by Julius Grafton
The State of Victoria is the latest to bring in an onerous new license system for labour hire that will affect any firm that rents labour. It is not restricted to crewing agencies but also applies if a line item on an invoice includes labour by the hour.
From 30 October 2019, substantial penalties will apply in Victoria to labour hire providers who don’t have a licence or a licence application pending and businesses that use unlicensed providers. Note that last part – a client can be fined as well.
Queensland and South Australia have similar schemes in place, ostensibly aimed at cleaning up the fruit picking industry. Each scheme is different, forcing national providers into different compliance regimes.
A range of companies that you would not consider to be labour hire companies are applying for the license.
A worrisome aspect to the Victorian license is that the tiers for the application fee are based on a company’s turnover, not just in Victoria but in total including other states. This means they may pay a proportionally higher rate for the license than their operations in Victoria might warrant.
In some cases subsidiary companies are being formed to mitigate the costs and insulate labour hire operations from the holding company.
The more straight-forward Queensland license is charged based on turnover in that state only. The South Australian system requires the ‘responsible person’ to do a couple of courses.
The schemes are a barrier to entry for a lot of potential providers and reduces the scope for competition. They favour larger players; companies with offices that can handle the extra reporting requirements and costs.
The other states, including NSW and WA, haven’t announced similar licensing schemes but given there are fees to be charged possibly will follow. The Federal Government have indicated they may introduce a national system which may sit over the state systems or lead to the abolition of state systems.
In the Queensland scheme there are reporting requirements where you have to itemise every job you’ve worked on, who the end client was, how many crew and specify the venue. A lot of this goes on the public record, which could create competition complications.
The schemes are not restricted to crewing agencies. For example an audio company who cross hire out a technician for a tour, without equipment, would technically be operating a labour hire company and would require a license. Without a license, the company would be in breach, and so would the client company that hired the tech. Both companies would be liable to pay fines.
A labour hire provider is a business that has an arrangement with one or more individuals under which the business supplies the individuals to perform work in and as part of a host’s business or undertaking and the provider is obliged to pay the individual for performance of the work.