Labour Hire Licensing update

After a lengthy gestation, the Victorian Parliament finally passed the Labour Hire Licensing Act on 20 June 2018. Victoria had the benefit of observing the earlier legislation passed by South Australia and Queensland and their implementation. The new legislation benefits from this perspective to provide clearer drafting, but the final result is to further complicate the situation by moving further away from synchronisation across the States.

The Queensland, South Australian and Victorian legislation seek a common goal of imposing regulation to strike at the exploitation of workers and restore integrity to the labour hire industry. They each impose an obligation on labour hire firms to be licensed, with online registers to be available in each State for public inspection. Each State makes it an offence to trade without a licence or to engage the services of an unlicensed labour hire firm. There are slight differences between the States as to who constitutes a ‘fit and proper’ licensee but the main focus is on financial viability, and corporate and safety compliance.

However, the schemes fall down in their definitions and scope of operation, which create divergences in interpretation between the three States, and their impact on national labour hire operations:

Commencement dates: The Queensland scheme has already gone live whilst the new Liberal Government in South Australia has extended the transition period. The Victorian start date is yet to be determined but has a potentially lengthy lead-in period.
SA: Commenced 1 March 2018 with transition period extended to 1 February 2019.Qld: Commenced 16 April 2018. The transition period concluded on 15 June 2018. The scheme is now in full force.Vic: Commencement date to be advised but by no later than 1 November 2019 with a transition period of six months.
Extra-territorial operation: The South Australian and Queensland legislation have similar wording whereas the Victorian legislation proposes wider operation. Unlike the other two States, the Victorian Act considers not only where the work is done but also where the arrangements for performing the work were made. It may be interesting to consider the constitutionality of Victoria purporting to dictate requirements for labour hire arranged in Victoria but performed in other States, particularly in the Transport industry.
SA: The Act operates inside and outside of South Australia to the extent of its extra-territorial powers, and covers all conduct in connection with labour hire services supplied in South Australia.Qld: The Act operates inside and outside of Queensland to the extent of its extra-territorial power. Vic: The Act applies to labour hire performed in Victoria, and any labour hire arrangements made in Victoria even if the work is performed outside of Victoria.
‘Provider’: The key definition of the entities caught by the legislation has similarities but also critical differences. The Victorian and South Australian definitions are clearer and more closely aligned to the traditional concept of labour hire supplied to work for a host whereas the Queensland definition is much broader. Interestingly, the construction industry is excluded from the definition in South Australia and Queensland but not in Victoria.
SA: A provider supplies a worker to another person to work in and as part of the business or commercial undertaking of that other person.
Includes labour hire sub-contractors.

Excludes private placement agencies and the construction industry.

Explanation to legislation excludes one off contractors supplied to provide a service to a business.
Qld: A provider supplies a worker to do work for another person.

Includes labour hire sub-contractors.

Excludes private placement agencies and the construction industry.
Vic: A provider supplies an individual to a host to work as part of the host’s business.

A provider also recruits or places workers with a business and provides accommodation.

A provider also recruits or places a contractor to a business and acts as the contract manager.

Includes labour hire sub-contractors.

Exclusions are to be advised once regulations are published.
‘Worker’: The core definition is similar across the three regimes but the Queensland regulations go to considerable lengths to exclude various categories of workers to compensate for the broad definition of ‘Provider’. It remains to be seen whether the Victorian regulations will adopt the Queensland exclusions or remain silent as in South Australia.
SA: A worker is supplied by the provider to do work for another person, and the provider pays the worker for that work.Qld: A worker is supplied by the provider to do work for another person and the provider pays the worker for that work.

Exclusions include non-award workers who are paid above the high income threshold under the Fair Work Act, a worker supplied through their own personal service company, staff employed by a holding company for use within a corporate group, and ‘in-house employees’ which covers secondments where a worker normally works for the provider but is temporarily supplied to another entity.
Vic: A worker is supplied by the provider to do work for another person and the provider pays the worker for that work.

This includes contractors where the provider manages the contractor.

The exclusions are to be advised once the regulations are published.
Administration: The South Australian Government has provided significantly more funds for the administration of licensing compared to the Queensland Government. However, the Victorian Government has upped the ante by creating an entirely new Labour Hire Licensing Authority.
SA: The SA Business and Consumer ServicesQld: Office of Industrial RelationsVic: Labour Hire Licensing Authority

(website yet to be set up)
Duration of licence: There is considerable divergence as to the life of a labour hire licence, with the Queensland Government keeping a tighter rein compared to the other States.
SA: Licences for an indefinite period until cancelled by the Government or surrendered by the holder.Qld: Twelve month licences unless cancelled or suspended.Vic: For a period to be set in the licence but not greater than 3 years from the date of issuing, subject to cancellation or suspension.
Reporting: The obligation on licence holders to provide regular reports is an important step common across the schemes. The significant amounts of data provided in the reports will allow the State Governments to monitor the performance of licensees and impose an administrative burden which only serious operators can afford to meet. This data can also be cross-referenced with other State and Federal authorities, including the Immigration and Treasury, to check for potential breaches of other legislation. Again, the Queensland Government is keeping a tighter rein on licence holders compared to the other two States.
SA: Annual reports.Qld: Six monthly reports.Vic: Annual reports.

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