A Labour Inspectorate operation targeting subcontractors rolling out Chorus' broadband network has found almost all of them to be breaching employment standards.
The Inspectorate visited 75 subcontractors as part of a joint operation with Immigration New Zealand and Inland Revenue in June of this year. According to a statement from the Ministry of Business Innovation and Employment, Initial analysis identified 73 subcontractors rolling out broadband networks throughout Auckland had breached minimum employment standards.
MBIE said the investigations represented the first phase of inquiry into employment breaches within the data cabling industry and further investigations were planned.
Labour Inspectorate national manager Stu Lumsden said the inspectorate had been made aware that migrant workers in the broadband industry were potentially being exploited by various subcontracting companies undertaking work on behalf of Chorus.
“Breaches we observed to-date included contracting employers failing to maintain employment records, pay employees’ minimum wage, holiday entitlements, and provide employment agreements," he said.
“In a number of cases it was found that contractors deliberately used practices such as ‘volunteering’ or extended trial and training periods without pay."
He said approximately 900 subcontracting companies had working agreements with Chorus and its three main sub-contractors. "Each of these has different work practices ranging from the compliant down to the outright exploitative, so the investigations are very involved and will continue.
“Many of these employees represent a vulnerable section of the New Zealand workforce that often aren’t aware of their minimum employment rights, and are concerned with their visa status."
He said the investigations and analysis demonstrated systemic failures in quality management, and it was incumbent upon large companies such as Chorus to be proactive and ensure their contractors and subcontractors were not exploiting their workers.
“It’s very disappointing that a national infrastructure project of this scale which is well resourced has failed to monitor compliance with basic employment standards.
The minister for workplace relations and safety Iain Lees-Galloway said the Labour Inspectorate's findings justified the Government’s priorities to strengthen employment law, to better protect New Zealand workers and stamp out migrant exploitation,.
“The investigations found that contracting employers were failing to maintain employment records, pay employees’ minimum wage, holiday entitlements, and provide employment agreements," he said.
He accused the previous government of putting cost ahead the welfare of New Zealand workers in allowing contracts that encouraged this kind of behaviour.
“It is critical that our workplaces are free of the kind of exploitative practices that the Labour Inspectorate has found. It is bad for workers, it is bad for our reputation and ultimately, bad for our economy."
E tū Union said the inspectorate's findings had come as no surprise. Communications industry coordinator Joe Gallagher said the union had been aware of the effect of this contracting model since its inception.
“This model of contracting and sub-contracting has allowed Chorus to pass the buck, resulting in contractors exploiting their workforce to keep to budgets and schedules," he said.
“It has resulted in terrible outcomes for the affected workers, as well as poor delivery of services in many areas.
“Chorus have kept their heads in the sand on this for far too long. They have tried to discredit our union and our members when issues have been raised. They have insisted in the past that issues we have raised were isolated events.
“We now have crystal-clear evidence that the systemic exploitation of vulnerable workers is ‘business as usual’ for Chorus and the whole fibre roll-out operation.”
He said the union was optimistic that the Government understood the issues and wanted to fix them. "But time is of the essence.”