SA Passes Labour Hire Licensing Bill

21 December 2017

South Australia has passed the Labour Hire Licensing Act 2017, joining Queensland, which introduced its Labour Hire Licensing Act in September 2017. This follows a critical focus on the industry, led in part by a Four Corners investigation which uncovered rampant exploitation in the food production industry, mostly affecting labour hire workers.

Section 6 of the Act defines labour hire services as “a person (a provider) who provides labour hire services in the course of conducting a business.”

Labour hire services are defined as “engagement arrangements” generally understood to mean ‘on-hire’ but which will capture other engagement arrangements. Under this broad definition, engagement arrangements may include, by way of example:

  • Host employer arrangements;
  • A corporate health service which supplies a nurse to deliver vaccinations to a business;
  • Temping agencies; and
  • Joint venture participants.

The Act commences operation on 1 March 2018.

Businesses must be aware that:

  • It is unlawful to operate as a labour hire provider without a licence; and
  • It is unlawful for a person to enter into “an arrangement” with another person for labour hire services when they do not hold a licence.
    • o Maximum penalty: up to $140,000 for individuals or 3 years imprisonment and $400,000 for a body corporate.
  • It is unlawful to advertise or hold out that a person can provide labour hire services without a licence
    • o Maximum penalty: $30,000;
  • It is unlawful to enter into an arrangement for the supply of a worker to avoid an obligation under the Act (referred to as an avoidance arrangement)
    • o Maximum penalty: up to $140,000 for individuals or 3 years imprisonment and $400,000 for a body corporate
  • Further, there is a positive obligation to report another person who has supplied them with a worker in circumstances where the supply of the worker is an avoidance arrangement.
    • o Maximum penalty: up to $30,000.
  • Individuals will be tested as to whether they are a “fit and proper person” to hold a licence, including whether they are honest, have integrity and professionalism.
  • Licence holders are required to report annually to the Commission. Reports are to contain a number of matters including (but not limited to) the number of workers supplied by the holder of the licence and a description of the arrangements entered into.
  • Licence holders are to pay an annual fee to the Commission as prescribed by the Regulations (yet to be drafted).
  • License holders may only be absent from the licence holder’s business for a period of 30 days. In their absence they must appoint an individual who is a responsible person as a substitute responsible person for the licence.
  • If a licence holder is absent from the business for a period of more than 30 days the Commissioner may, on application appoint another individual as a substitute responsible person.

What does this mean for businesses?

  • An urgent review should be conduct of all service provision contracts;
  • An assessment must be made of the requirements to be met by businesses and labour hire employers in time for March 2018;
  • Penalties for breach are at the higher end of the scale; and
  • Employers who supply labour hire services will be subjected to stringent reporting requirements and annual fees.
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