Action widens against Chorus subcontractors accused of migrant exploitation

Saturday, 9 February 2019

Concerns over the treatment of workers building New Zealand's broadband networks are showing few signs of abating.

More action is being taken against subcontracting firms that have been accused of breaching employment law and exploiting migrants while building Chorus' ultrafast broadband network.

Labour Inspectorate spokesman Michael Docherty said it had lodged a claim with the Employment Relations Authority (ERA) against a third subcontracting firm, 3ML, and had issued infringement and improvement notices to a further 15 firms since its crackdown began in December.

Chorus and contractor Visionstream have acted on whistleblowers' allegations that some of their staff breached policies relating to conflicts of interest, Chorus spokesman Ian Bonnar says.

A total of 13 UFB subcontracting firms have now received infringement notices for breaches of employment record-keeping obligations. These carry a fine of $1000 per breach, up to a maximum of $20,000 in any three-month period.

Another 21 subcontracting firms have been issued with 'improvement notices' ordering them to fix their employment practices and two more have been issued with 'enforceable undertakings' requiring them to enter into a formal agreement to 'improve and rectify compliance breaches'.

The inspectorate had previously lodged ERA claims against two UFB subcontracting firms – Sunwin Technologies and Babylon Communications, both of which are also based in Auckland.

**READ MORE

Subbies could receive backpay if a class action lawsuit succeeds.

* Crackdown begins against Chorus subbies

* E tū union gets in behind proposed 'class action' lawsuit

* Allegations of bribery and 'improper behaviour' investigated in UFB roll-out**

Docherty said action was likely against 'all 72' subcontracting firms that it identified breaching employment law during a series of visits by the department, Immigration NZ and Inland Revenue in June.

'Once investigations are completed with the remaining 33, the degree of compliance action against each can be finalised,' he said.

Labour Inspectorate national manager Stu Lumsden said in October that the visits took place after it became aware that migrant workers were 'potentially being exploited by various subcontracting companies undertaking work on behalf of Chorus'.

The breaches it uncovered included contracting firms failing to maintain employment records, failing to pay employees' the minimum wage and holiday entitlements, and failing to provide employment agreements.

Immigration NZ also found several workers who were carrying out work on the UFB network in breach of their visa conditions and one overstayer.

The enforcement action has encouraged Australian-listed law firm Shine Lawyers to seek support from fibre installers for a class action lawsuit against Chorus' main contractor, Australian-owned Visionstream, and contracting companies working for Visionstream.

The E tū union threw its weight behind the lawsuit last month. Union organiser Joe Gallager said he believed about 3500 workers who had been involved in building Chorus' UFB network should have been treated as employees rather than contractors.

The union believed those workers could have a claim to back pay, holiday pay and sick pay. Gallagher said the union was continuing to encourage linesmen to talk to Shine about the potential lawsuit.

Chorus has been providing protection to a group of whistleblowers who approached Stuff to relate largely separate allegations concerning the roll-out of UFB and who later agreed to meet with the company.

The allegations ranged from conflicts of interest around business interests held by some Visionstream and Chorus staff, through to concerns subbies were not being paid correctly for work and a suspicion a Visionstream manager had accepted bribes for approving linesmen to carry out work on the broadband network.

Chorus spokesman Ian Bonnar said on Saturday that both Chorus and Visionstream had taken action with regard to some of the lesser matters raised by the whistleblowers, while their investigations continued.

Those actions concerned conflicts of interest held by employees who were involved in UFB subcontracting companies on the side.

The various investigations have not affected investor confidence in Chorus, which saw its shares climb to a record high of $5.08 on Friday – more than triple their price five year's ago.