By Bayside Group

Jun 13, 2019

Victorian Labour Hire Licence scheme update

In late 2018, the Victorian Parliament passed the Labour Hire Licensing Act 2018, legislation that is aimed to protect labour hire workers from exploitation and provide confidence that appropriate workplace, taxation and Work Health and Safety laws are being complied with by Labour Hire providers. We have previously advised and updated our clients regarding the differing state-based labour licencing requirements in both Queensland and South Australia. Licences for our applicable Queensland businesses have been renewed by the Queensland State Government for the next year and South Australia has recommenced accepting applications for labour hire licences.

We have commenced working through applicable licence applications in Victoria and will shortly be submitted to the State’s Labour Hire Authority for approval. While businesses are required to submit an application by 30th October 2019, the approval process may extend beyond this deadline.


How does this Act apply to Host Employers?

The Act is vitally important for both Labour Hire Providers and Host Businesses. Within Victoria, penalties will apply for:

  • Labour Hire firms who operate an unlicensed business
  • Host Businesses who use Labour Hire Services from an unlicensed provider
  • Any parties who seek to enter into arrangements aimed at avoiding the obligations of the scheme

Significant fines exceeding $500,000 can apply for those firms found to be in contravention of the Act.  Individuals can also face penalties for breaches of the Act for amounts exceeding $120,000.

The Labour Hire Authority will be the Regulatory body responsible for administering the scheme including granting or revoking licenses, ensuring reporting requirements from licensed providers are being met and if necessary, enacting action under the Act against those bodies who breach the legislation.


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Who needs a licence?

It is important to recognise that the Labour Hire Licensing Regulations 2018 outline that those providers who supply only individuals who don’t meet the definition of a ‘worker’ may be exempt from requiring a Licence. The Regulations prescribe that there are a number of classes of individuals that are not considered ‘workers’, such as:

  • Certain secondees
  • Certain persons in circumstances where both the individual and the provider are part of an entity or group of entities
  • Students to whom Division 1 or 2 of Part 5.4 of the Education and Training Reform Act 2006applies
  • People undertaking work or services under a vocational placement within the meaning of the Fair Work Act 2009 (Cth)

However, even if a business supplies only one person considered a ‘worker’ then they will be required to obtain a Licence. Hosts are reminded of this requirement to only use licensed providers due to the penalties associated with using an unlicensed provider.


How does this apply to secondees?

What is also of vital importance to note is that a business cannot rely on the exemptions provided to secondees if that business has a main activity of labour hire services. In theory, a labour hire provider may have all of its workers fall under the regulatory definition of secondees, but because the organisations main activity is labour hire they will still be required to obtain a licence.

The issue of what is considered a ‘secondee’ is defined within the regulations. However, if the individual primarily performs work directly for the Labour Hire provider regularly and systematically, and has a reasonable expectation that upon completion of the secondment (work provided to another person on a temporary basis), they will revert back to continued employment with the Labour Hire provider – they can be considered a secondee.

We will continue to update all stakeholders with regards to the progress of our licence applications as we head toward the 30 October 2019 date of commencement.

If you would like advice and support regarding your obligations under the Act or for other workplace relations issues, contact our Workplace Relations team on 03 9864 6000.

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