Labour hire to be regulated in Victoria

In mid-December 2017, the Labour Hire Licensing Bill 2017 (Vic) (Bill) was introduced into the Legislative Assembly. 

The purpose of the Bill is to introduce new law regulating the labour hire industry in Victoria by setting out requirements for both labour hire service providers and labour hire users, and establishing a new regulator with broad powers to monitor compliance with the new laws.

The introduction of the Bill follows the Victorian Government’s Inquiry into the Labour Hire Industry and Insecure Work published in October 2015 which, confirming a number of high profile media reports, found systemic underpayment and exploitation of labour hire workers. 

In the Federal context, the Bill follows the introduction of the Federal Government’s Protecting Vulnerable Workers legislation which commenced in September 2017 (which amended the Fair Work Act 2009 (Cth) (FW Act)), and an increased focus by the Fair Work Ombudsman on labour hire arrangements. Queensland and South Australia have also introduced labour hire licensing legislation due to commence in 2018.

The Bill’s key objectives are to protect labour hire workers from exploitation by the providers and users of labour hire services, and to improve the transparency and integrity of the labour hire industry and therefore the commercial conditions for law abiding businesses.

To achieve these objectives the Bill provides for:

• the establishment of the Labour Hire Licensing Authority (Authority) and the Office of the Labour Hire Licensing Commissioner (Commissioner);
  
• the requirement that labour hire service providers be licensed, pass a fit and proper person test to be licensed, and that as licensees they comply with laws relating to the business to which the license relates, including the following “workplace laws”:
  
  • Occupational Health and Safety Act 2004 (Vic);
  • Workplace Injury Rehabilitation and Compensation Act 2013 (Vic);
  • Equal Opportunity Act 2010 (Vic);
  • Long Service Leave Act 1992 (Vic);
  • Child Employment Act 2003 (Vic);
  • Owner Drivers and Forestry Contractors Act 2005 (Vic);
  • Outworkers (Improved Protection) Act 2003 (Vic);
  • Public Holidays Act 1993 (Vic);
  • Construction Industry Long Service Leave Act 1997 (Vic);
  • Payroll Tax Act 2007 (Vic);
  • Fair Work Act 2009 (Cth);
  • Independent Contractors Act 2006 (Cth);
  • Safety, Rehabilitation and Compensation Act 1988 (Cth); and
  • Superannuation Guarantee (Administration) Act 1992 (Cth).
    
• the requirement that labour hire service users engage only licensed labour hire service providers;
• civil penalties (up to 800 penalty units ($168,000) for a natural person and 3,200 penalty units ($672,000) for a body corporate) on providers and users of labour hire services who fail to comply;
• the appointment to the Authority of inspectors with powers to monitor labour hire providers and users’ compliance;
• offences for giving false or misleading information to an inspector, the Authority or the Commissioner, or for hindering an investigation; and
• the development by the Authority of a voluntary Code of Practice.
  

Under the existing laws, labour hire providers and their users are subject to the FW Act, and under the accessorial liability provisions in the FW Act, it is possible for labour hire users to be held liable for breaches of workplace laws by their labour hire supplier(s).

Labour hire providers and their users should prepare for the passage of the Bill by:

• reviewing their operations, and if necessary, seeking legal advice, to determine whether or not they will be covered by the proposed legislation (in addition to covering the performance of work in Victoria, the Bill also covers arrangements made within Victoria for the performance of work outside Victoria);
• performing an assessment of current compliance with workplace and related laws (particularly for labour hire services providers who will be, on making an application for a licence, required to make a declaration as to existing compliance); and
• proactively introducing new policies and procedures to ensure compliance with the new laws.

 For more information on the Bill and how it may affect you, please contact Helen Lee and Sarah Ralph.