Tripartite employment relationships – who is the employer?

A recent case in the Employment Relations Authority has considered whether a ‘tripartite’ employment relationship existed (Dixon v Sky Network Television Ltd).

Sky Network Television Ltd (‘Sky TV’) engaged a company called Quantum Communications Ltd (‘Quantum’) to carry out field work.  Quantum then engaged subcontractors to do the work that Sky TV had contracted them to undertake. One Technician who worked as a subcontractor for Quantum sought to bring an employment claim against Sky TV.  The only issue determined in this case was whether there was an employment relationship between Sky TV and the Technician.

It was accepted that there was no written contract between Sky TV and the Technician.  Sky TV claimed that the Technician was an independent contractor engaged by Quantum, and there was no employment relationship between Sky TV and the Technician.  Sky TV argued that it had no control over who Quantum engaged, did not set wages or terms for Quantum subcontractors, and did not provide them with training.  Rather, the Technicians worked according their own hours and billed Quantum for the work undertaken (which would then invoice Sky TV). Technicians also supplied their own tools and vehicle, had a GST number, and were required to have public liability insurance.

The Technician said that he had a verbal contract with Sky TV, as it was Sky TV that primarily directed or controlled him.  The Technician said that:

  • he was required to wear an ID badge with a Sky TV logo on it
  • he was not allowed to do work for Sky TV’s competitors
  • Sky TV had contact with him regarding job scheduling, cancellation or passing on urgent information about faults, and sometimes sent out mass memoranda or email
  • Sky TV undertook health and safety checks on his van and equipment, and carried out stock takes of decoders and smart cards.

In McDonald v Ontrack Infrastructure Limited (2010), the Employment Court had stated that it was open for an applicant to claim that he or she was employed by an entity with whom his or her employer had a commercial relationship which included the exclusive provision of the employee’s services.

In the present case, the Authority held that there was not a tripartite employment relationship – noting that there was no commercial relationship between Quantum and Sky TV which included the exclusive provision of the Technician’s services.  Furthermore, the Authority considered the common law tests for establishing a contract:  offer, acceptance, contractual intention, consideration and certainty.  It held that there was no mutual assent or intention to create a contract, and any instructions given by Sky TV were not indicative of the formation of an employment contract.

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