From 30 October 2019, heavy penalties will apply to labour hire providers who operate without a licence and to businesses that use unlicensed labour hire providers in Victoria.

The Victorian labour hire licensing scheme

A scheme regulating the provision of labour hire has been introduced in an effort to address the exploitation of vulnerable workers and to ensure that legitimate labour hire providers are not unfairly affected by unscrupulous operators. The scheme makes it unlawful to operate as a labour hire provider without a licence, or for a business to engage an unlicensed labour hire provider.

All labour hire providers operating in Victoria must be licensed by 30 October 2019.

A similar scheme has been in effect in Queensland since 2018. Despite the South Australian State Government’s attempts to repeal the legislation, the South Australian scheme will commence operation on 1 November 2019. There is no comparable scheme in NSW.

What is a “labour hire services provider”?

A company is taken to provide labour hire services if:

  • they supply a worker to a host to perform work for the host; and
  • the individual who is supplied is a worker for the company.

All such companies must hold a valid labour hire licence, unless they fall within one of the exceptions set out in the Regulations.

Requirements for registration

To obtain a licence under the Victorian scheme, providers must pass a “fit and proper person test” and demonstrate compliance with workplace laws, labour hire laws and relevant standards. They must also provide an annual report about their labour hire activities.

Operation outside Victoria

The Victorian scheme has extraterritorial operation — which means that it applies to work performed within Victoria as well as arrangements made within Victoria in respect of work performed outside Victoria.

Breaching the scheme

There are significant financial penalties that may be imposed on businesses who contravene the scheme. If a business engages a labour hire provider who does not hold a valid licence, the business may face a maximum penalty of $528,704.

This same maximum penalty also applies to businesses who knowingly enter into an arrangement with an unlicensed provider in an effort to circumvent the licensing obligations.

Important takeaways

If you consider that your business may be a labour hire provider, you should apply for a licence before the scheme commences on 30 October 2009. If you are not sure whether you are covered, you should seek legal advice.

If your business uses labour hire providers, you should contact all your providers to clarify whether they have sought or obtained registration under the scheme and seek proof of this registration for your own records.

Up until 30 October 2019, you can still use unlicensed labour hire providers. However, from 30 October 2019, you must only use licensed labour hire providers or providers that have applied for a licence. You can search the register of applications and registered providers on the Labour Hire Authority’s website.