Legalities For Labour Hire Companies In Australia

2002 estimates by the Australian Government Productivity Commission put the number of Australians working through labour hire at about 270,000 – that was about 2.9% of the employed population at the time. Currently, labour hire work arrangements still employ hundreds of thousands of people contributing about 2% of the commonwealth’s workforce.

And with over 5,800 (and counting) labour hire firms in Australia, the industry has shown steady growth over the decade and consistently generates thousands of jobs each year. With such prevalence, it’s no wonder that many businesses and workers throughout the states engage with labour hire firms to get workers and job opportunities respectively.

What are they, labour hire firms?

Before we can take a look at the legal obligations they have, we’ll first need to understand what labour hire firms are and the business they’re in. Labour hire companies are business entities that provide workers to other businesses (host organisations) on a hire basis. These hired workers are called “on-hire” employees.

Although on-hire employees work for the host organisation they’re assigned to, the employer-employee relationship remains between the worker and the labour hire company that posts them to their work assignment. As such, the labour hire company is responsible for catering to the workers wages as well as other entitlements. So, it’s up to the labour hire company to ensure that industrial relations laws are adhered to in regard to their on-hire staff.

Labour hire laws: General labour laws apply

Like any other legal industry operating within the country, the labour hire sector is not exempt from the industrial relations laws that govern the land. Therefore, labour hire companies in Australia have to adhere to a set of legal obligations to ensure that the interests of stakeholders (i.e. the workers, the clients and the government) are protected.

In almost all Australian states (with the exception of Victoria and Queensland), labour hire companies only need to comply with the regular state and federal workplace relations system without additional legal obligations. As is the case with other employers, these laws ensure that the welfare of workers is adequately protected.

The employer legal obligations that labour hire companies need to adhere to in Australia are as follows:

  1. Providing worker entitlements in accordance to the National Employment Standards (NES) and relevant modern awards for the particular type of work a worker is engaged in – at the minimum. Otherwise labour hire firms could be liable to Huge fines from the Workplace Ombudsman for non-compliance.
  2. Providing Worker’s Compensation Insurance for all their employees. In addition, labour hire companies are also legally obligated to pay Superannuation to casual staff at the prevailing rate (which is 9.5% as of May 2019).
  • As is the case with other Australian employers, labour hire agencies are not allowed to hire foreign workers unless they’re legally allowed to work in the country. Therefore, all foreign workers are required to have a valid working visa that the agency can verify and keep copies of.
  1. On-hire companies are not allowed to generally apply the enterprise agreements of host organisations to their workers. They can, however, provide terms and conditions similar to those contained in the enterprise agreement of a host organisation to their workers – but they still have to ensure their on-hire employees get at least the minimum NES and modern award entitlements.
  2. Both the on-hire firm and host organisation are obliged by the law to ensure workplace health and safety for on-hired workers.

New labour hire legislation in Victoria, South Australia and Queensland

While the above-mentioned legal obligations apply to all labour hire firms nationwide, several states – namely: Victoria, South Australia and Queensland – have recently introduced additional legislations to regulate labour hire firms in their respective jurisdictions. These laws apply to all labour hire firms providing on-hire employees in these states regardless of whether they are based there or not.

The schemes introduced in the three states impose new legal obligations on labour hire firms with operations in these territories.

Victoria and Queensland on-hire schemes obligations

  1. Labour hire companies are required to acquire a licence in each of the states with the state creating a register of all the licensed labour hire providers for public access.
  2. The on-hire agency as well as some of the key personnel are required to undergo a “fit and proper person” test before a license can be obtained. And depending on the state, this could also include a demonstration of financial viability or the firm’s compliance with various laws.
  • Licensed labour hire companies are obligated to periodically submit reports about their business and other related activities to the authorities. This is to be done every six months in Queensland and every twelve months in Victoria.

The labour hire scheme for Queensland took effect on 6th April 2018 while that of Victoria became enforceable beginning 29th April 2019.

Repeal of The Labour Hire Licensing Act 2017 in South Australia

Soon after the new labour hire legislations were introduced in South Australia on 1st March 2018, the Authorities decided to defer them until January 2019. But before the January date, and after consultations with industry stakeholders, the state decided to repeal the labour hire scheme in SA. Currently labour hire firms that operate or wish to operate in South Australia do not need to fulfil the additional legal obligations required in QLD and Vic.

Blue Collar People is 100% legally compliant

From this information, it’s clear that labour hire companies have to follow the law just like any other Australian employer. As with all industries, there are a few dodgy players who, unfortunately, put a stain on the sector’s general reputation with their shady practises.

When you work with Blue Collar People, you have our guarantee that all our operations are above board and 100% legally compliant. In the 29 years we’ve been in the industry, we’ve ensured that legal compliance always remains at the core of our customer service.

You can count on Blue Collar People to provide you with high-quality and legal on-hire workers for a variety of industries including: warehousing, manufacturing, mining, construction, Oil & Gas, Hospital Cleaning & food preparation, Transport and Logistics, and more.