Labour Hire Back on the Agenda

Earlier this year, the Labour Hire Licensing Act 2018 (Victoria) came into effect making Victoria the third state (after South Australia and Queensland) to enact legislation requiring labour hire providers to hold a licence.

Licences are granted by the Victorian Labour Hire Licensing Authority for a 3-year period, provided the labour hire provider passes the “fit and proper person” test (demonstrating compliance with industrial and taxation laws).

In a recently-publicised briefing document provided to the IR Minister after the federal election in May 2019, the Government has agreed to provide funding to the Fair Work Ombudsman to enable it to set up a National Labour Hire Registration Scheme early in 2020.

The Scheme was recommended by Professor Allan Fels, head of the migrant worker taskforce, with a view to reducing worker exploitation in four high risk sectors- namely horticulture, meat processing, cleaning and security.

Consultation on the proposed national scheme will need to occur before any changes are introduced.

Once the new scheme is in place, along with the additional funding allocated to set up a dedicated sham contracting unit (see our earlier article: FWO cashed up to investigate and prosecute sham contract arrangements), the Fair Work Ombudsman will be well placed to ensure employers are educated about their obligations and that compliance is enforced.

In the meantime, employers would be well-advised to review their current arrangements with workers and ensure they are meeting their IR obligations. As compliance and enforcement are a continued focus for the FWO, employers are better to be on the front foot and correct any non-compliant arrangements rather than be subjected to the adverse financial and reputational impacts that can occur if they are “caught out” by a claim or as part of an investigation.

Lessons for employers

• If you are a labour hire provider- ensure you are updated about changes to the laws and whether you are required to obtain a licence
• Review the arrangements with your workers and ensure these arrangements reflect the true nature of the engagement
• If unsure seek advice