The Senate Education and Employment References Committee conducted an inquiry into corporate avoidance of the Fair Work Act 2009 (Cth) last year.

A report was handed down containing 29 recommendations intended to provide greater security to workers. One of these called for further regulation of labour hire providers, and of businesses who use labour hire.

The report’s main concern with regards to labour hire was around its use as a means to avoid employment obligations and deny workers the ability to make unfair dismissal claims.

The report also found that labour hire employees would be less likely to raise concerns about their employment for fear their host employer would cease to engage them.

The report contained a number of proposals around the labour hire industry with regards to matters such as licensing, reporting on the use of labour hire, the creation of employment obligations for a host for labour hire workers they have engaged and enabling labour hire workers to negotiate for enterprise agreements directly with their host.

Following this inquiry, several states have introduced legislation regulating labour hire arrangements.

While Western Australia does not currently have its own laws, it is likely that a bill will be introduced into parliament shortly. Notwithstanding this, businesses who are currently engaging labour hire workers and are operating across multiple states in Australia or wishing to expand interstate need to be aware of these changes.

The following states have introduced legislation creating mandatory licensing schemes.

Queensland: The Labour Hire Licensing Act 2017 commenced on April 16. Key features of the Act include:

• Labour hire providers must be licensed to operate in Queensland
• Only licensed labour hire providers can be engaged by hosts
• Labour hire licensees must satisfy the fit and proper person test (to demonstrate they are capable of providing labour hire services in compliance with the relevant laws)
• Labour hire businesses must be financially viable
• Licensees must provide reports on labour hire and associated activities in relation to compliance with relevant laws every six months
• Strong penalties for breach of legal obligations
• The creation of a labour hire licensing compliance unit with a field services inspectorate who is responsible for awareness, monitoring and enforcement functions.

South Australia: The Labour Hire Licensing Act 2017 commenced on March 1, with a transitional period allowing labour hire providers until September 1 to be licensed and fully compliant. This Act also requires labour hire providers to be licensed and makes it unlawful to engage an unlicensed operator.

Victoria: The state introduced the Labour Hire Licensing Bill 2017 into parliament in December 2017, with the bill being passed in February. Key features include:

• Labour hire providers in the state must declare and demonstrate the business and its key personnel are fit and proper persons and are compliant with workplace laws, labour hire industry laws and minimum accommodation standards.
• Users of labour hire services will be required to use only licensed providers.
• Substantial civil financial penalties will apply to providers operating without a licence, and to hosts engaging an unlicensed provider, amongst other things.
• The licensing scheme will be administered by a Commissioner for Labour Hire Licensing, as head of an independent Labour Hire Licensing Authority. The Commissioner and the Authority will be responsible for licensing decisions, maintaining a register of licensees, investigations, compliance, education and development of a voluntary code for labour hire operators.
• An inspectorate within the Authority will have broad powers to investigate non-compliance with the licensing scheme.
• Interested persons will be able to object to license applications and request reviews into some licensing decision.

It is highly likely that WA will follow suit in the near future. WA businesses should take heed of this and consider their current labour hire arrangements in preparation.

Free employee relations advice is just a phone call for most Members. Contact the team today on (08) 9365 7660 or visit cciwa.com/employee-relations/advice-centre for free information sheets.

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