New laws for triangular employment arrangements

The Employment Relations (Triangular Employment) Amendment Act 2019 came into force on 28 June 2020.

The law allows employees in triangular employment situations to include a third party to a personal grievance they have with their employer.

Employees in a triangular employment situation can still raise a personal grievance with their employer where they have grounds to do so, and apply to the Employment Relations Authority (ERA) for it to be resolved.

But under the new law an employee can now apply to the ERA to add a third party to the personal grievance if the third party has caused or contributed to the problem.

Triangular employment involves three parties – the employer, the employee, and a third party. In these situations the employee is employed by one employer (the agency), but works under another business or organisation that directs or controls the employee’s day-to-day work (controlling third party)

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.

In these cases it may be the behaviour or action of the third party (controlling third party) that has contributed to the problem, rather than the employer (the agency). This may include bullying, harassment or discrimination by the third party. In this situation, both the third party (controlling third party) and employer (the agency) could potentially be responsible for providing remedies to the employee.

The ERA can divide remedies or compensation against the employer (the agency) and the third party (controlling third party) in a way that reflects the extent to which the actions of each party contributed to the personal grievance.

For more information on triangular employment personal grievances, see our guidance.

Guidance on the Employment Relations (Triangular Employment) Amendment Act 2019

You can read the new Amendment Act on the New Zealand Legislation website.

Employment Relations (Triangular Employment) Amendment Act 2019 (external link)