Labour Hire Triangular Employment Dismissal

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.