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Minimum wage increase and triangular employment arrangements
An upcoming change to the minimum wage rate and recent amendments to the Employment Relations Act 2000 are explained below:
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Minimum wage increase
From 1 April 2021, the minimum wages is increasing as follows: > For adult employees, the minimum wage will increase from $18.90 to $20.00 (gross) per hour; > For starting-out workers or trainees, the minimum wage will increase from $15.12 to $16.00 (gross) per hour.
For more information on the minimum wage increase and how to get prepared check out the Minimum wage is increasing on 1 April. Are you ready? article on the Employment New Zealand website https:// www.employment.govt.nz/about/news-and-updates/
Triangular employment arrangements
On 28 June 2020, the Employment Relations (Triangular Employment) Amendment Act 2019 came into effect. The Act amends the Employment Relations Act 2000.
A triangular employment arrangement involves three parties and is essentially a situation where an employee is employed by one employer but is working under the direction or control and for the benefit of another person or organisation (now called “the controlling third party”) for his or her day-to-day work. Common examples include temping, labour-for-hire situations, or secondments.
The Employment Relations Act now allows an employee in a triangular employment arrangement to give notice to a controlling third party and to apply to the Employment Relations Authority to join that controlling third party in a personal grievance he or she has with the employer, if the third party has caused or contributed to the employee’s grievance. This would include cases of bullying, harassment or discrimination by a controlling third party. In this situation, both the controlling third party and the employer could be responsible for providing remedies to the employee. There is a 90-day employee notification period in which notice must be given.
An employer who considers that the actions of a controlling third party caused or contributed to an employee’s personal grievance claim can also give notice to the controlling third party and apply to the Employment Relations Authority to join that party to the proceedings to resolve the personal grievance. There is a 90-day employer notification period in which notice must be given.
The Employment Relations Authority or Employment Court may also join a controlling third party to the proceedings of their own accord.
These amendments mean that any business who uses temping, labour-for-hire or similar arrangements will now be at risk of an employment claim and will have to tread very carefully in relation to the management of the working relationship with the temp or labour-for-hire person. This may extend to having to act in good faith and fairly and reasonably before ending such a relationship. In some cases, it may be preferable to directly employ the person as a fixed term employee (if appropriate) or on a permanent basis with a 90-day trial period in place.
For further help on any employment related issues, NZCB members can call Danny Jacobson or Trudy Marshall at Employment Lawyers Tauranga, our NZCB Employment Helpline: 07 928 0529 for 10 minutes free advice.
Danny Jacobson and Trudy Marshall are Partners at Employment Lawyers Tauranga and they specialise exclusively in employment law. (The above is by its nature general, and is not intended to be a substitute for legal advice.)
