On 16 April 2018, new labour hire laws will commence in Queensland. These laws will require a labour hire service provider to apply for a licence within 60 days and regularly report to the government.
At this stage, it is unclear whether inter-entity employment arrangements will need to be licensed and report, however, given the intentionally broad definition of “labour hire provider”, they may.
The Queensland Government has intentionally defined “labour hire service” broadly.
A person provides a labour hire service (provider) if, in the course of carrying on a business, the person supplies, to another person, a worker to do work.
It is irrelevant whether:
- the worker is an employee of the provider;
- a contract is entered into between the worker and the provider;
- the worker is supplied by the provider to another person directly or indirectly through an intermediary; or
- the work done by the worker is under the control of the provider.
A person does not provide labour hire services merely because:
- the person is a private employment agent under the Private Employment Agents Act;
- the person is a contractor who enters into a contract to carry out construction work within the meaning of the Building and Construction Industry Payments Act (or subcontracted work); or
- the person is, or is of a class of person, prescribed by the regulations.
Queensland election – government in caretaker mode
Given the recent State election and the Queensland Government is in caretaker mode – the Regulations have not yet been released.
Shortly after the result of the election is known, we expect the Regulations to be released and hopefully the Regulations clarify whether inter-entity employment arrangements will be caught by the new licensing and reporting laws.
Inter-entity employment arrangements
An inter-entity employment arrangement typically consists of a company (or a related entity) in a group of companies (or related entities) supplying labour to the trading entities.
There is usually an on-charging arrangement where the trading entity reimburses or pays the labour and on-costs of the employment entity as opposed to the employment entity making a profit.
Request for clarification to the Queensland Government
We have written to the Queensland Government to seek clarification as to whether it is intended that:
- a provider must in the in course of carrying on a labour hire business;
- the Regulations will exclude an inter-entity employment arrangement from the licensing and reporting requirements;
- an inter-entity arrangement will be subject to the licensing and reporting requirements.
Main purposes of the labour hire licensing laws
The main purposes of the Labour Hire Licensing Act 2017 are to protect workers from exploitation by providers of labour hire services and promote the integrity of the labour hire industry.
The main purposes will be achieved by establishing a licensing scheme to regulate the provision of labour hire services.
A labour hire provider will need to apply for, obtain and renew a labour hire licence on an annual basis.
To get a licence, a provider will need to satisfy a ‘fit and proper person’ test and establish their financial viability.
Half yearly reporting obligations
Six monthly reporting will apply from the date the licence is granted.
A licensee must provide a report to the Chief Executive within 28 days of the end of a reporting period which includes information such as:
- the licensee’s full name and contact information;
- the business name, ABN and address;
- the full name and contact details of each nominated officer for the licence;
- the number of workers supplied by the licensee to another person during the reporting period;
- a description of the arrangements entered into between the licensee and the relevant workers;
- details of the type of work carried out by the relevant workers;
- the locations in Queensland where work was carried out;
- details of any accommodation provided to workers in connection with the labour hire services; and
- disclosure of any disciplinary action taken against the licensee by a regulatory body.
Other obligations will include:
- a nominated officer must be reasonably available to be contacted by the Chief Executive and public;
- a licensee must produce a copy of its licence for inspection if asked by an inspector, worker or another person with whom the licensee is dealing;
- a licensee must not to transfer, sell or hire its licence to another person; and
- a licensee must notify the Chief Executive of a prescribed change in circumstances within 14 days.
Fines for non-compliance
A person must not provide labour hire services unless the person is the holder of a licence, otherwise, they will be exposed to a maximum penalty of:
- $130,439 or 3 years imprisonment – for an individual; or
- $378,450 – for a corporation.
A person must not advertise, or in any way hold out, that the person provides or is willing to provide labour hire services, unless the person is the holder of a licence.
Considering the penalties for failing to comply with the new laws, please contact us for advice or assistance: