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Employment Relations (Triangular Employment) Bill

Triangular Windows

The Employment Relations (Triangular Employment) Bill was drawn from the Ballot list on 1 February 2018 and yet to have its first reading.

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 their right to allege a personal grievance.

What this Bill proposes is that where you outsource your employees to work under the control and direction of another employer, your employees will be able to be covered by the Collective Agreement of that secondary employer. However this will only apply where your employee is or becomes a member of a Union that has a Collective Agreement in place with that secondary employer and the work they are undertaking falls within the coverage clause of any Collective Agreement to which the secondary employer is a party. However, should your employee be bound by a Collective Agreement with their primary employer the employee would not be covered by the secondary employer's Collective.

This appears to be a straight forward, if not slightly confusing, way of ensuring collective coverage no matter who you work for, provided you are a member of a union and that union has a Collective Agreement with your employer. It appears that this provision of the Bill is saying, if you have staff who are union members but you don't have a Collective Agreement with their union, and you outsource those staff to another employer that does have a Collective Agreement in place that covers the work your staff will be doing and your staff are members union is a party to employer's Collective Agreement, then they would be covered by the other employer's Collective Agreement whilst they are performing that outsourced work.

If however, you do have a Collective Agreement with the union of which your staff are members, then the secondary employer's Collective Agreement will not apply to your staff.

The second aspect of this Bill provides for both the primary and secondary employers of an employee to be jointly named as respondents to a personal grievance. So, if your employee has an employment issue with their secondary employer, while they are outsourced to that employer, this Bill will enable the employee to jointly name both you and the secondary employer parties as respondents to their grievance. The employee will have to apply to the Employment Relations Authority (ERA) to allow the joining of the two employers as respondents to the personal grievance.

If the ERA allows this joinder to occur, then the actions of the secondary employer are deemed to be the actions of the primary employer. This potentially puts the primary employer at a disadvantage as it will have no control over what actions the secondary employer has or has not taken that may have contributed to the grievance. Regardless, this Bill will hold the primary employer jointly responsible for the actions of the secondary employer.

This approach does not appear, in our view, to be fair or reasonable. You will not have any control over what actions the secondary employer (or their representatives) take or fail to take toward your employees whilst they are working for the secondary employer. However, this Bill makes you responsible for the secondary employers actions as if they were your own.

There is scant explanation to the Bill, other than what has been set out in the opening remarks to this Blog. In my view this is a poorly drafted piece of legislation. The Bill does not explain what problem or issue it is trying to address and has the potential to confuse both employers and employees.

In my view, the Bill puts employers at a disadvantage and potentially opens up a number of issues. Will this result in higher penalties being awarded because two employers are joined together in a personal grievance? What, if any, defences will be available for the primary employer who has no control over the actions of the secondary employer and yet under this Bill will still be deemed liable for actions they cannot control? How does this approach fit in with the requirements of Good Faith? A lot of questions to ponder. It will be interesting to see how this Bill proceeds. McKone Consultancy will watch this Bill with interest.

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