Red Alert

Posts Tagged ‘Contractors’

Where are they?

Posted by on February 17th, 2013

Last year, Labour questioned why a company called King Facade Ltd had been given approval in principle from Immigration New Zealand to bring in 110 “Facade Installers” from China on the basis that there were no New Zealanders skilled enough to do the work. There were  questions about the granting of this approval that were not satisfactorily answered by either the Minister of Immigration or Immigration New Zealand, with only a cursory attempt to find New Zealand workers, and a exaggeration of the skills required ensuring that any Kiwis would not meet the requirements.

The parent company of King Facade Ltd is Mainzeal, and this week King Facade Ltd also went into voluntary liquidation.

The then Associate Minister of Immigration, Kate Wilkinson gave assurances that the parent company Mainzeal had a good record with Work and Income. Another big justification from the government was that King Facade would work with Mainzeal and the Industry Training Organisation to develop a Facade Installer Apprenticeship programme, so New Zealanders would be skilled to do the work in future.

Well that’s all fallen over, along with the collapse of Mainzeal, the loss of jobs and contractors out of pocket.

Who knows what’s happened to the poor Chinese Migrant workers, who were promised a three year employment contract.

My guess is they were on the next flight home, with no pay in their pockets for the work they have done.


David Shearer and Clayton Cosgrove announced today that Labour will legislate for a fairer deal for subbies.

Consultants for core administrative tasks?

Posted by on January 10th, 2013

Back in 2008 the then National opposition made two ‘key’ pledges when it came to public services. The first was to ‘cap but not cut’ the number of public servants, and the second was to ‘move resources from the back office to the frontline’. They didn’t keep either promise, but more importantly, evidence is increasingly emerging that their approach to public service provision is costing the taxpayer more, not less.

National’s cap on public service numbers has led to a blowout in consultancy costs, as government agencies continue to deal with the same, or in many cases greater, workloads with fewer people on board to do the work.

Take the Ministry of Education for example. This week I released data that shows they’ve been engaging expensive consultants to undertake core administrative tasks like processing official information requests, drafting ministerial documents, and writing business cases. I’ve got no problem with departments bring in outside expertise when a particular set of skills are required, but this is bread and butter stuff any department the size of the Ministry of Education should be able to deal with.

Between 2008 and 2011 ten of the biggest government departments spent a whopping $910 million on consultants and contractors between them. Those same agencies spent $114 million making people redundant during the same period. Increasingly anecdotal evidence is emerging of former employees being engaged as consultants to do the work they used to do for a lot less when they were employees.

National’s consultancy culture isn’t saving us money, it’s costing us more. It’s also leading to an erosion of the core capability of the public service, and some of the haphazard decisions ministers are making, often based on weak advice, reflect that.

Our democratic system relies on there being a quality public service with the expertise and capability to deliver on the priorities of the government of the day, whomever that may be. That includes the capability to deliver advice the government of the day might not like. Under National, that capability is being seriously eroded.

The contractor trap – more flexibility, no rights

Posted by on October 14th, 2012

This was published on the Radiolive website on 5 October.

There’s an old Kiwi maxim: a fair day’s pay for a fair day’s work, but that doesn’t ring true for many thousands of Kiwi workers.

For the past three decades there has been a steady growth in what is described internationally as non-standard work, including temporary workers, casual and labour hire workers and a substantial increase in the use of independent and dependent contracting.

Some contractors are highly skilled, entrepreneurial individuals, who are able to extract a significant premium for their efforts outside traditional employment.

However, for many, the opportunities of earning a secure and stable income are remote. Their classification as contractors effectively gives them no rights to the minimum protections provided for those classed as employees under New Zealand Law. For these workers the employment relationship, with its rights and obligations, under current law has become meaningless.

Look around you. Many fast food delivery workers, truck drivers, couriers, construction workers, caregivers, security guards, cleaners, telemarketing workers, forestry workers, even actors and musicians are contractors.

While Labour is pushing for the minimum wage to be $15 an hour, these workers have no guaranteed minimum wage.

While we enjoy our Christmas breaks, these workers have no paid holidays.

If we are treated unfairly at work, we can challenge our treatment under the law, but contractors have no such right.

If we want to join a union and bargain for a collective agreement, we are guaranteed that right, but that’s prohibited under competition laws for contractors.

Over the past few years many contractors have been in touch with me to talk about their situation. When Telecom announced that its two biggest network Engineering contractors, Transfield and Downer EDI had lost their contracts for the Northland and Auckland network to a new company, Visionstream, 700 skilled lines engineers were told if they wanted work they would have to move from being employees to contractors.

These workers were powerless. If they wanted a job they had to give up secure income and employee protections, buy their own vans and equipment and take all of the risks of the job on themselves. Many did. And they’re now struggling.

Some horrific stories from truck drivers hit the headlines. They had mortgaged their houses to buy the rig, and then the companies they were contracted to slashed hundred of dollars off their weekly pay claiming the drivers were overpaid. They showed me the figures; many are earning below minimum wage. Every week sometimes dies on the road through a truck related injury. We respond with ever-stricter safety laws, but does anyone ever think that the drivers are speeding, cutting maintenance, working over legal hours because that’s the only way they can make a living as owner-drivers?

Courier drivers are in a similar situation. As vehicle drivers have been converted from employees to contractors, courier drivers have been required to provide their own vehicle, pay for vehicle maintenance, insurance registration, and other running costs.

New Zealand is not alone in this phenomenan. Studies are taking place around the world and some governments have implemented new legislation to regulate dependent and independent contracting.

In this dog-eat-dog world of increasing competition, firms often turn to contracting as a means of avoiding the costs of employing someone directly. Others do it in a cynical attempt to avoid labour laws.

The International Labour Organisation has dedicated many conference discussions to finding a solution, saying that the protection of (all) workers “is at the heart of the ILO’s mandate and all workers, regardless of employment status, should work in conditions of decency and dignity.”

While Labour accepts there are advantages for businesses in different contracting arrangements and for that matter, advantages for some highly skilled workers, these must be balanced against the fundamental rights of fairness and equality.

There is a lot of discussion and thought required on this topic. But in the end, Labour doesn’t believe that it is the Kiwi way for the “law of the jungle” to prevail.

If we fail to regulate the growing incidences of independent and dependent contracting, we expose growing legions of workers to having no rights at all.

And in doing so, we make every other job that relies on the foundations of the employment relationship vulnerable to unacceptable competition.

Told you so

Posted by on July 11th, 2011

On 25th June 2009 Telecom announced that its two biggest network engineering contractors, Transfield and Downer EDI had lost their contracts to look after the Northland and Auckland network to a new company, Visionstream.  700 lines engineers were informed that their jobs were redundant and they would only get work if they transferred to Visionstream as dependent contractors.

Despite widespread industrial action, organised by their union, the EPMU, along with financial support to support the workers from being starved into submission, the lines engineers were made redundant, and one by one, many reluctantly became their own bosses.

Some of us wrote blogs about this dispute warning there would be serious consequences for the industry and Telecom.

An independent analysis of the contracts offered by Vision stream calculated that as owner operators, the workers could lose up to 50 – 66% of their income. The consequences haven’t just impacted on the lines engineers. Customers are paying too, just like we were told it would.

The EPMU reports that :

Last week, Visionstream called on its contractors for the tenth week in a row to work through the weekend in order to deal with a backlog of service calls. In a memo sent to all contractors, Visionstream said that they are currently going through “the worst performance we have faced as individual companies and Visionstream ever”.

Visionstream pays a flat rate to its dependent contractors for service calls, and if they want the work they have to meet the company’s demands.

The NZ Herald reported on the 8th July 2011 that ;

“Maintenance of Auckland’s telephone network at its worst in years – but the company in charge denies taking up to five days to fix faults.

The company asked all installation and fault technicians to postpone days off between June 28 and July 8, and acknowledged that this came on top of having staff working every weekend for the previous nine weeks.

“For the last nine weeks, on average up to 1000 customers per day in the Visionstream-managed areas have had their service impacted in one form or another,” the internal memo said.

I see these workers around still, driving the same Chorus vans they were driving when they were employees, but they are earning heaps less for the privilege of being their own boss.

They were treated them badly.  The law allowed Telecom to get away with it.

Now we’re all paying.

Hobbits and Goblins

Posted by on October 1st, 2010

Much of the media commentary in the past few days around the Hobbit stoush has been has been about the cheek of an Australian Union (the MEAA) daring to take on our very own Lord (Sir Peter Jackson) over the pay and conditions of NZ performers on the Hobbit set.

We’ve even seen the extraordinary situation where a Minister of the Crown and Attorney General has (mis)used his position to seek and publish advice from Crown Law to take sides in what is essentially an industrial dispute.

But underlying this is a much deeper issue. New Zealand’s competition laws impose huge restrictions on the rights of contract workers to collectively organise and bargain – no matter how dependent and how vulnerable.

I’m not qualified to comment on whether NZ performers in the Hobbit are being fairly paid or not. Nor do I pretend to understand the complexities of “residuals”” and other industry norms. But what I understand very well is the problem we have in New Zealand of dependent and independent contracting, and how this is often used to deny more vulnerable workers basic fairness.

I did a lot of work on this issue a couple of years ago when my members’ bill, Minimum Wage & Remuneration Bill was being debated through parliament (and was eventually defeated under the National/Act government).

At the time, NZ Actors Equity supported the bill saying :

“We have many NZ productions which we are all justly proud of, but rates of pay in some productions are nothing to be proud of. The poor pay & conditions of many performers is not commonly known, who, because they are classed as dependent or independent contractors, are expected to work for a whole lot less than workers who are employees.”

NZ law dictates that a worker who is not defined as an “employee” has no rights – even if they are vulnerable, dependent and poorly paid.

So, who can be surprised if from time to time, a group of workers, even if they happen to be performers and supposedly above needing to earn a decent living, use what leverage they can gather to get their boss to talk to them.

John Key’s Pizza Guy

Posted by on July 21st, 2010

Sanjay, the Pizza Hutt worker who delivered John Key’s pizza earlier this week and who, according to Mr Key, thinks John Key’s idea of a 90 day trial period is a good idea, should know that Prime Minister John Key voted against him getting minimum wage last year.

Mr Key obviously doesn’t know that workers like Sanjay have no rights anyway because Pizza Hutt drivers are independent contractors and not covered by basic employment laws, let alone trial periods. 

Last year, I tried to persuade the National Party to support my members’ bill (Minimum Wage and Remuneration Amendment Bill) which would have ensured that so-called “independent contractors” like Sanjay would have received at least the minimum wage. 

But guess what, they voted against it and the opportunity was lost.

Much of John Key’s and Kate Wilkinson’s pronouncements about their proposed labour changes this week are based on a view that is sharply skewed by their contact with employers.   The Labour Department evaluation of the 90 day trial period interviewed ar0und 3,500 employers and just 13 workers, so one has to question how balanced the evidence is that the PM is basing his decisions on.

John Key tried to make out he was sympathetic to workers like Sanjay this week by telling the story of this pizza delivery guy who came to his mansion in Parnell. 

But when he had a chance to really make a difference to Sanjay and other contract workers, his government failed.