1.0 Introduction
An employment relationship is founded upon a contract between the person or body (called the employer) who seeks to retain the services of another (called the employee) effectively putting the employee under their payroll . While this two-party, traditional relationship remains common, triangular employment is becoming more prevalent in Nigeria and globally. This structure involves a third party, such as a labour provider, outsourcing firm, or recruitment agency, particularly in industries like oil and gas, telecommunications, and manufacturing. It offers cost efficiency and flexibility but raises legal questions about employer identity, liability for breaches, and rights enforcement.
This article explores the concept of triangular employment, the legal framework governing it in Nigeria, and the challenges of liability allocation in such complex working arrangements.
2.0 Understanding the Triangular Employment Relationship
Triangular employment is said to occur when employees of an enterprise (the “provider”) perform work for a third party (the “user enterprise”) to whom their employer provides labour or services. Traditionally, under the privity of contract principle, only parties to a contract could enforce its terms. This meant employees could only sue their direct employer, the provider, not the user enterprise. However, modern labour practices now recognize that under certain circumstances, the end-user may also be held liable, giving rise to a tripartite relationship involving: the employee, the provider/outsourcing agency and the user enterprise/client organization.
This structure typically involves three interconnected relationships:
- A commercial agreement between the provider and the user enterprise
- An employment contract between the provider and the employee
- A secondment arrangement where the employee is placed with the user enterprise
