In April 2019, the new Labour Hire Licensing Act 2018 (Vic) (LHL Act) came into effect in Victoria.This Act requires all businesses that provide labour-hire services ('Provider') to have a licence by 30 October 2019. In this article, we set out the information that you need to know.
What's the purpose of the legislation?
The LHL Act is designed to prevent employee exploitation by increasing the transparency and accountability of Providers.
Providers and Hosts (those that receive or host the employee) both face hefty penalties in the event of a breach of obligations.
What captured entities are required to do?
The LHL Act creates a new legislative scheme which requires Providers to obtain a specific licence to continue operating in Victoria (Scheme).
In effect, this means that Providers will need to apply for a licence before 30 October 2019
This process requires the applicant to prove that they are a "fit and proper person" and to demonstrate a good standing record of compliance with Australian workplace and associated laws.
Will your business be caught?
The introduction of the LHL Act has resulted in widespread confusion about who is captured under the Act and what obligations are required.
A business is captured under the LHL Act if:
- In the business of supplying labour, it supplies individuals to a Host to perform work as part of the business or undertaking of the Host;
- In the business of providing recruitment services, it recruits or places individuals with a Host to work as part of the Host's business, and the Provider procures accommodation for the individuals;
- In the business of providing contractor management services, it recruits or places individuals with a Host to work as part of the Host's business.
The LHL Act then provides a list of arrangements that are excluded, including:
- Provision of a worker between related companies;
- Genuine subcontracting or outsourcing;
- Provision of professional services to a third party;
- Work experience placements; and
- Group training for apprentices and trainees.
We recommend that businesses seek legal advice to ascertain whether they need to comply with the Scheme.
Penalties for non-compliance Under the LHL Act
Providers face severe fines for contravention. Maximum penalties range from $132,176 (or 800 penalty units) for an individual to $528,704 (or 3,200 penalty units) for a business.
A Host can also face penalties for engaging with an unlicensed Provider. This means that there is a positive obligation on the Host to make sure their Provider is compliant.
If your business places employees in other businesses, we strongly recommend that you consider whether your business is captured by the LHL Act as soon as possible.
If your business receives employees from another business in Victoria, we strongly recommend that you enquire with the Provider whether they have obtained a licence.
If you are unsure about whether your business is covered and would like further certainty, please email Catherine Brooks at Law Squared via email@example.com.
About the author
Catherine Brooks is a senior employment lawyer, Accredited Specialist in Workplace Relations and Associate-Director at the innovative NewLaw firm, Law Squared. Law Squared works with the AMCA to provide members with quick and simple access to strategic legal advice on their employment law obligations, employee issues and related claims.
Catherine and her team can be contacted by the dedicated AMCA workplace relations email address or via phone on 0419 508 245.