A raft of new labour-hire companies have set up in post-quake Christchurch, prompting concerns from unions and audits from the Ministry of Business, Innovation and Employment (MBIE).
The labour-hire business is exploding as the rebuild reaches momentum, with at least 17 new agencies opening in the past three years.
It is good business, but unions warn it means lower pay for workers, especially migrants.
The Recruitment and Consulting Services Association (RCSA) provides a code of ethics and rules around health and safety as an umbrella organisation. However, a spokesman said only five of the 17 new labour-hire businesses had registered with the RCSA.
Labour-hire companies acted as employers for workers and then placed them with rebuild companies. The construction business paid the labour-hire agency, which then paid the workers.
The margins and fees charged were commercially sensitive, the RCSA spokesman said.
EPMU Construction director of organising Alan Clarence said data from the union’s members showed some labour-hire companies were taking “a considerable margin”.
In some cases, the agencies charged the workers and the employers for their services and fees could go up to $6000 on each side to get the worker started.
Clarence estimated that migrant workers were paid up to $5 less than if they were employed directly.
He said labour-hire contracts had an impact on work quality and pay inequality and needed to be regulated.
The MBIE’s labour inspectorate launched an audit programme of recruitment and labour-hire companies earlier this year following an increase in complaints around worker exploitation, especially among migrants.