SOUTH Australia has moved to regulate the labour hire industry, with the Labor Government introducing legislation last week.

The Labour Hire Licensing Bill 2017, follows a parliamentary inquiry into the state’s labour hire industry which recommended a national approach to labour hire regulation but in the absence of such approach, South Australia should introduce a licensing scheme.

The scheme would make it unlawful to operate as a labour hire provider without a licence, with a complimentary offence for another person or entity to utilise labour hire services from a provider who is unlicensed. This follows the Labor Government in Queensland introducing similar legislation into its parliament, as previously reported by AREEA. It is widely expected that Victoria (and possibly WA) will also be moving to regulate the labour hire industry.

Like the Queensland Bill, the South Australian Bill also makes it an offence to enter into what is described as an “avoidance arrangement” for the purposes of avoiding obligations under the legislation. An obligation to report such arrangements also exists.

A register is proposed, which means that the names and details of licensed providers will be publically available.

According to its objectives, the Bill aims to protect workers from exploitation by providers of labour hire services, protect licensed labour hire businesses from predatory business practices that may be engaged in by persons unsuitable to be licensed to provide labour hire services and promote the integrity of the labour hire industry.

Many of the key tenants of the Bill effectively replicate those in the Queensland Bill, although there are a number of differences around administration. Aside from the principal obligation to hold a licence, the Bill determines that an applicant for a licence must:

• be a fit and proper person; and
• have sufficient financial resources for carrying on the business under the licence.

Where the applicant is a body corporate, then each director must also be a fit and proper person.

In relation determining whether an applicant is a “fit and proper person”, the Commissioner (meaning the Commissioner of Consumer Affairs) can take into consideration demonstrated compliance with WHS, workers’ compensation and other employment laws (including taxation and superannuation); for individuals, whether they’ve been the director of a wound-up company within the preceding five years; and whether they’ve been found guilty of an offence, to name but a few considerations.

In a slight difference to the Queensland Bill, a designated entity (union, agency of a state, territory or the Commonwealth) may object to an application for a licence. This right is different to the provision contained in the Queensland Bill in that an objection can be made prior to a decision in relation to the granting of a licence, whereas under the Queensland legislation, certain third parties may apply to review a licensing decision that has already been made.

A licence, once granted, may remain in force until it is surrendered or cancelled or the holder dies (or body corporate dissolves). There are proposed to be reporting requirements every 12 months as well as the payment of a fee (as yet an amount has not been proposed), with a failure to report or pay the fee potentially resulting in the license being cancelled.

The reporting requirements are not dissimilar to those proposed under the Queensland Bill and include matters such as:

• Name and contact details (individual and body corporate licensee, responsible person(s) for the licence)
• Number of persons supplied by the holder of a licence to other persons during the reporting period;
• A description of the arrangements entered into between licensee and relevant workers;
• Details of the industry within which the work was carried out by the relevant workers;
• Details regarding accommodation or other services provided to the worker (if provided by the provider or another person);
• Whether any other services were provided to the worker by the licensee or user of the labour hire services;
• Information about compliance with relevant laws (as defined);
• Disclosure of any disciplinary/enforcement action taken, or started against the holder of a licence by any regulatory body under a relevant law;
• Notifiable incidents under the Work Health and Safety Act 2012 involving a relevant worker;
• Number of workers compensation applications under the Return to Work Act 2014;
• Any other information prescribed by the Regulations.

Breaching the proposed new laws could result in fines of up to $400,000 for companies and up to $140,000 and five years’ jail for individuals. Fines will also apply for record keeping and administrative failures, including a failure to report avoidance arrangements.

It is proposed that there be a transition period of 6 months to allow labour hire providers to undertake the necessary applications should they wish to continue operating as labour hire providers in South Australia.

Minister for Industrial Relations John Rau has said the crack down on dodgy operators was important for honest employers, but also for rogue operators exploiting workers.

As part of the consultation process into the parliamentary inquiry conducted by South Australia, AREEA had written to Attorney General Rau highlighting the recommendations of the independent report of Professor Anthony Forsyth undertaken at the behest of the Victorian government recommending a targeted approach to regulation. The preference of the South Australian government was always for a broader approach to licensing.

This is despite the outcomes of inquiry indicating that instances of exploitation were generally found in specific industries rather than across the board.

Unnecessary red tape opposed by AREEA

It has been AREEA’s long held position that labour hire is a legitimate business model in the resources sector and companies involved pay high wages and have high levels of compliance with their obligations to their employees. Licensing arrangements constitute unnecessary red tape and are a regulatory burden for business. Furthermore, licensing legitimate operators will not being effective in targeting those industries where worker exploitation has been demonstrated, who will continue to operate rouge.

A common theme in the reports of exploitation is the failure to comply with existing laws. AREEA has constantly advocated that where consistent breaches are identified within a particular sector, a targeted enforcement and education campaign is likely to be more effective in addressing worker exploitation than burdening already compliant businesses with extra administration and costs.

AREEA will continue to closely monitor developments in relation to any regulation of labour hire as a business model at both the national and state level, and continue to argue that the experience of labour hire workers in the resources sector militates against unduly impacting labour hire businesses operating in the industry.

Members are invited to contact AREEA at [email protected] if they want further details about AREEA activities on this issue or to have your say. A more detailed briefing document is in the process of being prepared and can be provided to Members upon request.