Understanding Triangular Employment in New Zealand: A Simplified Guide

Triangular employment relationships in New Zealand can be complex, but we're here to simplify it for you. Before you decide on whether this is the right path for you, let's understand the basics: What is triangular employment? 

Triangular employment normally involves three parties

  • Employer: The company you technically work for, most likely will be a recruitment or employment agency. 
  • Employee: The worker. 
  • Controlling Third Party: The company who gives you tasks and instructions on how to do your job. They have control over your work just like an employer would. 

In a triangular employment contract, you work for one company but get tasks from another third party. This work arrangement can be temporary, therefore the term "temping” can be shown on the employment agreement. The recruitment can also be project oriented and hence the contract can be signed based on projects.

In triangular employment, there are different terms like "worker-for-hire," "worker-on-hire," "worker-hire," "temping," or "contingent labor." All these designations indicate employees will work in triangular employment structures. These people work for one company but are also supervised by another company, known as the controlling third party. 

What are your rights in a Triangular Employment Relationship?

The recent changes in the New Zealand employment law have made it easier for employees to understand their rights. 

Until 2020, workers might find it difficult to make a complaint in triangular employment. If they had bullying or discrimination problems at work, they could only complain about their direct boss. This meant they couldn't address problems caused by the other company, who gave them work assignments. 

The law changed on June 28, 2020. Employees now have the right to complain about the "controlling third party" and can make them responsible for their actions. Moreover, employers can also ask to be part of these complaints provided they believe they should share the responsibility. This way, everyone is accountable when resolving issues. 

Thanks to these new laws, the Employment Relations Authority (ERA) can now examine how much each party - the employer and the controlling third party - is to blame. Based on the assessment, it will then make a decision on who should take action to make things right. This way, the ERA makes sure that those with power are held accountable for their responsibilities. It's a big improvement in ensuring people are fairly treated in triangular employment situations. 

In conclusion, a triangular employment has three parties, namely employee, employer and controlling third party. The recent change in law has made it less confusing and fairer for everyone. If you are considering signing a triangular employment contract or have any concerns about this type of work arrangement, please feel free to contact us. We offer consultation services on employment issues for both employers and employees in New Zealand. 

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