Australia: Casting a Wide Net - Proposed Labour Hire Licensing Scheme in Queensland

The Queensland Parliament is currently considering significant changes to the labour hire industry by way of the Labour Hire Licensing Bill 2017 (Qld) (Bill). The Bill was introduced and read for the first time on 25 May 2017 and was subsequently reported on by the Finance and Administration Committee (Finance Committee).

The Bill:

• introduces a licensing scheme for labour hire providers (Providers); and
• creates various offences relating to that scheme.

The potential impact of the Bill is broad. The scheme and offences create obligations on both Providers and users of labour hire (Hosts). The licensing scheme also requires compliance with other relevant laws, including work health and safety laws.

The Queensland government has indicated that the scheme is intended to be operative in 2018. However, the Finance Committee was unable to agree that the Bill be passed and its report details various stakeholder concerns and strong opposition from the non-government members of the Committee.

Similar licensing schemes are currently being contemplated by the Victorian and South Australian governments.

Anyone providing or using labour hire in Queensland should seek information about the proposed changes to ensure compliance ahead of the potential introduction of the licensing scheme.

New Offences Proposed by the Bill

To administer the licensing scheme, the Bill has introduced a number of offences applying to Providers and/or Hosts. Some of the more salient are extracted below (with the proposed fine amounts applying to corporations).

(a) Applying to Providers

The Bill makes it an offence for the Provider to, without a licence:

• provide labour hire services in Queensland ($378,450); or
• advertise, or hold out that they provide or are willing to provide, labour hire services ($25,230).

(b) Applying to Hosts

The Bill makes it an offence to:

• enter into an arrangement for labour hire with an unlicensed Provider ($378,450); or
• fail to report a Provider who is supplying a worker as part of an avoidance arrangement (arrangement designed to circumvent the Bill) as soon as the host becomes aware or ought reasonably have become aware of that matter ($25,230).

(c) Applying more broadly

• Avoidance arrangements: It is an offence to enter into an arrangement for the supply of a worker that a person knows or ought to know is an arrangement designed to circumvent or avoid the Bill, unless the person has a reasonable excuse ($378,450);
• Accessorial liability provisions: any person who counsels, procures or aids the commission of an offence under the Bill is taken to have committed the relevant offence.

The Proposed Licensing Scheme

The Bill introduces a requirement for a yearly, non-transferrable licence for each Provider providing labour hire in Queensland. It has been foreshadowed that application and renewal fees will range from $1,000 to $5,000. Some of the key features of the scheme are listed below.

(a) Criteria for being granted a licence

To be granted a licence, an applicant has to satisfy the chief executive that:

• the business is financially viable; and
• the applicant, nominated officers and ‘executive officers’ are fit and proper persons. The term ‘executive officers’ means any person who is concerned, or takes part, in the management of the corporation. This broad and historically vague definition would necessitate a case by case assessment of who would be required to be ‘fit and proper’.

(b) Obligations on licence holders

Various obligations would attach to licence holders. These include an obligation to:

• comply with conditions of the licence. Conditions include complying with the Bill and any Act of the State or Commonwealth imposing an obligation in relation to workers - including workplace health & safety laws (WHS Laws).
• report to the chief executive every 6 months. Notably, this would include reporting on details of the workers, accommodation of the workers, the Provider’s compliance with laws and disclosure of the number of compensation claims and ‘notifiable incidents’ (within the meaning of the Work Health and Safety Act 2011 (Qld)) that have occurred in that period.
• have the prescribed number of nominated officers (not yet prescribed).
• advise the chief executive of any prescribed changes in the Provider or its executive officers (not yet prescribed).

(c) Monitoring and enforcement

The Bill grants extensive powers to inspectors to monitor compliance with the Bill and investigate alleged contraventions.

(d) Licence suspension and cancellation

A range of circumstances would lead to a licence being suspended or cancelled. Cancellation would require a show cause notice, and the chief executive being satisfied that:

• the Provider, or a representative or employee of the Provider, has contravened a condition of the licence or a relevant law (including WHS Laws). This is not a requirement that a relevant law is contravened, just that the chief executive is satisfied that it has been contravened.
• the Provider is no longer a fit and proper person.
• the Provider has been wound up or deregistered.

A Provider whose licence has been cancelled would not be able to apply for a new licence for 2 years. However, a corporation and its related bodies corporate would not be able to apply for a new licence unless the chief executive is satisfied that because of a ‘genuine sale’ both of the following are true for the corporation:

• no shareholder at the time of cancellation is still a shareholder; and
• no person who was in a position to control or influence the affairs of the corporation is still in a position to do so.

This is an extremely broad and powerful provision. If interpreted literally, it could mean that where a Provider is wound up or deregistered, no company in that Provider’s group of companies could ever again hold a licence.

Finance Committee Report

After consultation with the Government, a review of 41 written submissions received from the public and a number of public hearings, the Finance Committee released its report in relation to the Bill on 24 July 2017 (a copy of which can be found here).

The Finance Committee was unable to agree that the Bill be passed. As a consequence, it did not made any formal recommendations, opting instead to make a number of suggestions, including that:

• the scope of the Bill should be clarified (though only through explanatory memoranda or the second reading speech);
• what amounts to an avoidance arrangement should be clarified (again, only through explanatory memoranda or the second reading speech);
• the reporting period should be increased to one year (from 6 months);
• the protection of confidential information obtained in the reporting process should be improved by express provisions;
• the power to request and hold security bonds as part of licensing conditions should be expressly given to the chief executive;
• the automatic confirmation of a decision on review if the chief executive fails to issue a review notice within 21 days should be removed;
• the Act’s transitional period should be extended to 40 or 60 days (instead of 28 days); and
• the Government should invest in an extensive consultation, marketing and communication campaign (going beyond an online presence and including more traditional methods of communication including direct mail out, print and radio advertising) to ensure awareness of the scheme.

What are the next steps?

The Finance Committee’s suggestions for improvements to the Bill and areas for clarification by way of extrinsic material contained in its report will now likely be considered by the Government prior to the Bill being put to Parliament for the second time.

This article was written by Catherine Berry, Senior Associate, and Travis Gooding, Solicitor,  Brisbane. For advice on this topic please contact: