New labour hire licensing laws in Queensland will affect providers and their clients

29 May 2017

A new mandatory labour hire licensing scheme will soon apply to all labour hire providers operating in Queensland - and it will also ban businesses from entering into labour hire arrangements with unlicensed providers.

The Queensland Government's Labour Hire Licensing Bill 2017 contains significant amendments which will apply broadly, including to people and businesses that may not consider themselves in a labour hire arrangement. Any business with a connection to Queensland that either provides or utilises labour hire must now review their arrangements to get ready for the new laws - or risk substantial penalties.

What does the Labour Hire Licensing Bill do?

There are two key elements to the Bill.

First, it will establish a mandatory business licensing scheme for the labour hire industry in Queensland requiring all labour hire providers to be licensed.

Secondly, it will require all labour hire arrangement to be with licensed providers.

It will apply where work is performed by labour hire workers in Queensland, whether or not the labour hire worker or company is based in Queensland.

A labour hire provider is someone who, in the course of carrying on a business, supply to another a worker to do work. It doesn't matter if:

  • the worker is an employee or not;
  • the worker is supplied directly or indirectly;
  • a contract is entered into between the worker and the provider, or the provider and the person to whom the worker is supplied; or
  • who controls the worker's work.

The requirements for getting a labour hire provider licence

The laws will require labour hire providers to:

  • pass a fit-and-proper person test to establish that they comply with all relevant laws and that the business is financially viable;
  • comply with workplace laws, including workers’ compensation, wages and superannuation;
  • report regularly on their operations, including providing information on the number of employees they have engaged, how they are engaged, the type of work performed and where it is performed.

The fit and proper person test takes into consideration a range of matters, including:

  • the person’s character (such as their honesty, integrity and professionalism); and
  • the person’s history of compliance with relevant laws (ie. laws about record-keeping, payment of tax and superannuation, work health and safety, or laws about building standards as it relates to the accommodation of a worker); and
  • whether they can demonstrate an ability to comply with relevant laws.

The Government has stated that the licence fee will be $1,000 for a small labour hire provider, $3,000 for a medium provider and $5,000 for a large provider.

The penalties for breaching these obligations

The Bill includes a number of new offences. There are high penalties for the most serious contraventions, such as operating as a labour hire provider without a licence, entering into arrangements with unlicensed providers and entering into arrangements intended to circumvent the Bill's requirements.

The maximum penalties for a breach of these provisions is 1034 penalty units ($126,044.60) or three years' imprisonment for an individual, or 3000 penalty units ($365,700) for a corporation.

Key actions for labour hire providers and their clients

Labour hire operators in, or who operate in, Queensland should review their operations now to ensure they will meet the criteria in the Bill for a licence.

Businesses in Queensland that use labour hire workers should now create management protocols to protect themselves from prosecution under the new laws, including seeking assurances in contractual arrangements that businesses with whom you engage meet the licence requirements. 

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.