Australia: Queensland Labour Hire Licensing Bill passes

The Labour Hire Licensing Bill 2017 was passed late on 7 September by the Queensland Parliament, with the legislation set to commence in the first half of 2018 (though a formal commencement date is yet to be proclaimed).

A brief update about the passing of the Bill is below. For more detailed information about its operation and potential impacts, please see our earlier articles about the content of the Bill and the status of labour hire licensing schemes in other Australian jurisdictions.

Scope remains broad

Despite much debate and criticism from the business community about the breadth of the proposed labour licensing scheme, the scope of the Bill has not changed.

In the course of her second reading speeches, Minister Grace confirmed that the Government made a deliberate decision to keep the scope of the Bill broad so as to capture a wide range of arrangements and minimise the possibility of loopholes being exploited. She further commented that there is an ability to exclude matters from the Bill by regulation if necessary.

The revised Explanatory Notes confirm the scope of the Bill is intended to capture ‘the triangular relationship between the worker, provider, and the client that a worker is supplied to which is characteristic of a labour hire arrangement, as well as variations on this model which can be used to disguise labour hire arrangements.’

According to the revised Explanatory Notes, the following are not (or at least are not intended) to fall within the scope of the Bill:

• recruitment services resulting in direct employment/permanent placement;
• genuine independent contracting arrangements;
• certain volunteer arrangements and ‘genuine volunteer work or pro bono work’ (e.g. where workers of an organisation perform volunteer work at a community organisation or legal centre); and
• work experience or student practical placements arranged through an educational institution.

As the accompanying regulations are yet to be drafted, there remains significant ambiguity as to whether a broad range of labour supplies not typically thought of as ‘labour hire’ will require licensing (e.g. intragroup labour supplies between related entities, professional secondments etc.)

Observations from the second reading debate

The second reading debate for the Bill extended over yesterday and today. In addition to Minister Grace’s comments noted above, we have set out below some notable observations from the debate.

1. Government members referred to specific examples of exploitation and unscrupulous operators in the labour hire industry. Generally, government members noted that while they supported a federal approach to labour hire regulation, the Federal Government had failed to act on the issue and the Queensland government cannot afford to delay. Some government members noted that it was appropriate the Bill was not limited to certain industries such as horticulture (which is the approach taken by some other jurisdictions), noting that exploitation can occur in any industry. Government members also criticised the LNP’s opposition to the Bill as ‘union-bashing’.
2. Non-government members commented on the strong union support for the Bill with reference to the various unions’ financial contributions to the Labor Party and used this to argue that the underlying purpose of the Bill is to boost union membership. In particular, several non-government members raised concerns about the publication of information regarding labour hire companies and the broad rights of review/objection available to unions, noting that unions will likely use that information to identify, intimidate and “bully” labour hire businesses (for example, by objecting to the granting of licences until union objectives are achieved). Non-government members also highlighted drafting issues in the Bill, its excessively broad scope and the unintended consequences. While non-government members generally acknowledged exploitation has occurred in the labour hire industry, they argued that existing laws are adequate to deal with any such exploitation, that the issue would be more appropriate for consideration by the Federal Parliament and that a targeted approach focussing on problematic sectors and industries would be more effective.
3. Cross bench – the two Katter Australia Party members expressed strong support for the Bill, noting specific examples of workers in their electorates apparently experiencing wage cuts as a result of an increase of the labour hire component in the overall workforce.

With significant cross-bench support, the Bill was passed by Parliament (47 ayes to 41 noes) with a couple of minor amendments (including an increase to the transitional period from 28 days to 60 days).

Next steps

Minister Grace has announced that the licensing scheme will commence in the first half of 2018 and be backed by a Compliance Unit within the Office of Industrial Relations (which will be able to take queries from businesses as to whether a licence is required in any given situation).

This article was written by Catherine Berry, Senior Associate, Brisbane and  Adam Ray, Solicitor, Brisbane. For more information on this topic please contact: