Triangular employment bill passes first reading – submissions open

Thursday, May 3, 2018

Submissions on the Employment Relations (Triangular Employment) Amendment Bill (Bill) are currently open.

The purpose of the Bill is to extend protection for employees in triangular employment relationships. Under the Bill, a triangular employment relationship exists where an employee is employed by a “primary employer” but performs work for the benefit of, and is subject to the control or direction of, another party (the “secondary employer”). This would capture situations where an employer seconds an employee to another organisation, as well as labour hire companies where they contract out labour to their clients.

The Bill has two key aspects. First, it provides that, where the secondary employer is a party to a collective employment agreement which covers the work that the employee will do, the employee must be engaged on the terms and conditions of the collective agreement. This means that the primary employer has to take on all the terms of a collective agreement, despite the fact they were not involved in negotiating the agreement and are not a party to it. For example, if the collective agreement sets out rates of pay, the primary employer will have to pay the employee at such rates (note that another bill currently before Parliament – the Employment Relations Amendment Bill – will make it compulsory to include pay rates in all collective employment agreements).

The second key aspect of the Bill is the ability of an employee to apply to the Employment Relations Authority or Employment Court for the secondary employer to be joined as a party to a personal grievance proceeding. Currently, employees face significant difficulties in pursuing personal grievances based on the actions of parties other than their legal employer. The present position is that an employee must first prove that the real nature of their relationship with the secondary employer is one of employment. Proving this is usually very difficult in situations of secondment or labour hire arrangements where the employee has an employment agreement with, and is paid by, the primary employer.

Under the Bill, a secondary employer may be joined to proceedings even if they do not have an employment relationship with the employee. The threshold for joining the secondary employer is that their actions must have caused or contributed to the grounds of the employee’s personal grievance. Where a secondary employer is joined, they will be jointly liable with the primary employer for any remedies awarded, unless directed to pay a specified proportion.

The possibility of being joined to personal grievance proceedings is significant. Employers who contract out employees may be held responsible for the actions of the secondary employer. Conversely, anyone who contracts in labour may be liable in personal grievance proceedings even though they do not have a direct employment relationship with the employee.

The Bill is currently before the Education and Workforce Committee. Submissions must be made by Friday 11 May 2018. To make a submission, click here.

If you would like to discuss how any of the proposed changes may affect your business, please 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.



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