Important changes to labour hire arrangements

By Michael Selinger on May 4th, 2018
  1. Work Health & Safety Act
  2. Workplace health & safety regulations

New requirements for labour hire businesses to demonstrate their compliance with work health and safety laws have begun in Queensland with the commencement of the new mandatory labour hire licensing scheme, with other jurisdictions likely to follow soon.

As promised last year, the Queensland government’s Labour Hire Licensing Act 2017 (LHL Act) and the accompanying Regulation came into operation on 16 April 2018. The LHL Act establishes mandatory labour hire licensing which requires:

  • labour hire providers to be licensed to operate in Queensland;
  • persons who engage labour hire providers must only engage licensed providers;
  • labour hire licensees are to satisfy a fit and proper person test to establish that they are appropriate persons to provide labour hire services;
  • labour hire providers are to comply with all relevant laws including work health and safety;
  • the labour hire business are to be financially viable so as to be able to pay workers promptly and also meet statutory obligations such as taxation, superannuation and workers’ compensation;
  • licensees must report on their activities every six months;
  • there are penalties for breaches of obligations; and
  • the establishment of the Labour Hire Licensing Compliance Unit within the Office of Industrial Relations, with inspectors responsible for monitoring and enforcement activities.

There is a short window for existing labour hire providers to apply for a licence before 15 June 2018, and new labour hire businesses must have a licence before they commence operation.

As one of the concerns regarding some labour hire providers was their lack of focus on WHS, businesses seeking to rely on appropriately trained and qualified labour hire workers will be able to review information on the Labour Hire Licensing Queensland website.

The website will have:

  • a register of licensed labour hire providers;
  • avenues to report problems and how to contact the Labour Hire Licensing Compliance Unit;
  • resources such as application guidance material, examples of labour hire arrangements and industry fact sheets; and
  • other information for labour hire providers, workers and users of labour hire.

There was some concern that the laws would extend beyond the labour hire industry. The position is that the laws do not apply to genuine subcontracting arrangements or recruitment and permanent employee placement services (where a recruitment agency supplies the worker whom the end user employs and pays directly).

Building contractors are not labour hire providers

Further, the LHL Act has a specific provision that a building contractor is not a labour hire provider merely because they enter into a contract to carry out construction or building work.

Also, volunteering and student placements are not labour hire arrangements. In addition, the Regulation provides further clarification to ensure that the Act does not capture unintended classes of workers such as genuine secondments, consultants or employees within the same group of companies that work for another part of the group.

Importantly, and in recognition of the focus on WHS, the Regulation provides guidance on how compliance with work health and safety laws will need to be demonstrated in order to maintain a licence.

So, if your business is involved in providing labour hire services in Queensland you will need to review your WHS systems to ensure that you are in a position to obtain, and maintain, a licence. And if your organisation engages labour hire workers, then it will now be incumbent on you to only source licensed providers.

This will not only be required in order to comply with the LHL Act (and to reduce the risk of penalties under that law) but also to be able to demonstrate that you have taken reasonably practicable steps to ensure properly qualified and trained workers are engaged as part of your business or undertaking.

More help is at hand

For more information on managing your health and safety legal duties to employees, contractors and supplied labour, the Health & Safety Handbook has you covered.

Written by the health and safety legal experts from Holding Redlich, the Health & Safety Handbook has more than 70 chapters covering all aspects of health and safety laws, written in plain English in a format that’s easy to understand and implement.

Don’t risk being hit with hefty financial penalties for not meeting your health and safety obligations to your workers. Subscribe today to the Handbook.


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