The Victorian Parliament passed the Labor Hire Licensing Bill 2017 on 20 June 2018. The purpose of the bill is to protect workers from being exploited by both labour hire providers and their users, as well as uphold honest and transparent labour hire. So how does it work?
How will the Act work
The Act will make it unlawful for a client to use an unlicensed ‘labour hire’ provider in Victoria.
Let’s first define what labour hire is. ‘Labour hire’ is defined as anyone who in the course of conducting a business, supplies a worker to another person to do work. This means that all labour hire providers placing staff in Victoria, will be required to obtain and maintain a Labour Hire Licence.
It will be the responsibility of both the Labour Hire provider to be licenced and the company using the Labour Hire provider to ensure they are licenced. Both Acts impose heavy penalties for offences including fines and prison sentences.
When will the Act begin?
The legislation has not be yet been introduced, however, it has been stated that the commencement of the legislation will be introduced at the very latest on the 1st November 2019.
How do Labour Hire providers obtain a licence?
• Pass a fit-and-proper person test (Directors, Managers, Owners)
• Undergo a financial review
• Demonstrate business knowledge
• Demonstrate an understanding of legislative compliance
• Undertake a background check
What does it mean for companies engaging with Labour Hire providers?
• Companies based in Victoria must only use a valid licensed provider
• Companies hiring Victorian residents in a labour hire agreement in any other state in Australia must only use a valid licensed provider
• When entering into an agreement for Labour Hire where a Third Party is involved, all chains of hire are required to hold a current and valid Licence.
• It is the responsibility of the company to check the online register to ensure all chains of hire hold valid licenses.
• Strict penalties will apply if you use a provider who isn’t licensed, including fines and prison sentences.
• If you currently use a Labour Hire provider in Victoria, we recommend you touch base with all providers to find out what their plans are to obtain a license.
What does it mean for Contractors?
• People wanting to contract in Victoria need to ensure the Labour Hire provider they are working with holds a valid license.
• Residents of Victoria who are contracting in any other state in Australia need to ensure the Labour Hire provider they are working with holds a valid license. For contractors who own property in multiple states, you technically reside in the state where you are registered to vote.
• At this stage, there is no concrete information regarding whether ABN Contractors will need to obtain their own licences in either state. Speller International will endeavour to share this information with you as it becomes available.
• If you are a currently contracting in either Victoria, we recommend you touch base with your Labour Hire provider to find out what their plans are to obtain a license.
The new Act will see transparent and fair labour hire across Australia. It is important for both Contractors and Companies employing contractors to adhere to these requirements to avoid any penalties.