On 25 May 2017, Industrial Relations Minister, the Honourable Grace Grace, introduced the Labour Hire Licensing Bill 2017 (the Bill) to Queensland Parliament. The Bill was drafted in response to findings of alleged exploitation and undermining of labour hire workers’ rights in Queensland, and it seeks to create a mandatory licensing scheme which will affect businesses across Queensland.
Who will the proposed laws affect?
Under the proposed terms, the Bill will apply wherever work is performed by a labour hire worker in Queensland regardless of whether the company or the worker is based in Queensland. The Bill places obligations on both labour hire providers and hosts.
The Bill uses a very broad definition of arrangements that will make a business a “provider”. A business will be considered a provider if, in the course of business, it supplies a worker to do work for another person. This is, irrespective of whether the worker is an employee or whether there is contract between the business, the worker and the person to whom the worker is being supplied. The licensing scheme seeks to apply to not only traditional labour hire businesses, but to also cover contractors supplying workers to farmers, group training organisations or organisations who supply apprentices to hosts.
Although Grace stated that the Bill was not intended to cover “genuine subcontracting” (with a given example of a plumber on a construction site), the breadth of the definition of a “provider” suggests the licencing scheme may also extend to other subcontractors and franchise businesses that have arrangements in place involving the provisions of workers. This is further emphasised by the lack of any express exemption or exception in the Bill for such businesses.
What are the consequences for businesses?
Those businesses deemed to be providers under the scheme will be required to obtain a licence to provide labour services. Further, hosts must also not enter into an arrangement for labour hire with an unlicensed provider. A breach of either of these requirements will be an offence against the Bill, which hold a maximum penalty $130,439 from 1 July 2017 or three years’ imprisonment for an individual, or $378,450.00 from 1 July 2017 for a corporation.
Other offences include where a provider advertisers or holds out they are willing to provide labour hire services where they do not hold a licence. It will also be an offence for a person to enter into an arrangement for the supply of a worker where that person knows or ought to know it is an arrangement designed to circumvent the Bill. The Bill compels a host to report such conduct.
The Bill imposes a number of requirements on businesses that seek to obtain a licence.
Firstly, a licence fee will be payable. It is expected that the fees will be $1,000.00 for a small labour hire provider, $3,000.00 for a medium provider and $5,000.00 for a large provider.
Further, there is a requirement to pass a fit-and-proper person test. Companies and relevant persons will need to demonstrate compliance with relevant laws and show financial viability, amongst other things. The Bill will require regular reporting with respect to the number of workers, work performed, any non-compliance with relevant laws, including the Work Health and Safety Act 2011 (Qld) any information about workers’ compensation claims.
While the Bill appears to give effect to the Government’s mandate to “drive out cheaters and rorters” in the labour hire industry, the Bill includes a number of provisions which will be of concern to many legitimate businesses. For example:
- Licences may be cancelled if the Chief Executive is satisfied that there is a contravention of a licence;
- Condition (noting that it does not need to necessarily be proven to any legal standard) or if satisfied that there is a contravention of a relevant law, whether or not there has in fact been a conviction;
- The Bill creates powers of entry for inspectors. Although the Bill proposes that these powers of entry are subject to occupier consent (unless exercising a warrant obtained under the Bill), the Bill reserves the right for the Chief Executive to unilaterally impose a condition a licence (even after being issued) that allows the Chief Executive to inspect the premises at which the licensee carries on business at stated reasonable intervals. Arguably, such a power may be exercised by a delegate of the Chief Executive and used to supplement the ordinary power of entry under the Bill;
- Conditions may be imposed on providers’ licences to require insurance of a stated kind and in a stated amount, or require that the organisation provide security to the Chief Executive;
- The Bill gives rights to the licencing body to regulate certain matters, which include imposing requirements and thresholds that must be met to establish a company or individual’s financial viability, while retaining the right for the Chief Executive to make “necessary inquiries” regarding a company or person’s financial viability; and
- The Bill gives the Chief Executive powers to obtain a persons’ criminal history to assist in determining if that person is “fit and proper”. These provisions might possibly be used to obtain records regarding the criminal history of a company (i.e. history of convictions or prosecutions under work health and safety legislation).
With respect to licence cancellations, a provider who has a licence cancelled would not be permitted to re-apply for a two year period. In the case of a corporation, it will not be able to apply again unless the Chief Executive is satisfied that there was a “genuine sale” of the company, no shareholders at the time of cancellation remain a shareholder and no person who was in a position of control or influence in the company remain in a position of control or influence. Where a provider is deregistered (including as a result of lacking financial viability), such a provider (or its related entities) may not be permitted to hold a licence again.
What should my business be doing now?
The Bill may be passed as early as August 2017. Any business that believes it may be captured by the Bill should consider its practices and procedures in respect of worker hire and identify any areas in which it may need to change in order to comply with the requirements of the Bill if it is enacted.
This article was written by Heinz Lepahe, Partner.