If you are a labour hire service provider in Queensland, Victoria, and South Australia, you need to have a license, or you could face penalties. It is also an offence to engage an unlicensed labour hire service provider in these three states. This licensing regime broadly aims to ensure that only individuals and companies that meet financial and character standards can provide labour hire services. In this article, we detail and compare some of the key features of the labour hire licensing regimes in Queensland, Victoria, and South Australia.

Queensland

In Queensland, you must have a license to operate as a labour hire provider. Labour hire licenses are valid for 12 months, and you need to renew them every year. In Queensland, a labour hire provider is a business that supplies workers for another business or person. 

The requirements to obtain a license are that:

  • you can apply for a labour hire license as an individual, or as a company;
  • your business is financially viable and can meet operating costs and expenses, pay employees promptly, and is prepared for additional costs;
  • you or the executive officers of the company have not been convicted of a serious criminal offence, had a labour hire license refused, suspended or cancelled, been insolvent, or been an executive officer of a company that was made insolvent; and
  • you can demonstrate previous compliance with workplace, immigration, workplace health and safety and worker’s compensation laws. 

When You Will Not Need a Licence

You do not need a labour hire license in Queensland if you:

  • provide recruitment and permanent placement services;
  • are organising volunteer placements;
  • provide workplace consultants;
  • engage in a genuine subcontracting arrangement;
  • are transferring employees within a group of related companies; or
  • are an in-house employee who is temporarily working for another business.

Penalties

If you are an unlicensed labour hire provider or conduct labour hire services without a license, you could face fines up to $137,987 or three years imprisonment as an individual. Conversely, if you operate the business as a company, your company could face up to $400,350 in fines.

Victoria

In Victoria, you must either be licensed or have lodged an application for a license if you are a labour hire service provider. Labour hire licenses can last for a period of up to three years, although annual renewal fees apply.

In Victoria, a labour hire service providers are businesses that have an arrangement with one or more individuals where the business supplies the individuals to perform work in a different business. The businesses themselves pay the individual for performance of the work.

Certain recruitment or placement services, and contractor management services, are also covered by the Victorian definition of labour hire.

The requirements to obtain a license are that:

  • you can apply for a labour hire license as an individual, or as a company. 
  • if you provide transport or accommodation to your workers, you will need to make a declaration and demonstrate that the accommodation and transport meet minimum acceptable standards; and
  • you, or the executive officers of the company, have not been convicted of a serious criminal offence in the past ten years, or, in the last five years, broken workplace laws, had a labour hire license suspended or cancelled, or been insolvent.

When You Will Not Need a Licence

You do not need a labour hire license in Victoria:

  • your business provides a worker as a secondee to another organisation;
  • you are providing workers between a group of related companies; and
  • you are arranging students in placement and work experience.

Penalties

Penalties of up to $120,000 for individuals, and $500,000 for corporations apply if you supply labour hire services without a license or engage an unlicensed provider.

South Australia

In South Australia, you must either be licensed or have lodged an application for a license. Labour hire licenses are valid for 12 months and need to be renewed annually. In South Australia, Labour hire is where:

  • your business provide workers for someone else to work in as part of that other person’s business;
  • you have an arrangement with your workers to supply them to another person to do work; and
  • the workers you provide to the other person are paid, whether in full or in part, by your business. This is even if payment is only for accommodation or some other expense.

Requirements

Requirements to obtain a license are that:

  • you can apply for a labour hire license as an individual, or as a company. 
  • your company (or you as an individual) are solvent and can prove this with a letter from an authorised accountant that is no more than six months old; and
  • you must have a minimum of two responsible persons operating the labour hire business. This means you may need to provide a police clearance check to demonstrate that you or the responsible persons in your business have not been convicted of a serious crime.

In South Australia, applicants for a labour hire license need to meet certain knowledge and experience requirements. If you are applying as a company, at least one of the directors of the company must have satisfied the knowledge requirements. 

Here, you must demonstrate that you can satisfy one of the four knowledge requirements. These being that:

  1. you have completed accredited courses in risk management for small businesses, and in remuneration and employee benefits;
  2. you have completed an economics, business, accounting or humanities degree; 
  3. your company is listed on the Australian stock exchange; and
  4. you have an equivalent labour hire license in another state.

When You Will Not Need a Licence

You do not need a labour hire license in South Australia if:

  • you are providing services and not labour hire;
  • there is a genuine subcontracting arrangement in place;
  • providing labour hire services is not a core function of the business;
  • you are providing workers to a company within the same group; and
  • you are providing workers to another business within a franchise, or to another business with the same trading name and banner.

Penalties

If you supply labour hire services or engage an unlicensed labour hire service provider, you could be faced with a penalty of up to $140,000 and three years imprisonment for individuals and $400,000 for corporations. 

The South Australian government is currently in the process of narrowing the scope of the labour hire licensing laws. As this is still subject to the parliamentary process, labour hire providers still need to meet the above requirements and obtain a license.

Key Takeaways

It is mandatory to have either applied for or hold a labour hire license in Victoria, Queensland and South Australia if you are providing labour hire services. There are penalties for operating without a license or trading with an unlicensed provider. The state definitions of ‘labour hire provider’ are unclear, and their scope is fairly wide. If you think you may be a labour hire provider, or are unsure if you fall within one of the exclusions, it is important to obtain legal advice to ensure you are compliant. Contact LegalVision’s employment lawyers on 1300 544 755 or fill out the form on this page.

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