Labour Hire Licensing Scheme starts 30 October 2019

22 October 2019

Large penalties for ‘providing’ or ‘using’ unlicensed labour hire in the Transport industry

The Labour Hire Licensing Act 2018 (Act) establishes a licensing scheme to regulate labour hire providers and labour hire users in Victoria.

1. The Act applies far beyond traditional labour hire providers and impacts the transport industry.

  • Businesses that provide persons to do work for third parties (whether as employees or contractors or owner-drivers) could be labour hire providers who will need to have applied for a licence by 29 October 2019.
  • Businesses that use labour supplied by third parties must ensure the labour hire provider has applied for a license by 29 October 2019. 1

Potential Penalties

2. Labour hire providers operating without licences from 30 October 2019 risk being unable to obtain a licence in the future and risk prosecution and fines in excess of $500,000.

3.   Labour hire users that obtain labour hire services from anyone other than a licensed provider from 30 October 2019 risk prosecution and fines in excess of $500,000.

4.  Labour hire users that do not report schemes set up by labour hire providers to avoid the Act, to the Labour Hire Licensing Authority risk prosecution.

5.  Managers or directors ‘involved in’ contraventions of the Act may be prosecuted and subject to personal penalties in excess of $132,000.

Target Industries

6.  The licensing scheme is particularly targeted to certain industries that are subject to specific scrutiny (such as the contract cleaning industry) but it applies to all industries including the transport industry.

7.  All cleaning businesses supplying cleaners to commercial premises require a licence. All users of commercial cleaning businesses, including transport companies, will be required to use licensed cleaning businesses or risk penalties.

Transport Industry Examples

8.  A construction company is undertaking a large project that requires the removal of material from the construction site. The construction company engages a transport company who engages a number of owner-drivers to move material from the construction site to different locations. The owner-drivers are subject to directions from and managed by the construction company’s employees.

  • The owner-drivers supplied by the transport company are labour hire workers.
  • The transport company is a provider of labour hire services and requires a license.

9.  A transport company has a contract with a cleaning company to supply cleaners to clean its commercial premises and its trucks.

  • The cleaners supplied by the cleaning company are labour hire workers.
  • The cleaning company requires a licence to provide the cleaners to the transport company.
  • The transport company may be prosecuted as a user of unlicensed labour hire services if the cleaning company is unlicensed and the transport company continues to use the cleaning company to provide the cleaning services.

Contact us

If you would like advice or assistance with any of the above issues, please contact a member of our Workplace Relations team.

1 Exceptions Apply – For example: secondees, labour supplied within one recognisable business, directors of body corporates supplied and vocational placements as defined by the Fair Work Act.

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