, invoices and financial arrangements.
Brad Horan, business growth consultant at Lucrature, has seen the same oversights surface repeatedly across cleaning contracts. “Missing scope of activities and expected standards, and no process for variations or changes to scope, are recurring problems,” he says, adding that absent pricing adjustment clauses, unclear dispute resolution timelines and unaddressed liability around equipment and consumables – especially where client equipment is involved – round out the most common failings.
John Taylor, of cleaning industry consultancy Nivernais Pty Ltd, has seen both ends of the contract spectrum across his years in the sector. At one extreme, he recalls agreements so granular they included a set time allowance for cleaning each basin and a per-square-metre rate for vacuuming carpet versus maintaining a hard floor, with provision for the contract rate to be adjusted whenever a fixture was added or removed. At the other, he has encountered contracts reduced to a single line: clean all internal areas to an accepted standard and supply all hygiene requirements for the floor. “Both have advantages and disadvantages,” Taylor says, “but it gets back to the age-old problem of ‘what is clean’.”
That question, deceptively simple on its surface, carries real legal weight. Under principles established by the High Court, a comprehensive written contract will generally determine the nature of a working relationship on its own terms. But when the founding document falls short, too brief or too equivocal to do that job, the question of employee versus contractor can be tested against decades of post-contractual conduct. For operators running long-term arrangements on little more than a handshake or a short email, that is an exposure that compounds with every passing year.
Unfair terms and the consumer law lens
While the Tribunal case highlights risks from within the industry, a separate action launched by the ACCC against health program provider Miyagi Pty Ltd illustrates what happens when contract terms are wielded unfairly against clients. The ACCC alleges that Miyagi used contracts that prevented consumers from cancelling programs, made false and misleading representations about cancellation and refund rights, and pressured consumers to agree to terms during a sales call while a representative waited on the line, limiting their ability to consider what they were signing.
Although the Miyagi case involves a health business rather than a cleaning company, its lessons translate directly. Facilities management contracts, service level agreements and subcontractor arrangements in the cleaning industry are all subject to Australian Consumer Law protections against unfair contract terms, particularly where one party holds significantly more bargaining power than the other.
Horan’s advice on navigating that landscape is refreshingly direct. “Be an honest human,” he says. “Contracts should be written in plain English. Be fair, and don’t put something in the contract you wouldn’t be comfortable accepting if you were the customer.” He is equally clear on the limits of contractual creativity. “Operators should never attempt to sign away legislated rights. Be clear that law comes first, contract second.”
What best practice looks like
Both cases point to the same underlying failure: contracts that were either too thin to protect anyone, or structured to benefit one party at the expense of the other. Taylor points to the Covid pandemic as a defining moment that exposed how unprepared many agreements were. “A new standard called Covid Clean emerged where contractors were expected to do a specialised clean, particularly in medical facilities,” he says, noting that neither highly prescriptive nor loosely worded contracts had adequately anticipated the demand.
His advice, regardless of contract style, is to build in flexibility, and back it up with process. “It is important for contractors to have regular documented meetings with the client to determine that the contract conditions are being met and that the cleaning standard required is being achieved,” Taylor says.
Horan outlines the core elements every cleaning service agreement should address: what will and what won’t be cleaned, any quality measures or standards to be adhered to, frequency and locations, pricing uplifts linked to an index such as CPI, fees and payment terms, variation processes for extra charges, insurance and compliance obligations, the intended nature of the relationship, and staff hiring exclusion clauses preventing clients from directly engaging the contractor’s employees.
For cleaning businesses, that checklist is a starting point, not a ceiling. Contracts should be reviewed regularly as arrangements evolve, and businesses engaging subcontractors should pay particular attention to worker classification. Regulatory scrutiny of contract conduct is intensifying, and cleaning operators who treat their agreements as living documents, backed by consistent, documented client communication, will be far better placed to protect their business, their workers and their clients when questions arise.
