Labour hire is a valuable and commercially necessary engagement model for workers, particularly for specific industries such as construction, warehousing, retail and mining. These industries usually prefer labour hire as they are subject to fluctuations in workloads due to seasonal demands and additional or delayed projects.
Even though labour hire has many benefits for the host employer and the labour hire worker, it has been the subject of much controversy over the past few years. This has been as a result of the poor treatment and pay of labour hire workers and the undefined responsibilities between the host employer and the labour hire agency (including in relation to wages, entitlements and Work Health and Safety (“WHS”)).
As such, significant attention at both State and Federal government level has recently been focussed on this issue. This has seen the introduction of labour hire licensing rules in some States and a greater emphasis on WHS. In this week’s article, we discuss the recent release of Safe Work Australia’s labour hire guide and provide an update on the labour hire licensing scheme introduced by the relevant States.
WHS and Safe Work Australia Guide
Labour hire arrangements are covered by the model Work Health and Safety Act (“WHS Act”) and as such, both the labour hire agency and the host organisation are persons conducting a business or undertaking (“PCBU”) under the Act. Notably, a primary duty of care under the WHS Act is owed by a PCBU to a ‘worker’ and the term ‘worker’ specifically includes a labour hire worker.
Accordingly, if your business contracts labour hire workers or is a labour hire agency which provides services of labour hire workers, the WHS Act sets out specific health and safety obligations applicable to your business.
Safe Work Australia recently issued a new guide ‘Labour hire: duties of person conducting a business or undertaking’. The guide provides information for PCBUs in labour hire arrangements regarding compliance with their health and safety duties under the model WHS laws.
Host PCBU and Labour Hire PCBU
The guide outlines that both the host PCBU and the labour hire PCBU have a primary duty of care to ensure, so far as reasonably practicable, the health and safety of labour hire workers engaged by, or caused to be engaged by them, or whose activities are influenced or directed by the PCBU.
All duty holders in a labour hire arrangement must consult, cooperate and coordinate with each other so far as is reasonably practicable. For example, host and labour hire PCBUs must discuss consultation arrangements, the hazards and risks associated with the work, what precautions will be taken to ensure the health and safety of the labour hire worker and the respective roles the organisation will have in responding to an incident.
Duties of a host PCBU
A host PCBU under the model WHS Act, have the same health and safety duties to labour hire workers as they do for any other worker within their organisation. The model WHS Act specifically provides that a host PCBU cannot contract out of or transfer WHS obligations to another party including the labour hire agency.
Before engaging labour hire workers, it is ideal to consider the nature of work to be carried out including any hazards or risks, plant or equipment to be used, the skills or qualifications required to safely undertake the work required and health and safety risk associated with the work. It is then vital to consult with the labour hire agency and eliminate or, minimise risks in the workplace as well as confirming there is a review process for ensuring ongoing WHS of workers.
Duties of a labour hire PCBU
A labour hire PCBU has a duty under the WHS laws to ensure, so far as is reasonably practicable, the health and safety of workers during their placement with the host PCBU. This also means, in some circumstances, not placing in, or removing workers from, a workplace where the labour hire agency believes there is a risk to health and safety or where the risks have not been adequately controlled.
Similar to the host PCBU, the labour hire PCBU should gather information about the workplace, health and safety risks, the knowledge and skills required by the worker and provide workers with suitable and adequate WHS induction training. Furthermore, the labour hire PCBU should also establish communication methods for workers to contact the labour hire PCBU. Workers must be able to raise concerns regarding WHS including ensuring the workers are able to raise safety issues with the labour hire PCBU if they are unsatisfied with the host PCBU’s response.
Labour Hire Licensing
Labour hire licensing first arose as a way to reduce the exploitation of workers and regulate the labour hire sector. There was initially pressure to create a national scheme, however, labour hire licensing remained a matter for individual States to determine. As such, there are different levels of progression across the country regarding labour hire licensing regimes. In this regard, business that operate across multiple jurisdictions need to ensure they remain up to date and compliant in each jurisdiction.
In addition, if your business uses labour hire workers in any state that now has a licensing scheme, it is an offence to accept such workers from an unlicensed labour hire agent. If you do engage with such unlicensed agents, your business could be subject fines of up to $400,350, depending on the jurisdiction in which you operate.
To assist our clients, we have provided a summary of each jurisdictions current stance on labour hire licensing:
Queensland was the first state to implement labour hire licensing which commenced in April 2018. This was as a result of a number of complaints of worker mistreatment, specifically relating to backpackers and migrant workers working through the seasonal harvest.
Labour hire providers had until 15 June 2018, to apply for a licence in order to continue operating in the State.
Notably, a Queensland Magistrate just recently imposed the first conviction of a company under the labour hire licensing legislation in Australia.
The company, A & J Group Services Pty Ltd had initially applied for a labour hire licence but withdrew the application after failing to provide information regarding its compliance with various workplace laws. The company was warned by Labour Hire Licensing Queensland not to provide labour hire services in Queensland. However, they continued to operate and was caught supplying workers to a strawberry farm in January 2019. The Magistrate noted the deliberate decision of the company to ignore the warning and imposed a fine of $60,000.
South Australia first passed their Labour hire licensing legislation in 2017 which was set to commence on 1 March 2018. However, before it came into full effect, a change in government occurred and it was announced the legislation would be repealed before the end of that year. However, there was not enough support to abolish the legislation and the licensing scheme has recently been reinstated. It was announced that the governing body for South Australia, Consumer and Business Services recommenced accepting applications for labour hire licences and all labour hire providers needed to have lodged their application by 31 August 2019.
Importantly, from 1 November 2019, all labour hire services without a licence must not provide labour hire services otherwise penalties may apply.
The Victorian labour hire licensing scheme commenced on 29 April 2019. Labour hire providers will have six months, or until 29 October 2019 to register online and apply for a licence.
Labour hire providers who do not apply for a licence within the six-month grace period or who have been refused a labour hire licence will be prohibited from providing labour hire services.
Australian Capital Territory (ACT)
In 2018, the ACT government announced their plans to introduce a labour hire licensing scheme. The ACT government confirmed they would look at the existing systems in Victoria, South Australia and Queensland when developing their scheme. There are currently no other details confirmed.
New South Wales, Tasmania, Western Australia, and Northern Territory
These states are all yet to adopt a labour hire licence scheme and there have been no announcements about plans to introduce a labour hire licensing scheme.
Lessons for Labour Hire PCBU’s
Given the changing environment in relation to labour hire services, it is vital for both labour hire agencies and host employers to remain up to date with proposed changes and their duties and obligations including in relation to labour hire licensing, wages and entitlements to workers and work health and safety.
We recommend host employer and labour hire agencies consider the following:
- Ensure labour hire agencies and host employers review the new Safe Work Australia guide regarding labour hire and ensure the organisations are undertaking and complying with their health and safety duties under the model WHS legislation;
- Review workplace policies in relation to work health and safety;
- Ensure all labour hire workers have the required skills and qualifications to undertake the work required;
- Provide adequate workplace training regularly;
- Proactively conduct audits of work health and safety compliance;
- Arrange for regular discussion with the host company/labour hire organisation to ensure both parties are aligned when it comes to obligations for WHS;
- Continue to remain up to date with changing laws regarding labour hire licencing; and
- Ensure if your organisation is operating in more than one jurisdiction, that the organisation is compliant in each jurisdiction.
If you wish to discuss any aspect of this article or require specialist advice or assistance in relation to your employment relations framework, please do not hesitate to contact us.
This alert is not intended to constitute, and should not be treated as, legal advice.