Despite spearheading Labour Hire Licensing in Australia, the South Australian (SA) Government has already scrapped their new scheme. Growing concern over the exploitation of workers in the mining and agricultural industry has led a number of state governments to introduce new legislation tackling the issue. In the past year, South Australia, Queensland and Victoria have all instigated new licencing schemes for labour hire services. However, the Labour Hire Licensing Act 2017 (SA) (the Act) will be scrapped before the licencing scheme has even commenced. If your company provides or uses labour hire services, read on to untangle the abrupt backflip of the SA licencing scheme and find out what this means for your business.

What is the Labour Hire Licensing Act 2017?

The SA Government passed the Act in 2017 and it came into operation on 1 March 2018.

It introduced a new scheme requiring all labour hire services to hold a licence, with hefty penalties of up to $400,000.00 for providers who breached the conditions of their licence.

The Act provided labour hire services with a transitional period until September 2018 to obtain a licence, which was subsequently extended until November 2019.

Earlier this month, the SA Government announced that they intend to repeal the Act before the end of the year.

So what went wrong?

The Act attempts to capture a multitude of work arrangements that are designed to exploit workers. It applies to all ‘labour hire services’ who in the course of conducting a business, ‘supplies to another person, a worker to do work in and as part of a business or commercial undertaking’.

Unfortunately, with such a broadly defined term, the licensing scheme inadvertently applies to a swathe of innocent service industries and work arrangements which are not the target of the legislation. As a result, the SA business community has protested this additional regulatory burden because they perceive it as unnecessary for the bulk of providers under the scheme.

By way of comparison, the Queensland Labour Hire Licensing Act 2017 provides a more nuanced definition of labour hire services by making specific exclusions to ‘service companies’ and ‘employee holding companies’.

A cynical observer would also note that the 16 year incumbent Labour Party was defeated earlier this year by the business friendly Liberals.

What does this mean for the agricultural and mining industries? 

If you were planning on obtaining a labour hire licence, don’t bother as Consumer and Business Services – SA are no longer accepting applications for the licence.

If you have already obtained a labour hire licence, you will need to wait for the successful repeal of the Act before getting your refund.

If you engage with labour hire agencies in your industry, it does not matter whether they are licenced or not. 

Is this the end of labour hire legislation in South Australia?

Unless there is a significant change in stance by the SA Government, (maybe another Four Corners Report), consider labour hire licencing in South Australia over.

The SA Government announced that a taskforce has been established to ‘assess the adequacy of existing laws, under Work Health and Safety and Return to Work’ with any recommendations forming part of the repeal bill to be introduced into Parliament later this year.

Any amendments within the repeal bill aren’t likely to include a comprehensive labour licencing regime. However, the Attorney-General, Vickie Chapman, has indicated that a separate taskforce will be introduced that investigates and prosecutes companies that exploit workers.