If your business is low on workers and struggling to keep up with demands, you may wish to engage a labour-hire provider to find employees. Accordingly, you must understand your rights and responsibilities under your labour hire agreement. This article will run through some essential considerations when engaging a labour-hire provider to fulfil your staffing needs.
What is a Labour Hire Arrangement?
Under a labour-hire arrangement, you can request a provider to supply your business with workers. You will then pay the provider for supplying these workers, instead of directly paying your contractors and employees as you usually would.
While labour-hire is common in blue-collar work, there is no restriction on which industries can use labour-hire services. Using labour hire services will allow for flexibility in your workforce.
By engaging a labour-hire provider to supply you with a worker, you can:
- outsource the work involved in finding a worker;
- hire a worker only when you need them, including for short periods or one-off occasions; and
- find workers with specific skills.
Furthermore, a labour-hire arrangement may be ideal if your business is affected by fluctuations in demand. For example, if you work in the retail industry, you may need more workers during the Christmas period.
Choosing the Right Labour Hire Business
Labour hire businesses often specialise within particular industries, like retail or mining. When looking for a provider, you should ensure that they have expertise in your industry. This will provide you with the peace of mind that they will understand your business’ needs.
When choosing a provider, consider whether:
- they provide their workers with training;
- you require their workers to have a specific qualification or level of experience;
- the business checks on their workers regarding visas or prior employer references; and
- you have a say in which worker you will obtain.
By researching the labour-hire provider, you can determine whether they have the appropriate workers for your business.
Continue reading this article below the formAre There Any Hidden Restrictions or Obligations?
When engaging employees through a labour-hire company, you must enter into a labour-hire agreement. This agreement ensures you set out the terms of your arrangement.
You will need to ensure that you are aware of any:
- obligations that you have to the worker; and
- restrictions on your business.
A common restriction in these agreements prevents you from directly engaging a worker. This could be problematic if you wish to use the labour-hire agreement to find good employees you might hire permanently in the future. Therefore, you should check to see whether these restrictions will apply to you.
Check Pricing and Flexibility
You will need to determine the rates you will be paying the labour-hire business to obtain the services of a worker. If the rates and pricing are reasonable, you should check to see whether the labour-hire provider has the right to increase these rates in the future. You can check this in your labour hire agreement. If they can increase prices, ensure there are no restrictions on you working with other labour-hire companies.
You should also check whether the provider can meet your requirements. For example, consider whether the labour-hire provider can supply workers to you on short notice. You will need to specify this in any contract you make with them.
Further, as the employee you hire under a labour-hire agreement will be under your supervision, you may be responsible for their actions. Therefore, it is crucial to ensure that you have adequate insurance if the worker were to cause any damage to property or injury to any of your other employees.
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Licensing Requirements
In Queensland, Victoria, and South Australia, labour-hire businesses must have a licence. Even if your company operates from another state, if you engage a labour-hire provider in these states, you should ensure they have a licence.
Key Takeaways
If your business needs to hire new workers quickly, you might want to work with a labour-hire provider. By undertaking your due diligence on the labour-hire provider and properly reviewing any agreements, you can better protect your business. You must ensure that the labour-hire provider is experienced within your industry and has the appropriate licences.
If you need help with a labour-hire agreement, our experienced employment lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1800 534 315 or visit our membership page.
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