Changes to triangular employment
On 28 June 2020, the Employment Relations (Triangular Employment) Amendment Act 2019 came into force. Organisations that have individuals working for them, who are technically employed by another entity, may want to seek advice on how the new law affects them. Please contact us if you would like assistance.
Triangular employment
The term “triangular employment” refers to an employment relationship involving three parties – the employer, the employee, and a third party. In such instances, the employee is employed by one employer (the agency) but works for another business or organisation that directs and/or controls the employee’s daily work (the controlling third party).
Key change
The new law allows employees and employers in triangular employment arrangements to apply to the Employment Relations Authority to add a “controlling third party” to a personal grievance, if the third party has caused or contributed to the problem.
Process
Before a controlling third party can be joined to personal grievance proceedings, a personal grievance must be raised by the employee with their employer in relation to an action alleged to occur while they were working under the control of the third party. In addition, the controlling third party must also be notified within 90 days of the grievance being raised. It is also a requirement for an arguable case that the controlling third party’s actions caused or contributed to the personal grievance.
If proceedings are filed, the Authority may, on application by the employer or employee, join the controlling third party to the proceedings. If the Authority is satisfied that the requirements have been met (concerning notification and an arguable case), they must grant the application. Where an application has been granted, the Authority must consider whether to direct the three parties to mediation. The Authority or Court also retains a discretion to join a controlling third party to a personal grievance proceeding at any stage, regardless of whether it is requested by the employer or employee.
Remedies
In respect of potential remedies available, the Authority or Court has the jurisdiction to apportion responsibility, liability and awards between the employer and the controlling third party. The Authority or Court may also require a controlling third party to contribute to any remedies awarded to an employee based on the extent to which they caused or contributed to the situation giving rise to the employee’s personal grievance.
Disclaimer: The information contained in this article is current at the date of publishing and is of a general nature. It should be used as a guide only and not as a substitute for obtaining legal advice. Specific legal advice should be sought where required.