A 'climate of fear' has prevented more Chorus subcontractors being charged, the E tū union says.

Last October, the Labour Inspectorate announced the results of a months-long investigation, carried out in tandem with Immigration NZ.

Some 73 of 75 Chorus subcontractors investigated were systematically breaching employment laws, the Inspectorate said.

Alleged violations included "volunteer" work or extended training periods without pay, plus sub-minimum wage pay, failure to keep accurate records and failure to pay holiday pay.


In early December, the Inspectorate said it had taken cases against two subcontractors to the Employment Relations Authority (ERA) against two Chorus subcontractors: Sunwin Technologies and Babylon Communications (trading as Clearvision).

And in January, it laid ERA charges against a third, 3ML Services.

The Employment Court-backed ERA can imposed penalties of up to $100,000 per offence - putting it several weight classes above the notices that can be issued by the Inspectorate itself, which carry fines starting from a modest $1000 (the Inspectorate says 13 subcontractors have been issued Infringement Notices and 21 with Improvement Notices. A Chorus insider shrugged off the notices, saying infringements tend to be errors of paperwork rather than intentional or malicious).

E tū industry coordinator Joe Gallagher says he's not surprised that only three of the 73 subcontractors accused of exploitation have been hauled before the ERA.

The union organiser says some cases have been resolved through mediation. But he adds that taking a case to the ERA requires workers to appear as witnesses or otherwise provide evidence - and most don't want to.

"It's difficult because a lot of the guys are quite scared," Gallagher said.

"I wouldn't say there's intimidation, but I would say people are scared to get involved in that process - because rightly or wrongly they think if they come forward they won't get work again."

 E tū Industry Coordinator, Joe Gallagher says linesman are scared they'll be blacklisted if they give evidence. Photo / Supplied.
E tū Industry Coordinator, Joe Gallagher says linesman are scared they'll be blacklisted if they give evidence. Photo / Supplied.

Gallagher adds, "The environment isn't geared toward people coming forward and having a no-risk conversation. Once it comes out, people are scared they'll be blacklisted. Contactors talk to each other."


Labour Inspectorate National Manager Stu Lumsden responded, "The Inspectorate encourages anyone to come forward if they have information or concerns about breaches of minimum employment standards, and these will be handled in a safe environment."

Investigations continue and more ERA cases could be brought once they wrap up, Lumsden said.

Meantime, Gallagher's claim is borne out by the Herald's experience. More than a dozen employees of Chorus subcontractors have been in touch with claims of exploitation or poor conditions, but only one - veteran linesman John Lightfoot - has been willing to be named.

Lightfoot said he was willing to talk about the squeeze on subbies because he made a fair living during his time as a Telecom linesman and owned his own home and was close to retirements. He said he appreciated others - often younger, and recent immigrants - were in a more vulnerable position and afraid to be named.

Gallagher claims that rather being cowed, Chorus contractors and subcontractors are continuing to behave badly. He says E tū continues to get fresh reports of exploitation. He says a Visionstream move to layoff 11 full-timers working on Chorus's copper network and replace them with subcontractors represents the UFB model being expanded into Chorus's traditional business.

Visionstream did not respond to a request for comment. Chorus spokesman Ian Bonnar said it was simply the case that as UFB fibre progressively replaced older copper networks, there was less work to go around on the latter. "As people have moved to fibre there are fewer jobs to do on copper, hence Visionstream has laid off 11 techs who worked exclusively on copper," he said.

After the Labour Inspectorate first made its allegations against 73 subcontractors, Chorus opened an in-house investigation, lead by ex-Deputy State Services Commissioner Doug Martin.

This morning, Bonnar said the investigation was making good progress. It has no set timeline, but the Chorus spokesman said Martin's final report should land "in a matter of weeks." Chorus has yet to say if it will make the full report public.

Although they have drawn criticism from Labour Inspectorate head Stu Lumsden, Chorus and primary contractors such as Visionstream are not in the gun.

Employment lawyer Jennifer Mills says the arm's length contracts set up under Paul Reynolds-era Telecom, which saw the soon-to-be-spun-off Chorus outsource most UFB work to three primary contractors, who in turn subcontracted to smaller companies, put Chorus out of the Labour Inspectorate's reach.

Ordinarily, only a worker's immediate employer was responsible for any employment law breaches, she said. An exception was health and safety breaches, which could see a company at the top of a subcontracting foodchain held liable.