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Tony, Michael and David Partners at ABKJ
ABKJ Lawyers

Labour hire licensing: are you affected?

The Labour Hire Licensing Act 2017 (Qld) (‘the Act’), which was passed in late 2017, came into effect in April this year. The Act imposes strict licensing requirements on various parties to labour hire services in Queensland. According to Labour Hire Licensing Queensland, ‘the scheme aims to protect labour hire workers from exploitation, and ensure rights are upheld.’

Labour hire providers; or those parties who provide labour hire services to other parties, are subject to a mandatory licensing scheme and face severe penalties under the new legislation for non-compliance.Labour hire users; or those parties who contract, employ or otherwise use labour hire services, are subject to strict obligations under the Act.

What are labour hire services?

The scope of the definition provided under the Act is intentionally broad:

‘A person (a provider) provides labour hire services if, in the course of carrying on business, the person supplies, to another person, a worker to do work.’

This realistically captures a vast number of varying service agreements. The Act includes examples of labour hire service scenarios such as; a contractor who supplies fruit pickers to a farm, an employment agency who on-hires administration staff for external offices, and a group training organisation that supplies apprentices to employers. It is important to note that there are some exceptions that apply when the labour is carried out within the meaning of the Building and Construction Industry Payments Act 2004 (Qld). These scenarios should be approached on a case-by-case basis.

Am I a labour hire ‘provider’?

The Act sets out a number of contracting and employment arrangements that constitute the provision of labour hire services. At section 7(2), the Act states that a provider provides labour hire services regardless of –

(a)      whether or not the worker is an employee of the provider; and

(b)     whether or not a contract is entered into between the worker and the provider, or between the provider and the person to whom the worker is supplied; and

(c)      whether the worker is supplied by the provider to another person directly or indirectly through 1 or more agents or intermediaries; and

(d)      whether the work done by the worker is under the control of the provider, the person to whom the worker is supplied or another person.

As illustrated by these examples, there are a multitude of differing labour arrangements that may fall within one of the abovementioned categories. Note that there is a legislated exception for genuine subcontracting arrangements. It is important to ascertain whether you may be classified under the Act as a labour hire provider – if you are found to by Labour Hire Licensing Queensland, and you cannot demonstrate compliance with the Act – you may face penalties of up to $391,650.00 for a corporation, and $134,988, or three years imprisonment for an individual.

Am I a labour hire ‘user’?

A labour hire user is any person who enters into an arrangement with a labour hire provider for the provision of labour hire services. Whilst labour hire users are not required to hold licences under the Act, they are subject to strict obligations, and severe penalties in the event of non-compliance. Labour hire users must not enter into avoidance arrangements (agreements designed to circumvent the obligations of parties under the Act), must only use licenced labour hire providers, may have their workplaces inspected and should report providers that do not comply with their obligations. The penalties for non-compliant labour hire users are identical to the penalties for non-compliant labour hire providers.

How do I get a licence?

Applications for labour hire licences can be submitted online through the Labour Hire Licensing Queensland website. Application fees apply, and labour hire providers must not provide labour hire services until the licence has been officially granted. A decision will be made within 28 business days of the submission of an application for a licence.

The assessment process will consider various factors relating to an applicant’s eligibility, including whether they are a fit and proper person, whether the purpose of the licence is financially viable, and whether the applicant has a demonstrable history of compliance with similar laws.

The application fee schedule is as follows:

Total amount of wages paid in the financial year preceding the day the application is made Tier Licence fee as at
1 July 2018
$1.5 million or less 1 $1,000
$1.5 million and up to $5 million 2 $3,000
Over $5 million 3 $5,000

With risks of severe pecuniary penalties and imprisonment for non-compliance, it is critical that labour hire providers and users recognise their role under the Act and comply with the regulations accordingly.

This article is intended to provide a brief overview of a developing area of the law. For more information on labour hire licensing, or legal advice tailored to your individual circumstances and concerns, please contact ABKJ Lawyers on (07) 5532 3199.