On 16 April 2018, the Labour Hire Licensing Act 2017 (Qld) (the "Act") came into effect as the first of its kind in Australia. The Act aims to protect those working under labour hire agreements from exploitation and to restore confidence in the labour hire industry .

This issue is not unique to Queensland, with similar Bills being tabled in Victoria and South Australia.

The Act is a response to industry concerns over 'sham-contracting', whereby employees are not treated as such and are instead contracted via a third party as a means of employers avoiding their obligations to pay various employee entitlements.

Criteria for the granting of a licence

The applicant for a licence to provide labour-hire services must be a fit and proper person. The considerations for fitness and propriety include:

1. a person's history of compliance and capacity to demonstrate an ability to comply with relevant laws;

2. whether a person has previously held a licence or had a licence suspended; and 3. a person's character, including if they have been disqualified from managing a corporation under the Corporations Act 2001 (Cth).

If the applicant is a corporation, the officers of the corporation must also be fit and proper persons and the business must be financially viable.

Ongoing reporting License holders will have ongoing bi-annual reporting requirements from the date their licence is granted. These reporting requirements will provide a wealth of information about labour hire service providers, including:

1. the number of workers deployed;

2. the arrangements between the workers and the license holder;

3. the location and type of work that has been performed;

4. details of any disciplinary or enforcement action taken against the license holder; and

5. the number of notifiable incidents and workers' compensation applications involving the license holder.

Prohibited conduct under the Act

  1. The Act prohibits conduct such as: 1. providing labour hire services without a licence; 2. without reasonable excuse, entering into an agreement for the provision of labour
  2. hire with a provider who does not hold a licence; and 3. entering into an arrangement with any person where one knows, or ought to
  3. know that the arrangement is designed to avoid some obligation outlined in the Act.

Compliance with the Act and license conditions will be monitored by 'inspectors' appointed under the Act.

Implications for labour hire users:

If you are a company who traditionally uses labour hire providers as a source of additional labour, the new requirement to ensure that you are sourcing workers from licensed providers does bring with it the added burden of checking the credentials of your provider. However, mainstream commercial suppliers will hopefully make this easy for their clients to achieve.

Those companies who may be significantly affected are businesses who have elected to establish their own `internal' or `captive' labour hire arrangements, whereby the business structures its affairs so that workers are employed by one entity in the company group, but perform work for another entity. Undoubtedly, these new laws will add a much greater regulatory burden to continuing with such arrangements. The new reporting requirements will cast light onto notifiable incidents involving the company group and the license fees may also render these arrangements less attractive overall.