All businesses with connections and operations in Queensland should be aware that the Queensland Government’s proposed Labour Hire Licensing Bill 2017 could change the way they provide or engage labour.
The Bill introduces a licensing scheme and requires businesses to hold a license in order to provide labour hire services to other businesses and individuals. In order to obtain and hold a licence, the Bill would require a labour hire provider to be a ‘fit and proper person’. The ‘fit and proper person test’ will take into account whether the applicant has a history of compliance with relevant laws and whether the applicant has ever been insolvent or was an executive of a corporation that was placed into administration, receivership, or liquidation.
Despite labour hire employers and employees being subject to the same laws as everyone else, the Bill would impose very onerous arrangements on labour hire businesses and their clients. The Bill follows a 2016 Queensland Parliamentary Committee Inquiry.
Of concern, the proposed licensing scheme extends well beyond labour hire operators, being generally businesses whose main activity is to provide labour to other businesses. The licensing scheme would require any business, which in the course of carrying on a business, supplies to another person, a worker to do work. Such a broad definition of labour hire services would cause significant disruption and restriction to all sorts of employment and commercial arrangements, most of which already comply with current legal obligations.
For instance, a licensing scheme could cover businesses that:
- provide goods or services to customers that may include the incidental provision of labour, e.g. an employee providing onsite ongoing maintenance or support for a product and service;
- are digital platforms providing work for contractors to customers;
- are not-for-profit group training organisations;
- temporarily second employees to third party organisations with whom there is a business relationship, for purposes that may include employee professional development.
Similarly, the concept of a “worker” doing such work is not just confined to employees. Under the Bill, a ‘worker’ is anyone who has an arrangement with a provider under which the provider supplies the individual to do work for another person, and for which the provider is obliged to pay the worker. This could include a variety of independent contractors, many of which are already treated as such for the purposes of taxation and insurance.
Businesses who use or rely on workers other than through direct employment should also be aware that the Bill would make it unlawful for businesses to enter into an arrangement with a provider of labour unless the provider is the holder of a licence. To do so would be an offence for which a maximum penalty of up to $365,700 for companies and $126,045 and imprisonment for up to three years for individuals could apply. These penalties also apply to businesses who provide labour hire services without the required licence and to persons who enter arrangements to avoid the obligations of the licensing scheme.
In addition, the Bill contains some onerous reporting requirements on licensee holders, including requiring licensees to report every six months on the number of employees, descriptions of employment arrangements, the locations of work performed in Queensland and details of the type of work performed.
Impact on the Gig Economy
Despite growth and strong consumer demand for ‘gig economy’ services, the Bill’s potential to restrict both digital platforms and individual consumers of services, such as ride-sharing, cleaning and other tasks is significant.
Under the Bill a digital platform may need to be a licence holder in order to provide workers to perform work for consumers. But what of individual consumers? Could they too be committing an offence if they unknowingly engage an unlicensed digital platform for a worker to perform work for them? With such hefty penalties, including jail terms, the proposed licensing scheme would be an unreasonably punitive regime on individual consumer choice.
If the Bill is passed in its current form, we are likely to see far-reaching regulation on various employment models, including the majority of those businesses who do the right thing.
Victoria and South Australia
The State Governments of Victoria and South Australia are also intending to establish labour hire licensing schemes. As in Queensland, it is intended that such schemes would require labour hire operators to hold a license in order to provide labour hire services and that users of labour hire would also be required to only use licensed operators.
For more information about the various labour hire licensing scheme proposals, please contact Nicola Street, Ai Group’s National Manager – Workplace Relations Policy.