Withheld payments, unexpected deductions and ultra-thin margins for Ultrafast Broadband (UFB) installations are fact of life for Chorus subcontractors, according to a small-business owner in the Wellington region.

His comments follow a finding from the Labour Inspectorate that 73 of 75 Chorus subcontractors are systematically exploiting workers, and union E tū's claim that Chorus is "hiding behind a model that pushes pressure onto subcontractors who don't have the experience of a big player".

The subcontractor does work for one of Chorus' primary contractors, Visionstream.

He told the Herald that he gets paid a standard $187 for the simplest type of UFB install, involving cable being strung from a pole to a house.


The work takes two technicians four hours, and with the technicians paid $25 an hour (equivalent to $200 for the job) the work was a money loser.

The subcontractor said more complicated UFB installs paid better, but could also lead to disputes.

He said his company was still waiting for payments from Visionstream for some work that had been carried out in November.

In another case, the subcontractor said, Visionstream paid him $5000 for a UFB install where ducting was blocked and a driveway had to be dug up then re-asphalted by a third-party. Visionstream then "took back" the money (by deducting from a round of payments for other work) after Chorus questioned the payment.

Chorus made onerous demands for every element of the job in question to be documented and photographed, he said.

In other cases, Chorus had claimed (through Visionstream) that an excessive number of hours had been billed, he said.

Chorus chief executive Kate McKenzie. Photo / Supplied.
Chorus chief executive Kate McKenzie. Photo / Supplied.

The subcontractor said he has been forced to lay off 14 staff, or nearly all of his technicians.

He said other subcontractors were having similar issues with Visionstream and fellow primary contractor Universal Communications Group (UCG).


Meanwhile, veteran Auckland linesman John Lightfoot - who carries out work for an owner/operator Visionstream contractor - complains jobs now pay a lot less than they used to, and that he is getting less work.

Earlier in the UFB rollout there was a shortage of engineers, but Lightfoot says he now often gets only two or three hours' work a day. He blames the situation, in part, on work being soaked up by subcontractors who push new hires to do 'volunteer' work during extended training periods (a trend picked up on by the Labour Inspectorate).

Lightfoot said Visionstream had agreed to hear his complaints. He has a meeting scheduled with the company this Thursday.

Visionstream took over Wellington UFB work from Downer in 2016 amid Chorus cost-cutting and a drive to shorten UFB-install wait times.

In its 2018 annual report, Chorus says the average UFB connection cost in the year to June was $1037 - below its forecast $1050 to $1200.

The subcontractor's account gels with comments from E tū union spokesman Joe Gallagher. While his union is advocating for subcontractors' employees, Gallagher also told the Herald that smaller subcontractors are under financial pressure and often lack the skills and experience of primary contractors like Visionstream when dealing with HR issues.

Chorus and Visionstream did not immediately respond to requests for comment.

This afternoon, a meeting is taking place between Chorus and the Labour Inspectorate. Chorus says it initiated the meeting, which will see its service company relationship lead Rob Broadbridge general counsel Elaine Campbell square off with Labour Inspectorate national manager Stu Lumsden.

The lines company wants more information about the Labour Inspectorate investigation, which was conducted in partnership with IRD and Immigration. The Herald understands Chorus will also raise objections about learning about developments through the media.

This morning, Chorus said it had appointed an independent investigator, former Deputy State Services Commissioner Doug Martin, to review its subcontractors' employment processes.