Do I need a Labour Hire Licence in Victoria?

From 30 October 2019, only licensed labour hire providers may supply the provision of labour hire services. This came about through a new legislation called the Labour Hire Licensing Act 2018 (Vic) (“Act”), which was designed to: [1]

• protect workers from being exploited by providers of labour hire services; and
• improve the transparency and integrity of the labour hire industry.

In particular, prior to the introduction of this new law, it was found that labour hire workers had “little protection from exploitative behaviour” and were often: [2]

• afraid to come forward;
• uncertain of how to seek assistance; or
• operated on temporary visas, and subsequently returning to their home country.

Therefore, with the introduction of the Act in Victoria, if you run a business that is a labour hire provider, you must be licensed. [3] Otherwise, you may face significant penalties if you provide labour hire services without a licence to do so.

Is my business a Labour Hire Provider?

There are three questions that may be asked to determine whether your business is a labour hire provider, if:

• your business supplies workers to another business;
• the workers perform work ‘in and as part of’ that other business; and
• the workers are within the meaning of the Act.

If you answered yes to the above, your business is most likely a labour hire provider. [4] However, examples where your business may not be a labour hire provider include:

• an accounting firm supplying an employee accountant to prepare tax documents for a client’s business; or
• a plumbing company supplying an employee plumber to fix a dishwasher at a domestic residence. [5]

Furthermore, if your business provides recruitment or placement services, and provides or procures accommodation for the workers, then you may also fall within the definition of a labour hire provider. [6] This is so even if you are not obligated to pay the workers for the work engaged. [7]

Likewise, the definition of labour hire provider can also extend to businesses conducting contractor management services in some circumstances. [8] Examples of types of contractor management services that may be classed as labour hire providers include:

• providing administration and payroll functions;
• providing supervision or performance management functions,

in relation to an independent contractor that is supplied. [9]

For some businesses, the question of whether they provide labour hire services will be reasonably straightforward. For others, whether they fall within the Act’s definition of “labour hire providers” will not be so clear. However, the consequences of failing to properly identify your business as a labour hire provider can be detrimental.

What happens if my business does not obtain a Labour Hire Licence?

If you are found to be providing labour hire services without an appropriate licence, the Labour Hire Licensing Authority may apply to the Court for any order that the Court considers appropriate against you. [10]

This may include a penalty of up to 800 penalty units for an individual (i.e. a fine of $132,176.00), or 3200 penalty units for a body corporate (i.e. a fine of $528,704.00). [11]

How can DSA Law help?

If you have an employment issue or question, please Contact Us or one of our Commercial Lawyers at DSA Law on (03) 8595 9580 so we can assist you with your concerns.

[1] Labour Hire Licensing Act 2018 (Vic) s 4.

[2] Victoria, Parliamentary Debates (Hansard), Legislative Council, 8 February 2018, 216.

[3] Labour Hire Licensing Act 2018 (Vic) s 13.

[4] ibid s 7.

[5] Explanatory Memorandum, Labour Hire Licensing Bill 2017 (Vic) 3.

[6] Labour Hire Licensing Act 2018 (Vic) s 8.

[7] Explanatory Memorandum, Labour Hire Licensing Bill 2017 (Vic) 4.

[8] Labour Hire Licensing Act 2018 (Vic) s 8.

[9] Explanatory Memorandum, Labour Hire Licensing Bill 2017 (Vic) 5.

[10] Labour Hire Licensing Act 2018 (Vic) s 93.

[11] ibid s 94.