Queensland and South Australia have recently introduced laws requiring labour hire firms operating in those States to obtain a licence.  Victoria's laws passed the lower house in February 2018 however are yet to pass the Upper House in that State.

Below is a current summary of the laws in each State:

1. SOUTH AUSTRALIA

1.1  Legislation

1. Labour Hire Licensing Act, 2017 (SA)
2. Labour Hire Licensing Regulation 2018 (SA)

The Act commenced on 1 March 2018.

1.2  Who is and isn’t caught by the regime?

The Act defines ‘labour hire’ services as follows:

A person (a "provider") provides "labour hire services" if, in the course of conducting a business, the person supplies, to another person, a worker to do work in and as part of a business or commercial undertaking of the other person. 

The Act defines ‘worker’ as an individual who enters into an arrangement with the provider under which- the provider may supply, to another person, the individual to do work; and the provider is obliged to pay the individual, in whole or part, for the work. However, an individual is not a worker if the individual is, or is of a class of person, prescribed by the regulations.

There are currently no exceptions to the definition of worker in the regulations.

1.3  What information and documents must accompany an application

• You must provide a letter from a chartered accountant, certified practising accountant or IPA public accountant confirming that you are solvent. The letter date must not be any older than six months of your licence application.
• Completion of knowledge and experience requirements such as an accounting, business, economics or human resource related degree or diploma from Australia or New Zealand.
• Individual applicants, and all directors if applying as a company, must include with their application a copy of a National Police Certificate (NPC) disclosing all history no more than 12 months old

1.4  What are the fees for applying for, renewing or restoring a licence?

The regulations set out the fees associated with applying for, renewing or restoring a licence.

 1.5  What are the penalties?

1. in the case of a natural person—$140,000 or imprisonment for 3 years;
2. in the case of a body corporate—$400,000.
3. A person must not advertise, or in any way hold out, that the person provides, is entitled to provide or is willing to provide labour hire services unless authorised to provide labour hire services by a licence under this Act. Maximum penalty: $30,000.

1.6  What must you do now?

Any business providing or utilising labour hire arrangements must:

• establish whether the entity providing the labour hire needs to be licensed; and
• if entity does need to be licensed, collate the required information and submit the necessary application before 1 September 2018 however compliance will not be enforced until 1 March 2019.

2.  QUEENSLAND

2.1  Legislation

1. Labour Hire Licensing Act, (QLD) 2017
2. Labour Hire Licensing Regulation 2018 (QLD)

The Act commenced on 16 April 2018. The Regulations outline the scope of the regime.

Labour hire providers caught by the regime have 60 days from the commencement of the legislation to apply for a licence.

Labour hire licenses have a one year term.

2.2  Who is and isn’t caught by the regime?

The Act defines ‘labour hire services’ as follows:

A person (a provider) provides labour hire services if, in the course of carrying on a business, the person supplies, to another person, a worker to do work.

The Act defines ‘worker’ as an individual who enters into an arrangement with a provider under which the provider may supply, to another person, the individual to do work, and the provider is obliged to pay the worker, in whole or part, for the work. However, an individual is not a worker if the individual is, or is of a class of individual, prescribed by regulation.

The regulations provide that the following individuals are not ‘workers’ for the purposes of the Act:

The exclusion for internal labour hire will exempt some, but not all, internal labour hire arrangements and providers will need to carefully scrutinise their arrangements to determine whether they fall within the scope of the exclusion.

Some of our health care clients have raised concerned about the application of these laws to community care workers.  If these workers are employed by an organisation providing services to clients and patients in the community, they would be considered to be covered by the definition of internal labour hire or an in-house employee and the organisation does not require a labour hire licence for the provision of these services.

2.3  What information and documents must accompany an application?

The regulations prescribe a long list of information that must accompany an application for a labour hire licence, including information as to:

• the business’s financial viability and the solvency of entities associated with the business;
• work health and safety offences and enforceable undertakings, and workers’ compensation obligations;
• other licences, accreditations or authorities to carry on a business;
• migration matters;
• convictions for serious criminal offences, as well as other offences against certain laws;
• discrimination and sexual harassment matters;
• the regions in Queensland where the applicant provides, or intends to provide, labour hire services; and
• the industries to which the applicant provides, or intends to provide, labour hire services.

2.4  What are the fees for applying for, renewing or restoring a licence?

The regulations set out the fees associated with applying for, renewing or restoring a licence. The fees vary depending on the ‘tier’ of the business, which is determined by:

• the total amount of wages the business paid in the financial year preceding the day on which the application is made; or
• if the business did not operate in the immediately preceding financial year, the total wages the business is projected to pay in the financial year in which the application is made and the next financial year.

2.5  What are the penalties?

The Act includes penalties of up to $365,700 for companies. The maximum penalty for individuals is $126,045 or imprisonment for up to three years.

2.6  What must you do now?

Any business providing or utilising labour hire arrangements must:

• establish whether the entity providing the labour hire needs to be licensed; and
• if entity does need to be licensed, collate the required information and submit the necessary application before Friday 15 June 2018.

3.  VICTORIA

3.1  Legislation

1. Labour Hire Licensing Bill 2017

The Bill has passed the lower house however is subject to a Committee inquiry in the Upper House.

3.2  Who will be and who isn’t caught by the regime?

A person will be a provider of labour hire services if in the course of conducting a business, they supply a worker to perform work in and as part of a host's business or undertaking. This covers the 'triangular' labour hire relationship, where there is no direct contractual relationship between the host and the labour hire worker. Instead, the worker is engaged by the provider, either as an employee or as an independent contractor.

The bill provides for two additional scenarios in which a person will be a provider of labour hire services and require a licence, even though there may be a direct contractual relationship between the worker and the host:

1. where accommodation providers procure or provide accommodation to workers and also recruit workers for third parties, and
2. contractor management services, which are akin to labour hire.

The regulations may deem certain activities to be working in and as part of a business or undertaking. They may also exclude classes of persons or activities from the operation of the scheme. The Victorian Government is currently consulting with stakeholders as to these regulations..

3.3  What will be the fees for applying for, renewing or restoring a licence?

Licence fees, application fees and renewal fees will be set in the regulations to the Act, once proclaimed. It is anticipated that the fees will be scaled according to the business turnover of the applicant.

3.4  What are the penalties for not having a license?

The Bill includes penalties of up to $507,424 for companies. The maximum penalty for individuals is $126,856 or imprisonment for up to two years.

3.5  What must you do?

Once the legislation has been finalised in Victoria we will provide a further update as to the specific requirements for licencing in this State however you should start preparing for the commencement of the legislation which is expected later this year.

4.  GENERALLY

4.1  Examples when a license is not required?

Generally, a licence is not or unlikely to be needed for the following:

• individuals and companies that hold a current contractors licence for building, plumbing, gas fitting, electrical or security work
• individuals and companies that provide a service rather than a worker do not require a licence - eg a customer asks for a financial audit and an accounting business delivers the service.
• a business subcontracting work to another business - eg a building company subcontracting work to a tiler
• a business outsourcing work to another business - eg a nursing home outsourcing maintenance tasks
• registered group training organisations that supply apprentices or trainees to do work for other persons
• hiring someone for a particular task through the sharing economy - eg Airtasker
•  a business that has been granted an exemption from the requirement to be licensed.

4.2  Businesses must be aware that:

• It is unlawful to operate as a labour hire provider without a licence;
• The penalties are harsh for breaches of the legislation;
• You will require a licence for each State and each State has different requirements to have a license as well as eligibility requirements;
• It is unlawful for a person to enter into “an arrangement” with another person for labour hire services when they do not hold a licence.
• It is unlawful to advertise or hold out that a person can provide labour hire services without a licence
• It is unlawful to enter into an arrangement for the supply of a worker to avoid an obligation under the Act (referred to as an avoidance arrangement)
• Further, there is a positive obligation to report another person who has supplied them with a worker in circumstances where the supply of the worker is an avoidance arrangement.
• Individuals will be tested as to whether they are a “fit and proper person” to hold a licence, including whether they are honest, have integrity and professionalism.
• Licence holders are required to report annually to the applicable regulator. Reports are to contain a number of matters including (but not limited to) the number of workers supplied by the holder of the licence and a description of the arrangements entered into.

Holman Webb can assist you to prepare the necessary application material and advise you on any changes which may need to be made to existing or proposed contractual arrangements.

If you would like further information on this matter please contact Rachael Sutton, Partner in our Workplace Relations Team

The content of this article is intended to provide a general guide to the subject matter.  Specialist advice should be sought about your specific circumstances.