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Telecom and the logic of capitalism

Written By: - Date published: 6:00 am, September 1st, 2009 - 69 comments
Categories: telecommunications, workers' rights - Tags: , ,

united-we-bargain-divided-wThere’s nothing like a Tory Government in power and a monopolistic corporate flexing its muscle to remind you that capitalism is all about serving the bosses and screwing the workers.

This Telecom dispute. The engineers are being made redundant from their current roles already in batches. On October 1, all the jobs will be gone and the contract for servicing the network goes over to Visionstream. As the workers are being made redundant, Visionstream is trying to get them to sign up as contractors on worse rates than they get now and forcing them to buy all their own equipment. Cost of that is up to $60K. The catch? Visionstream is only offering 70% of the jobs that exist currently (they think they’ll be able to work fewer workers harder for less. Don’t expect to be getting prompt repairs if you have a phone or internet fault if Visionstream wins).

Of course the workers don’t want to take worse conditions for less money. That’s why Telecom and Visionstream’s strategy is so devious. By making them redundant in batches quite a way out from the changeover they’re really putting the screws on financially in they hope they’ll buckle. And each redundant engineer who breaks and signs up with Visionstream leaves a worse jobs to jokers ratio for the ones who are standing strong.

Forget the fairy stories you’ve been told about capitalism, in disputes like this bosses’ basic strategy is to sew fear in the hope it will lead to division. Make people fear they won’t be able to meet their mortgage and feed their kids, make them fear they’ll be left jobless in the middle of a recession, then try to divide them against each other by making them compete against their workmates for the few shitty jobs that are left.

As long as most of the engineers stay staunch, Visionstream are stuffed. But the bosses are counting on hunger and fear to do their work for them.

So far, the workers are winning. Few of the engineers have been buckled and signed up with Visionstream. Most of them are unionised and they know that together they can force Visionstream to break. Visionstream is desperate enough that they are lying, making claims to have signed up hundreds of engineers and threatening workers who won’t sign up, but the workers know it’s a crock. As long as they stand together, they have the power.

It’s a matter of holding the line until the bosses back down, which is why the donation of $10,000 from the Maritime Workers was so fantastic, and why you should get behind them by donating too. If the bosses break these workers, you could be next.

69 comments on “Telecom and the logic of capitalism ”

  1. vto 1

    Good on you. Stick it to the corporate dogs. United you stand.

    • jcuknz 1.1

      I think it rather fun and ironical that if you decide to support the striking linesmen you can do it using the telecom system of adding your payment to your account. Good that other telecom workers are helping the linesmen becuase what is happening to them could happen to other sections of the company without too much trouble I think. maybe it is the thin end of the wedge. It seems wrong to me that a company is trying to save money from some workers yet seems quite happy to pay a ridiculous salary to its chief executive. As with other aspects in life the pursuit of excellence leads to foolishness …. it be better to have not quite such a high flyier at the top and not have to bother about not paying workers a proper return for their labours to pay the shareholders..

  2. Zetetic 2

    I see the Zeal320 workers won a good result. Must have been scary for them striking, especially with all the propaganda AirNZ ran against them to other AirNZ workers. they stayed staunch though, and got the reward

  3. Ron 3

    It’s all very well for me to stand on the sidelines and heckle but is this an opportunity for more widespread action? I don’t know how unionised the rest of the company is ut some strike action elsewhere in the company or in Government Depts related to Telecom might help.

    • Daveo 3.1

      Under the Employment Relations Act it’s illegal to strike in support of other workers. In fact it’s illegal to strike for just about anything.

      Maritime Union have said they’ll be diverting Telecom broadband shipments though.

      • Swampy 3.1.1

        Maritime Union might find National is prepared to look a lot more closely at the law in relation to them than Labour was prepared to turn a blind eye to.

        I remember previous time MUNZ getting away with stopping a shipment to a company in support of the EPMU which was clearly an illegal sympathy strike.

        As to why we have such legal restrictions, because in the past a lot of industrial action was clearly political, directed at governments of all hues. A lot of strike action in the last months of Muldoon stopped as soon as Labour was elected, but it started up again once Roger Douglas’ razor gang got into full swing.

    • The Voice of Reason 3.2

      There has been a nationwide strike of workers employed by Transfield in support of the Northland/Ak workers. This has been possible because their collective agreement talks have stalled and they are legally entitled to take industrial action. I understand there is more to come.

      Good signs that Vision Stream are cracking, too, with a fantasy press release claiming victory in the dispute and the bringing forward of redundancies in order to ratchet up the pressure on the workers they are bullying into the new contracts.

      Reminds me of the bluster and bullshit that Progressive Enterprises used in the days before they ran up the white flag. Hopefully, there will be the same result here, which will be good for both workers and consumers.

  4. singularian 4

    Oh look, another hate filled, bitter diatribe on the Standard.

    Tagged with ‘class warfare’

    Which century do you guys live in again?

    • mike 4.1

      Careful mate they’ll send the boys round to rough you up.

      NZ remains an uncompetitive backwater but these luddites don’t see
      the world has changed, they want to stay in the good old days..

      • Zetetic 4.1.1

        mike, you sound scared. oh no, the big union boys gonna beat you up?

        And when has that actually happened to you? It’s not the 60s anymore.

      • Quoth the Raven 4.1.2

        I expect mike hates the market. Unions are part of the market. This is just market acitivty the workers are bargaining with the power they have – the power to remove their labour.

        Corporate collectivists like mike just can’t stand it.

        • Draco T Bastard 4.1.2.1

          No capitalist likes or supports the free market as it decreases profit. That’s why things like patents exist.

          Telecom gets opened up to competition (even if it was artificially) and their profits decreased. Their response was perfectly predictable – they cut costs and one of those costs is labour. They are trying cut the price of labour to less than cost price to maintain the profits of the worthless shareholders.

          • jcuknz 4.1.2.1.1

            Before you attack shareholders remember that a goodly proportion of them are hard working, or retired hard working workers, with their savings invested in the sharemarket and they will or currently do need those returns to reward them for their efforts in keeping the country going.
            There are workers who save some of their pay rather than booze and smoke it away. If there were more like them the country would be a better place for all.

            • Draco T Bastard 4.1.2.1.1.1

              The point is that the shareholders don’t actually add any value to the business and are, therefore, worthless. Telecom was fully paid up and operating at a profit long before it was sold. In other words, it was self-sustaining. It would be now except that most of the profit now goes to a bunch of bludgers rather than being fed back into the network.

              shareholders remember that a goodly proportion of them are hard working, or retired hard working workers,

              That doesn’t give them the right to take others livelihood from them.

        • Swampy 4.1.2.2

          So you agree that unionists can remove their labour, and the employer has the right to confirm that as a permanent arrangement if they so choose?

        • Swampy 4.1.2.3

          That’s the inconvenient market, and its reality coming home. Telecom were doing quite nicely out of the local loop but Labour came along and decided they should shaft them, and I’ve no doubt there were some in Labour who thought Telecom should get it in the neck for being evil money grubbing capitalists.

          It is a complete contrast from Kiwirail, Labour bought up the tracks and eventually the whole business and the former owners made such a good deal they fell over themselves to sell out.

          So OK, Labour shafts Telecom with the LLU, making sure it is not profitable any longer, then Telecom turns around to cut the costs of this albatross, the response is not a big surprise is it?

    • Zetetic 4.2

      So, no disagreement with the facts and the conclusions singularian? No defence of Telecom?

      Just having a little cry because the language is robust? Do you need a little cuddle? mike might give you one, you seem to get along.

      We live in a class society – capitalist and worker and a few in the middle who want to be capitalists and end up being house slaves… you guys know what I mean eh?

      • singularian 4.2.1

        Zetetic – I have no intention of arguing against your ‘facts’. I have seen enough of you on this site to know that you are a zealot and therefore, as in arguing against god with a believer, there is no point.

        Class society? Ha, believe what you want. It is you that is out of touch whether you and your friends realise it or not.

    • RedLogix 4.3

      Which century do you guys live in again?

      Oh I dunno, how about the one in which Telecom’s CEO can get paid in one day about as much as the median annual income?

      If this executive class of bosses really believed that turning employees into dependent contractors was such a good idea, why then are we not seeing Paul Reynold’s own job being put out to tender? I’m sure they would get some pretty competitive bids unders $7m.

      Is there any way you think that kind of salary (plus benefits) can be justified? Or are you ok with me just calling it by it’s real name, ‘class warfare’?

      • singularian 4.3.1

        So the Telecom CEO obviously employed himself?, paid himself whatever he wished? and all the shareholders are too scared to say anything in case they get reduced in class?

        I’m sure you could apply for his job when it comes up. You seem like a pretty smart person, why don’t you? You appear to be saying anyone could do it, are you?

        • RedLogix 4.3.1.1

          So the Telecom CEO obviously employed himself? Paid himself whatever he wished?

          More or less. It’s called ‘executive capture’, where a small class of self-selecting individuals perpetuate their own hyper-privileges on their own terms.

          the shareholders are too scared to say anything in case they get reduced in class

          Most shareholders have no say whatsoever.

          You appear to be saying anyone could do it, are you?

          Yes. I’ve watched these senior executive types for years, it doesn’t take much talent or skill even. Mainly it helps if you are tall, better than average looking, have the ability to act confident and project a little drama from time to time… and most critically.. be willing to manipulate and push other people around, to betray and sacrifice them with no scruples whatsoever. The rest is just a little general learning, the right accent from the right schools… and a nice suit.

          Often fairly dull and tedious work once the novelty wears off.

          • Akldnut 4.3.1.1.1

            Shit you’ve just describe the Nact government and the public. (Most shareholders have no say whatsoever.)

    • Whole singularian calm down calm down
      1st stop being a stupid jerk and wake up and smell the freashly cut roses
      At the end of last year, Vodafone had 1.527 million customers, compared with Telecom’s PATHETIC 1.302 million and why do you think that actually dont answer that it answer this why are telecom making their employees spend 60K on tools and transport im sure you could lend them some couldnt you
      so stop and think before you type something and then just dont type it

  5. sean14 5

    “…the workers know it’s a crock. As long as they stand together, they have the power.”

    What’s the problem then?

  6. IrishBill 6

    The 21st, it’s capital and its political arm that are pushing the 19th century economic dogma.

  7. Relic 7

    Nice post Zetetic, about something that is happening in the real world, this is the type of issue where people show what they are made of. It is one of several defining disputes so far during Shonkey’s term. Mr Fyfe and all his “Air New Zealanders’ may be feeling a bit queasy too after the Zeal settlement. Well done EPMU members.

  8. Shona 8

    Zetetic,Thanks for the donation link. Makes it easy as the EPMU local office is out of town.
    Done!

  9. Bart 9

    Keep up the good fight. It will be a sad day if Visionstream get their way. Anyway the public can help out, other than making donations? Boycotting certain products etc?

    • singularian 9.1

      Yeah Bart – boycott Telecom – you better shut down your internet straight away. 🙂

      Oh, and don’t use the phone today, OK?

  10. singularian 10

    OK Bart – you don’t like that suggestion? I thought you wanted to do something….you know….like a boycott to help the boys ( are there any female phone techs?). Obviously your want to help only goes so far, as you are still commenting here your internet is obviously still on. ( i bet you’re one of those people who believes in AGW but still drives around wearing label clothes made in China, drinking coffee from South America and using expensive consumer devices to pontificate on the internet…am I right?)

    Sooooo….why don’t you make some nice egg (freerange of course) sandwiches and pop down and serve them up to the protesters where ever they are? No crusts please.

    Just trying to help.

    By the by – I don’t do KB, no fun at all.

    • Maynard J 10.1

      I think your first suggestion was better. If you do not like what is going on, then switch your internet to Ihug or worldxchange. Go over to vodafone or 2degrees. And then tell telecom exactly why you are doing it.

    • Draco T Bastard 10.2

      Well, at least he’s admitting that Telecom is an actual monopoly.

  11. stevo 11

    Let’s remind ourselves about how strong unions have maintained wages in Australia above ours without driving that economy into the ground. Wage gap anyone?

    Visionstream was established in 1994 as a subsidiary of Telstra.

    And lets see how Telstra has agreed to negotiate with the Communications Workers Union..
    http://www.cepuconnects.org/telecommunications/telstra-eba-2008/unions-and-telstra-new-relationship/index.cfm

    Is this an example of bad behavior when you are away from home and you think no one’s looking?

    This will not be the only example of an Australian company..shackled for years into good behavior in Australia coming over here and taking advantage of our innovative labour laws.

    Just when I thought I might swap networks back to Telecom, after teaching them a lesson with their outrageous mobile and Internet charges a while back….wanting to support a NZ company and all that…and then this own goal..maybe not.

    • Swampy 11.1

      Australia is a much bigger and wealthier economy.

      You are wrong to suppose Telecom has ever been any different from what they were when they were the post office and it took weeks to get connected.

      Incidentally the Progressive Enterprises campaign happened under a Labour governemnt, it doesn’t really make any difference which government is in power.

  12. ieuan 12

    I’m interested in some of the facts presented here, how is the ‘up to $60K’ figure justified? Thats a lot for a van and some tools. Considering you can lease a van that’s a lot for tools.

    A Visionstream spokesman (I think it was on ‘Breakfast’) said they were offering a $3K one off payment and a low interest loan to help cover the set-up costs.

    I’m not trying to defend Telecom or Visionstream but I do think there is a great opportunity here for ‘the Workers’ who can see that this is the way their industry is heading and want to leap into running themselves as a business.

    • Relic 12.1

      Dependent contractors is what any service people that sign up with ‘VisionSteam’ will be. It is not an aspirational ‘be your own boss’ lifestyle, particularly given the mileage some of these guys will clock up between jobs. This was a disastrous arrangement for many so called owner drivers forced into such arrangements in the 90s. Some mortaged homes (and ultimately lost them) to buy their rigs only to have work reduced or stopped. I know this having been involved with the NDU at that time. Industries affected were petrolium, long haul, bitumix, building etc.

      Communications infrastructure is too important these days to expose to further Telecom price gouging gymnastics.

    • Daveo 12.2

      We’re not talking about a couple of spanners here mate, have you seen what kind of tools are needed to maintain a telecommunications network? That’s on top of the van and the business setup costs.

      As for the “great opportunity”, have a look at the analysis.

      http://www.epmu.org.nz/assets/Visionstream/Acura-Accountants-Analysis.pdf
      http://www.epmu.org.nz/assets/Electrocomms/PETER-CASTLE-OPINION.pdf

      The contracts are a sham, even John Carter MP has described them as a “crock” and advised workers not to sign. Of course it’s easy to say on a secure MP’s salary, not so easy when you’re laid off with no redundancy and there’s a mortgage to pay.

    • RedLogix 12.3

      [Moved]

  13. RedLogix 13

    I do think there is a great opportunity here for ‘the Workers’ who can see that this is the way their industry is heading and want to leap into running themselves as a business.

    Problem is that it’s not a great opportunity, it’s a lousy one.

    Would you for instance set yourself up in a business in which there was say, 1000 suppliers, and only 1 customer?

    These dependent contracts are only sham businesses. Even IRD does not allow them to make normal expense claims and deductions because they have long recognised that this kind of practise, where an employer sets up it’s own employees as dependent and bonded contractors is just a tax rort.

    These guys have to put a “Chorus” label on their own vans, and are forbidden to work for a third party. What kind of ‘business opportunity’ is that?

  14. ieuan 14

    It is hard to understand that Visionstream would want these guys to fail, that would benefit no one.

    • Armchair Critic 14.1

      Visionstream surely don’t want them to fail. All VS are asking is that they accept more risk for less money and worse conditions.

    • RedLogix 14.2

      No they don’t need them to fail, just be desperate enough to take whatever VisionStream doles out on it’s own terms.

      Surely you can see that this kind of thing is simply a negation of employment law, and all protections it brings to the employer/employee relationship… and substituting with a master/servant one. Subcontractors have almost no effective legal rights whatsoever, especially ones who don’t even have the choice to work for any third party.

      Seriously, would you sign up to that kind of ‘opportunity’?

      • ieuan 14.2.1

        ‘Seriously, would you sign up to that kind of ‘opportunity’?’

        Without knowing all the details, I don’t know. It’s fair to say that the coverage of this dispute by the writers at the Standard is long on rhetoric and very short on detail, I guess this is a union site so balance and objectivity go out the window around here.

        • Maynard J 14.2.1.1

          Can you think of a single benefit or advantage to these ‘contractors’ that they might gain from the idea?

          And that is a genuine question, throw anything out there that you think that might benefit them. I for one can not think of anything, apart from that they have some capital to sell if everything goes to custard. Of course, most would have to take a loan to buy the capital, and they are then paying interest on something that will rapidly depreciate…so really I have just shot that idea down as a benefit. See if you can do better.

          This really is a clear-cut case of workers being screwed by their organisation.

          • ieuan 14.2.1.1.1

            Again not knowing the details how can anyone answer that question?

            I guess they don’t have a job with Telecom anymore so working for Visionstream at least gives them a job.

            Does anyone know the details of the rates Visionstream are offering? I have read ‘little better than minimum wage’ but I find that very hard to believe.

            (PS anyone want to have a go at justifying the ‘up to $60K’ set-up cost mentioned by Zetetic?)

            • snoozer 14.2.1.1.1.1

              the $60K is in the independent reports, see link above.

              “I guess they don’t have a job with Telecom anymore so working for Visionstream at least gives them a job.”

              OK, so imagine you work hard and well for a profitable company but to make a little more cash the boss fires you and all your coworkers then hires another company to employ people to do your job but for less money… sure you might take the job because ‘at least it gives you a job’ but it’s not fair or right is it?

              Now, what if you and your co-workers could band together and say “bollocks to that, we can see you’re just using a fancy loophole to give us all big paycuts, well we’re not having it – we won’t work for you unless we keep our current conditions”… like some kind of organised group of labour. You could even prove to the boss that you’re serious by withdrawing your labour for short periods and only working to the exact conditions of your contracts.

              If enough of you stood together, and there weren’t enough unemployed workers to replace you, the company would have to back down and you wouldn’t get ripped off.

              Wouldn’t you do that?

            • Maynard J 14.2.1.1.1.2

              If you want to play devil’s advocate, you need to advocate. Disagreeing because you do not know anything is not going to get anyone anywhere.

              Your benefit so far is that being fired and forced to sign up under much worse conditions is good, because without signing up they would not have a job. That shows how bad the situation is overall, but yes, it is better than nothing.

              Still, hardly a ringing endorsement for your proposition that this could be “a great opportunity here for ‘the Workers’ who can see that this is the way their industry is heading and want to leap into running themselves as a business.”

              This business seems to give all the risk, and removes a chunk of the reward. Whoop-de-dee for that.

            • The Voice of Reason 14.2.1.1.1.3

              I’ll have a crack, Ieuan. Van plus tools equals $60K. Lease costs are around $20k p.a. plus running costs on top. To buy a van would cost around $40 k, plus fit out (racks, ladders etc.) Leases also have a limit on Km’s on them, so if you run around like a blue arsed fly, you pay more.

              You are completely wrong about the lack of detail. Daveo’s post an hour ago has links to the cost analysis and contract summary. Have a quick flick thru and remember, no constant supply of work is guaranteed to these ‘contactors’, but they have to be on call 12 hrs a day and not work for anyone else. It’s pathetic. If you need more details, try epmu.org.nz and don’t forget to make a donation while you are there.

              Imagine working for Macca’s for 12 hrs a day, but only getting paid on a per item basis, and then only if they ring you and tell you to come in to make a burger, and then they send you home again till the next punter walks in the door. And you have to supply the cooker, the fryer, the uniform and the cleaning gear, but you can’t cook a feed for anyone else during the down time.

        • snoozer 14.2.1.2

          check out the independent analysis in those links above.

          Visionstream is just doing what companies do when they can – minimise their labour costs by paying their workers less. It’s not evil on an individual level and it’s not hard to believe, it’s a product of the capitalist system, but it should still be fought otherwise the company ends up with bit fat profits and the workers end up with crumbs.

          • ieuan 14.2.1.2.1

            OK I’ve looked at the Acura analysis and they are saying contractors could expect $1525 per week (or around $80K a year) in revenue. However this somehow drops to $24,000 per year because of ‘expenses’. There is no breakdown of these ‘expenses’.

            • Daveo 14.2.1.2.1.1

              Have a look at the document by Peter Castle, the commercial barrister. The contracts are a bloody sham.

            • RedLogix 14.2.1.2.1.2

              The estimation I completed for Tim allows for 15 $65 codes and 2 $275 codes per week / 45 weeks a year. From talking with the local fault technicians it seems this would be a good week. This is the equivalent of $1525 income per week on the proposed codes.

              And if I multiply $1525 * 45 I get $68,625 which for an independent contracting business is risible.

              And is a ways short of $80k.

        • Draco T Bastard 14.2.1.3

          Considering the fact that the detail and the analysis has been posted here and over at Red Alert it would seem that you’re the one that short on fact and long on rhetoric.

  15. Shona 15

    Ieuan, my eldest has a an engineering trade qualification. His tools purchased over a 7year period are insured for a replacement cost of $20.000.

    • ieuan 15.1

      Looking at the Visionstream contracts they do not look great but then again the analysis by Acuro seems superficial and flawed at best.

      The union in this case would do their members the most service by sitting down with Visionstream and trying to get a better deal.

      I’m not trying to defend Telecom or Visionstream as their management of the change has been terrible.

      • RedLogix 15.1.1

        but then again the analysis by Acuro seems superficial and flawed at best.

        Like your ‘flawed’ attempt at multiplication above?

        Superficial? A $70k income for a business is pathetic. And bear in mind that this is pretty much a maximum, neither is there any guaranteed minumum.

        I personally used to run my own personal contracting business, not dissimilar to the kind these telecom techies are being asked to run, only without the van, tools and material expenses. Or the requirement to be on call 12hrs/day, the requirement to accept the all risk on re-work, and consequent liability.

        In a normal year I would invoice out around $150k. But by the time I took out all the downtime, the unpaid travel time, the training, the new software and equipment, the insurance, the vehicle costs, the office costs, ACC, the tax, the accountant’s fee, provisional tax, the fact that banks would not lend me money, and on and on… I was in the end better off on a salary.

        What I did enjoy was the diversity of work I found myself doing, both here and overseas… but that’s not even an option under these VS contracts.

        I repeat, $70k pa revenue for this kind of business, with so much risk and so little security is risible.

      • Mike 15.1.2

        Visonstream refuse to talk to the union.

  16. millsy 16

    I went to VS’s website today, and it had a write up about one of their owner operators. Turns out the guy ‘bought some of his tools from Trademe’.

    ******

    Unlike what some rightwingers on here think, I actually think there is nothing wrong with being an employee (what happened to the whole capitalist dream of starting as a mail boy and working your way up?), and not everyone wants the insecurity of running a small business. I have no problem with people become owner-operators but it should be a choice, and not imposed on them – I dont see why its such a mission fo VS to say, hey, we will keep you on as employees but if you want, you can become a owner operator, and start your own business.

    • snoozer 16.1

      because that wouldn’t cut VS’s labour costs and shove all the risk on the workers.

      Remember, they’re working in their own short-term interests, not for some optimal outcome for all involved.

  17. Luxated 17

    Apologies if this has been mentioned but how is Telecom making people redundant then hiring a contractor do the same job even legal? Surely it contradicts New Zealand’s redundancy laws?

    • lprent 17.1

      What redundancy laws? It’d be nice if there were some.

    • PaulD 17.2

      Telecom? Telecom only has a couple of hundred staff of it’s own in Chorus. AFAIK the redundancies are in Contractors to Chorus.

    • The Voice of Reason 17.3

      The question may have been worded awkwardly, but it’s something I’ve been wondering about, too. Redundancy is when the job a person does ceases to exist and as a consequnce, the person is laid off. I’m guessing that in this case, the awarding of the contract to a new provider, Vision Stream, means the current provider, Transfield, is the one laying off the staff.

      Vision Stream are simply refusing to (re)hire the same workers unless they accept the shonky contracts.

      Given the professionalism of the EPMU, I would have thought they’d have shot straight to court if there was anything illegal in what is happening. Which leads into Lprent’s point that there is bugger all protection for workers who are made redundant, even under appaling circ’s like this. The sooner a law comes in giving minimum redundancy protections and payments, the better.

      • ghostwhowalksnz 17.3.1

        I dont think its V S thats doing the hiring (how would they get rid of them if their process suceeds?)
        Its another 3rd party contractor to the new contractor that would be hiring

  18. jcuknz 18

    If it was such a good deal for the potential contractors I would expect Visionstream to offer either jobs or contract and most would pick to be contractors. The fact that very few want the contracts speaks for itself. It is a sow’s ear being forced on them.

  19. Draco T Bastard 19

    http://blog.labour.org.nz/index.php/2009/09/08/work-and-income-sells-telco-jobs/

    Looks like Telecom have been making people redundant and then offering those same jobs up for less.

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