Proposed legislation is currently before the Victorian Parliament that seeks to introduce a new licencing scheme regulating providers of labour hire and their customers.

The Labour Hire Licensing Bill 2017 is a response to the 2016 Inquiry into the Labour Hire Industry and Insecure Work which uncovered worker exploitation by “invisible” labour hire agencies operating outside of existing regulatory frameworks.

If the Bill becomes law, labour hire providers will be required to obtain a licence by demonstrating that their officers are “fit and proper” and that their business is compliant with workplace, labour hire and immigration laws and minimum accommodation standards. Licenced providers will be listed on a public register. Labour hire providers operating without a licence and users engaging their services risk significant civil and criminal penalties. The maximum fine for providing labour hire services without a licence or entering into an agreement with an unlicensed provider will be more than $126,000 for an individual and more than $500,000 for a corporation.

A new independent Labour Hire Licencing Authority will be established to oversee and enforce the scheme. The Authority will have the power to enter premises where it is suspected that an unlicensed labour hire provider is operating, as well as premises where it is suspected that a worker for an unlicensed provider is providing services.

What will this mean for labour hire providers and their clients?

Following the introduction of the new scheme labour hire providers will need to ensure that they have a current licence and are listed on the public register before they provide labour hire services.

Under the proposed laws, users of labour hire that have reasonable grounds to suspect that the proposed arrangement is for the purpose of avoiding or circumventing legal obligations must report this to the Authority.

This means that businesses seeking to engage the services of labour hire providers would need to be proactive in ensuring that the provider is licensed and that the arrangement is not attempting to avoid or circumvent legal obligations or risk significant penalties.

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