What do Queensland’s new labour hire licensing laws mean for you?

08 August 2018

The Labour Hire Licensing Act 2017 (Qld) (Act) commenced on 16 April 2018 and introduces a mandatory licensing regime for providers of labour hire services in Queensland. Importantly, the Act is likely to impact entities in a broad range of sectors not commonly associated with labour hire, including government.

The Act was introduced in response to evidence of exploitation of workers in the labour hire industry documented in a Report of the Queensland Finance and Administration Committee.

The stated purposes of the Act are to:[1]

protect workers from exploitation by providers of labour hire services; and
promote the integrity of the labour hire industry.

Application to Government Bodies and Entities

Given the broad definition of ‘labour hire services’ (discussed below), the reach of the Act is likely to be far wider than the labour hire industry.

Among those potentially affected by the Act are government bodies and government-affiliated entities who would not ordinarily consider themselves to be providers or users of labour hire services.

Notably, the Act provides that while the State cannot be prosecuted for an offence under the Act,2 it nonetheless remains bound by it.3 This effectively means the State must comply with the Act like any other private entity.

One particular area where government entities may fall foul of the Act is in their dealings with third parties. Seemingly innocuous arrangements which involve the supply of personnel (for instance, the supply of locum doctors to a State Health Service) may risk contravening the Act where the suppliers of such personnel are not licensed labour hire providers (see below).

What conduct is covered?

The Act prescribes a number of offences which apply to both providers and users of ‘labour hire services’. The main offences under the Act are as follows:

a person must not provide labour hire services unless they hold a licence;[2]
a person must not advertise, or in any way hold out, that they provide or are willing to provide labour hire services, unless they hold a licence;[3]
a person must not, without a reasonable excuse, enter into an arrangement with a provider for the provision of labour hire services to the person, unless the provider holds a licence;[4] and
a person must not enter into an arrangement with another person for the supply of a worker if the person knows, or ought reasonably to know, the arrangement is designed to circumvent or avoid an obligation imposed by the Act, unless the person has a reasonable excuse.[5]

These offences are punishable by substantial penalties of up to $391,650 in certain cases.

What are ‘labour hire services’?

At the heart of the Act is the concept of ‘labour hire services’.

A person is a provider of labour hire services if, in the course of carrying on a business, they supply, to another person, a worker to do work.[6]

This definition has a number of important components. In particular:

A person will usually be ‘carrying on a business’ where they undertake a commercial enterprise, for the purpose of profit, on a continuous and repetitive basis.[7] Significantly, however, that business does not have to have the dominant or even substantial purpose of providing labour hire.
A ‘supply’ is likely to be a broad concept that is not confined by the legal or commercial details of the relationship between the provider of labour, the end user, and the worker who is supplied.
Subject to some exceptions, an individual is a ‘worker’ if they enter into an arrangement with the provider under which the provider:[8]

may supply, to another person, the individual to do work; and
is obliged to pay the worker, in whole or part, for the work.

The drafting of this definition is significant because it focuses on what conduct is being undertaken, rather than who is undertaking it. The effect of this is to require entities to assess, on a case by case basis, whether compliance with the Act is met.

Are there any exemptions?

The Act, together with the Labour Hire Licensing Regulation 2018 (Qld), contain provisions which operate as exemptions to the requirement to hold a licence.

For instance, a person does not provide labour hire services merely because they are:[9]

a private employment agent under the Private Employment Agents Act 2005 (Qld); or
a contractor who enters into a contract to carry out construction work as defined in the Building and Construction Industry Payments Act 2004 (Qld), and engages subcontractors to carry out the work.

In addition, the following people are not considered ‘workers’ for the purposes of the definition of labour hire services:[10]

an individual whose annual wages meets or exceeds the high income threshold under the Fair Work Act 2009 (Cth) (currently $145,400) and who is not employed under a State industrial instrument, modern award or enterprise agreement;
where the provider of labour is a corporation, an executive officer of that corporation who is the only individual the provider supplies, in the course of business, to another person to do work;
an in-house employee who is supplied to another person to do work on a temporary basis on one or more occasions; and
an individual supplied to another person to do work if the provider and the other person are each part of an entity or group of entities that carry on business collectively as one recognisable business.

As governments strive to broaden their commercial presence, and traditional public functions are increasingly outsourced to the private sector, government bodies should be aware of the potential impact of the Act (and other regulatory regimes) on their dealings.

^{[1] Labour Hire Licensing Act 2017 (Qld) s 3.}

^{[2] Ibid, s 10(1).}

^{[3] Ibid, s 10(2).}

^{[4] Ibid, s 11(1).}

^{[5] Ibid, s 12.}

^{[6] Ibid, s 7(1).}

^{[7] See, for example, Hope v Bathurst City Council (1980) 144 CLR 1 at 8-9.}

^{[8] Labour Hire Licensing Act 2017 (Qld) s 8(1).}

^{[9] Ibid, s 7(3).}

^{[10] Labour Hire Licensing Regulation 2018 (Qld) reg 4.}

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