How does this relate to me?
During the summer months, increased numbers of business owners consider using temp workers or labour hire services. There are all those university students on their long break that help take the load off in peak periods. There are also lots of weather dependent agricultural or tourism jobs that need doing while the sun shines. At FixHR we know business owners have been caught out badly without basic knowledge of obligations and responsibilities in this space, and as always we want to help people avoid HR problems rather than simply hook them out of trouble!
So let’s dive in, and always if this brings up questions for you, or you think you need a bit more detail, feel free to make an appointment with one of us. We are always here to help.
What is a Temp Worker?
A ‘temp worker’ is typically an employee hired by a labour-hire agency and assigned to a host business. We have labour hire companies as clients, as well as clients who use staff from agencies, so we know this material well! While the agency is the official employer, the host business directs the employee’s day-to-day tasks. The host business pays the agency’s fee, which covers the employee’s wages and a profit margin.
Temp work, often referred to as ‘assignments,’ is usually documented in a written employment agreement detailing the specific assignment. Upon completion of an assignment, the employment relationship is often terminated by the agency. However, many temp workers end up working long and regular hours for extended periods, which can blur the lines between casual, fixed-term, and permanent employment.
Legal Considerations
According to Section 6 of the Employment Relations Act 2000, the Employment Relations Authority and the Employment Court can determine the true nature of the employment relationship, regardless of what the employment agreement states. This means that even if an agreement labels a worker as casual or fixed-term, the reality of their working conditions might indicate a permanent employment relationship.
The Triangular Employment Amendment Act 2019
The Triangular Employment Amendment Act 2019, effective from 27 June 2020, defines a “controlling third party” as a person or business that has a contract with an employer under which an employee performs work for their benefit and exercises control over the employee similar to that of an employer.
This legislation allows temp workers to join a “controlling third party” to their personal grievance claims, holding them accountable for actions or inactions that contribute to the grievance. Importantly, a host business is not automatically liable; liability arises where the host’s actions or omissions have caused or contributed to the personal grievance.
Terminating a Temp Worker
When a temp worker’s employment is terminated, they can raise a personal grievance for unjustified dismissal within 90 days (12 months for sexual harassment claims). If the host business’s actions contributed to the grievance, the temp worker must notify the host within this period.
If the labour-hire agency determines that the host business’s actions contributed to the grievance, they can notify the host within 90 days of receiving the grievance. This notification holds the host accountable and may involve them in legal proceedings if the claims cannot be resolved. In practice, this means host businesses must ensure their day-to-day management decisions are consistent with the standards expected of a fair and reasonable employer.
Resolving Disputes
If a resolution cannot be reached through mediation, the Employment Relations Authority will hear and determine the matter. This ensures that all parties involved in the employment relationship, including the controlling third party, can be held accountable for their actions.
Why all this this matters
- Compliance with Employment Laws: Understanding the legal obligations and rights associated with temp workers helps you comply with New Zealand’s employment laws, avoiding potential legal issues and unpleasant disputes.
- Managing Workforce Flexibility: Many businesses, regardless of industry, need temporary staff to handle peak periods, special projects, or staff shortages. Knowing how to manage these relationships effectively is crucial to avoid people-problems.
- Risk Management: The Triangular Employment Amendment Act 2019 holds host businesses accountable for the treatment of temp workers. Regular employers (like you, probably) need to be aware of their responsibilities to avoid personal grievance claims and potential legal consequences. This includes ensuring fair processes, clear communication, and appropriate supervision where you exercise day-to-day control.
- Employee Relations: Properly managing temp workers can improve overall employee relations, ensuring that all staff, whether permanent or temporary, feel valued and supported. Of course this is the goal.
- Business Continuity: By understanding the intricacies of temp work, you can better plan for continuity and stability in your operation, even when relying on temporary staff.
This information is practical for any business that might engage temp workers at some point. Understanding the complexities of temp work and the legal implications is crucial for both employers and employees. At FixHR, we’re here to help you navigate these challenges and ensure compliance with New Zealand’s employment laws. Reach out to us for expert advice and support in managing your workforce effectively.
