Triangular employment and labour hire dismissals in NZ: who is liable?
Labour hire temp recruitment agencies and their clients can both become liable for unfair dismissal under the new Triangular Employment legislation.
Labour hire and recruitment agency work is often treated as "easy to end". In reality, dismissals in triangular employment still require justification and a fair process, and in some cases both the agency and the host business can be held responsible.
Key takeaways
- Contract wording is not decisive: a clause saying the assignment can end at any time does not override NZ employment law obligations.
- Process still matters: notice, information, time to respond, and genuine consideration.
- Host involvement matters: if the host effectively controls the work and drives the termination, it can be brought into the claim.
Temping Agencies
Labour hire contracts often say that the temporary assignment can end at any time. This is not lawful in NZ employment law as it attempts to contract out of the Employment Relations Act 2000 Good Faith and Justification requirements that an employer must follow.
Labour hire temp agencies and their clients can both become liable for unfair dismissal. The Triangular Employment Amendment Act 2019 allows an employee to take both the temp agency (the employer) and the controlling third party (the host) to the Employment Relations Authority and Employment Court to seek remedies for their losses.
Temp Agency Dismissal
What a temp or labour hire agency must do before terminating an employee's employment:
- A fair and reasonable process must be undertaken.
- Provide relevant information.
- Give the employee an opportunity to comment.
- Genuinely consider the employee's response.
- The decision to dismiss must be substantively justified.
If an employer and/or the controlling third party cannot justify dismissal, the employee will become entitled to compensation for hurt, humiliation, loss of dignity and injury to feelings as well as reimbursement of lost wages. If the decision has come from the controlling third party (the host) where the employment is to be terminated the employee is able to include them as being answerable to the unfair dismissal claim.
Read our full article
We write for the Deals on Wheels magazine. Read our full article:
Related articles
Browse all articles
Medical incapacity dismissal: fair process and reasonable timeframes
Employers are not expected to keep a sick or incapacitated employee's job open for an indefinite period. The tests of fairness and reasonableness apply.
Evidence for unjustified dismissal personal grievance claims: what to collect
Unfair Dismissal and Personal Grievance cases require the employee to give evidence and provide clear and convincing proof to support their claim. Employee advice on evidence gathering.
Unjustified redundancy: when redundancy becomes an unfair dismissal personal grievance
The Employment Court upheld a determination of the Employment Relations Authority that an employer pay its former employee substantial compensation for hurt and humiliation in remedy of the redundancy having been found unjustifiable.
Who is the employer? identifying the true employer in NZ employment claims
Where there is confusion or ambiguity of the identity of the employer the legal test requires an objective observation of the employment relationship at its outset with knowledge of all relevant communications between employer and employee.
Recording workplace conversation in NZ: what is legal and what backfires
You do not need permission to record a conversation that you are party to but there are consequences that you may face later if you record conversations without permission.
Disciplinary meetings: employee rights and common employer mistakes
In a disciplinary meeting an employee has rights to procedural fairness and to be fairly heard. We represent employees at disciplinary meetings.