Do you need a labour hire licence?

By Simon Dewberry
Employment & Safety Human rights obligations Industrials Risk & Compliance Superannuation

In brief

New labour hire licencing schemes have commenced in South Australia and Queensland, and will soon commence in Victoria. The schemes aim to protect labour hire workers from exploitation and to promote the integrity of the labour hire industry. Senior Associate Stephanie Burn, Associate Emma Veljkovic and Vacation Clerk Adaena Sinclair-Blakemore report.

How does it affect you?

  • The schemes make it unlawful for a business to provide a person to another business to do work (a provider), or to host a person to perform work in its business (a host), without the provider holding a valid licence.
  • If you are a labour hire provider, you are required to be licensed to supply labour hire workers, must be able to demonstrate that you are fit and proper and must comply with ongoing reporting obligations.
  • If you are a user of a labour hire provider, you must only engage licensed labour hire providers.

The law

While the laws are broadly similar, there are some differences, including in terms of the definition of:

  • a provider: Queensland and South Australia exclude private recruitment/placement agencies, and contracts involving construction work, whereas Victoria does not. Therefore the construction industry is not covered by these laws in Queensland and South Australia; and
  • a worker: Queensland laws exclude high-income earners, employees on temporary secondments, and individuals who are supplied to work for another entity within the same corporate group. South Australia does not have any exclusions. Victoria has not yet published its regulations, so it is unclear who (if anyone) will be excluded in Victoria.

There are significant penalties for non-compliance.

What should you do?

Because of the broad application of the laws, businesses:

  • should review their structures and models to determine whether the laws apply to them;
  • who engage workers through a third party should audit their list of current providers and check the third party's licence status and review their procurement processes;
  • should review their contracts to include provisions requiring labour hire providers to maintain and provide evidence of licenses/compliance, and to provide a process to manage situations involving disciplinary action (including termination) against a labour hire worker; and
  • should carefully consider their obligations when managing or dismissing labour hire workers. Providers cannot defeat unfair dismissal claims purely because the worker had issues with the host, and cannot rely on its contract with the host to avoid obligations to treat employees fairly.