2025 has been a year full of significant changes to employment law, and a new members’ bill promises to make yet another shift to New Zealand’s employment law landscape.
The Employment Relations (Collective Agreements in Triangular Relationships) Amendment Bill seeks to ensure that employees who are employed under triangular employment arrangements are eligible to be covered by collective agreements. The Bill was drawn from the members’ bill ballot and introduced to the House early this year.
Triangular Employment
The Bill may have far-reaching effects, because triangular employment continues to be a widely used system in New Zealand, especially in industries such as construction and medicine.
A triangular employment arrangement is where employers have employees work for a third party (the controlling party) who controls the work carried out by the employee. Common examples of triangular employment arrangements include recruitment or labour hire agencies.
The Bill
Clause 4 of the Bill amends section 56 of the Employment Relations Act (Act) to add a new category of employee who may be bound by and can enforce a collective agreement. The definition of “eligible employee” now includes employees who carry out work for a controlling third party if:
- their work is within the coverage clause of any collective agreement to which the controlling third party is a party; and
- they are members of the union with which that controlling third party has a collective agreement; and
- they are not bound by another collective agreement to which their employer is a party.
Takeaways
Controlling third parties will need to be aware that the upcoming change means employees will be able to enforce collective agreements against controlling third parties, as long as the criteria in the new section 56(1)(b) of the Act are met.
The new law falls in line with earlier legislative changes such as employees’ ability to apply to the Employment Relations Authority to include controlling third parties in a personal grievance claim. Previously, employees could only bring personal grievance claims against their employers.
As with the expansion of personal grievance liability, this new law will keep controlling third parties on their toes and will likely see unions and employees routinely include controlling third parties in enforcement claims.
If you have any queries in respect of the new Bill, or any other employment law issues, please contact Lane Neave’s Employment team.
