Triangular Employment Bill: how does it affect your business?

Triangular Employment Bill2

Employees who are sub-contracted will receive additional rights under the recently approved Employment Relations (Triangular Employment) Amendment Bill.

The Employment Relations (Triangular Employment) Amendment Bill received Royal Assent on 27th June 2019 – the status given to a Bill once it’s officially approved by Parliament.

The Bill will take effect in either 12 months’ time after the date of Royal Assent on the 27th June 2020, or on a date appointed by the Governor General.

What is the Employment Relations (Triangular Employment) Amendment Bill?

‘Triangular Employment’ is the term to describe the relationship between an employee who is employed by a business or organisation but engaged to work under another company’s direction or control.

For example, a recruitment agency employs a worker and then sub-contracts them to another company for temporary work. The recruitment agency remains the primary employer, but the other company becomes a ‘controlling third party’. This is because the third party has control or direction over the agency’s employee as if they were directly employed with the other company.

What is the purpose of the Bill?

The Employment Relations (Triangular Employment) Amendment Bill amends the Employment Relations Act 2000.

The biggest change employers need to be aware of when using temporary workers, is the additional legal rights the employee has if they’re within Triangular Employment. For example, an employee will now be able to raise a personal grievance with the controlling third party company, as well as their employer, e.g. recruitment agency.

The Bill adds to current legislation by giving employees and employers the right to apply to the Employment Relations Authority to have the controlling third party joined to personal grievance proceedings. In reviewing an application to join the controlling third party to the proceedings, the Authority must decide whether the third party business is a controlling third party as per the Bill’s definition and whether the third party’s actions have contributed to the personal grievance.

How does this affect employers?

With greater protection for employees comes bigger responsibility for employers to ensure they are compliant with the latest employment relations.

EQ Consultants’ Recruitment and HR Consultant, Anita Dazzi explains: “Anyone who employs workers under a Triangular Employment basis, including employment agencies and ‘controlling third parties’, need to ensure they’re up to speed with the latest changes to the Employment Relations Act. 

“For companies whose primary source of labour is via temporary recruitment, they will need to ensure they treat workers who are not directly employed by the company, as well as they treat their own.

What next?     

Businesses and organisations are reminded to ensure they're up to date with the latest changes and ensure their policies and procedures are compliant.

For further advice about how the Bill could affect your business or organisation please call Anita on (03) 366 4034 or email a.dazzi@eqconsultants.co.nz. This article is not intended as legal advice but is intended to alert you to current topics of interest.