Australia: Labour Hire Licensing Scheme enacted in Victoria

The Labour Hire Licensing Bill 2017 (Vic) (Bill) was passed on 20 June 2018. A commencement date has not yet been proclaimed. We expect it will be soon, but if no date is proclaimed the legislation will commence no later than 1 November 2019.

At a glance

Following in the footsteps of the Queensland and South Australian governments, the legislation establishes a similar mandatory licensing scheme in Victoria for labour hire providers. The stated objects of the legislation are preventing workers from being exploited by both the providers of labour hire services and hosts, as well as improving the transparency and integrity of the labour hire industry.

The legislation establishes offences for providing (or advertising) labour hire services without a licence, and for a host entering into an arrangement for labour hire services with an unlicensed provider.

To obtain a licence, labour hire providers and officers must pass a ‘fit and proper person’ test and show compliance with workplace and labour hire laws and accommodation standards.

For more information, our earlier update on the Bill is available here. Since the Bill was introduced, it has been amended to include some specific changes proposed by the Legislative Council, including an amendment intended to ensure that a person registered to provide labour hire services in another State or Territory will be entitled to be registered as a licensed labour hire provider in Victoria.

Broad scope

The scope of the legislation is broad and applies to all sectors. It will cover ‘labour hire services’ which is much broader than ‘labour hire’ as that term has been traditionally understood.

Helpfully for many of our clients, in the Legislative Council debates, the Minister for Agriculture stated that the existing provisions of the legislation do not cover:

• Genuine subcontracting arrangements – because the ‘subcontractor is not performing work in and as part of a business or undertaking of the host’; and
• Outsourcing arrangements – where the outsourcing means the workers are no longer performing work in and as part of the business or undertaking of the host.

However, whether this position is accurately reflected in the arguably broad language in the legislation remains to be seen.

Potential exclusions

We are also awaiting the release of Regulations that may provide carve outs from the scheme, as was the approach taken in relation to the Queensland legislation. In the Legislative Council, the Minister for Agriculture foreshadowed the following exclusions.

• Secondments – the examples given were a lawyer employed by a law firm seconded for a period of time to a client of the firm to work for that client, or certain types of short-term ad hoc arrangements between similar businesses.
• Supplies of workers between an entity or group of entities carrying on business collectively – the example given was where a business that operates a group of medical centres employs workers for the centres through a trust entity and the workers, including doctors, nurses, reception staff and so on, are supplied to the medical centres to perform work.
• Work experience and educational placements.
• Limited body corporate arrangements – where a person who provides work is a body corporate with no more than two directors and the only workers provided by the body corporate are the directors of the body corporate.

Once draft Regulations are finalised, there will be a period of consultation during which key stakeholders in the industry will be given an opportunity to raise concerns or questions about the practical operation of the legislation and the scheme more broadly.

Next steps

The legislation will have a six month transitional period after the commencement day (which is to be proclaimed, or otherwise will be 1 November 2019). Licence applications will need to be submitted by the end of the transitional period. Those providing or engaging labour hire with a connection to Victoria should seek information about the legislation and how to ensure compliance ahead of its commencement, as well as consider whether they would like to participate in the consultation process about the Regulations.

This article was written by Georgia Williams, Solicitor. For more information or advice on this topic, please contact: