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In Victoria, you must hold a license to be able to provide labour hire services. Unfortunately, the definition of labour hire services under the Victorian licensing regime is fairly vague. As such, understanding whether you need a license can be confusing. However, if you do not have a license when you need one, you could face heavy fines. This article will outline:

  • some of the key features of the Victorian labour hire licensing regime;
  • list some circumstances where a business is and is not covered by the legislation; and 
  • assist businesses to understand the legal framework. 

Who Needs a Labour Hire License?

The Victorian government defines a labour hire provider as a business that has an arrangement with one or more individuals supplying the individuals to perform work ‘in and as part of’ a host’s business. This provider pays the individual for performance of the work.

Additionally, the regime covers certain recruitment or placement services and contractor management services.

Recruitment Services

If you operate a recruitment or placement service, you will be providing labour hire under the law when you:

  • recruit or place individuals to work as part of a host’s business; and
  • find accommodation for those individuals for the time that they are working with the host business.

Contractor Management Services

If you operate a contractor management service, you will be a providing labour hire where you:

  1. recruit or place independent contractors to perform work as part of a host’s business; and
  2. you manage the independent contractor’s performance of their obligations to the host.

Unlike the general definition of labour hire, a recruitment service or contractor management service that meets the test above does not need to actually pay the workers to still fall within the definition of a labour hire provider. 

Additional Industries

There are also certain industries where, if you are supplying workers, you are engaging in labour hire. As such, you must have a license. These industries include: 

  • commercial cleaning; 
  • horticulture (fruit picking, packing, machinery work); and 
  • meat and poultry processing.

Who Is Exempt From Labour Hire Licensing?

Secondees

You will not need a license to supply workers who are considered to be secondees. This is where an employee is provided to another business for a temporary basis, but are expected to return to their original workplace after a specified period of time.

You cannot rely on this exception where your business’ primary function is to supply workers to other businesses. Even if all the workers that you provide are secondees, you will still need to be licensed if it is your business’ main activity.

Providing Workers Within a Group

If you provide workers to a company within the same group of companies as your business, you will typically not need a labour hire license.

Small Body Corporate Providing a Director

If a body corporate (which includes entities such as a company, an incorporated association, incorporated statutory body) has no more than two directors, one director of that original body corporate is able to be provided to another business without a labour hire license.

For example, if you are the director of a small company and receive an income from that company, you can typically still work for another business without the need for your company to have a license.

There are other exemptions to labour hire licensing made for: 

  • public sector employees;
  • students undertaking work experience; or 
  • people undertaking a vocational placement.

Am I Covered by the Labour Hire Licensing Laws?

One of the key challenges for many Victorian businesses is that they do not clearly fall into one of the exclusions above. However, it is also not clear if they are providing workers to act ‘in and as part of’ a host business. 

For example, does a consultant who spends time in another business need to be licensed? What about an IT support person who is stationed in one location to provide ongoing support?

Although these types of workers are not traditionally labour hire workers, depending on the nature of their day to day work and interactions with the host business, they may still need to be licensed. This can put many small businesses in a difficult position where they might not want to apply for an unnecessary license, but do not want to risk fines for being unlicensed. 

In Victoria, application fees for a license will depend on the business turnover and will range from $2,710.23 and $13,329. If you are operating as a labour hire provider and do not have a license, penalties can be up to $120,000 for individuals and $500,000 for corporations.

Key Takeaways

If you provide labour hire services in Victoria, you need to make sure you are complying with the relevant laws. Under the regime, if you are providing workers who act ‘in and as part of’ a host’s business, you will need to have a license. Certain recruitment, placement, and contractor management services will also need a license. If you are providing secondees or workers within a corporate group, you may not need a license. If you are unsure about what to do, contact LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.

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