Let's talk law: Triangular employment relationships

Parliament has recently passed the Employment Relations (Triangular Employment) Amendment Bill. Photo / File

Do you really know who your employer is?

Many employees are surprised to find that, despite being managed and working onsite for one boss or company, in fact, their employment agreement (and official "employer") is with an entirely different company. Labour-hire companies are a typical example.

This employment structure creates a triangle with blurred lines of responsibilities and liability.

Who is liable for breaches of employment law? Who is responsible for managing workplace bullying?

Who is responsible for employees' health and safety? Do employees need to work the hours agreed to in the employment agreement, or, the hours their onsite manager requires?

To address these issues, Parliament has recently passed the Employment Relations (Triangular Employment) Amendment Bill. This legislation will likely come into force in June 2020.

The Triangular Employment Bill specifically applies to employment structures in which employees are employed by one official employer, but work for a "controlling third party" who exercises, or is entitled to exercise, control or direction over the employee in a way that an employer would traditionally do.

In these situations, employees who raise a personal grievance against their employer, can also join in the "controlling third party".

This new legislation ensures that the party which has direct control and management of the employees are ultimately responsible for their own actions and cannot pass all liability on to whomever may only be the named employer on the employment agreement.

This legislation also applies to situations where an employer contracts out their employees to another company (eg, secondment) and during that time some transgression occurs which causes the employee to raise a personal grievance claim.

Brittany Gibson from Treadwell Gordon. Photo / Supplied

Although the employee's personal grievance claim must be against the employer, the employer can join the other company ("controlling third party") to the personal grievance proceeding they are now facing.

Where an employee is successful in establishing a personal grievance claim, the court or Authority will then need to look at the extent to which each the employer in the controlling third party caused or contributed to the personal grievance and apportioning any award or reimbursement and/or compensation.

In passing this legislation, the Government is sending a clear message; companies are no longer able to pass off their employment responsibilities and will be held to account for their actions.