On 27 June 2020 the Employment Relations (Triangular Employment) Amendment Act 2019 ("the Act") came into force.
The Act aims to provide protection to those in triangular employment relationships. Typically, a triangular relationship exists where a person is employed by a labour hire company/recruitment agency, and works under the control and direction of another entity ("a controlling third party").
A controlling party means a person who (a) has a contract or other arrangement with an employer under which an employee of the employer performs work for the benefit of that person; and (b) 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. It could also include a secondment situation.
Before this Act came into place employees could only bring a personal grievance against their employer, not a controlling third party. This consequently limited employees ability to raise a grievance as often their personal grievance arose when they were performing work for the controlling third party.
Under the new Act, an employee or an employer may now apply to join a controlling third party (such as a labour hire or temp agency) to their personal grievance claim. Where such an application is made, the Employment Relations Authority or the Court must grant the application if the third party caused or contributed to the events giving rise to the grievance.
If the personal grievance is successful the Employment Relations Authority will apportion remedies between the third party and the employer to the extent to which each party contributed to the to the situation that gave rise to the personal grievance.
Take Home Tips
• Employers need to be aware of their obligations.
• Employers should check their employment documentation and make sure it is clear who the employer is.
• Think carefully about who has the control over the employee, who is giving the employee directions.
• Ensure the structure of the relationship is clear to all parties.
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© McVeagh Fleming 2020
This article is published for general information purposes only. Legal content in this article is necessarily of a general nature and should not be relied upon as legal advice. If you require specific legal advice in respect of any legal issue, you should always engage a lawyer to provide that advice.