What is an on-hire worker?
An on-hire worker is also known as a labour hire or agency worker. On-hire firms often hire a worker (the on-hire worker) and send them to work for another organisation, called a host organisation. The host organisation pays the on-hire firm and the on-hire firm pays the on-hire worker.
What to include in an on-hire agreement between the on-hire firm and the on-hire worker?
The on-hire firm needs to take into consideration the National Employment Standards (NES) and any relevant award when entering into an on-hire agreement with an on-hire worker. The on-hire firm needs to provide their workers with the minimum entitlements detailed in the NES. These entitlements prevail over any award, agreement or contract of employment that apply to the on-hire worker but would be considered less beneficial than these entitlements.
Do the host organisations have any obligations to on-hire workers?
Although the agreement is between the on-hire firm and the on-hire worker, the host organisation needs to follow the appropriate workplace health and safety requirements while hosting the on-hire worker. The host organisation also needs to abide by State and Commonwealth legislation relating to equal opportunity, discrimination, sexual harassment and unlawful workplace discrimination. The host organisation could be liable for contraventions of the Fair Work Act 2009 if they are involved in any way in a contravention committed by the on-hire firm.
What are the tax obligations of the on-hire firm?
As an on-hire firm, you need to withhold tax from the payments made to your on-hire worker. You may also be liable for paying superannuation or fringe benefit tax.
Are on-hire workers considered employees?
An on-hire worker is usually employed by an on-hire firm on a casual basis making them casual employees. However, depending upon the demands of the business, on-hire workers can also be hired as independent contractors.
Although the host organisation has a significant degree of control over on-hire workers, the contractual relationship is with the on-hire firm. An on-hire agreement between the on-hire firm and the on-hire worker (whether it be as employee or contractor) should clearly outline the terms and conditions of the arrangement to avoid confusion in practice.