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Labour hire is a common way to engage workers in Australia. If you run a labour hire business, you play a crucial role as the link between workers and host employers. As such, it is essential to protect yourself with a comprehensive labour hire agreement. To ensure you are thoroughly protected, this article will take you through some key terms to include in your labour hire agreement.

1. Services and Fees

In your labour hire agreements, you will need to outline the scope of services you will provide and how much you charge for each service. This section of the agreement will often 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, such as:

  • the different types of workers you provide, for example, mechanics or crane operators;
  • your workers’ hourly rates;
  • any differences in hourly rates, for example, different rates for day or night; 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 may be engaged for a specific term or on an ad-hoc basis.

A fixed-term clause will specify the exact dates the host employer can 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 determine whether a host employer can request this arrangement and how it will work.

3. Recording Time

It might also be relevant to detail the process of recording how much time someone has worked for the host employer in your labour hire agreement. This will ensure that the fee you received from the host employer adequately reflects the amount of time that the worker was engaged.

You might record times on paper or on a digital timesheet. This timesheet should form the basis of the fees you will charge the host employer and the wages you will pay the worker. Keeping accurate records will also help reduce disputes. 

4. Dispute Resolution Methods 

You should also consider including a dispute resolution clause in your labour hire agreements. Such a clause is particularly useful for labour hire agreements, as the host business has no direct contract with the worker themselves. Therefore, they will need to resolve their disputes with you, as the labour service provider. 

A dispute resolution clause should set out exactly how disputes are to be resolved and provide any deadline for making complaints.

For example, your dispute resolution clause might provide that the host employer has 28 days to make any complaints about your workers. Likewise, there may be a specific form to make the complaint. You might also provide a deadline for you to resolve the dispute with the worker, after which time you and the host business are to mediate the dispute

By putting such a clause in place, you can minimise the need to involve the court. This is important, as taking disputes to court will only cause strain between you and the host business. It can further impact the work of all of your other workers. 

5. 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 instructions 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.

6. Insurance

Insurance is an important consideration for all employers, including where a labour hire agreement is used. A labour hire agreement should detail whether you or the host employer is responsible for obtaining insurance, such as public liability insurance.

It is recommended that you speak to an insurance broker to understand the insurances you should have 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 and ensure these are implemented.

7. Non-Solicitation

To protect your business model, you may 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 as an employee without going through your business for a specified timeframe.

Alternatively, you might choose to include a fee clause. This requires that the host employer pay you a specified fee if they wish to engage one of your workers directly. 

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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 labour hire agreement should include clauses for:

  • services and fees;
  • term of work;
  • recording time;
  • dispute resolution methods;
  • workplace health and safety; and
  • non-solicitation. 

If you need assistance developing an enterprise 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 1300 544 755 or visit our membership page.

Frequently Asked Questions

What is a labour hire agreement?

Labour hire is a common way to engage workers in Australia. Under a labour hire agreement, a labour hire company will employ workers. The company then passes on their services to host businesses to complete specific tasks. 

What should a labour hire agreement include?

If you run a labour hire business, it is crucial that your labour hire agreement clearly outlines your legal relationship with host businesses. Your labour hire agreement should include clauses for services and fees, term of work, recording time, dispute resolution methods, workplace health and safety and non-solicitation. 

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