Christchurch rebuild migrants face debts, cramped accommodation


MIL OSI – Source: Unite Union –

Headline: Christchurch rebuild migrants face debts, cramped accommodation

By Michael Morrah


Reprinted from TV3 News

In the third winter since the earthquakes, men and machines are still working across Christchurch.

As the demolition nears an end, attention is now turning to the rebuild. Thousands of workers will be needed to rejuvenate a bleak landscape.

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And to get numbers, the Government has fast-tracked visa applications to get more people in from overseas.

READ MORE: Tech5 has provided additional info, which you can read here


Most of the international workforce is coming from the Philippines, where the Trade Minister was just last month.

More than 700 workers came in last year and the Government is confident that is only going to increase.

Despite such encouraging messages, for some Filipino workers the Christchurch experience has been a major disappointment. There are stories of oppressive contracts, job losses and working without pay, not to mention crowded accommodation – three people to a room, a room that is used not only for sleeping but cooking too.

Complete with stove and fridge, many of the immigrant workers live at accommodation in the Christchurch suburb of Mairehau.

It is not only crowded, but it can be pricey too. The workers say their room costs $465 a week – that’s $155 a head.

“It’s a single bedroom,” says lawyer Paul Brown. “Three guys living and cooking in a single bedroom? There’ll be no one in New Zealand who is ever going to accept that as reasonable living conditions.”

“This is just gross exploitation of workers,” says FIRST Union southern region secretary Paul Watson. “It is not the environment we want for migrants to come to Canterbury. It’s sullying our international reputation as a destination for migrant workers.”

But the company providing that accommodation, recruitment firm Tech5, rejects such criticism. It says in the crowded Christchurch housing market, it does a good job.

“These are top quality properties, typically $500,000 and $700,000 each,” says Tech5 director John Wyatt. “They are quality accommodation. They have flat-screen TVs, washing machine, dryers. They are step off the bus and into quality accommodation.”

But current Tech5 employee “Antonio” says when he first arrived earlier this year, he stepped into something quite different. He says he was sleeping in a room at a house with not three but five other men on three sets of bunk beds, each paying rent of $155 per week.

“There are three double decks there and you can’t sleep because one is calling to the Philippines, the other is watching movies,” he says. “Where is the relaxation? Where is the fairness here? There is no privacy.”

“We didn’t have six people in a room,” says Mr Wyatt. “That’s not the case.”

But Antonio’s story is not isolated.

“We are living in a garage for three months and we are paying $155 each week,” says Tech5 worker Reynaldo Lugtu.

Mr Lugtu was brought here in March by Tech5 and initially stayed at another property owned by the company directors, sleeping in a converted garage with seven other men.

“Just eight people living in the garage. We have one heater and if you look in the outside we have one Portaloo.”

Tech5 has 117 Filipino workers and says it has reduced rent to $125 a week per worker, which includes all amenities.

“We’re paying for gas, power, internet, Sky, and then we’ll put on the odd boxing match that they like and, like I said, there’s no issue with the housing,” says Mr Wyatt. “I’m not quite sure why we’re talking about it actually.”

A worker representative put up by the company agrees there is no issue.

“As of now the boys are happy with what they have in their houses,” says Mr Wyatt. “Actually they are told if they are not happy with the accommodation you can find your own.”

It wasn’t just Tech5′s properties that appeared to be overloaded. We visited other worker accommodation with shared bedrooms, rundown bathrooms and crowded kitchens.

At one flat on the outskirts of the city, 14 Filipinos are living in a six-bedroom villa, each charged $150 a week.

James Saunders’ firm, Major Holdings, brought the men over and housed them at a friend’s rental property.

“The rates that people were charging we heard was $200 a week, so $150 a week we thought was fair,” says Mr Saunders.

But the men have more on their minds than just their accommodation. They came here as painters and carpenters, but three months after arriving they have been told they no longer have jobs.

“This is really bad for us because we are really shocked what happened to our company, because we didn’t receive any notice coming from our company,” says worker Frankie.

Saunders’ company went into liquidation after a contract he assumed he’d get didn’t eventuate. Uncertain and without income, his men must wait for their visas to be altered before they can start work elsewhere.

And while they wait, they’re being chased by debt collectors back home. Why? Well there are hundreds of recruitment companies in Manila who charge locals anything from NZ$3000 to NZ$15,000 as a fee for getting them work abroad.

Most men paid around NZ$4000 to be here. For these men, that’s a small fortune, and many of them got the money through loans, with monthly payments.

The cash to secure the job is borrowed from loan sharks who charge cripplingly high interest. In the case of these men, it’s 5 percent a month – that’s 60 percent a year.

So what makes these men take on such huge debt? Well, a job here – earning anything from $18 to $25 an hour can be life-changing, something that can secure their families’ future.

Hundreds turn up for interviews in the Philippines even if there are only a handful of positions.

“A job in New Zealand is like winning the lottery and as a result it makes them quite open for exploitation, and I do have some concerns about that,” says Anthony Leighs of Leighs Construction.

Mr Leighs has taken on 75 Filipino workers. His team manages the recruitment themselves, pay for their workers to get to Christchurch and then set them to work on their own company contracts so their workers are not saddled with debt.

“A lot of businesses have jumped into Christchurch and consider it’s the next gold mine or gold rush town and you’ve got to be part of it,” says Mr Leighs. “The reality is it’s a really demanding and challenging environment to operate a business at the moment. And I think as a result of that you are seeing some organisations taking advantage of some staff who can’t look after themselves quite as well as the traditional New Zealand worker can.”

The cost of work

Some Filipinos working in Christchurch have endured their country’s own great rebuild, after last year’s devastating typhoon.

Like their homeland, the landscape in Christchuch has been altered dramatically. And in the aftermath, there have been changes in the commercial environment too.

With an estimated $40 billion worth of work, the Christchurch rebuild has seen a spike in the number of labour hire and recruitment businesses operating in the city. Firms set up specifically to get foreign labour in and then contract those workers out, at market hourly rates.

“Some of them are making really big money,” says Mr Brown, lawyer. “Some of the recruitment companies where they’re their own labour hire company, they’re paying $20, $21, they’re charging out $30, $31, $32. Great money! Ten bucks an hour for every hour your guy works, 40 hours, 400 bucks per worker – that’s big money.”

Mr Brown has acted for dozens of Filipino workers in Christchurch who have found themselves in strife with their New Zealand employers. Sixteen of those workers were employed by the company we met at the start of this story – Tech5.
Tech5 prides itself on being a one-stop shop for construction firms, importing a workforce who is highly skilled, equipped with gear and ready to work.

There’s no doubt bringing in a foreign workforce requires a significant investment. Tech5 take on all the upfront costs of recruitment and travel, so their workers don’t necessarily have to face the loan sharks. But the company does want the workers to reimburse those costs, and workers we’ve spoken to say the Tech5 contract they sign in the Philippines doesn’t make that entirely clear.

The only mention of costs is the need to repay the company for a toolkit without specifying the amount.

But the contract handed over in New Zealand is different. Suddenly there’s a schedule of costs the employee is liable for – flights, medical tests, trade testing, site testing, insurance, even branded clothing as well as the tools. The grand total: $7700.

“It’s definitely not $7700,” says Tech5′s Mr Wyatt. “The contract has been amended since then. We’ve had discussions with everyone in relation to that.

“With the amount of guys we’ve brought in it’s enabled us to reduce the cost quite a lot. So the guys’ costs have gone down to, I think if i can remember, about $5600 now. And they are all aware of that before they leave the Philippines.”

Tech5 says workers get verbally briefed on the costs during an induction before they leave the Philippines.

Tech5 worker representative John Ordonez agrees.

“They were told about this – every deduction, airfare, for the tools and all the things, accommodation.”

But ex-Tech5 worker Mr Lugtu says the new contract in New Zealand came as a shock.

“When we are in the Philippines, even in our induction, also in our contract, it doesn’t have any issue regarding to pay that money. Then when we arrive here, we sign a contract to pay that.

“We are all surprised, and naturally we ask each other why the contract is like that, you know, ‘We don’t know about here, sir.’ We are afraid. That’s why we can’t talk much. We can say nothing, only sign, that only. We can do nothing.”

“That’s why we have employment agreements, and that’s why the law says you have employment agreements, so that you do not do this verbally,” says Mr Brown. “You prevent disputes by having a written employment agreement.”

But Mr Brown’s biggest concern with the contract is the small print in addendum one – specifically, point six. It’s a warning that if the employee does not complete their three years with Tech5 they will have to pay the company a bond of more than US$10,000.

“I would call that an attempt at bonded servitude,” says Mr Brown. “That’s a direct attempt to stop these guys working for someone else.”

Bonded servitude is an emotive term for sure, but Mr Brown says that’s the way some workers see it.

“Yeah, it’s a threat,” says Antonio. “It’s like a chain in our neck up. That contract is a chain for us. It’s squeezing us. We don’t have freedom. I don’t know if that is the exact term but it seems like they are controlling us through that contract.”
Tech5 says the clause was intended to stop other companies poaching their workers.

But it admits US$10,000 would be difficult for any of the workers to get.

“Obviously we are trying to protect our investment,” says Mr Wyatt. “Look, the reality is would we ever carry that out because we have a right to that, because it’s in the contract to do that? But that’s not who we are as a company and we’ve since reviewed that clause anyway.”

Tech5 says it’s now amending all employee contracts after an audit by the Government’s labour inspectorate.

There’s no doubt this rebuild is unprecedented in New Zealand, so it’s not surprising some companies like Tech5 are learning as they go.

The Council of Trade Unions says amending contracts is a step in the right direction, but ultimately it says there needs to be closer monitoring of all rebuild businesses.

“We do need to develop a community culture that we want to actually ensure that migrants when they come and work here will be treated well,” says Mr Watson.

“This is New Zealand, right?” says Mr Brown. “We have employment legislation, we have rights for workers. They should apply to everybody who’s coming here lawfully to work. If you’ve got your visa then they should have the same rights as you and I.”

Statement from Tech5 in regards to the 3rd Degree programme: “We can put our hands on our hearts and say that we didn’t get everything right in the beginning, but we have not sat back and done nothing. We have improved everything significantly and have succeeded in what we set out to do.”

For migrant support, contact Mely Feria of Migrante Christchurch: 0800 863 477 or email secretariat.

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