In September 2017, the Queensland Government passed and assented to a new piece of legislation known as the Labour Hire Licensing Act 2017 (Qld) (LHLA). In short, the LHLA establishes a licensing scheme to regulate those persons who provide labour hire services to third parties.
The purpose of this article is to provide a rundown of the important elements of the LHLA.
Who Needs a License
Any person or business that provides labour hire services (the provider) to a third party as part of the ordinary course of their business is required to apply for and obtain a labour hire licence.
The LHLA provides a few examples of the types of businesses that provide labour hire services. The LHLA states that the following persons do provide labour hire services:
- a contractor who supplies workers to a farmer or fruit grower to pick produce for the farmer or grower
- a group training organisation or principal employer organisation under the Further Education and Training Act 2014 that supplies an apprentice or trainee to an employer;
- an employment agency who on-hires temporary administration staff to a business
Importantly, labour hire services are provided:
- even if the worker is not an employee of the provider;
- regardless of whether a contract is entered into between the worker and the provider;
- regardless of whether a contract is entered into between the provider and the person receiving the labour hire services;
- regardless of whether the worker is supplied to another person, either directly or indirectly;
- regardless of who has control of the work done by the worker.
As is most often the case with this type of legislation, there are exclusions as to who is a provider of labour hire services. One such exclusion is a person who is a contractor and enters into a contract to carry out construction work within the meaning of the BCIPA legislation, and then engages subcontractors to carry out that constructions work. Further exclusions (if any) are yet to be identified and subsequently prescribed by regulation. More detail on these exclusions will be provided in due course.
These laws are fairly draconian to the extent that a person can be fined up to a maximum of approximately $131,000 for an individual (or three years imprisonment) and $380,000 for a corporation for providing labour hire services without a licence. There is also the risk of a fine of up to $25,000 for a person or corporation that advertises or holds themselves out as a person who provides labour hire services and does so without a licence.
If I apply for a licence, will I automatically be granted one
No. the chief executive has discretion not to grant a licence to a person or corporation in certain circumstances. Essentially, the person who applies for the granting of a license must show that they are a fit and proper person to provide labour hire services and the business to which the application relates is financially viable.
Are there any reporting obligations once I am granted a license
Yes. Within 28 days after a reporting period ends, the licensee must provide a report to the chief executive officer, reporting on a whole range if issued including (but not limited to):
- the number of workers supplied to another person;
- the type of work carried out;
- the locations in Queensland where the work was done;
- the number of notifiable incidents involving a relevant worker notified under the Work Health and Safety Act 2011 (Qld);
- (where relevant) the number of workers who are of a non-English speaking background.
What do the Regulations Say
Recently, the Regulations (associated with the LHLA) were released.
The Regulations provide further guidance and information as to how the LHLA is to be interpreted and how the labour hire licensing scheme will operate.
Importantly, the Regulations identify a number of prescribed classes of worker who will not be a “worker” for the purposes of the LHLA. That is:
- An employee: whose wage earnings meet or exceed the high income threshold under the Fair Work Act 2009 (Cth) (currently $142,000 base remuneration per annum), and who is not covered by either a state award, a modern award or an enterprise agreement.
- An executive officer of a corporation who is the only individual supplied to perform work for a third party.
- An in-house employee of a provider who is supplied on to undertake work for a third party on a temporary basis on one or more occasions. For example, a consultant who provides consultancy work to a consultancy business.
- An individual who is provided to another person and the other person (or party) is part of an entity or a group of entities that carry on a business collectively as one recognisable business.
This means that all other workers supplied to a third party as part of a business that provides labour hire services are likely to be workers for the purposes of the LHLA.
What is the licence fee I will be required to pay
Taking its lead from the WorkCover legislation, the applicable tiers and the corresponding fees are as follows:
- Tier 1 Business – wages of less than $1.5 million – $1,000 licence fee;
- Tier 2 Business – wages more than $1.5 million but less than $5 million – $3,000 licence fee; and
- Tier 3 Business – wages more than $5 million – $5,000 licence fee.
As you can see, the introduction of the LHLA is significant. If you require assistance in assessing whether you and your business are covered by the LHLA and/or you require further information about your obligations under the LHLA, then please do not hesitate to get in contact with a member of the CG Law workplace team.
Please note that from 16 April 2018, all existing labour hire service providers who provide workers in Queensland, have only 60 days in which to lodge an application for a licence. If relevant, it may also be helpful to register your email address on the State Governments labour hire licensing mailing list to receive regular updates. The email address is [email protected].