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Labour hire licensing scheme commences in Victoria

29th April, 2019

The Victorian labour hire licensing scheme and Labour Hire Licensing Authority commence operation today.

This new regulatory scheme was implemented through legislation passed by State Parliament in 2018, based on the recommendations of the 2015-16 independent Inquiry into the Labour Hire Industry and Insecure Work.

The Inquiry identified widespread breaches of workplace legislation and other laws, adversely impacting the employment rights of many workers engaged through labour hire providers.

From today, Victorian providers of labour hire services have 6 months to obtain a licence from the Authority. From 30 October 2019, providers will not be able to operate without a licence – and users of labour hire services must only engage licensed providers. Significant monetary penalties will apply to breaches of these obligations.

The licensing scheme is modelled on a similar framework operating in the UK, overseen by the Gangmasters and Labour Abuse Authority. Numerous studies and reviews have confirmed the effectiveness of the GLAA, over the last 15 years, in reducing the impact of exploitative providers (see, for example, the recent review of the GLAA’s operations by a UK inspectorate body).

As I argue in an article to be published soon in the Federal Law Review:

Labour hire licensing seeks to tackle the problem of exploitation from a different angle, by focusing on the fitness of business operators to provide labour hire services. …

While Australian regulation in this area mostly focuses on the attachment of civil forms of liability to breaches by employers (e.g. underpayment of award wages in breach of the Fair Work Act), given the nature of non-compliance in the labour hire sector, it is time for an approach which focuses instead on the ‘front end’: the imposition of strict licensing standards to preclude rogue operators from entering the market for providing labour services.

Labour hire licensing schemes are now in place in Victoria and Queensland. A national scheme is needed to ensure the maximum effectiveness of licensing, and a consistent regulatory approach across the country.

 

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