Chorus has brought in ex-Deputy State Services commissioner Doug Martin to investigate its subcontractor's employment processes. The move follows a Labour Inspectorate report that 73 of 75 Chorus subcontractors systematically exploit workers.

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The company says the review is fully independent and will start immediately. "This is an absolute priority, with the full support of the Board," chief executive Kate McKenzie said.

There is no timeline on Martin's investigation.

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Chorus also says its relationship lead with service companies, Rob Broadbridge, and its general counsel Elaine Campbell will meet with Labour Inspectorate national manager Stu Lumsden this afternoon. Chorus says it initiated the meeting.

"While we have immediately sought further information from MBIE regarding the cases, we also need an independent view to ensure all people working on Chorus' behalf are always treated fairly and within the law," McKenzie says.

The company also further removed itself from the problem, saying "Chorus contracts most of its build and provisioning work to primary contractors VisionStream, Downer, Broadspectrum and UCG. In turn, these primary contractors often sub-contract that work to smaller businesses." (A rep for Downer says, "Downer is not involved with fibre provisioning work for Chorus, and we haven't been part of that work for over two years.")

"Chorus will expect all its primary contractors to be fully co-operative with the independent review. We will also continue to co-operate fully with the ongoing work of the Labour Inspectorate," McKenzie says.

Yesterday, the Labour Inspectorate said a joint investigation with IRD and Immigration into 75 Chorus subcontractors had found 73 were in breach of minimum employment standards. The MBIE agency said "systematic" labour law violations included "volunteer" labour or extended training periods without pay, sub-minimum way pay and poor record keeping.

Martin is a director of consultancy Martin Jenkins.

He has previously had trouble-shooting roles in Christchurch, where he served as Crown Manager, charged with improving the Christchurch City Council's consent function following the Council's loss of accreditation as a Building Consent Authority, and in the aged-care industry as the Crown negotiator on pay equity.

Doug Martin is a director at consulting firm Martin Jenkins. Photo/Martin Jenkins website
Doug Martin is a director at consulting firm Martin Jenkins. Photo/Martin Jenkins website

The Labour Inspectorate is currently analysing records received to prove any breaches, and will then take enforcement action, Lumsden says.

Lumsden says his agency's inspectors can issue an employer an Infringement Notice of $1000 per charge, per employee, up to a maximum of $20,000 for failing to keep employment records.

For the most serious breaches, such as exploitation, cases will now be heard at the Employment Court and carry maximum penalties of $50,000 for an individual and the greater of $100,000 or three times the financial gain for a company.