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97% of Chorus subcontractors fail employment standards inspection

08 Oct 18

Widespread employment breaches found with broadband subcontractors

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

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

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.

Labour Inspectorate national manager Stu Lumsden comments:

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,

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.

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

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