The Employment Relations (Triangular Employment) Amendment Bill

Update on progress

On 3 April 2019, the Employment Relations (Triangular Employment) Amendment Bill (Bill) passed through its second reading. The Bill is steadily tracking to gain Royal Assent and become legislation towards the end of 2019.

If you engage a temporary workforce, or you are a labour hire company, you should be tracking the progress of this Bill and be aware of its impact on your business.

Proposed amendments

The Bill aims to clarify the employment rights of employees that are employed by one organisation but under the control and direction of another. This arrangement is known as ‘triangular employment’ and is common in the labour hire sector.  New Zealanders working under triangular employment arrangements represent a significant and growing part of the workforce.

The Bill as originally drafted proposed to give employees working under a triangular employment arrangement the right to:

1. Raise grievances against both the employer of record and the third party entity who had engaged the employer for the employee’s services; and
2. Coverage by any collective agreement applying to the employees of the third party entity.

Amendments to the Bill

The following changes have been approved at the second reading:

• “Primary employer” and “secondary employer” have been amended to “Employer” and “Controlling Third Party” which is defined as a person:

1. Who has a contract or other arrangement with an employer under which an employee of the employer performs work for the benefit of the person; and
2. Who exercises, or is entitled to exercise, control or direction over the employee that is similar or substantially similar to the control or direction that an employer exercises, or is entitled to exercise, in relation to the employee.

• Employees will not be bound by the collective agreements of controlling third parties, due to the complexity this would create.
• Amendments making it easier for an employee, the employer, and the Employment Relations Authority or Court to join the controlling third party to personal grievance proceedings. The Bill sets out timeframes for this to occur. The controlling third party would be notified if the grievance related to their actions or policies, or if the employer considered that to be the case. The Employment Relations Authority or Court would then apportion responsibility, liability, and awards as it considered appropriate.

Please ask a member of our employment team if you would like further information about the impact of this legislation on your business.

Workplace Law team

If you have any queries in respect of the above, or any other Workplace Law issues, please contact a member of Lane Neave’s Workplace Law team:

Employment: Andrew Shaw, Fiona McMillan, Gwen Drewitt, Maria Green,  Hannah Martin, Joseph Harrop, Holly Struckman, Alex Beal, Giuliana Petronelli, Abby Shieh
Immigration: Mark Williams, Rachael Mason, Daniel Kruger, Nicky Robertson, Julia Strickett, Ken Huang, Mary Zhou, Shi Sheng Cai (Shoosh), Sarah Kirkwood, Janeske Schutte, Lingbo Yu
ACC: Andrew Shaw
Health and Safety: Andrew Shaw,  Fiona McMillan