A call centre company that recently laid off 100 workers has collected taxpayer subsidies aimed at creating ongoing employment worth more than $200,000 for hiring half of them off the dole less than a year ago.
Sitel announced the job cuts in Auckland last week as a result of Virgin Australia relocating its call centre operations to Brisbane and Manila.
The call centre operator hired 50 unemployment beneficiaries using the Work and Income New Zealand Flexi-Wage subsidies when it won the Virgin contract last year. 
In a bid to reduce the numbers on the unemployment benefit, Work and Income effectively pays a percentage of the wages for each worker a business takes on.
The subsidy lasts for the first six months of the employee’s contract, but only if the job position remains an ongoing one.
Sitel gained taxpayer subsidies of an average $4130 per employee for 50 of the 100 employees it hired. Just six months after the subsidy stopped, Sitel has disestablished their positions due to losing the contract.
Sitel declined to comment on the Work and Income Flexi-Wage subsidies.
A Work and Income spokesperson said the Government agency viewed the positions as ongoing at the time it granted the subsidy, even though they were linked to Sitel’s short-term contract with Virgin Australia.
It did not define what the required timeframe was to determine if subsidised positions were “ongoing”.
One affected Sitel worker who spoke to Fairfax Media anonymously said she was devastated by Sitel’s actions, especially because the company had never revealed the short-term nature of the contract.
“I am sure they knew it was coming. There should have been more forward planning so to soften the blow because it’s heartbreaking for those of us with families,” she said.
The call centre operator said although she had two job interviews since finding out her fate last week, she could easily end up back on a benefit.
Engineering, Printing and Manufacturing Union boss Joe Gallagher said negotiations into the mass lay-off were ongoing and it was a blow to the affected workers and their families.
“They all came in, worked their guts out to set it up and now they are left with nothing,” he said.
“If Sitel has accessed taxpayer money, they should have a responsibility to secure permanent work for their employees instead of throwing them on the scrapheap,” Gallagher said.
He has concerns the scheme further paints New Zealand as a low-wage economy and is too easy to exploit.
“The least Sitel could do is use that $200,000 of taxpayer money to pay redundancies.”
Work and Income confirmed it had been in touch with all the affected workers.
University of Auckland international business professor Nigel Haworth said government schemes like Flexi-Wage, which effectively acts as an export subsidy for labour, are open for exploitation.
“There is a grey area between cynical and proper use by companies of these schemes. There are always those that push the boundaries,” he said.
Haworth said no government would introduce a policy to bind employees to a subsidised employer indefinitely, but caveats and penalties to the scheme should be explored.
Green Party industrial relations spokeswoman Denise Roche said there was a moral case for Sitel to refund the $200,000 subsidy, but the bigger issue was to tighten the conditions that grants them in the first place.
“The problem with the recent Jobseeker welfare reforms, is that Work and Income doesn’t care if a job is short-term or long-term. That leads to a churning of workers through unstable and unsuitable jobs,” she said.
“We will see more situations like this under National’s current employment laws.”
