Paul Ronfeldt and Kate Simpson

Critical Last Month to Comply with Labour Hire Licensing Laws in Victoria and South Australia

Paul Ronfeldt and Kate Simpson

16 October 2019

Legislation Update

Queensland, Victoria and South Australia have each established a labour hire licensing scheme.

Queensland was the first State to implement a labour hire licensing law, and has required providers to obtain a licence since 15 June 2018.

Providers in Victoria and South Australia must apply for a licence by 29 October and 1 November 2019 respectively, or face significant penalties.

Significant penalties also apply to businesses and organisations which use service providers which meet the definition of labour hire if those providers either do not have a licence or have not applied for a licence.  The users of labour hire providers are described as ‘hosts’.

Accordingly, businesses should ensure that they check whether their service providers fall under the scheme, whether they hold a licence and whether they have applied for a licence.

There is a register available to allow hosts to confirm whether providers are licensed or have applied for a licence, which can be accessed via the following websites:

Users of labour hire should check the status of their labour hire providers as soon as possible.

Who are labour hire providers?

The definition of ‘labour hire’ in these laws is very broad: it captures arrangements involving intermediaries such as recruitment or placement services and contract management services. Many different types of service providers, including contract cleaners, security contractors, providers of nursing and allied health professionals to hospitals and community services organisations, fall within the definition of labour hire providers and must be registered.

Both Victoria and South Australia have indicated that they will be targeting the commercial cleaning, horticulture and meat processing industries when enforcing these laws.

Penalties

Fines apply in Victoria, South Australia and Queensland for unlicensed providers who provide or advertise labour hire services and for hosts which enter into arrangements with unlicensed providers.

The maximum penalties in each State are in excess of the following:

State Corporation Individual
Victoria $500,000 $130,000
South Australia $400,000 $140,000 or 3 years’ imprisonment
Queensland $390,000 $130,000 or 3 years’ imprisonment

The Government in South Australia has introduced amendments to seek to reduce penalties and limit the scope of the laws, and make various other amendments. These amendments will not come into force until passed by the South Australian parliament.

States yet to adopt a Labour Hire Licensing Scheme

 In 2018, the Australian Capital Territory government announced its plans to introduce a labour hire licensing scheme, however the details of the scheme are yet to be confirmed.

At the time of writing, there have been no announcements about plans to introduce labour hire licensing in New South Wales, the Northern Territory or Tasmania. In Western Australia, the State Government conducted a ministerial review of its industrial relations system, however this did not contemplate a labour hire licensing scheme.

 Federal Response

The Federal Government in March 2019, announced that it will create a National Labour Hire Registration Scheme as part of adopting in full 22 recommendations from the Migrant Workers’ Taskforce final report (Taskforce Report).

The Federal Government announced further measures responding to recommendations in the Taskforce Report on 2 April 2019 as part of the 2019-20 Budget, including for the development of a National Labour Hire Registration Scheme. The scheme will be developed in consultation with stakeholders, with the objective of reducing worker exploitation, improving accountability, providing greater transparency and driving behavioural change among labour hire operators.

Where to from here for Victorian and South Australian providers?

  1. Businesses should seek advice to determine whether they may be classified as ‘providers’ or ‘hosts’ under the relevant Act.
  2. Hosts should check the links above to determine whether providers have been granted a licence.
  3. Businesses should review contractor engagement policies and procedures to ensure that they include checks on whether providers of services hold licences as labour hire providers when it is necessary for them to do so.
  4. Providers should immediately apply for a licence, if they have not done so already. Providers will be entitled to continue operating as normal while the application is assessed.
  5. Hosts should track the progress of applications submitted by their labour hire providers, and should cease using providers if an application is rejected.
  6. Businesses operating across multiple jurisdictions will need to ensure they have procedures in place to comply with specific state requirements.

Please contact a member of our Employment, Workplace Relations and Safety team if you would like our assistance in understanding the potential impact of these changes on your business.