New Victorian Labour Hire Licensing Legislation – Everything You Need To Know

By Megan Teh, Lawyer, MST Lawyers and Chao Ni, Senior Associate, MST Lawyers

Introduction

Following an inquiry into the labour hire industry exposing the widespread exploitation of workers, the Victorian Parliament passed the Labor Hire Licensing Bill 2017 on 20 June 2018.

Once enacted, the new legislation will be called the Labor Hire Licensing Act 2018 (Vic) (the Act).

The principal objectives of the Act are:

• to protect workers in the labour hire industry from being exploited by both labour hire providers and their users; and
• to improve the transparency and integrity of the labour hire

The legislation commencement date has yet to be announced but will be no later than 1 November 2019.

Notably, similar (but not identical) legislation was introduced in South Australia and Queensland earlier this year.

The Act will introduce obligations for both “labour hire providers” and their users referred to as “hosts”.  

 Obligations On Providers

Under the Act, labour hire providers must not operate without a licence.  To obtain a licence, a labour hire provider must:

• provide information about their business and key personnel;
• demonstrate compliance with a fit and proper person test, workplace laws, labour hire laws, and (where relevant) minimum accommodation standards; and
• declare that they will comply with laws relating to taxation, superannuation, occupational health and safety, workplace laws, and migration laws.

Once a licence is obtained, a provider will have an ongoing obligation to:

• comply with all licence conditions; and
• report to the regulator annually with detailed information including:
  • the number of workers supplied by the provider to its hosts;
  • the industrial instruments that determined the terms and conditions of engagement of those workers; and
  • whether those workers held temporary work visas and if so, the number of workers who held such visas and the kinds of visas they held.

 Obligations On Hosts

The Act requires hosts to:

1. use only licensed labour hire providers;
2. not enter into any proposed arrangement if the user knows, or has reasonable grounds to suspect, that the proposed arrangement is intended to circumvent the Act; and
3. notify the regulator, as soon as practicable, after the user becomes aware, or reasonably suspects, that the proposed arrangement is intended to circumvent the Act.

 Penalties

Labour hire providers and users who fail to comply with the Act (including individuals who are involved in the contravention) can face hefty civil penalties and/or criminal charges.

Next Steps

Labour hire providers should prepare for the Act by:

• assessing their compliance with workplace and related laws;
• rectifying all non-compliance issues;
• applying for a labour hire licence within six months from the commencement date of the Act;
• developing new policies and procedures to ensure compliance with their obligations under the Act and conditions under the labour hire licence; and
• educating employees (including managers) on the new policies and licence conditions.

Hosts should prepare for the Act by:

• contacting their current labour hire providers to make enquiries about whether they are aware of the Act and the obligation to obtain a labour hire licence;
• reviewing contracts to include specific clauses requiring labour hire providers to maintain registration under the licensing scheme;
• conducting regular searches of the labour hire licensing register (once it is available);
• developing new policies and procedures (including a reporting policy where arrangements intended to circumvent the Act are involved).

For more information on the Act and how it might specifically affect your business, contact MST Lawyers’ Employment Law team by email or call +61 3 8540 0200.