February 11, 2018/ News
The reigns are being tightened on Australia's labour hire industry. As a result of the media coverage surrounding the exploitation of workers by certain labour hire agencies, state governments are pushing for greater legislation and the introduction of licensing schemes to regulate the industry. The main aims of the proposed labour hire legislation are to better protect vulnerable workers, hold shonky businesses accountable, and maintain the integrity of the labour hire industry in Australia.
Some state governments have been successful in getting it across the line, with the South Australian government's licensing scheme beginning from the 1st of March 2018, and the Queensland government's licensing scheme commencing from the 16th of April 2018. Victoria is expected to follow suit shortly, as they have announced in September 2017 that they would be introducing their own labour hire licensing scheme.
New South Wales, the Australian Capital Territory, Tasmania, Northern Territory, and Western Australia are yet to announce if they will introduce specific labour hire legislation. However, with the pitfalls of labour hire being publicised and broadcast fairly frequently as of late, it is expected that they too will launch their own inquiries, and draft regulations surrounding labour hire licensing for their state.
A Look At Queensland's Labour Hire Licensing Act 2017
The broad definition regarding the affected parties in the Queensland's Labour Hire Licensing Act 2017, has meant that labour hire agencies won't be the only companies being regulated. The bill is also intended to apply to all individuals and entities that provide workers to another person or company, known as the 'receiving entity'. This means that individuals and entities that are not necessarily classified as a labour hire agency, could find themselves subject to this new licensing scheme. For example, a security company that supplies a venue with security personnel may need to hold a labour hire licence in order to carry out business in Queensland.
A labour hire licence will need to be held by any individual or entity providing labour hire in Queensland, regardless of whether or not they are based there. Queensland's Labour Hire Licensing Act 2017 is applicable to all industries/sectors.
In order to acquire a labour hire licence in Queensland, a fit and proper person test is required. The fit and proper person test must be passed by the applicant labour hire providers, the nominated officer/s and the executive officer/s of the company. The fit and proper person test assesses the character of the individual, their professionalism, their compliance with workplace legislation, and if they have been previously part of a company that has become insolvent, or come under administration, receivership or liquidation. The purpose of the fit and proper person test is to ensure that the labour hire business is being conducted ethically and within the bounds of the law.
In addition to passing the fit and proper person test, to acquire a labour hire licence in Queensland, the individual or entity providing labour hire must provide a report every 6 months. This report will need to include the following information:
- Licensee's name and contact details
- Business name, business address, and ABN
- Number of workers that have been supplied during the reporting period
- The kind of work that the workers have done and the industry in which the work relates to
- Information regarding the licensee's compliance with relevant laws during the reporting period
For the full list of required information in the report, click here.
Queensland's labour hire licensing scheme will be strictly enforced and if labour hire providers do not comply, severe penalties will be applied to the offending individual or company. If an individual is found to be guilty of providing labour hire services in Queensland without a licence, the maximum penalty is 1034 penalty units or 3 years imprisonment. If a corporation violates Queensland's Labour Hire Licensing Act 2017, then they may be fined a maximum of 3000 penalty units.
Will The 'Gig Economy' Be Affected?
The loose definition of Queensland's labour hire licensing scheme means that a wide net will be cast and a range of businesses could potentially be subject to this licensing requirement. So, even if a business isn't strictly a labour hire business, but it engages in the provision of workers to another entity, then they may also be required to hold a licence in order to operate in certain states.
A sector that could potentially fall under this legal grey area is the 'gig economy' and the businesses that operate within it.
The 'gig economy', often associated with tech and app-based startups, is characterised by the provision and hiring of independent contractors and freelancers to perform various tasks. This is done instead of employing full-time workers. The 'gig economy' has shifted traditional employment structures and allowed the receiving entity to be more responsive to fluctuations in demand, without the costs associated with keeping staff on a full-time basis.
Since, these on-demand businesses often facilitate the supply of workers to individuals and companies that require them, they may fall under the scope of the Queensland Labour Hire Licensing Act 2017, even though they are not a labour hire agency.
One prominent example of a tech-startup that may have to comply with Queensland's licensing scheme is Uber. This is because Uber's business model is to connect drivers with ride-seekers, via their mobile platform. However, Uber may be able to slip through a loophole, as they don't consider their drivers employees, but 'partners'. This distinction may be used to excuse them from labour licensing requirements. However, there is a clause in the legislation that states that the individual or business entity is a labour hire 'provider', even if the supplied worker is not an official employee. Presently, it is unclear how far-reaching the labour hire licensing requirement will be and what businesses will be in the crosshairs of these impending regulations. Only time will tell if these businesses in the 'gig economy' will be required to hold a labour hire licence in order to operate, once the legislation is enacted officially.
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