8 October 2018
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.
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 says, “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.
“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.
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