Employment Relations (Triangular Employment) Amendment Bill
The Employment Relations (Triangular Employment) Amendment Bill (Triangular Employment Bill) received Royal Assent on 27 June 2019, to be enacted in law in 12 months’ time, or earlier if another date is appointed by the Governor-General. The Bill was passed with the support of Labour, New Zealand First and the Green Party. It provides 16 new clauses to be inserted into the Employment Relations Act 2000 (the Act) which recognise the position of employees in New Zealand who work under the direction of someone who is not their employer. The Bill broadens the reach of the personal grievance mechanism for these employees.
The Triangular Employment Bill specifically applies to employment relationships where employees are employed by an employer, but also work under a “controlling third party,” who exercises or is entitled to exercise, control or direction – similar to that of an employer – over the employee.
Employees in the relevant working arrangement will have, under section 103B of the ERA, the ability to apply to join a controlling third party to an existing personal grievance claim against their employer. This is subject to the same 90-day notification period within which the employee can raise a personal grievance against their employer. An employer can also apply to join a controlling third party to a personal grievance proceeding they are facing, provided they notify the controlling third party within 90 days of the personal grievance being raised.
Where the Court or Authority determines a successful personal grievance, it will be required to consider the extent to which each the employer and the controlling third party caused or contributed to the personal grievance in apportioning any award of reimbursement and/or compensation.
The Bill recognises that a growing number of New Zealanders work in triangular employment arrangements, and acts to provide more robust protections to employees in these relationships. Industries that this change is likely to affect are those involved in labour hire arrangements, those in sectors affected by seasonal fluctuations, and those who hire a temporary workforce. The triangular employment relationship also likely applies to employees on secondment from their employer to another business or organisation.
If you have any questions, please do not hesitate to contact a member of our employment team.
Disclaimer: the content of this article is general in nature and not intended as a substitute for specific professional advice on any matter and should not be relied upon for that purpose.