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Labour hire is a common way to engage workers in Australia. If you run a labour hire business, you have a crucial role as the link between workers and host employers. As such, it is essential that you are legally protected through a labour hire agreement. This agreement will protect your business during any arrangements with host employers. This article will detail key aspects that you must include within your labour hire agreement.

1. Services and Fees

In labour hire agreements, you will need to outline what services you provide and how much you charge for each service. Often, this section will include the different job titles of your workers and their corresponding hourly rates. 

For flexibility, you should include a schedule of rates within your agreement. This will include:

  • the different types of workers you provide, like mechanics or crane operators;
  • your workers’ hourly rates;
  • any differences in the hourly rates like, for example, different day or night rates; and
  • any overtime or penalty rates.

2. Term of Work

Your labour hire agreement should set out the period of time that a host employer can engage a worker. Workers can be engaged for a specific term, or on an ad-hoc basis.

A fixed-term clause will specify the exact dates that the host employer will engage the worker. Here, the labour hire agreement should set out the worker’s exact dates and hours of work. It should also include any meal and rest breaks.

In comparison, some host employers may wish to engage workers on an ad-hoc or on-call basis.

Your labour hire agreement should set out whether a host employer can request this arrangement and how it will work.

3. Recording Time

Your labour hire agreement may need to detail the process of recording how much time someone has worked for the host employer. This will ensure that the fee the host employer paid to you adequately reflects the amount of time that the worker was engaged.

Recording the times could be set out either on paper or on a digital timesheet. This timesheet should form the basis of the fees that you will charge the host employer and the wages that you will pay the worker.

If the host employer and worker state different times of work, this could cause a conflict.

So, you should also include a dispute resolution clause that explains how you will resolve any disputes surrounding timesheets and payment.

4. Workplace Health and Safety

Your labour hire agreement must account for the safety of your workers. Therefore, it should outline that the host employer is obliged to:

  • provide your workers with a safe working environment;
  • comply with any occupational, health and safety laws;
  • provide work safety inductions to your workers when necessary;
  • ensure that equipment used by the worker is safe; and
  • provide access to any health and safety protocols or manuals.

5. Insurance

Insurance is an important consideration. The labour hire agreement should clearly set out whether you or the host employer is responsible for obtaining insurance, like public liability insurance.

Speak to an insurance broker to understand the insurances you need in place when conducting a labour hire arrangement. You should also request details of any types of insurance that the host employer should have in place.

6. Non-Solicitation

To protect your business model, you should determine whether you will need to prevent the host employer from directly engaging your worker. Here, you may wish to include a non-solicitation clause. This clause will hold that a host employer cannot directly engage one of your workers without going through your business for a certain timeframe.

If you don’t wish to include a non-solicitation clause in your labour hire agreement, you could include a fee clause. Here, the host employer will need to pay you a specified fee in they wish to engage one of your workers directly. 

Key Takeaways

If you run a labour hire business, it is crucial that your labour hire agreement clearly outlines your legal relationship with host businesses. Your agreement should outline the services that you provide and the fees that are associated with them. It should also address how to keep track of how long a host employer engages a worker, and what will happen if any disputes arise during this process. If you need a labour hire agreement, contact LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.


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