This guidance is for people and organisations working in triangular employment situations.
This law change addresses a gap in legislation in relation to employees in triangular employment situations (eg labour-for-hire).
Previously, employees could only bring a personal grievance – such as for bullying, harassment or discrimination – against their employer. This limited their ability to take a personal grievance, as the actions that lead to them taking a claim may be those of the ‘controlling third party’ they are assigned to work for, rather than the person actually employing them.
From 28 June 2020, employees are able to apply to the Employment Relations Authority (ERA) to add a ‘controlling third party’ (such as a ‘host’ employer in a labour hire arrangement) to a personal grievance claim.
Note: employers can also apply to add a controlling third party to a personal grievance – not just employees, though it is most likely to be the employees making the application.
The ERA will be able to divide responsibility for providing remedies between the responsible parties, reflecting the degree to which the employer and the controlling third party contributed to the personal grievance.
A triangular employment arrangement is a situation where the employer (the agency) arranges for the employee’s placement or assignment with a third party (controlling third party).
It is ‘triangular’ because there are three parties to an employment arrangement, with each party having distinct relationships with one another.
Common situations where triangular employment happens include where an employee is employed by a recruitment or employment agency, and is sent on work assignments to another organisation. Sometimes this is called labour-for-hire or “temping”. Other situations include where an employee is on a secondment from their employer to a host organisation.
Controlling third party
These are terms to describe the business or organisation where an employee, involved in a triangular employment situation, performs their day-to-day work for the benefit of the third party until the arrangement ends.
The third party is a ‘controlling third party’ if they direct or control the employee in a similar or substantially similar way to that of an employer.
Usually, the agency, who is the employer, pays the employee.
Labour-for-hire / On-hire labour / Labour hire / Temping / Contingent labour
These are all terms to describe certain employees who are employed by one employer, but work under the control and direction of another business or organisation (referred to in the legislation as a controlling third party) in a triangular employment arrangement.
Good employment relationships start with a recruitment process so that the employee and employer have the same expectations about the role and working conditions.
A well written employment agreement helps the employee and employer to know what is expected from them and what they’re entitled to. This means misunderstandings are less likely to happen and if a problem does arise, then the employee and employer can go to the employment agreement to clarify things.
Employment agreements must have certain clauses, including agreed hours, description of duties, and place of work. Additional clauses should be agreed which suit the needs of the organisation and the employee.
Personal grievance process
If the first steps of solving a problem don’t fix an issue, in many instances an employee can raise a personal grievance. This is covered by the Employment Relations Act 2000.
An employee can raise a personal grievance if they believe their employer has acted unfairly or unreasonably towards them.
How to raise a personal grievance
There are various ways in which an employee could raise a personal grievance.
Talk informally first
Employees should first talk to their employer to resolve problems. Trying to resolve the problem informally first can help to keep the employment relationship positive.
Request mediation for personal grievance
If an employee or their employer decides mediation is needed, they can use the free Employment Mediation Services. The parties do not need a lawyer to go to mediation.
Mediation is where an independent person called a mediator helps an employee and an employer resolve an employment relationship problem in a semi-formal and confidential environment.
Make a personal grievance claim with the Employment Relations Authority
The Employment Relations Authority (ERA) is an independent organisation that sits below the Employment Court. The ERA’s process is more formal than mediation but less formal than the Employment Court.
The ERA helps to resolve employment relationship problems by looking into the facts and making a decision based on the merits of the case, not on technicalities.
An employee can make a personal grievance claim with the ERA if they believe their employer has acted in an unfair or unreasonable manner without having to discuss it with their employer or going to mediation.
Familiarise yourself with the changes in the Employment Relations (Triangular Employment) Amendment Act 2019 on the New Zealand Legislation website.
Employment Relations (Triangular Employment) Amendment Act 2019
You can direct any questions to Employment New Zealand.