Mandatory licensing scheme introduced for QLD Labour Hire Industry

Businesses operating in Queensland need to be aware of the imminent significant overhaul of the labour hire industry following the first reading of the Queensland Government’s Labour Hire Licensing Bill 2017 (Qld) (Bill). The Bill will have a significant impact on all labour hire businesses and workers operating in Queensland, regardless of whether the labour hire provider or worker is actually based in Queensland.

In essence, the Bill provides for:

  • A mandatory licensing scheme requiring all labour hire providers operating in Queensland to be licensed;
  • All businesses that utilise labour hire to only engage a licensed labour hire provider; and
  • Strong penalties for non-compliance, including for any person or business that engages in conduct designed to circumvent or avoid an obligation imposed under the legislation.

Who does the Bill cover?

The Bill defines a ‘labour hire provider’ as a person who supplies to another person a worker to do work, regardless of how the work activity might be described. As a result, this definition applies regardless of whether or not:

  • The worker is an employee;
  • A contract is entered into between the worker and provider, or between the provider and the person to whom the worker is supplied;
  • The worker is supplied by the provider to another person directly or indirectly through one or more agents or intermediaries (i.e. through a chain of labour hire arrangements);
  • Whether the work completed by the worker is under the control of the provider, the person to whom the worker is supplied, or another person.

The Bill clarifies however that a person is not a labour hire provider in circumstances where, for example (but not limited to):

  • A business supplies a worker, whom the end user then employs themselves (i.e. a genuine recruitment/ permanent placement arrangement in accordance with the Private Employment Agents Act 2005 (Qld)); or
  • A genuine subcontracting arrangement is in place in accordance with the Building and Construction Industry Payments Act (Qld).

The Proposed Licensing Scheme

To obtain a license to provide labour hire services, providers will be required to:

  1. File an application in the appropriate form;
  2. Provide detailed information to the regulator regarding:
    1. The financial viability of the labour hire business;
    2. Compliance with the Work Health and Safety Act 2011 (Qld) and Workers’ Compensation and Rehabilitation Act 2003 (Qld).
  3. Pass a ‘fit and proper person‘ test, determined by:
    1. The person’s character (i.e. the person’s honesty, integrity and professionalism);
    2. History of compliance and ability to comply with relevant laws;
    3. License history (i.e. whether a previous license was cancelled or suspended etc.);
    4. Whether the person has been convicted of an offence;
    5. Whether the person has been insolvent or disqualified from managing corporations under the Corporations Act 2001 (Cth), or was an executive officer of a corporation that has been placed into administration, receivership or liquidation;
    6. The person is under the control of, or influenced by, another person whom is not a fit and proper person to provide labour hire services.
  4. Pay a prescribed fee (likely to range between $1,000 to $5,000).

Subject to the above requirements, the regulator may issue a license to a provider for up to one year. If a license is granted, the licensed provider will be listed on a public register on a departmental labour hire website. The website will also contain information about any enforcement action taken against any individual or company.

Providers will be heavily regulated under the scheme and may have strict license restrictions imposed for non-compliance, including having their license suspended, revoked, varied or cancelled. A holder of a license that has been cancelled will not be able to apply for a license for a period of two years after the cancellation.

Severe Penalties for Non-compliance

The Bill sets out a range of offences for non-compliance, including civil, administrative and criminal sanctions. The highest penalties relate to the core principles of the licensing scheme, namely:

  • Operating as a labour hire provider without a license;
  • Entering into an arrangement with an unlicensed provider;
  • Entering into an avoidance arrangement.

The maximum penalty for breach of the above provisions is $126,044 or three years’ imprisonment for an individual, or $365,700 for a corporation.

Key Points for the Labour Hire Industry

The Bill, once passed, will make it impossible for labour hire providers to operate their business in Queensland without a license or a clear exemption from coverage. It is therefore crucial for labour hire providers to understand the licensing and reporting obligations of the Bill prior to the commencement of the licensing scheme.

Any person or business that uses labour hire workers must ensure that businesses with whom they engage are licensed labour hire providers.

The timing of the passage of the Bill is still unclear, however:

  • Parliament’s Finance and Administration committee held a public briefing on the Bill with officers from the Office of Industrial Relations on 14 June 2017.
  • The closing date for submissions was 19 June 2017.
  • Parliament’s Finance and Administration committee held a public hearing in Brisbane on 22 June 2017.

We will keep you informed as further updates are announced but please do not hesitate to contact Stephen Hughes with any queries in the meantime.

This article was written by Stephen Hughes, Principal and Manja Lalovic, Lawyer.