A tripartite/triangular employment relationship arises where an employee is formally employed by one entity but performs work under the day-to-day direction and control of another. This arrangement standardly involves three parties, being the employer, the employee, and a ‘controlling third party’. Examples of this include labour-hire arrangements, recruitment agencies supplying temporary workers to client businesses, and employee secondments (transfer to another business temporarily whilst keeping your original job - e.g., a builder apprentice working for a foundation company for a week to get that module of their apprenticeship ticked off).
Amendments made in 2019 via the Employment Relations (Triangular Employment) Amendment Act 2019 gave employees in triangular employment arrangements the ability to pursue personal grievances against the ‘controlling third party’. Prior to this amendment coming into force, an employee could generally only bring a personal grievance against their direct employer even where the conduct giving rise to the grievance was attributable to the organisation exercising day-to-day control over their work, and not the direct employer.
A controlling third party is an entity that exercises control or direction over an employee's work but is not the employee's formal employer. Section 103B of the Act enables an employee to apply to join a controlling third party to personal grievance proceedings where the actions of that party are alleged to have caused or contributed to the grievance.
Before a controlling third party can be joined to proceedings, several statutory requirements are to be satisfied. The controlling third party must be notified of the personal grievance within 90 days, and there must be an arguable case that the party exercised the requisite degree of control over the employee. There must also be an arguable case that the actions of the controlling third party caused or contributed to the circumstances giving rise to the grievance.
Where these requirements are met, the ERA or EmpC may join the controlling third party to the proceedings and determine the extent of its liability. If the controlling third party is found to have caused or contributed to the personal grievance, it may be ordered to provide standard s 123 remedies to the employee as applicable. This amendment ensured that businesses with practical control over employees can still be held accountable even when they are not a direct party to the employment agreement.
