To provide labour hire services legally in Victoria from 30 October 2019, labour hire providers must have applied for, or already hold, a labour hire licence.
Equally, from 30 October 2019 businesses are now prohibited from using unlicensed labour hire providers. Businesses can continue to use unlicensed labour hire providers after 30 October 2019 if the providers have applied for a licence before 30 October 2019 and their application has not been refused.
Significant penalties can be imposed (on both providers and “hosts”) with the maximum penalty exceeding $500,000.
The idea of the licensing scheme is that only a “fit and proper person” should be able to provide labour hire services, and the application process assess matters such as previous convictions, breaches of workplace laws and insolvency.
What is “labour hire”?
The Labour Hire Licensing Act 2018 (Vic) (“LHL Act”) states that 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
It is clear from the wording of the LHL Act that it will apply to businesses even if they only provide one labour hire worker (ie there is no minimum threshold).
There is an extended definition of labour hire services relating to labour hire providers using independent contractors as follows:
- in the course of conducting contractor management services recruits the individuals as independent contractors to perform work in and as part of a host’s business or undertaking and manages the contract performance by the independent contractors
There are a number of exceptions under the LHL Act where a licence is not required, including in relation to:
- providing workers within a group;
- a small body corporate providing a director;
- public sector employees;
- students; and
- vocational placements.
What do I need to do?
If you are a labour hire provider in Victoria and have not yet applied to a licence the last day to apply is 29 October 2019. If you have not applied before this date you should do so as soon as possible and should seek legal advice before carrying out any further labour hire activities.
If you use labour hire services in Victoria you should check that your provider is licensed (or at least has applied for a licence).
Further information can be obtained at the Labour Hire Authority’s website.
Labour hire in other States and Territories
Both Queensland and South Australia have similar labour hire licensing schemes, but with notable differences to the Victorian legislation.
How EI Legal can help
EI Legal has advised a number of clients on their obligations under the new Victorian labour hire licensing scheme. If you require assistance in working out if it applies to your business or your obligations under the scheme please contact one of lawyers at firstname.lastname@example.org or on 1300 180 902.