Don’t get caught out by the labour hire licensing scheme

Victoria passed the Labour Hire Licensing Act 2018 (Vic) (Act) in June 2018 in an attempt to regulate the labour hire industry.

Most notably, the Act provides a requirement for labour hire providers to hold a labour hire license.

As noted in our previous article, the scheme came into effect on 29 April 2019. Labour hire providers have until 29 October 2019 to apply for a license to operate in Victoria.

Who does the licensing scheme apply to?

The labour hire licensing regime will apply to businesses which, in the course of conducting a business, supply one or more individuals to a host business to perform work in and as part of the host’s business.

Further, users of labour hire services must only use a licensed provider, listed on a State’s Public Register.

What are the implications of the scheme?

A successful application for a labour hire licence under the Act would require a business to, amongst other things:

  1. compile and provide information regarding its operations and employees;
  2. demonstrate compliance with superannuation, taxation, occupational health and safety, workers’ compensation, workplace and migration laws;
  3. have its directors pass a fit and proper person assessment; and
  4. pay an annual license fee.

Who is excluded under the licensing scheme?

Under the licensing scheme there are some classes of workers who are excluded, these include:

  • individuals who are employed by one business on a regular and systematic basis but are provided to another business to work on a temporary basis with the expectation that they will return to their place of employment after working for the other business;
  • a worker who is provided by one business to another which is part of the same entity or group of entities;
  • director of a body corporate, where the director participates in the management or share of the profits in the body corporate and that has no more than two directors;
  • public sector employees who are seconded, transferred, provided or made available to do work for another person;
  • students; and
  • vocational placements.

Where to from here?

If you are a labour hire provider and have not obtained a labour hire license, then you will be unable to provide labour hire services and may face civil and criminal penalties if you continue to provide those services without a license.

Host businesses entering into an arrangement with unlicensed labour hire providers may also be liable for criminal and civil penalties.  Unlicensed labour hire providers and host businesses using unlicensed labour hire providers may face substantial fines ranging from a maximum penalty for a natural person of more than $120,000 and for a corporation more than $500,000.

For advice regarding your obligations as a labour hire provider or as a business which uses labour hire providers for on-hire employees, please contact our Employment, Safety and Migration team.

This article was written by Veronica Clinch, Lawyer – Employment, Safety and Migration.