By Claire Mansell - 4 Sep 2019
The Employment Relations (Triangular Employment) Amendment Bill
has passed its third reading in parliament and will come into force
by at least 27 June 2020. The Bill allows for a "controlling third
party" to be joined to a personal grievance claim in the Employment
Relations Authority. This means that an individual employee can
bring a claim against both their 'official' employer and any other
controlling third party.
A controlling third party is a person or entity who
-
- has a contract or other arrangement with an employer under
which an employee performs work for the benefit of that
person/entity and;
- exerts control or is entitled to exert control or direction
over an employee that is similar or substantially similar to the
control or direction that an employer exerts over an employee.
A controlling third party can be joined to a personal grievance
claim by either an employee or employer, but they must be given
notice within 90 days of either the personal grievance arising (if
joined by an employee) or, within 90 days of the employee raising
the personal grievance with the employer (if joined by an
employer).
The Bill provides additional powers to look past the terms of
the employment agreements and hold the party who has the real
control over the employee accountable. It also recognises the
increasing complexity of employment relationships, in which the
notion of 'one employee, one employer' may no longer apply.
Although the Bill was intended to address situations such as
labour hire agreements, it is likely to apply to a number of other
situations such as secondments or where an employee is employed by
a separate subsidiary company but effectively under the control of
the parent company. This may be particularly relevant where a
parent company is seeking to ring fence liability by employing an
employee under a separate entity.
Please contact Claire Mansell if you have any concerns
about your liability under the Employment Relations (Triangular
Employment) Amendment Bill.