Who is a labour hire provider?
The Act stipulates that a 'person (a provider) provides labour hire services if, in the course of carrying on a business, the person supplies, to another person, a worker to do work'.
The Act includes a broad definition of 'worker', meaning a wide range of work arrangements not traditionally considered to be 'labour hire' could potentially have been captured by the scheme.
Now that the Regulations are out the clarified coverage of the scheme is summarised below:
- 'Traditional' labour hire companies who typically engage employees on a casual basis and provide them with host employees to work in the host's business.
- Group Training Organisations or principal employer organisations under the Further Education and Training Act 2014 who provide apprentices or trainees under a training contract.
- Employers who temporarily provide staff to clients or other organisations on a secondment basis.
- Employers within a corporate group who provide employees to other entities in that corporate group and who operate 'one recognisable business'.
- Individual independent contractors who provide personal services through a corporation.
- Consulting and independent contractor companies where the employee who is provided:
- is provided to undertake temporary work for another business;
- is employed by the provider on a regular and systematic basis;
- has a reasonable expectation of continued employment; and
- the employee primarily performs work other than as a worker supplied to another person to do work for that other person.
- Recruitment agencies operating under the Private Employment Agents Act 2005 who solely put forward job applicants. Many recruitment agencies also provide labour hire employees – those companies will be covered by the regime.
- Construction contractors who carry out work within the meaning of section 10 of the Building and Construction Industry Payments Act 2004 and 'merely' engage sub-contractors to carry out the work (construction work exclusion). Take care in deciding whether this exclusion applies to you because labour hire companies operating in the construction industry will be covered.
- Volunteers and genuine student placements, as there is no obligation to pay these workers.
- Consistent with the scheme's intention of protecting vulnerable workers, a company will not be covered if they only provide a worker who earns more than the high income threshold (as set out in the Fair Work Act – currently $142,000 pa) and who is not otherwise covered by an award or enterprise agreement.
Some grey areas
The Queensland Government has indicated that the scheme is not intended for businesses that fall outside of those 'typically' referred to as labour hire. However, the definition of 'provider' in the Act is not restricted to situations where the worker is provided to a host organisation to perform work in the usual business of that host (the usual understanding of labour hire). It only requires that the worker be provided to 'do work'.
There are still situations which would not typically be considered 'labour hire' arrangements but which have not specifically been excluded by the Regulations.
An example of this would be if a business enters into a contract for cleaning services with a cleaning contractor and the contractor in turn engages a sub-contractor who employs more than one cleaner and the individual cleaner only ever works at the host business' premises.
In this situation, the individual cleaner is arguably doing 'work' for the business - but none of the exclusions listed in the Regulations apply. This means the business may be required to take reasonable steps to ensure that the cleaning contractor obtains a licence under the regime.
What to do if you engage non-employee workers
If you engage workers through a third party company, you should:
- audit the list of your current providers to determine which ones will be covered by the scheme and closer to 15 June 2018, check their registration status on the Regulator's website;
- review your procurement processes to ensure you identify new labour hire providers and check their registration status on the Regulator's website; and
- review your current contracts to include specific clauses requiring labour hire providers to maintain registration under the scheme and provide evidence of this upon request.
You also have an obligation to report any provider attempting to supply workers to your business in an avoidance arrangement.
Our team of experts can assist in reviewing any contractual arrangements you have in place with providers of labour hire services to ensure your risk is minimised.
What labour hire providers need to do
The regime will add an additional compliance burden on labour hire providers operating in Queensland.
Applying for a licence
If you are a company or an individual who provides labour hire services in Queensland, you must apply for a licence by 14 June 2018.
The scheme's licence fees are based on licensees' actual or (in the case of new businesses) projected annual wage liabilities.
Tier 1 - Where total wages of less than $1.5m - $1,000
Tier 2 - Where total wages of $1.5m or more but less than $5m - $3,000
Tier 3 - Where total wages of more than $5m - $5,000
When applying for the licence, there must be a 'nominated officer' named on the application who is responsible for the day-to day carriage or management of the business to which the licence relates.
To obtain a licence, the applicant must satisfy the Regulator that:
- the applicant is financially viable (this will require detailed financial information both relating to the provider and any related companies or close associates);
- the applicant, any nominated officer/s and (for corporations) the executive officers of the corporation are fit and proper persons (further defined in the Act);
- provide other detailed application information including:
- the type of labour hire services proposed to be provided, and where they will be provided;
- workers' compensation insurance information;
- the existence of any WHS undertakings or convictions;
- whether any other licences or accreditations have ever been suspended, cancelled or had conditions imposed;
- criminal and conviction history of the applicant and associates;
- visa and migration arrangements; and
- whether any sexual harassment complaints have been made against the applicant or associates.
Once you have obtained a labour hire provider licence, you will need to:
- comply with the licence conditions, including industrial obligations and paying a yearly fee;
- report to the Regulator every 6 months. This report must include detailed information such as:
- accrued leave entitlements;
- details of any accommodation provided to workers;
- details of any fees required to be paid by the workers to the licensee; and
- the number of notifiable incidents under WHS law and applications for workers' compensation; and
- ensure that relevant records are retained.