Do you know your obligations if you’re a business that provides or uses labour hire?
Despite the significant exposure in this area, many businesses are not aware that labour hire providers must now be licensed by the Labour Hire Authority.
New labour hire conditions
As of October 30 2019, all labour hire providers in Victoria must have a licence.
According to the Labour Hire Authority, “If you supply one or more workers to perform work in and as part of a business or undertaking of another person, you’re likely to be a labour hire provider. If you are you will need to apply for a licence.”
There are already equivalent laws in Queensland and South Australia.
Section 7 of the Labour Hire Licensing Act 2018 Act (Vic.) states that a labour hire provider is a business that “has an arrangement in place with one or more individuals to supply the individuals to perform work in and as part of a host’s business or undertaking and is obliged to pay the individual for the work performed for the host.”
Some factors that might suggest someone is ‘performing work in and as part of the host’s business’ include:
“the work is performed at the host’s premises
the work is subject to the host’s direction
the work is supervised or managed by the host or another labour-hire worker supervised or managed by the host
the work is not a specialised service
the work is a key function of the host’s business or undertaking
the work is of a similar nature to work performed or previously performed by the host’s own employees.”
Deemed labour hire
There are circumstances in which an individual that has not met the traditional definition of labour hire will be deemed labour hire under the Act and the Labour Hire Licensing Regulations 2018 (Vic.).
For example, in addition to traditional labour hire providers, recruitment and contractor management businesses also are now required to have a labour hire license.
Specific industries are also mentioned in the Labour Hire Licensing Regulations 2018 (Vic.), including commercial cleaning, horticulture and meat and poultry processing.
These industries are taken to be supplying labour hire when a business is supplying workers (as per the LHA website):
- as a cleaner in a commercial premises
- in the horticultural industry, performing certain activities
- in a meat manufacturing or processing establishment, performing certain activities or
- poultry processing establishment, performing certain activities.
These are taken to be cases where individuals are performing ‘work in and as part of a business or undertaking’ and will require labour hire licences.
Penalties for not getting a license
It is now an offence to provide labour hire without a license — and it is also an offence to use an unlicensed labour hire provider.
This means both a host business and a labour hire provider may be at risk if the labour hire provider does not have a licence from the Labour Hire Authority.
The Labour Hire Authority has the power to enter and inspect a workplace, issue search warrants and notices to comply — and to prosecute.
It differs from state-to-state but there are severe penalties for providing labour hire without a licence OR entering into an arrangement with an unlicensed labour hire provider.
In Victoria, individuals can face up to $126,856 and corporations up to $507,424.
Note: There are some exceptions when an individual is not considered to be a worker under the Act. To see the relevant information about your obligations, click here.
You can apply for a labour hire licence on the Labour Hire Authority website here.
