A version of this article was first published by VTA in August 2023.
It has become apparent that there is some confusion about how labour hire regulation impacts the transport industry. A business can be liable for a penalty exceeding $590,000 for using an unlicensed provider, or providing labour without a labour hire licence — so it’s important to get it right.
If you use drivers that are not your own employees, then you need to consider whether the person supplying those drivers to you needs to have a labour hire licence.
Who needs a labour hire licence?
In summary, a business operating in Victoria will be a ‘labour hire provider’ and require a licence where it provides labour to a transport company (host) if it:
- provides workers — i.e. the business engages a worker as a contractor or as an employee, and pays the worker to perform work as part of a host’s business; 1
- places workers — i.e. the business provides recruitment or placement services where it recruits or places its own workers (contractors or employees) who it pays to perform work as part of a host’s business and provides/procures accommodation for these workers;2 or
- provides contractor management services — i.e. the business provides contractor management services, and as part of this, recruits, pays and manages performance of contractors to perform work as part of the host’s business.3
Certain exceptions apply, including where a business is carrying on its business in a corporate group and supplies workers to another company within the same group, or if an individual is seconded to another organisation.4
Example one
Big Trucks provides delivery services of fruit and vegetables to Coles and Woolworths in Victoria. Big Trucks engages Middle Man to transport the vegetables from the supplier to the supermarkets. Middle Man engages owner drivers to transport the vegetables. Middle Man manages the performance of the owner drivers based on the requirements of Big Trucks.
In this case:
- Middle Man is a labour hire provider and is required to hold a labour hire licence. This is because Middle Man is providing contractor management services to Big Trucks which includes placement of individual owner drivers who work as part of Big Truck’s business.
- Big Trucks is the host organisation, and must only engage Middle Man if it has a labour hire licence.
Example two
Big Trucks is owned and operated by John who has three vehicles. Big Trucks is therefore covered by the Owner Drivers and Forestry Contractors Act 2005 (Vic). Big Trucks hires two drivers to operate two of its three trucks and deliver the baked goods from Jill’s Bakery.
In this case:
- Big Trucks is not a labour hire provider because it is not recruiting drivers to work in and as part of Jill’s Bakery.
- There is no labour hire arrangement in place and therefore no requirement for John, the owner driver, to hold a labour hire licence.
Example three
Bigger Trucks has a fleet of 20 trucks, and 20 employee drivers. When it needs more drivers, it contacts Middle Man Drivers to supply extra drivers on short notice to work in and as part of Bigger Trucks’ business. Bigger Trucks pays Middle Man Drivers, for supplying the extra drivers.
In this case:
- Middle Man is a labour hire provider and is required to hold a labour hire licence as it is conducting a business of supplying labour.
What to look for
If the person is working as a part of your business, then you need to ask yourself whether the person/business that supplied them needs/has a labour hire licence.
For more information, see the Labour Hire Licence Authority page.
Upcoming legislative changes
In May 2023, the Albanese government proposed national labour hire regulations (National Labour Hire Regulation consultation paper) which would impose criminal penalties on both the host employer and labour provider if they ‘knowingly and recklessly’ breach the scheme’s rules. It is recommended to keep an eye out for developments in this area.
Contact us
If you are an Australian business or individual requiring advice on any aspect of the labour hire regulation, please contact our Workplace Relations or Transport & Logistics team.
References
[1] Labour Hire Licensing Act 2018 (Vic) s 7.
[2] Labour Hire Licensing Act 2018 (Vic) s 8(1).
[3] Labour Hire Licensing Act 2018 (Vic) s 8(2).
[4] Labour Hire Licensing Act 2018 (Vic) s 10 and 11; Labour Hire Licensing Regulations 2018 (Vic) Reg 4. Also note that Victorian Labour Hire Authority provides examples of these exceptions here.
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