Triangular Employment Relationships

The Employment Relations (Triangular Employment) Amendment Bill is currently before the Select Committee and if implemented will have major implications for both labour hire companies and employers who hire labour.

The purpose of the Bill is to ensure that where an employee is employed by one organisation, but is controlled or under the direction of another organisation, the employee is not:

  • subject to a detriment with respect to their right to raise a personal grievance;

  • deprived of their right to have coverage of a collective agreement.

Primary Employers and Secondary Employers

The Bill refers to:

1. The “Primary Employer” who is the individual or organisation which employs the employee; and

2. The “Secondary Employer” which has a contract with the Primary Employer for the employee’s labour and has control and/or direction over the employee.

The Impact of Personal Grievances on Primary and Secondary Employers

If implemented the Bill will allow an employee to bring a personal grievance against both the Primary Employer and the Secondary Employer and apply to the Employment Relations Authority to join the Secondary Employer to the grievance.

A Secondary Employer can be joined to a Personal Grievance where their actions resulted in or contributed to the grounds of the personal grievance. Where the Secondary Employer is joined to a grievance the actions of the Secondary Employer are deemed to be the actions of the Primary Employer.

If a Secondary Employer is joined to a grievance, they will be jointly liable with the Primary Employer for any remedies awarded unless the Court or the Employment Relations Authority orders an apportionment of the remedies.

Collective Agreements

The Bill also allows for the Primary Employer to be bound by a collective agreement which the Secondary Employer is a party to, if the employee is:

1. performing work for the Secondary Employer which is covered by a collective agreement the Secondary Employer is a party to;

2. a member of the union party to that collective agreement;

3. not bound by any other collective agreement to which the Primary Employer is a party.

Unintended consequences of the Bill?

The Bill appears to be targeted to labour hire companies and organisations which regularly hire staff in order to run their businesses. However the Bill could have the potential to capture other situations. For example, where an organisation hires cleaners from a cleaning company to clean their offices, the organisation may be considered a Secondary Employer under the Bill.

We suggest that employers watch this space as if implemented this Bill will have an impact on labour hire arrangements.

Talk to us

If you would like advice on this topic or any other employment related issue please contact our Employment Team today.

Disclaimer: The information contained in this publication is of a general nature and is not intended as legal advice. It is important that you seek legal advice that is specific to your circumstances.

Heather Collins

Position: Associate
DDI: +64 3 545 6702

Topics: All Select