All labour hire providers, who provide recruitment, placement (and in some cases contractor management) to host businesses operating in Victoria, are required to be licenced by 29th September 2019. Extensive penalties apply to labour hire providers that operate without a licence and to host businesses that engage with providers who are operating without a licence. All businesses who engage labour through a third party in Victoria should familiarise themselves with the requirements now to ensure compliance.
The Labour Hire Licencing Act 2018 (VIC) and Regulations have come into force and the Labour Hire Licencing scheme commences on 29th April 2019.
Under the Scheme all businesses providing labour to another business will be required to be licenced with the Labour Hire Licencing Commissioner. Businesses will have until 29th September 2019 to complete licencing requirements and extensive penalties exist for labour hire providers and for host businesses that operate in contravention of the Act.
In understanding the requirements it is important to first understand the roles in the labour hire relationship.
What is a Provider?
A Labour Hire Provider is defined as a business that has an arrangement where and or all of the following apply;
- the Provider is supplying workers to perform work in and as a part of a Host business, where the Provider is the business that is paying the worker
- the Provider recruits workers to perform work in and as part of a Host business, where the Host is the business that is paying the worker and the Provider business is procuring or providing accommodation for the worker for some or all of the time they are working with the Host business
- the Provider recruits workers as independent contractors to perform work in and as part of a Host business, where the Provider manages the contract performance
Where a business is a Provider under this definition, and is providing workers in Victoria – regardless of if the Provider is based in Victoria, the Provider will need to be licenced under the Scheme.
What is a Host?
A Labour Hire Host is a business that uses the services of a Provider to obtain workers for their enterprise.
What is a Worker?
A Labour Hire Worker is an individual who meets any or all of the following situations;
- is employed and paid by a Provider to undertake work at a Host business
- is employed and paid by a Host business but the accommodation is procured or provided by the Provider
- is an independent contractor supplied to a Host by a Provider
Providers who supply only individuals who fall outside the definition of a worker under the Act and Regulations will not be regarded as Providers and as such will not need to be licenced under the Scheme. The Regulations outline these exceptions to the definition of a worker;
- certain secondees
- certain persons in circumstances where both the individual and the provider are part of an entity or group of entities
- an individual supplied to a Host who is a Director of a boy corporate with no more than two Directors and who participates in the management of the body corporate or shares in its profits
- students to whom Division 1 or 2 of Part 5.4 of the Education and Training Reform Act 2006applies
- people undertaking work or services under a vocational placement within the meaning of the Fair Work Act 2009 (Cth).
Responsibilities and Penalties
It is the responsibility of all Providers to apply for a licence by 29th September 2019 and not to provide Labour Hire Services without a licence after that date. Penalties apply for any Provider who contravenes this requirement. Penalties can exceed $500,000.
It is the responsibility of all Hosts to only utilise services of Licenced Labour Hire Providers from 29th September 2019. Penalties apply for any Host who contravenes this requirement. Penalties can exceed $500,000.
Labour Hire businesses providing workers in Victoria are encouraged to apply for licences now to ensure they meet the 29th September 2019 deadline. Additionally Licenced Providers will be required to report annually to the regulator. For more information on the application process and requirements see: https://labourhireauthority.vic.gov.au/provider
Hosts are encouraged to consult the list of licenced Labour Hire Providers when engaging labour hire businesses to ensure they are meeting the requirements of the law. For more information on Licenced Providers and Host compliance requirements see: https://labourhireauthority.vic.gov.au/host
All businesses with questions about the operation of the Scheme, Law or Regulations are encouraged to contact the regulator now to ensure compliance.
The Labour Hire Authority Victoria has produced a series of detailed resources and provided detailed information for all parties
For businesses that provide labour hire workers to other businesses: https://labourhireauthority.vic.gov.au/provider
For businesses who have labour hire workers working at their sites: https://labourhireauthority.vic.gov.au/host