After an in-depth inquiry into the labour hire sector, the Victorian Government has passed the Victorian Labour Hire Licensing Act 2018 (Vic). The Act came into force on 27 June 2018. However, many of the changes, including licensing requirements for labour hire providers, are not expected to begin before early 2019.
What are the key objectives of the new Act?
The report into this sector found damning evidence of underpayment and exploitation of workers. This Act aims to provide strong barriers and protections for workers who are in vulnerable positions to ensure that all superannuation, taxation and workplace obligations are upheld by companies who engage labour hire workers. The Act will cover providers, who in the course of conducting a business, provide or supply individuals to another business (the host) to subsequently perform work or business for that host.
What is the major change to the labour hire sector?
The Act introduces a number of key changes. The major change is that a labour hire business must not operate without a licence. There are heavy civil penalties for engaging in such prohibited conduct. There are also civil penalties for entities that enter into arrangements with labour hire businesses who operate without a licence. We would recommend that whenever you enter into labour hire arrangements, you must immediately enquire about whether the labour hire provider has a licence before any further negotiations are commenced.
How I do apply for a licence if I operate a labour hire entity?
The Act outlines a number of requirements that must be followed when applying for a licence. These include:
- Your personal and business details such as your ABN, ACN and, if you are a body corporate, office holder details.
- A declaration that you are a 'fit and proper person' to hold such a licence. This includes declaring:
1. Whether you have been found guilty of deception or drug trafficking offences in the previous 10 years
2. Whether you have contravened any workplace laws within the previous 5 years from the time of your application
3. Whether you have been insolvent in the previous 5 years, or
4. Whether you have been disqualified from managing corporations or body corporates in the previous 5 years.
- You must also declare that you have complied with all superannuation, taxation, OHS standards, migration law, and any other workplace or labour hire laws. This declaration should include the same information, whether the labour hire business is currently being conducted or is a new business.
Once a licence is issued, it will remain in force for 3 years. However, during this time, it is not transferable.
Once I have a licence, is there anything I have to report?
Once you are granted a licence, you still must report the following information annually:
- Whether you have been registered with the ATO;
- Whether you have been registered with WorkSafe;
- The number of workers you have supplied under the licence;
- The terms of any labour hire arrangement;
- Whether any workers supplied held temporary work visas and, if so, how many; and
- Whether you are compliant with your original declaration made when you applied for a licence.
It must also be noted that inspectors can be appointed under the Act. If they request access to your books and information, you must comply. For further assistance if this occurs, contact us immediately.
How can Sharrock Pitman Legal help?
With tougher regulations and reporting requirements coming into force within the labour hire sector, it is extremely important that you remain compliant with your new obligations. At Sharrock Pitman Legal, our experienced legal practitioners can guide you through the process of applying for a licence and can ensure you are in the best position to remain compliant with the conditions of your licence.
Once you have your licence, and given the heavy civil penalties that can be imposed for non-compliance, it is important that you remain pro-active. For any legal advice or assistance, please feel free to contact our Accredited Specialist in Commercial Law, Mitchell Zadow on 1300 205 506 or complete the form below.
The information contained in this article is intended to be of a general nature only and should not be relied upon as legal advice. Any legal matters should be discussed specifically with one of our lawyers.
Liability limited by a scheme approved under Professional Standards Legislation.
Mitchell is the Managing Principal of our law practice.
He is an Accredited Specialist in Commercial Law (accredited by the Law Institute of Victoria). He also deals with areas of Employment Law, Wills & Estate Planning and Probate. For further information, contact Mitchell on his direct line (03) 8561 3318.
