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New labour hire laws – what you need to know

November 09, 2017

Following a number of high-profile media reports about exploitation of vulnerable workers, numerous laws have been made or proposed to address the issue.

In the Federal Parliament, the Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 was passed which imposed higher penalties on serious breaches of the Fair Work Act 2009, and made franchisors and holding companies liable for the breaches of their franchisees and holding companies.

At the State level, governments are also cracking down on business structures where it appears worker exploitation is common, in particular in the labour hire sector.

Queensland passed new labour hire licensing laws in September 2017. These are set to come into force on 18 April 2018.

South Australia put new labour hire licensing laws before Parliament in August 2017; these were passed in September 2017 and sent to the Legislative Council. The laws have yet to be passed.

Victoria has also announced that it will follow the lead of Queensland and South Australia in introducing labour hire licensing laws.

The Queensland and South Australian schemes

The labour hire licensing schemes introduced/proposed in Queensland and South Australia are largely the same.

Who is a provider of labour hire services?

A provider of labour hire services is set out in the Act as:

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.

There are presently no exceptions to this broad definition, although it is possible that the Regulations (when they are made) may provide exceptions.

How far are these new laws likely to extend?

NRA is concerned that the new laws may extend to numerous businesses that would not ordinarily be considered labour hire or in the labour hire industry.   Based on the current definition in the Act, this could extend to businesses that second employees or have employees perform work across a number of related companies.

What are the consequences?

Conducting labour hire activities without a license, or dealing with an unlicensed labour hire provider in Queensland will soon attract significant financial penalties of up to:

  • For an individual – $130,439.10 or three years imprisonment;
  • For a corporation – $378,450.00.

In South Australia, the proposed penalties are even more severe, being:

  • For an individual – $140,000 or five years imprisonment;
  • For a corporation – $400,000.

How do I obtain a license?

To obtain a license, the individual person or each officer of a corporation must demonstrate to the Regulator that they are a ‘fit and proper person’ to hold a license.

Whether a person is ‘fit and proper’ depends an extensive list of factors, including a person’s ‘character’, meaning an assessment of their honesty, integrity and professionalism.

Business will also need to pay a fee to obtain a license, but the amount is not yet known – this will be set by the Regulations.

What do I have to do once I’ve got the license?

Once a license is granted, the labour hire business must report their labour hire activities to the Regulator at regular intervals. In Queensland, this is six months; in South Australia this will be every 12 months.

In Queensland, each license is granted for a maximum of 12 months – at the end of that period, the labour hire business will need to recommence the application process, and again demonstrate that each relevant person in the business is a ‘fit and proper person’.

In South Australia, under the law as currently proposed, licenses will be granted without an expiry date. Every 12 months, the licensee must make their report to the Regulator and pay the licensing fee if they wish to continue to hold the license, but they need not re-apply in the same manner required under the Queensland law.

What’s happening in Victoria?

The Andrews Government announced new laws to crack down on the exploitation of workers in the labour hire sector on 10 September 2017.

The scheme will introduce licensing requirements, and will include licensees to show that they are a ‘fit and proper person’.

Despite the announcement, the laws have not yet been introduced to Parliament, with the debate around voluntary euthanasia consuming much of Parliament’s attention.

Regardless, NRA expects that any laws introduced in Victoria will be substantially similar to those introduced in Queensland and South Australia.

What should our business do next?

The NRA recommends that businesses that use labour hire workers in Queensland should now take steps to create appropriate management systems and protocols in preparation for the new laws.

Businesses in South Australia should also start getting their affairs in order in preparation for the new laws. Not knowing when the laws will be passed, and when they will take effect, it is better for businesses to be over-prepared than caught off-guard.

Further, all affected businesses should at least begin gathering the information and evidence they may need to satisfy the ‘fit and proper person’ test, and start putting processes in place to assist in the generation of six-monthly reports to the Regulator.

Businesses in Victoria may not have any particular laws that they need to worry about just yet, however it would be prudent for businesses who are likely to be affected to start making similar preparations.

How can NRA assist?

NRA can assist any members that require our further advice or support in preparation for these new laws, including a draft response plan.

NRA is eagerly awaiting the release of the Regulations in Queensland, and will provide an update as soon as they are released and further developments occur in the other States. 

NRA expects that the Queensland Regulations are likely to be released in draft form after the Queensland State election in late November this year, however if the LNP form government their past opposition to the scheme may see it repealed before it comes into effect.

NRA will keep members updated as this situation develops.

For more information about how this may affect your business and how the NRA Legal can assist, contact Alex Millman on (07) 3240 0100 or a.millman@nra.net.au.

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