Australia’s labour hire industry has a new regulatory speed bump looming – mandated labour hire licensing schemes. Two states have already legislated and are implementing their schemes, with another to be finalised this year. These state-based labour hire licensing schemes will cause wide ranging impacts not just on the industry, but also on clients that engage labour hire providers.
Previously, regulatory schemes either were not directed towards labour hire providers or actually excluded them altogether. The new approach was largely triggered by the “Slaving Away” report aired in May, 2015 by the ABC’s Four Corners television program. This report uncovered the unscrupulous behaviour of a minority of labour hire firms who exploited mostly migrant workers on factories and farms around the nation. The Federal and (some) State and Territory governments responded to public outcry surrounding this report by establishing commissioned inquiries into the misconduct that was occurring.
As a result of these commissioned inquiries, three state governments, Queensland, South Australia and Victoria, as well as the Australian Capital Territory have either implemented or signalled their intention to implement licensing schemes for the labour hire industry.
The first to legislate was Queensland. The QLD Bill passed the parliamentary process on 7 September 2017, with a commencement date of 16 April 2018.
Key features of the sunshine state’s Labour Hire Licensing Act 2017 include:
- All labour hire providers operating in Queensland must attain a license;
- Persons/organisations must only engage the services of licensed labour hire providers;
- Labour hire licensees must satisfy a “fit and proper person” test in order to establish that they are capable of providing labour hire services in compliance with all relevant laws;
- The labour hire provider must be financially viable;
- Licensees must provide six monthly reports on labour hire and associated activities in relation to compliance with relevant laws;
- Strong penalties for breaches of obligations (for example, operating without a licence will incur a maximum penalty of $130,439 or a possible three years’ imprisonment for an individual or $378,450 for a corporation); and
- All labour hire providers are required to lodge an application for a licence within 60 days from commencement.
South Australia’s Labour Hire Licensing Bill 2017 was proposed soon after Queensland’s legislative move and shares numerous similarities. Some notable differences exist though, which include higher penalties for non-compliance, Licenses are ongoing until cancelled or suspended, which removes some of the administrative burden, and an annual fee and reporting obligation will be required. The SA Labour Hire Licensing came into effect on March 1st 2018.
The Victorian Government is currently finalising the legislation to enact a similar licensing scheme to their SA and QLD counterparts. Known similarities include the establishment of an independent statutory authority, licensed providers being listed publicly and a “fit and proper person test”. However, as with all of these schemes, the devil is in the detail – a dilemma considering Victoria’s exact legislation is yet to be finalised.
The ACT Government has conducted an inquiry into insecure work, though legislation is yet to be introduced to the Territory’s parliament. Meanwhile, the NSW Labor party has announced its intention to introduce a broad licensing scheme should it win back state parliament in 2019. Finally, currently there is no current or proposed licensing scheme in Western Australia, Tasmania or the Northern Territory.
The predicament with the current labour hire licensing situation is the sheer inconsistency and complexity for businesses. Sure, the currently implemented schemes share some similar elements, however the details of even these common threads differ state-to-state. While the new laws will certainly catch out unscrupulous and blatantly non-compliant firms, it is the law abiding companies (and their clients) that will be unfairly impacted.
At best, compliant labour hire companies will continue to be compliant, albeit while incurring extra costs due to additional red tape. At worst, normally compliant companies operating across several states will get lost in the maze of varying legislation. In this instance, the company will be liable for significant (and somewhat unfair) penalties as well as their clients potentially also facing penalties.
If the Labour Hire Licensing Schemes are here to stay (and it appears that they are, at least for now), what is needed is leadership from Canberra. The Federal Government needs to take action at the next Council of Australian Governments meeting and enact a standardised licensing scheme (while also negotiating the dissolution of state-based schemes).
While a national scheme would still pose somewhat of a speed bump for labour hire businesses and their clients, it would at least be a clear, consistent and straightforward speedbump.