New Labour Hire Licensing Regime

Labour Hire Licensing Act 2017 - What does it mean for local governments?

The Labour Hire Licensing Act 2017 is set to commence on 16 April 2018.  It establishes a licensing scheme to regulate the provision of labour hire services, which aims to protect workers from exploitation, and promote the integrity of the labour hire industry.[1]

What are the key features of the Scheme?

• Labour hire providers must be licensed to provide labour hire services in Queensland.
• Persons who engage labour hire providers can only engage through licensed providers.
• Labour hire licensees will have to satisfy a fit and proper person test to establish that they are capable of providing labour hire services in compliance with the Act.
• Licensees must provide six monthly reports on labour hire and associated activities.
• Penalties will apply for a breach of the Act.
• The introduction of a labour hire licensing compliance unit.

Who is a provider of labour hire services?

A person will be a "provider" of "labour hire services" if, in the course of carrying on a business, the person supplies, to another person, a worker to do work.[2]

A provider provides a labour hire service regardless of:-

• whether or not the worker is an employee of the provider; and
• whether or not a contract is entered into between the worker and the provider or the provider and the person to who the worker is supplied; and
• whether the worker is supplied by the provider to another person directly, indirectly or through one or more agents or intermediaries; and
• whether the work done by the worker is under the control of the provider, the person to whom the worker is supplied or another person.[3]

How does this impact Councils?

When a Council engages a provider of labour hire services, it must ensure that it is engaging a licensed provider.

For example, where a Council uses an employment agency who on-hires temporary administration staff, or where a Council pays a professional consultancy firm (i.e. an engineering firm) for the firm to supply the Council with one of its workers (i.e. an engineer who works in Council's office), in each case the employment agency and the engineering firm would have to be licenced.

Once published online, Councils will be able to search a register of licensed labour hire providers to verify that they are engaging with a licensed business.

If a Council, in the course of carrying on its business, supplies a worker to do work for another person (or company), it will be considered a provider of labour hire services, and therefore subject to the licencing obligations in the Act.

For example, a Council employs a building certifier who works at the Council's office for three days per week and the Council agrees with a neighbouring Council that the Council will supply to the neighbouring Council the building certifier for the remaining two days per week.  In this situation, the Council will need a licence.

To the extent that a Council operates a company who employs workers and those workers are then supplied by the company to others (including in some instances to the Council), in that situation, the company will need a licence.

If your Council (or a company operated by Council) is a provider of labour hire services, from 16 April 2018, it will have 60 days to apply for a licence.  If an application is made within that 60 day period, the obligations and penalties of the Act will not apply until the licence has been granted.  The online process for making a licence application is not yet available.

What are a Council's obligations as a licenced provider of labour hire services?

Once a Council has obtained a licence, it will be required to submit an online report to the chief executive on a 6 monthly basis.[4]  Various information is required to be included in the report, such as the number of workers supplied during the period and where the workers worked.

Who is not covered by the Scheme?

The Scheme does not apply to workers doing voluntary work, or to students undertaking work experience.

It also does not apply to building contractors engaging subcontractors to carry our building work, agents registered under the Private Employment Agents Act 2005, in relation to their activities under that Act (ie, recruiting staff who are then engaged by the client) and any other person or category exempted by a regulation (no exemption has been made at this stage).

Consequences of breaching your obligations under the Act

Councils are prohibited from providing labour hire services unless they holds a licence to do so.[5]  Councils are also prohibited from entering into an arrangement with an unlicensed provider of labour hire services.[6]

Strict penalties, including terms of up to three years imprisonment, apply for a breach of these obligations under the Act.

Councils should implement processes to ensure compliance with the new laws, these should include seeking assurances in contractual arrangements that businesses who supply Councils with workers meet the licence requirements.  Councils should also identify whether they are involved in the supply of workers to others and if so, obtain a licence.

Further Information

You can access more information about the Act on the Queensland Treasury website here.

Should you have concerns or enquiries about what the introduction of the Labour Hire Licensing Act 2017 means for you, or if you would like to ensure that your Council is fully prepared for these changes, contact Tim Fynes-Clinton or Kristie Taylor on (07) 3243 0000.

[1] Labour Hire Licensing Act 2017 (Qld), s 3.
[2] Labour Hire Licensing Act 2017 (Qld), s 7(1).
[3] Labour Hire Licensing Act 2017 (Qld), s 7(2).
[4] Labour Hire Licensing Act 2017 (Qld), ss 31 and 32.
[5] Labour Hire Licensing Act 2017 (Qld), s 10(1).
[6] Labour Hire Licensing Act 2017 (Qld), s 11(1).

This article was prepared with assistance from Clare Heitkonig.  Clare is a Law Graduate in the firm's Planning & Environment Group.