Businesses that place their workers in the businesses of their customers on a contractual basis will likely be subject to the licensing requirements of the new Labour Hire Licensing Act 2018 (Vic) (Act). The Act’s licensing scheme is due to commence on 29 April 2019, and affected businesses will have six months from this date, or until 29 October 2019, to register online and apply for a licence.
DO YOU NEED A LICENCE?
Section 7 of the Act generally defines labour hire services to be:
A person (a provider) provides labour hire services if in the course of conducting a business, the provider supplies one or more individuals (who are considered workers) to another person (a host) to perform work in and as part of a business or undertaking of the host.
The Act is centred around the following 3 key persons:
- Providers: people/companies which provide a labour hire service. Providers are the ones required to apply for and receive a Licence.
- Hosts: people/companies who receive workers from a Provider. Hosts will need to be careful to confirm that any Provider they deal with has a Licence.
- Workers: the employees/contractors of Providers, that are placed in the Host’s business.The definition of ‘Worker’ is broad, and includes any person that has an arrangement in force with the Provider:
- under which the Provider has the option to supply the worker to one or more other persons to perform work. and
- where the Provider is obligated to pay the worker.
The above definition of a worker will capture employees and contractors of a Provider who are provided for periods of work in the customer’s business. However, the Labour Hire Licensing Regulations 2018 (Vic) (Regulation) set out a couple of exceptions, including: secondees, workers being used between related bodies corporate carrying on the same business, person undertaking a vocational placement within the meaning of the Fair Work Act 2009 (Cth), and certain students and employees of the public sector. 1
HOW DO YOU APPLY FOR A LICENCE?
A Provider’s application for a Licence must be accompanied by a declaration of the Provider (or director in the case of a body corporate) that it (or to the director’s knowledge, each director) is a fit and proper person. A person is deemed a fit and proper person if:
- within the preceding 10 years, neither they, nor a company of which they were a director of, have been found guilty of an indictable offence, or an offence involving fraud, dishonesty or drug trafficking that was punishable by a term of imprisonment of 3 months or more.
- within the preceding 5 years, neither they, nor a company of which they were a director of, have been found to be non-compliant with workplace law, a labour hire industry law or a minimum accommodation standard.
- within the preceding 5 years, any licence held by them or a company of which they were a director of under a labour hire industry law has not been cancelled, suspended or revoked.
- within the preceding 5 years, neither they, nor a company of which the they were a director of, have been insolvent or under administration. and
- within the preceding 5 years, they were not a director of a company which was disqualified from managing corporations.
A second declaration is required by the applicant that they have complied with their general employment legal obligations, including laws in relation to taxation, superannuation, OH&S, workers’ compensation, labour hire industry, workplace, migrations and (if applicable) minimum accommodation standards.
The licence may have conditions imposed on it and is generally valid for 3 years with renewal applications available. Once a licence is granted, the licence holder is subject to reporting requirements (see Section 34 of the Act for a list of reporting requirements).
WHAT HAPPENS IF YOU DO NOT HAVE A LICENCE?
Implementation and compliance of the new licence scheme will be the responsibility of the Labour Hire Licensing Authority. From the 29 October 2019, ‘a person must not provide labour hire services unless the person is the holder of a licence that is in force’ and ‘a person must not advertise or in any way hold out that the person provides, or is willing to provide, labour hire services unless the person is the holder of a licence that is in force’.2 Penalties include:
- Providers: A Provider’s failure to obtain a licence will result in significant penalties, of up to 3200 units (currently $507,424.00). and
- Hosts: Hosts who receive labour hire services can be fined up to 3200 units (currently $507,424.00) if they enter into arrangements with an unlicensed labour hire service Provider.
If you would like further advice on whether your business (as either Provider or Host) will be captured by the new licencing scheme, or require assistance in completing the application, please contact Ellenore Hardman, Commercial & Business Lawyer at Nicholas O’Donohue & Co Lawyers, on 03 9607 8186, or at email@example.com
The information provided in this article is general in nature and does not take into account your own specific circumstances. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. You should seek the advice of a lawyer with recognised expertise in your industry prior to acting on any of the issues discussed.