Chorus operation identifies employment breaches

A Labour Inspectorate operation targeting Chorus subcontractors has found that nearly all of the subcontractors identified are breaching employment standards.

The Inspectorate completed 75 proactive visits as part of a joint operation with Immigration New Zealand and Inland Revenue in June of this year.

Initial analysis identified 73 subcontractors rolling out broadband networks throughout Auckland had breached minimum employment standards.

The investigations represent the first phase of inquiry into employment breaches within the data cabling industry and further are planned across New Zealand.

“We were made aware that migrant workers in the broadband industry were potentially being exploited by various subcontracting companies undertaking work on behalf of Chorus," says Labour Inspectorate National Manager Stu Lumsden.

“Breaches we observed to-date included contracting employers failing to maintain employment records, pay employees’ minimum wage, holiday entitlements, and provide employment agreements.

“In a number of cases it was found that contractors deliberately used practices such as ‘volunteering’ or extended trial and training periods without pay.

“To emphasise the size of the operation, approximately 900 subcontracting companies have had working agreements with Chorus and its three main sub-contractors. Each of these have 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. Large companies such as Chorus need to be proactive and ensure that their contractors and subcontractors are 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.

“Despite earlier public assurances from Chorus that any breaches involving its contractors were isolated cases, the investigations and analysis to date demonstrates systemic failures in quality management,” says Mr Lumsden.

The Labour Inspectorate is continuing with its investigations with a view to taking a wide range of compliance actions.

MBIE encourages anyone concerned about their employment situation, or the situation of someone they know, to call 0800 20 90 20 where they can report their concerns in a safe environment.

Statement on Chorus subcontractors investigation

The Government’s priorities to strengthen employment law, to better protect New Zealand workers and stamp out migrant exploitation, are justified by the findings revealed today by the Labour Inspectorate’s investigations into Chorus subcontractors, says Workplace Relations and Safety Minister Iain Lees-Galloway.

“Initial analysis by the Labour Inspectorate has revealed that of 75 proactive visits to subcontractors rolling out broadband networks for Chorus throughout Auckland, 73 had likely breached minimum employment standards.

“The investigations found that contracting employers were failing to maintain employment records, pay employees’ minimum wage, holiday entitlements, and provide employment agreements.

“This is simply not acceptable and it is not welcome in New Zealand workplaces.

“This activity is in breach of minimum employment standards required by law, it is clearly exploiting migrants, and it is a timely reminder why the Government is strengthening employment law to protect vulnerable workers.

“This also demonstrates the previous Government’s procurement process prioritised cost over the welfare of New Zealand workers in allowing contracts that encouraged this kind of behaviour.

“The Labour Inspectorate operation’s findings demonstrate why the Coalition Government has embarked on a programme of restoring fundamental rights for New Zealand workers.

“One of my top priorities for this term of Government is improving protections for contractors and workers in precarious employment arrangements.

“The Coalition Agreement also sets tackling migrant exploitation as one of this Government’s top priorities. We have already increased the number of Labour Inspectors and further work to stamp out migrant exploitation will begin before the end of the year.

“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,” Iain Lees-Galloway says.


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