The Labour Hire Licensing Act 2018 (Vic) (LHL Act) comes into effect on 30 October 2019. So what does this mean for your business?

If your business provides individuals to perform services within a host business, you may be classified as a labour-hire company. If this is the case, you have until 30 October 2019 to apply for, or secure a licence to operate legally. Failure to comply will result in significant penalties (circa $500,000 for corporations or $126,000 for individuals). Labour-hire businesses will also be subject to annual reporting obligations.

Furthermore, if your business engages labour through a third-party supplier, you must ensure that the provider is compliant with the new laws before you continue to use their services. The same penalties may apply if you engage an unlicensed provider.

The LHL Act provides definitions regarding who is classified as a ‘provider’ and who is classified as a ‘worker’. For example, if you provide workers to a host business that are contractors, you are still likely to be caught under the definition of labour-hire. Further, a provider can supply an individual to a host business, recruit or place workers in a business or recruit or place a contractor in a host business and act as the contract manager.

The LHL Act generally applies to conventional labour hire providers. However, each arrangement should be looked at in isolation and if you are unsure whether your business is either providing labour-hire individuals to host businesses or engaging labour-hire individuals, we urge you to contact us as soon as possible so that we can assist you in determining whether your business requires a licence to operate (or alternatively, if you are engaging labour-hire workers, whether the provider is required to be licenced).

Furthermore, if your business operates in the following industries, you may also be required to be licenced:

  • commercial cleaning;
  • some horticulture activities where there is exercise of minimal judgment under direct supervision such as picking and labelling;
  • some meat manufacturing activities such as packing and processing; and
  • security.

This is because the Labour Hire Licensing Regulations 2018 has extended the definition to capture these industries, even where they do not operate under a traditional labour-hire arrangement.

With only a month to comply, it is paramount that those businesses that are required to comply with the LHL Act do so without further delay. If you are unsure of your obligations, please contact Francine Clancy for further assistance.