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latest news in employment law

Triangular Employment update

Published 20 Jun 2020

Employment Relations (Triangular Employment) Amendment Act 2019 comes into effect from 27 June 2020.

The Employment Relations Act 2000 will allow employees in a “triangular employment relationship” to bring a personal grievance against the person or entity who controls their work, as well as their actual employer.

An employment relationship is labelled 'triangular' when a company uses staff for their operations who are actually employmed by another firm. Prime examples of this are labour hire companies and those who use them.

Historically a business who engages a labour hire firm to supply people for their operation could simply ring up the labour hire company and request them to remove a certain staff member without reason, process or notice, thus leaving the hire company little choice but to comply and face an immediate problem in finding their employee alternative work in some cases. Because the worker is not a direct employee of the firm for which they are performing the work, that company could in effect often request such an action with immediacy and impunity.

That is about to change.

A disgruntled worker can now lodge a personal grievance (PG) against their employer AND whoever is deemed to be in control of their work, and the Employment Relations Authority (ERA) and Employment Court can award against both. Also worth noting, the actual employer (the labour hire firm in the above example) can also request the ERA or Court to have another party added to any such PG too, eg their customer who has put them in this predicament.

Obviously with New Zealand's slanted playing field of PGs it won't be long before this will be tested and precedents set, and expect to see changes to terms & conditions when engaging labour hire firms soon.