On 2 April 2019, the Federal Government handed down its 2019-2020 Budget. The Budget includes allocation of funds to a national labour hire registration scheme, a sham contracting unit within the Fair Work Ombudsman and the Superannuation Guarantee Taskforce.

Many of these Budget measures are a direct response to the recommendations in the Report of the Migrant Workers’ Taskforce and are said to build on other available measures to protect vulnerable workers.

National labour hire registration scheme

A national labour hire registration scheme will be introduced. The labour hire scheme will:

provide visibility of businesses operating in the labour supply industry, introduce a pre-entry requirement for those operating as a labour hire business, help to reduce worker exploitation, and drive behavioural change in the industry.

It will be mandatory for labour hire providers in high-risk sectors to register. Sectors that were flagged in the Budget documents include horticulture, cleaning, meat processing and security.

The funding will also enhance the Fair Work Ombudsman’s capacity to conduct investigations into underpayment and related issues and deliver information and education activities.

Sham contracting

The sham contracting unit within the Fair Work Ombudsman was provided additional funding to address sham contracting behaviour, with a particular focus on:

those who knowingly or recklessly misrepresent employment relationships as independent contracts to avoid statutory obligations and employment entitlements. The unit will more effectively tackle sham contracting by increasing education, compliance and enforcement activities, and dedicating additional resources to investigate and litigate cases.

Superannuation Guarantee Taskforce

The Budget also continues government funding to the Australian Taxation Office to establish the Superannuation Guarantee Taskforce and introduce new laws that will enable the ATO to seek criminal penalties against employers who refuse to pay workers’ superannuation.

What this means for employers

There is a stronger focus on ensuring employer compliance to protect workers.