LEGAL ALERT – Employment Relations (Triangular Employment) Amendment Act 2019

In a welcome milestone amendment to the law, employees will now be able to join a “controlling third party” to a personal grievance with their employer. But what does this mean?

Your employer may not be who you think…

Sometimes, the party who signs an employment is not the same party that has day-to-day control over the employee. Consider the following examples of “triangular employment:”

  • Employees employed within company groups may be surprised to find that their employment agreement is signed by a different company from the one whose uniform they wear. These employer companies may have limited assets, leaving employees exposed.
  • A labour-hire company supplies workers to businesses. These businesses then have control over workers without having an employment relationship, or employment rights.

If you have an employment agreement with Company X, who lawfully orders you to do work for Company Y, who do you raise a grievance against when your rights are infringed? This is not always a simple question to answer. Prasad v LSG Sky Chefs NZ Ltd found that employment relationships lie on a spectrum and inquiries into the real nature of a relationship are “intensely factual.”

While the Courts’ focus on the “real nature of the relationship” allowed the plaintiffs in Prasad to be considered employees of the defendant, the Courts have not gone so far as to challenge the “unitary concept of employer” and find that one employee may have multiple employers. This causes uncertainty as to the identity of the employer and creates a barrier to dispute resolution due to potential inflated costs in litigation.

What is the significance of the new Act?

The new act introduces the notion of a “controlling third party,” defined as:

A person who has a contract or other arrangement with an employer under which an employee of the employer performs work for the benefit of the person AND

Who exercises, or is entitled to exercise, control or direction over the employee that is similar or substantially similar to the control or direction than an employer exercises, or is entitled to exercise, in relation to the employee.

An employee (or employer) can now apply to the Authority to join a controlling third party to a personal grievance if there is an arguable case that that controlling third party caused or contributed to the personal grievance.

The controlling third party, who benefits from a triangular employment relationship, now discretely incurs risks and obligations that go with those benefits, disincentivizing it from breaching its obligations to employees.

This amendment will likely benefit vulnerable workers who may not be aware of employment relationships which are prejudicial to them. If the facts of Prasad were to arise today, there would be no need to agonize over the party to raise a personal grievance against. The only question for the Court would be to determine who is responsible for the actions that led to the grievance.

Other important information:

  • Controlling third parties must be notified within the 90 day statutory timeframe.
  • The controlling third party is not automatically subject to the grievance upon notification- either the employer or the employee must apply to the Authority to join the controlling third party to the proceedings. This may limit the ability to engage controlling third parties in pre-litigation discussions and mediation.
  • The Authority has the ability to join a controlling third party of its own motion at any stage of the proceedings.

If you are unsure about your rights, do not hesitate to contact Buckettlaw.

PRIMARY SERVICE AREAS

although BuckettLaw is based in Wellington City, it services clients throughout New Zealand, with a focus on servicing employees and organisations in certain regions.

Wellington City.
Porirua City & wider North Wellington Area.
Kapiti Coast (Te Horo, Waikanae, Paraparaumu, Raumati & Otaki ).
Lower Hutt & Upper Hutt.
Masterton City & wider Wairarapa Region.
Palmerston North City & wider Manawatu-Wanganui Region.

Hawkes Bay (Napier, Hasting & Havelock North).
New Plymouth & wider Taranaki Region.
Hamilton, Taupo & wider Waikato Region.
Tauranga, Rotorua & wider Bay of Plenty Region.
Gisborne.
Auckland.

Nelson City & wider Nelson-Tasman Regions.
Blenheim & wider Marlborough Region.
Christchurch.

CONTACT US

we are currently offering a free first email or phone contact

contact us for a no obligation free quote and consultation. Just fill-in the form below and we will get in touch with you as soon as possible.






buckettlogo-white
Located in the heart of Wellington City, BuckettLaw services clients nationwide, with a strong presence in certain regions. If you are unsure whether you need an employment lawyer, or want a preliminary discussion on your employment issue, get in touch with one of our employment lawyers right away.
WE DO
Legal Representation & Advocacy
Workplace Conflicts and Disputes
Specialist Workplace Advice and Assistance
Mediation & Negotiation
Employment Relations Documents
Collective Negotiations & Bargaining
Disciplinary & Performance Issues
Restructures & Redundancies
Employment Investigations
Employment Law Compliance
Bullying, Harassment & Discrimination
Confidentiality & Privacy Issues
Health and Safety
HR & ER Audits & Advice
Medical Incapacity & ACC Issues
FREE CASE EVALUATION
As employment law experts, we provide specialist legal advice, support and advocacy for employers and employees nationwide.
Your first email or phone contact is free.
FOLLOW US
CONTACT US
P: +64 4 472 8600
E: reception@buckettlaw.co.nz

Physical Address:
1/309 Willis Street
Te Aro, Wellington

Postal Address:
PO Box 6137
Marion Square, Wellington 6141

Hours: Monday-Friday 8:30AM-5:00PM