5 July, 2018
Labour Hire Licensing Bill 2017 (Vic)
What you need to know
On 20 June 2018, the Victorian Parliament passed the Labour Hire Licensing Bill 2017 (Vic) to regulate the labour hire industry. The Bill, which awaits royal assent, will:
- regulate both labour hire service providers and labour hire users under a new licensing syste prohibit the provision of labour hire services by an unlicensed person (including a company); and
- prohibit a person (including a company) from obtaining labour hire services from an unlicensed provider.
The scheme is broadly similar to the labour hire licensing schemes recently established in Queensland and South Australia.
What you need to do
Consider the requirements to apply to hold a licence under the Bill and how you can meet them.
Put in place processes to ensure that when the Bill is passed, your organisation only uses licensed labour hire providers. This could include:
- requiring any existing provider to demonstrate that it is appropriately licensed; and
- reviewing and amending contracts with providers to include relevant compliance provisions and reporting obligations as to the maintenance of licences, and to deal with the consequences of a provider losing its licence.
Why is this relevant now?
The establishment of the Victorian labour hire licensing regime, which is broadly similar to the schemes already in place in Queensland and South Australia, represents a further major step in the process of reforming the labour hire industry nationally.
The Bill provides for a six month transitional period after the commencement date, which is a day to be proclaimed, or otherwise 1 November 2019.
In the absence of a uniform national scheme, Victoria will become the third state to introduce a labour hire licensing scheme:
Queensland introduced a mandatory licensing scheme when it passed the Labour Hire Licensing Act 2017 (Qld), which commenced on 16 April 2018. In order to continue their labour hire operations, labour hire providers were required to apply for a licence by 15 June 2018.
In South Australia, the Labour Hire Licensing Act 2017 (SA) commenced on 1 March 2018 but implementation has been pushed back – licensing requirements will not be enforced prior to 1 February 2019.
Key issues
The legislation will apply widely due to a broad definition of the term "provides labour hire services". The definition captures situations where, "in the course of conducting a business, the provider supplies one or more individuals to another person (a host) to perform work in and as part of a business or undertaking of the host and the individuals are workers for the provider". Businesses that historically would not have regarded themselves as engaged in labour hire should carefully consider whether they may be caught by the definitions, particularly in relation to employee secondment or placement arrangements.
Regulations have not yet been released. It is hoped that the Regulations will provide carve-outs from the scheme, as is the case in Queensland. The Labour Hire Licensing Regulations 2018 (Qld) (Queensland Regulations) exclude certain classes of workers, and corresponding licencing requirements, from the scheme, such as:
- workers earning more than AUD $142,000 per annum (indexed annually) and not covered by a modern award or enterprise agreement;
- employees of a provider supplied to related entities to do work; and
- an "in house employee" of a provider who is supplied on a temporary basis on one or more occasions (an in house employee is defined as an employee engaged on a regular and systematic basis with a reasonable expectation of continued employment with the provider, who primarily works for the provider other than as a labour hire worker).
Notwithstanding the exclusions in the Queensland Regulations, the scheme is still seen as exceptionally broad and likely to capture arrangements not generally considered to fall within the concept of "labour hire". There is uncertainty regarding the scope and interpretation of a number of the exclusions and it remains to be seen how they will be applied and enforced in practice.
Similarities and differences between the regimes
Operation
An independent Labour Hire Licensing Authority will administer the scheme and be responsible for the provision of licences, and may impose conditions on the licence. An inspectorate within the Authority will monitor and ensure compliance with the scheme.
The Bill provides that if a person holds the right to provide labour hire services in another State or Territory that person will be, on notifying the Authority, entitled to be registered in Victoria and permitted to engage in labour hire accordingly.
What you need to do when the Bill passes
Under the scheme, providers of labour hire services in Victoria will be required to hold a license and all businesses must only use licensed providers.
The Bill contains detailed license application requirements. As part of the application process, providers will need to provide information including:
- whether the provider is registered with WorkSafe and the ATO
- the number of workers the provider expects to provide
- the industrial instruments that it is expected will determine the terms and conditions of the workers; and
- whether the provider expects that those workers will hold temporary work visas.
The application process is likely to be administratively burdensome. The application process will involve each "officer" of the company providing a declaration that, to his or her knowledge, he or she is a fit and proper person.
Any business that engages labour hire providers will need to implement processes to ensure compliance with the new scheme. This should include:
- requiring any existing provider to demonstrate that it is appropriately licensed; and
- reviewing and amending contracts with providers to include relevant compliance provisions and reporting obligations as to the maintenance of licences, and to deal with the consequences of a provider losing its licence.
For further information, please contact:
George Cooper, Partner, Ashurst
george.cooper@ashurst.com
