Resources: Blog

Victorian Government Explores Licensing System for Labour Hire Companies

Blog
|

Licence to Labour Hire

Underpayment and sham contracting in the labour supply chain has been the focus of much of the Fair Work Ombudsman’s (FWO) and the media’s attention this year. The FWO has conducted a number of campaigns and inquiries into industries where the use of labour hire and independent contractors is prevalent. In some circumstances, it has taken legal action where workers have been underpaid minimum wages and conditions.

Underpayment and sham contracting in the labour supply chain has been the focus of much of the Fair Work Ombudsman’s (FWO) and the media’s attention this year.

The FWO has conducted a number of campaigns and inquiries into industries where the use of labour hire and independent contractors is prevalent. In some circumstances, it has taken legal action where workers have been underpaid minimum wages and conditions.

The FWO inquiry into the a leading poultry food manufacturing group last year revealed a complex labour supply chain involving labour hire providers where workers were underpaid, worked long hours, unlawfully deducted money and provided with poor accommodation.

Further, most recently, Oaks Hotels & Resorts Limited agreed to back pay a total of $1.9 million to “housekeepers” it engaged as independent contracts when they should have been employees.

In response to incidences of exploitation of workers, the Victorian Government ordered an inquiry be conducted into the Victorian labour hire industry and insecure work arrangements. The Final report entitled “Victorian Inquiry into Labour Hire and Insecure Work” (the Report) was recently tabled into Parliament.

The Report noted that labour hire arrangements offer businesses flexibility in their workforce and are used when labour is required in certain skill sets, to fill a labour shortage or for short term projects. However, for labour hire workers, the engagement is often on a casual basis with no security of ongoing income.

The Report found that compliance with legal obligations widely varied in the labour hire industry and that while some labour hire operators complied with workplace laws, there were other labour hire operators whose activities were in breach of workplace laws.

The Report identified that the actions of “rogue” labour hire agencies, particularly in the horticultural, meat and cleaning industries, resulted in the exploitation of workers by way of underpayment of wages and superannuation, poor accommodation and non-compliance with work health and safety legislation.

In response to such practices, the Report recommended that the Victorian Government establish a labour hire licensing system in order to regulate the industry. This licensing system would require new and existing agencies to meet certain criteria in order to operate. The criteria suggested include:

Adoption of a “fit and proper persons” test. Labour hire companies and key personnel cannot have convictions or offences for fraud, have been previously involved in bankrupt companies (such as in a phoenix company scenario) or have breached workplace health and safety laws;

  • Demonstration of compliance with industrial instruments and minimum terms and conditions;
  • Registration with the Australian Taxation Office and demonstration of regular deduction of taxation and compliance with the superannuation legislation;
  • Having in place work health safety systems to comply with work health and safety legislation and to ensure the safety of workers at host organisations; and
  • Demonstration of compliance with migration laws and ensuring that employees have the right to work in Australia.
  • It was also recommended that agencies which operate without a license and host organisations that utilise the services of an unlicensed agency face civil liability or criminal offences.

Recently inquiries into labour hire were also conducted in South Australia and Queensland. A similar licensing system was recommended by the South Australian Parliamentary Committee Inquiry into the Labour Hire Industry while the Queensland Parliamentary Committee Inquiry into the Practices of the Labour Hire industry in Queensland was not able to agree on whether such a system should be introduced.

The FWO has made it clear that the exploitation of vulnerable workers, particularly in the labour supply chain, will not be accepted. It appears now that State governments are also willing to introduce regulatory functions to further enforce compliance with Australia’s workplace and sham contracting laws.

 

Information provided in this blog is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.

 

Similar articles

Court finds multiple breaches of general protections provisions

Direction needed

The Federal Circuit Court of Australia (the Court) recently ruled on an application brought by an employee alleging that three respondents had engaged in breaches of the Fair Work Act 2009 (Cth) (FW Act), including sham contracting and dismissing the employee because she was pregnant.

Read more...

Workplace Relations Review

Cases and Legislation December 2020

In response to the COVID-19 pandemic, the Full Bench of the Fair Work Commission amended the Clerks – Private Sector Award 2020 in March 2020 to include temporary measures to facilitate working from home arrangements.

Read more...

Workplace Relations Review

Cases and Legislation September 2020

The Queensland Government recently passed legislation amending the Criminal Code Act 1899 (the Code) to criminalise wage theft by employers in Queensland.‍The Criminal Code and Other Legislation (Wage Theft) Amendment Bill 2020 (the Bill) was introduced to the Queensland Parliament in response to a Report released in 2018 by the Queensland Parliamentary Education, Employment and Small Business Committee following an inquiry into wage theft in Queensland. The Report identified critical issues in wage theft as well as deliberate action taken by employers to frustrate employees’ attempts to recover entitlements.

Read more...

Commission orders employer to pay compensation as a result of its procedurally unfair disciplinary process

Procedurally disastrous

When investigating allegations of misconduct against an employee in the workplace, employers must ensure that any ensuing disciplinary process is kept distinct from and separate to from the investigation.

Read more...

The importance of WHS refresher training

Not a “one and done” thing

It is an expected and necessary part of work health and safety (WHS) plans that all new workers receive relevant WHS training.

Read more...

Casual Terms Award Review 2021

NEWS UPDATE

In March 2021, the casual employment amendments to the Fair Work Act 2009 (Cth) (FW Act) introduced a new statutory definition of “casual employee” and an entitlement to casual conversion as one of the National Employment Standards (NES).

Read more...

Let's talk

please contact our directors to discuss how ouR expertise can help your business.

We're here to help

Contact Us
Let Workplace Law become your partner in Workplace Relations.

Signup to receive the latest industry updates with commentary from the Workplace Law team direct to you inbox.