New “Triangular Employment” legislation comes into force

July 10, 2019

Kathryn McKinney Special Counsel

The new Employment Relations (Triangular Employment) Amendment Bill received royal assent on 27 June 2019. 

This legislation provides a statutory entitlement for employees to raise a personal grievance, not only against those who it is employed by but also by any other “controlling third party” who has “control or direction” of the employee’s work. It is expected to come into force in June 2020, unless an earlier date is appointed by the Governor-General.

What is triangular employment and how dies it affect employers?

The phrase ‘triangular employment’ is used to describe a  tripartite employment engagement, for example, in a labour hire situation where the employee is employed by one company but works on assignment under the control and direction of another. This could also cover secondment arrangements.

The new legislation sets out the manner in which the employee can raise a personal grievance against both parties and the timeframes within which this must be done.  An employer or an employee may seek to join a controlling third party to a complaint, and the Employment Relations Authority may be required to confirm a third party may be joined and direct that mediation should involve all the parties.  If ultimately the matter progresses to a hearing, the Employment Relations Authority can decide the proportion of blame ( if any) that sits with both the employer and the controlling third party and therefore the proportion in which compensation will be divided to be payable between the parties.

Labour hire companies

We expect to see labour hire companies and those who use their services to be revisiting their contractual terms in the coming weeks and months, as businesses reassess how these staff should be managed, directed and controlled more carefully.

Contact our employment team who will be happy to assist with any queries you have with regards to this legislation.

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