Many transport operators have corporate structuring arrangements in place that involve internal labour hire.
The Queensland Government recently introduced the Labour Hire Licensing Bill 2017 into Parliament. If enacted, the Bill will introduce Australia’s first licensing system for the labour hire industry. The scope of the Bill appears wide enough to capture internal labour hire arrangements. Therefore, companies providing labour hire to other companies within the same corporate group will need to be licensed. Significant penalties will be imposed on labour hire providers operating without a licence and on companies entering into arrangements with unlicensed providers.
The new regime will apply to ‘providers’ of ‘labour hire services’ and to entities entering into arrangements with those providers.
If the Bill is passed:
- labour hire service providers will be required to obtain a licence in order to provide labour hire services;
- In order to be granted a licence, the labour hire service provider must be assessed as a ‘fit and proper’ person and as financially viable. If the labour hire service provider is a company, its executive officers must also be assessed as ‘fit and proper’ persons;
- Licences will be granted for a term of up to one year and may be granted subject to conditions such as requiring the licence holder to hold particular insurance cover;
- Licence holders will be required to lodge reports on a six monthly basis.
The Bill also provides for the appointment of inspectors to monitor compliance with the new regime and take action to deal with alleged contraventions of the legislation.
Penalties for prohibited conduct
The Act, if passed, will prohibit the following conduct:
- providing labour hire services without a licence;
- entering into arrangements with unlicensed providers, without reasonable excuse; or
- entering into an arrangement where the person knows, or ought to reasonably know, the arrangement is defined to avoid an obligation under the regime.
The maximum penalty for each offence will be $378,450 for companies and $126,044 or three years’ imprisonment for individuals.
The Bill is complex. A more comprehensive bulletin discussing the new provisions is available here.
Where to from here?
The current draft of the Bill has been referred to the Finance and Administration Committee of the Parliament, which will produce a report by 24 July 2017. It is possible that the scope of the Bill will be clarified through this process and that internal labour hire arrangements will be excluded from coverage.
Should the Bill pass in its current form, transport operators utilising internal labour hire arrangements will be significantly affected. Those operators will need to ensure the company providing the labour hire:
- is licensed; and
- complies with its reporting obligations and other obligations under the new regime.
Should you wish to discuss any aspect of the proposed new legislation, please contact Annie Smeaton (07 3231 2946) or Gillian Bristow (07 3231 2925).