Australia: Labour hire industry changes in Queensland

WHO SHOULD READ THIS

• Labour hire providers operating in Queensland and businesses that engage labour hire providers.

THINGS YOU NEED TO KNOW

• When enacted, the Bill will introduce a licensing system for labour hire providers that operate in Queensland. The licensing system will include licence fees and requirements that management of labour hire providers are 'fit and proper' persons. It also introduces significant penalties for operating as a labour hire provider without a licence or engaging a labour hire provider which does not have a licence.

WHAT YOU NEED TO DO

• Submissions on the Bill can be made by 19 June 2017. The Employment Relations and Safety team is holding a breakfast seminar to discuss the Bill and its potential impacts on business on 22 June 2017 from 8am (registration from 7.45am). Click here to register.

The Queensland Government recently introduced the Labour Hire Licensing Bill 2017 (Bill) into Parliament. When enacted, the Bill will see the Queensland Government introduce Australia's first licensing system for the labour hire industry.

Snapshot of the Bill

The Bill provides that:

• A person who wants to provide 'labour hire services' will need a licence to do so. This licence will need to be renewed annually.
• 'Labour hire services' is broadly defined to mean supplying to another person a worker to do work. Examples of labour hire services providers include contractors who supply workers to a farmer or fruit grower to pick produce. It could also capture an employer which seconds an employee to another business.
• A person will provide labour hire services regardless of:
• • whether or not the worker is an employee of the provider
  • whether or not a contract exists between the worker and provider
  • whether the worker is supplied to another person directly or indirectly, and
  • whether the work done is under the control of the provider.
• The Government has said that Regulations will be introduced to limit the scope of the definition where the supply of a worker by the person is not a dominant purpose of the business.

Prohibited conduct and offences

• Providing labour hire services without a licence will have a maximum penalty of $378,450 for a corporation.
• Entering into an arrangement with a labour hire provider who does not have a licence is prohibited. The maximum penalty for doing so will be $378,450 for a corporation.
• Entering into an 'avoidance arrangement' will have a maximum penalty of $378,450 for a corporation.

Applications, renewals and cancellations

• If the licence applicant is a corporation, each individual concerned with the management of the corporation (this is broader than just directors) must be a 'fit and proper person' and the corporation must be financially viable.
• To determine whether someone is a fit and proper person, the following matters must be considered:
• • the person's character, for example, the person's honesty, integrity and professionalism
  • whether the person has a history of compliance with 'relevant laws' (those which impose obligations on the person in relation to workers, such as record keeping obligations) and is able to demonstrate an ability to comply with such laws
  • whether the person has previously held a licence that has been cancelled or suspended, or had conditions imposed
  • whether the person has been convicted by an offence against a relevant law or another law that affects their suitability to provides labour hire services
  • whether the individual has been insolvent or a corporation has been placed into administration, receivership or liquidation while the person was an executive officer of the corporation
  • whether the person has been disqualified from managing corporations under the Corporations Act, and
  • whether the person is under the control of, or substantially influenced by, another person considered not to be a fit and proper person to supply labour hire services.
• Licences have a maximum one year term and can be granted subject to conditions.
• A licence may be suspended or cancelled. If a licence is proposed to be cancelled, the licensee must be issued with a show cause notice to allow a written response prior to cancellation. Cancellation may occur in circumstances where the licensee:
• • has contravened a condition of the licence
  • is no longer a fit and proper person
  • has contravened a relevant law, or
  • has been wound up or deregistered, or an individual licensee has become insolvent.
• If an individual has their licence cancelled, they may not apply for a licence for two years after the cancellation. If a corporation (or any of its related bodies corporate) has had its licence cancelled, it cannot apply for a licence unless, because of a genuine sale, the shareholding and control of the corporation has completely changed.

Reporting and inspections

• The licensee must comply with extensive reporting requirements, including reporting on the arrangements between the licensee and workers, the locations and accommodation of workers, and any disciplinary action or enforcement action taken against the licensee by the regulatory body.
• Inspectors will have broad powers to enter a labour hire provider's workplace and will have a wide array of powers once at the premises, including searching the premises, taking equipment to the premises and removing things or documents from the premises.

What this means for industry

The proposed changes to labour hire regulation in Queensland will create significant new regulatory hurdles and potential penalties for labour hire employers that operate in the State. Businesses which engage unlicensed providers will also be exposed to significant penalties.

It is unclear from the Bill how common corporate group arrangements which involve internal provision of labour from one group company to another will be impacted by the changes. As currently drafted, such group structures will need to obtain a labour hire licence to operate without risk of penalty.

Where to from here?

The Bill has been referred to the Finance and Administration Committee (Committee) for examination. The Committee is due to report on the Bill by 24 July 2017.

The Committee will hold a public briefing on the Bill on Wednesday 14 June 2017, with officers from the Queensland Treasury. The Committee will take submissions, from all interested parties, until 4pm on Monday 19 June 2017. For more information and to make a submission, click here. The Committee's public hearing on the Bill will be held in Brisbane on Thursday 22 June 2017.

McCullough Robertson will be holding a breakfast seminar on the day of the public hearing, Thursday 22 June 2017, to discuss the Bill and its potential impacts on your business. For more information and to register, click here.