New Labour Hire License Laws.. What You Need to Know
Author: Dan Musto
Published date: 2019/05
Did you know that 25% of working Australian’s are employed on a causal basis? This means a quarter of Aussies are not entitled to paid leave, sick pay, or any other benefits that a full time employee would typically receive.
The recent trend towards insecure work in Australia which has resulted in an increased reliance on casuals, short-term contracts, independent contractors and labour hire employees.
With such a large amount of the workforce now employed on a casual basis, The Victorian Labour Hire Licensing Scheme was introduced in 2018 to protect workers and regulate providers in the industry. To operate legally in Victoria, labour hire providers must have applied for or have a labour hire licence before 30 October 2019.
So whether you are a labour hire provider, a labour hire host, or a labour hire employee, there are some new rules around licensing that you should know before the regulation comes into effect later this year.
Please see below responsibilities that a labour hire provider and a host employer should do, and what labour hire workers are entitled to…
A labour hire provider is a business that has an arrangement with one or more individuals under which the business supplies the individuals to perform work in and as part of a host’s business or undertaking and the provider is obliged to pay the individual for performance of the work.
Note: a business only needs to provide one worker to a host to be a considered a labour hire provider.
Providers will need to declare that, to their knowledge, they comply with:
Labour hire hosts are people such as businesses, farms or other organisations that use the services of labour hire providers to obtain labour for their enterprise.
When the new labour hire scheme starts in October, labour hire hosts will no longer be allowed to use unlicensed labour hire providers.
The main obligation on hosts under the Act is to use only licensed labour hire providers to obtain the services of labour hire workers.
Once the scheme commences, before engaging a labour hire provider, hosts will be able to find out whether the provider they plan to use is licensed by checking the online Register of Licensed Labour Hire Providers.
Hosts will also be able to find out whether their planned provider has applied to be licensed, by checking the separate online list of ‘Applications received’. Hosts will fall into the category of ‘interested persons’ who can make an objection to a licence being issued to an applicant.
Hosts can be assured that licensed providers have been assessed in relation to their compliance with a range of relevant State and Commonwealth laws and whether they are a fit and proper person to hold a labour hire licence.
However, hosts are reminded that under Victorian occupational health and safety laws, they are responsible for providing and maintaining a safe work environment at their workplace for all workers which includes labour hire workers.
Hosts will be prohibited from using an unlicensed labour hire provider, and hosts doing so will be exposed to significant fines, with a maximum penalty exceeding $500,000.
Hosts who use labour hire services may be investigated as part of monitoring compliance with the licensing scheme, and with written notice, may be required to produce documents.
Labour hire worker
Workers are generally individuals employed and paid by labour hire providers and supplied to host businesses, farms or organisations on a full-time, part-time or casual basis.
In addition, if a person supplied by a labour hire provider is paid by a host, that person will still be a worker under the Labour Hire Licensing Act 2018 if the provider also procures or provides accommodation for the person.
A person who is an independent contractor supplied to a host by a labour hire provider will also be a worker under the Labour Hire Licensing Act 2018 if the provider continues to manage the performance of the contract — for example, by providing administrative and payroll functions or performance management in relation to the contractor.
In summary, this new regulation is designed to protect all labour hire workers as well as to regulate providers – so everyone, please be aware of your own individual obligation in relation to the act. The Labour Hire Licensing Authority is responsible for licensing labour hire providers and undertaking education, enforcement and compliance activity. Workers will be protected against exploitation from unlicensed labour hire providers and host employers not engaging licensed providers.
The scheme is rolling out on the 29th of April, and the Labour Hire Authority is giving labour hire providers and hosts six months to purchase a license. A word of advice: do not leave it last minute – otherwise the Labour Hire Authority will have some serious questions for you if you are applying for a license on the 29th of October.