Collective Agreements: How this bill alters triangular employment?

Published 14 March 2025 | 2 min read

Triangular employment is no longer a legal grey area. With a new bill reshaping collective agreements, businesses that rely on labour hire or secondments face fresh compliance challenges.

If you work with recruitment agencies or have staff seconded to other companies, this change affects you. Controlling third parties can now be held accountable under collective agreements—and the stakes are high if you miss the fine print.

The pressure is rising

Imagine this: You run a construction business and rely on agency workers for critical projects. Until now, those workers' employment terms were the agency’s responsibility.

Under the new bill, if those workers are union members and their work falls under a collective agreement you’re party to, you could be bound by that agreement.

It means you could face direct claims from workers you don't technically employ. For businesses using triangular employment, the legal risks are growing.

What employers need to know

With these changes, many employers are asking the same questions:

Who does this law apply to?

Any business using workers from a third party, including recruitment agencies and secondments.

What obligations do we now have?

If a worker is covered by a union agreement with the third party, they can enforce that agreement against you.

Can workers raise disputes directly with us?

Yes. Just like with personal grievances, employees can now hold controlling third parties accountable for collective agreement breaches.

When does this take effect?

The bill is currently before the House, and if passed, it will reshape how you manage outsourced workers.

Bill amendments

• Expanded definition of "eligible employee": Includes workers under a controlling third party if their work is covered by a collective agreement.
• Direct accountability: Businesses using third-party workers may be directly responsible for enforcing collective agreements.
• Increased liability: Employees can raise claims for breaches of collective agreements against both their direct employer and the controlling third party.
• Secondments covered: Seconded employees can enforce collective agreements if their work meets the new criteria.
• Union membership matters: Only union members covered by an agreement with the controlling third party can enforce these new rights.

What this means for your business

The new bill puts controlling third parties under the legal spotlight. If your business relies on agency workers or secondments, you must prepare for increased legal obligations and potential disputes. 

Review your contracts, assess any existing collective agreements, and engage with legal experts to ensure compliance. Staying ahead of these changes will protect your business and strengthen relationships with third-party workers.

Note: This information is based on official details from Employment New Zealand and is subject to change. Always refer to the latest guidelines for the most accurate information. Visit Employment New Zealand here.