Triangular Employment Relationships – New Laws Proposed

General / 25 March 2018
Triangular Employment Relationships – New Laws Proposed

It has been a busy start to the year for employment law changes!   In addition to the broad changes reported here the Employment Relations (Triangular Employment) Amendment Bill (Bill) has also been introduced to Parliament.

The purpose of this Bill is to ensure that employees employed by one employer, but working under the control and direction of another business or organisation, are not deprived of the right to coverage of a collective agreement, and to ensure that such employees are not subject to a detriment in making a personal grievance claim.

Primary and secondary employer
The Bill talks in terms of “primary employer” and “secondary employer”.  A primary employer is an employer who employs a person, and a secondary employer is a person who contracts with the primary employer to use the employee to perform work for them, under their control or direction.

A classic example of a triangular employment relationship as described by the Bill is labour hire arrangements. For example Labour Hire Limited may employ a builder, and then subcontract him out to ABC Builders Limited to perform work for them. In this example, Labour Hire Limited is the primary employer, and ABC Builders Limited is the secondary employer.

Party to the collective agreement
The Bill proposes that the primary employer can be bound by a collective agreement that only the secondary employer is party to, which could occur if:

The secondary employer is a party to a collective agreement covering the work being carried out; and
The employee is a member of the union party to that collective agreement;
The employee is not bound by any other collective agreement to which the primary employer is a party.
Joining secondary employer to the personal grievance
The Bill further proposes that an employee could bring a grievance claim against their secondary employer, if the Authority or Court considers:

The secondary employer’s actions have resulted in or contributed to the grounds of the personal grievance; and
It is just to do so.
If joined to a grievance, the secondary employer becomes jointly liable for any remedies awarded unless the Authority or the Court specifically order an apportionment.

The Bill, if passed, would likely mean significant change for labour hire arrangements.  We will keep you posted on its progress through Parliament.

Disclaimer: We remind you that while this article provides commentary on employment law and health and safety topics, it should not be used as a substitute for legal or professional advice for specific situations. Please seek legal advice from your lawyer for any questions specific to your workplace.

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