Legislation has recently been passed in Queensland and South Australia that will affect labour hire companies and those that use the services of labour hire companies. This development will increase operational costs and the regulatory and legal exposure faced by those within the industry.
If you are a labour hire provider, we recommend that you take steps immediately to become licensed, and that you have your operations, contracts, and insurance policies reviewed for compliance and risk management.
If you engage labour hire providers, we recommend that you take steps to review your arrangements with those providers and ensure that you are not engaging any unlicensed providers.
Why are the changes taking place?
The legislation was introduced following a number of government and parliamentary inquiries and media investigations on the serious exploitation and mistreatment of labour hire workers, including:
- Underpayment or non-payment of workers’ wages, taxes, and superannuation;
- Not providing workers’ compensation cover;
- Not providing appropriate safety equipment or training;
- Housing workers in substandard accommodation;
- Forcing workers to use particular travel services at vastly inflated prices;
- Mistreating workers, including through sexual harassment;
- Holding on to workers’ passports; and
- Avoiding responsibilities by inducing businesses into phoenix arrangements.
Who do the changes affect?
This legislation will not only affect businesses based in Queensland and South Australia, but will also impact on businesses who engage workers through a labour hire company that is based in either Queensland or South Australia and businesses that engage labour hire workers to perform duties in either Queensland or South Australia, even though the business is based outside of these states.
What do the changes mean?
Both pieces of legislation establish a licensing scheme requiring providers of labour hire services to apply for and obtain a licence in order to operate and prohibiting anyone engaging labour hire companies from engaging an unlicensed provider.
The penalties in Queensland for operating as a labour hire provider without a licence or for engaging an unlicensed provider are up to $130,439 (1,034 penalty units) or up to three years’ imprisonment for an individual and up to $378,450 (3,000 penalty units) for a corporation.
In South Australia, the penalties are a fine of up to $140,000 and/or up to three years’ imprisonment for individuals and up to $400,000 for corporations.
What should impacted businesses do?
Labour hire companies based or operating in Queensland or South Australia should take steps to ensure they fulfil the criteria and have obtained a labour hire licence.
Those engaging labour hire workers in either Queensland or South Australia should put processes and procedures in place to ensure businesses with which they are engaging are licensed labour hire providers.
The online register
Once a labour hire provider is licensed, they will be listed on a register of licenced labour hire providers, which allows users of labour hire and workers to confirm whether they are dealing with a legitimate licensed provider.
If you have any questions regarding the scheme or would like further information regarding how your business can manage the effects of the changes, contact Jason Baker for advice.