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Dodgy labour hire crack down

10 July 2017

New legislation will create a fairer and safer labour hire industry by weeding out unscrupulous operators.

The state government is drafting a bill to introduce a state-based licensing scheme.

The scheme would make it unlawful to operate as a labour hire provider without a licence, and for employers to use unlicensed operators.

Measures may include:

  • a ‘fit and proper person’ test for owners and directors
  • annual reporting requirements
  • a fee to partially fund compliance and enforcement
  • significant penalties for employers that use unlicensed labour hire companies.

Background

Following an ABC Four Corners report that alleged exploitation and underpayment of migrant workers employed at various companies in Australia, the government announced that the South Australian Parliament’s Economic and Finance Committee would look into the labour hire industry in May 2015.

Since that report aired, ReturnToWorkSA commenced investigations into labour hire companies as part of a crackdown to identify unlawful behaviour. The focus of these investigations was to ensure employers pay the appropriate premium so that costs are not increased for honest employers. Hundreds of millions of dollars in remuneration discrepancies have been identified by ReturnToWorkSA.

Premium avoidance monitoring is now a dedicated function within RTWSA including the ability to identify potential phoenix activity.

The Economic and Finance Committee handed down its final report in October 2016. Seven recommendations were made, including that the state government assist with the introduction of a national licensing scheme or institute a state-based scheme.

Following reports of worker exploitation, there have been three other inquiries into the industry – one by a Senate committee and one each in Victoria and Queensland. Each recommended some form of licensing or registration scheme for labour hire providers.

The Victorian and Queensland governments also will be establishing state-based schemes.