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New laws for corporate group workers - don't get caught out - 8 February 2018

If your operation is using workers employed by a separate company you are probably using “hired labour”. From 16 April 2018 new laws will regulate these arrangements in Queensland. 

Introduced in response to scandals involving agricultural workers, the Labour Hire Licensing Act 2017 is nevertheless of general application – the industry for which the workers are supplied is irrelevant.

The core obligations of the new laws are:

  • labour hire providers – that is those companies or individuals who supply workers to others – must be licensed; and
  • those using supplied labour must use only a licensed supplier.

When is it labour hire?

The laws apply where an entity (company or person) is supplying workers to another and being paid for it.  

Essentially, the test is whether a business (A) is paying another entity (B) on an ongoing basis for the services of an individual worker (W) who is paid by B, ie if the financial relationships look like this:

If those financial relationships exist it doesn’t matter what the contractual arrangements are between B, A or W, whether other entities are interposed, who is supervising or controlling W, or whether W is temporary, casual, full or part-time, a trainee, a contractor or employee.

Unless exempted, B must be licensed. 

These new laws will catch many in the resources sector. If you have an operating company using staff and workers employed through another entity, you will be caught and your employing company will need to be licensed.  For example, Supamine Pty Ltd operates the Supa Gold Mine, using labour provided by its holding company Supa Co. Supa Co is a labour hire provider and must be licensed.

Exemptions are:

  • building contractors engaging subcontractors to carry out building work;
  • agents registered under the Private Employment Agents Act 2005, in relation to their activities under that Act (i.e. recruiting staff who are then engaged by the client); and
  • any other person or category exempted by a regulation – of which there are none at this stage. Regulations may only exempt where labour hire is not the dominant purpose of a business.

Penalties for breaching the obligations are up to $375,000 for a company and $130,000, or a three year jail term, for an individual. Those penalties may also apply to entering into arrangements to avoid the new requirements – if the person “knew or ought to have known” the arrangements were to avoid the law.

For more information on getting licensed, obligations once licensed, and enforcement click here

To discuss this further, please contact Consultant, Lucy Snelling from HopgoodGanim Lawyers’ Resources and Energy team, or Anna Hendry from HopgoodGanim Lawyers' Insurance and Risk team. 


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