New Zealand: A turning point in triangular employment relations

It is currently full steam ahead in the world of employment legislation and businesses who make use of labour-hire arrangements should take note. The Employment Relations (Triangular Employment) Amendment Bill passed its third and final reading on 27 June 2019, and was promptly given royal assent the following day. The Employment Relations (Triangular Employment) Amendment Act 2019 (Act) will come into force on the 27th of June 2020, unless an earlier date is appointed by the Governor-General.

The Act creates new clauses which will be inserted into the Employment Relations Act 2000.

While employers will be pleased to know that nothing has changed since the Act’s second reading, it is important for businesses to be reminded of what is in store, particularly as the Act will become law in the near future. The MP in charge, Kieran McAnulty, has stated the basic premise of the Act is to allow “workers employed by one employer but working under the control and direction of another business or organisation to apply to the Employment Relations Authority to have their… controlling third party joined to a personal grievance.”

To clarify, the “controlling third party” is defined in the Act as a person:

(a) 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

(b) 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.

So how will it work in practice?

If an employee raises a personal grievance against their direct employer (usually the labour hire company), then when the Act becomes law in June 2020 or earlier:

1. The employee or the employer, or both, may apply to the Employment Relations Authority or the Employment Court to join the controlling third party to proceedings to resolve a personal grievance, if it relates to an action that is alleged to have occurred while the employee was working under the direction of a controlling third party.

2. The controlling third party needs to be notified within a 90-day period.

3. Remedies may be granted where a controlling third party has in fact caused or contributed to a personal grievance.

4. For mediation purposes, an employment relationship is defined to include that of an employer and an employee employed by the employer where the work is performed is under the direction of a controlling third party.

If you, or someone you know, require assistance in preparing an application in light of the above information, the Lane Neave Workplace law team would be happy to assist.

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 ShawFiona McMillanGwen DrewittMaria Green,  Hannah Martin,  Alex Beal, Giuliana Petronelli, Ana Fruean, Elise Wilson, Abi Shieh, Sean Kim
Immigration: Mark WilliamsRachael MasonDaniel KrugerNicky RobertsonHetish LochanJulia StrickettRita WornerLavinia ShanksKen HuangSally Stone,  Shi Sheng Cai (Shoosh)Josh TempletonMary ZhouSarah KirkwwoodJaneske Schutte, Isaac Huang, Sati Ravichandiren, Lingbo Yu
ACC: Andrew Shaw
Health and Safety: Andrew Shaw,  Fiona McMillan