Australia: Victoria - Labour Hire Licensing Scheme introduced

Following an inquiry into work arrangements in the labour hire industry, the Victorian Government has recently introduced the Labour Hire Licensing Bill 2017 (Bill).

The Bill establishes a licensing scheme for labour hire providers and creates civil and criminal offences for breaches of the scheme. The stated object of the Bill is to prevent vulnerable workers from exploitation by both the direct providers of labour hire services and hosts. Accordingly, the application of the Bill is broad and applies to all industries within Victoria.

Obligations under the scheme

The scheme has many similarities with other schemes recently introduced in South Australia and Queensland, including that:

• providers of labour hire services will be required to hold a licence, and businesses wanting to use labour hire workers will be under an obligation to use only licensed providers;
• licence providers will be required to pass “a fit and proper person test” and show compliance with workplace and labour hire laws and accommodation standards;
• labour hire providers will be listed on a public register;
• a Labour Hire Licensing Authority (a newly established body) will monitor and investigate compliance; and
• operators that do not hold a licence or breach licensing requirements will be liable for civil and criminal penalties.

However, there are a number of notable differences between the Victorian Bill and those schemes, including that:

• the Bill contains far more onerous licence application requirements, providers are requested to provide detail on a number of matters including:
  • the number of workers the applicant expects to provide to hosts;
  • the industrial commitments that the applicant expects will apply to the workers; and
  • whether the applicant expects that those workers will hold temporary work visas;
• the civil penalties under the Bill are substantially higher (including a penalty of $507,424 for entering into an arrangement for labour hire services with an unlicensed provider without reasonable excuse);
• there are powers that allow inspectors to enter and search a premises (at any time during normal business hours) without consent or a warrant (the explanatory memorandum expressly sets out that businesses involved in providing labour hire will have a diminished expectation of privacy);
• where a search warrant authorises the seizure of something that cannot, or cannot readily, be physically removed, the Bill provides for an inspector to issue an embargo notice prohibiting a person from selling, leasing, transferring, moving, disposing of or otherwise dealing with the thing or any part of it; and
• the Bill also provides for the development of a voluntary code of practice for the labour hire industry.

Next steps

The second reading of the Bill occurred on the last sitting day of Parliament for 2017 and members will now be given time to study the Bill before it is brought back on for debate. likely in February 2018.

It is intended that the Bill will come into operation on a date to be proclaimed, or, if not in operation before 1 November 2019, it will come into operation on that day. The scheme contemplates a six month transition period where labour hire providers will have an opportunity to apply for a licence.

As with the Queensland and South Australian schemes, businesses will need to review the accompanying Regulations which should hopefully further clarify the scope and application of the scheme. There has been no indication yet as to when the draft Regulations will be released for comment but it is unlikely to occur until the Bill has been passed by Victorian Parliament.

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

This article was written by Catherine Berry, Senior Associate, Brisbane and Natassia Smith, Solicitor, Melbourne.  For more information or advice on this topic, please contact: