Labour Hire Alert – changes in legislation affecting the labour hire industry

A recent legal development affects the labour hire industry in Queensland and will increase operational costs and the regulatory and legal exposure faced by those within the industry.

If you are a labour hire provider, we recommend that you take steps immediately to become licensed, and that you have your operations, contracts, and insurance policies reviewed for compliance and risk management.

If you engage labour hire providers, we recommend that you take steps to review your arrangements with those providers and ensure that you are not engaging any unlicensed providers post 15 June 2018.

Labour Hire Licensing Act 2017

On 7 September 2017, the Queensland Government passed the Labour Hire Licensing Act 2017.  The Act establishes a mandatory labour hire licensing scheme intended to protect labour hire workers from exploitation and to promote the integrity of the labour hire industry.  The legislation was introduced following a number of government and parliamentary inquiries and media investigations on the serious exploitation and mistreatment of labour hire workers, including:

  • underpayment or non-payment of workers’ wages, taxes, and superannuation;
  • not providing workers’ compensation cover;
  • not providing appropriate safety equipment or training;
  • housing workers in substandard accommodation;
  • forcing workers to use particular travel services at vastly inflated prices;
  • mistreating workers, including through sexual harassment;
  • holding on to workers’ passports; and
  • avoiding responsibilities by ‘phonexing’ businesses.

The scheme comes into effect on 16 April 2018, so it is important that you understand your obligations and take steps to ensure compliance now.

Key features of the scheme are:

  • labour providers must obtain a licence to operate in Queensland within 60 days of 16 April 2018. This includes interstate or overseas organisations providing services in Queensland. To obtain a licence, providers must:
    • satisfy a fit and proper person test to establish they are capable of providing labour hire services which are compliant with all relevant laws (including workers compensation laws, superannuation laws, and the Fair Work Act). The test takes into consideration a range of matters, including:
      • the person’s character (honesty, integrity, professionalism);
      • the person’s history of compliance with relevant laws (ie, laws about record-keeping, payment of tax and superannuation, work health and safety, the Fair Work Act, or laws about building standards as it relates to worker accommodation);
      • whether they can demonstrate an ability to comply with relevant laws;
      • whether their business is financially viable;
    • comply with all relevant laws;
    • report every 6 months on their operations, including providing information on the number of workers they have engaged, how they are engaged, the type of work performed, and where it is performed;
    • pay a licence fee. The government has indicated that the fees will be $1,000 for small labour hire providers, $3,000 for medium providers, and $5,000 for large providers;
  • people who engage labour hire providers must only engage licensed providers.

Serious contraventions of the Act will attract significant penalties of up to 1034 penalty units ($130,439) or 3 years’ imprisonment for an individual, or 3,000 penalty units ($378,450) for a corporation. Serious contraventions include operating as a labour hire provider without a licence, engaging an unlicensed provider, and entering into arrangements intended to circumvent the legislation.

The Act defines a labour hire provider as being an entity who supplies to another entity a worker to do work. It doesn’t matter if:

  • the worker is an employee of the labour hire provider or not;
  • the worker is supplied directly or indirectly to the workplace;
  • a contract is entered into between the worker and labour hire provider, or the labour hire provider and the workplace; or
  • the labour hire provider or the workplace controls the worker’s work.

The Act does not apply to workers doing volunteer work, or students who are placed in work experience positions. By default, private employment agents (ie recruiters) are not bound by the Act, and nor are contractors who enter into a contract to carry out construction work (within the meaning of the Building and Construction Industry Payments Act 2004) who are engaging subcontractors to carry out the work.  However, if either of those businesses does engage in labour hire services in the course of their business, then they would be bound by the Act.

Labour hire providers wishing to apply for a licence can do so online via a website which is not yet live. The same website will also allow any users of labour hire providers and any workers looking for an employer to search a register of licensed labour hire providers.  Reporting of problems or concerns about a labour hire provider or labour hire arrangement will also be done via the website.

Please contact Steven Morris or Jennifer Ingrey of our office if your need further advice.

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