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Do You Need a Labour Hire Licence?

by | Dec 16, 2019 | Conveyancing & Property, Corporate & Business

The Labour Hire Licensing Act 2018 came into operation on 29 October 2019. The legislation followed media publicity about questionable practices of some labour hire providers. The most publicised examples were fruit and vegetable pickers and process line workers in meat and chicken processing companies.

The Act established the Labour Hire Licensing Authority and requires labour hire providers to be registered. There is a $1,600.00 fee to register as a labour hire company and ongoing fees of $1,100.00 every three years. From 30 October 2019 businesses required to be registered, or employers that use unlicensed providers, face fines of up to $500,000.00.

Determining whether or not registration is required under the Act may not be entirely clear. The Act provides a very general definition of the meaning of providing labour hire services. A person provides labour hire services if in the course of conducting a business the person supplies one or more individuals to another person (referred to as a host) to perform work in and as part of the business of the host. As an example of the uncertainty, as to precisely what is caught by these words, we had an inquiry whether, in the context of a quarry business, excavation work carried out by a family connection, and provision of trucks to a nearby similar business to assist the other business with large jobs, would be caught by the legislation and require registration.

The Act itself offers very little certainty, apart from listing some exclusions. The regulations under the Act list examples of when a person is taken to perform work as part of a business. These examples are confined to various horticultural work and work in a meat or poultry processing establishing, but it is important to note that they are examples only and do not restrict the generality of the definition of providing labour hire services.

Information sheets published by the Labour Hire Licensing Authority provide the only real guidance in determining what falls within the full ambit of the very general words of the definition. The information sheets contain guidelines, including whether:

  • The work is performed at the host’s premises;
  • The work is subject to the host’s direction and is supervised and managed by the host;
  • The work is not a specialised service;
  • The work is a key function of the host’s business;
  • The work is of a similar nature to work performed or previously performed by the host’s own employees.

It rather seems to be a case of legislation by administrative information sheet.

It is unfortunate that the legislation is cast in terms, the generality of which raise the possibility that registration may be required in numbers of situations where it would not have been expected that this would be so. However, given the potential quantum of the penalties, whether or not registration is required needs to be given careful thought. Each situation needs to be considered on its facts.