Labour Hire Licensing Regulations 2018 (the Regulations) to accompany the Labour Hire Licensing Act 2017 (the Act) have now been released by the South Australian Government and it appears are less onerous than were first predicted.
The Act proposes to not only protect labour-hire workers from exploitation but also promote the integrity of the labour-hire industry and has been the subject of focus across APSCo as it continued to lobby on behalf of the professional staffing businesses affected by the changes.
As of 1 March 2018, it will be unlawful for labour-hire providers to operate or do business in South Australia without a licence, as well as for employers to engage an unlicensed operator (subject to certain exceptions). While companies have until 1 September 2018 to apply for a licence, APSCo is urging impacted recruitment firms to plan for the requirements early.
All businesses who supply workers to another person or entity in South Australia to work in, and as part of, that person’s business or undertaking, and who pays the individual for that work, must hold a licence whether it has operations in South Australia, or not.
In order to obtain a licence, Directors and other responsible persons within the business will need to pass a ‘fit and proper’ person test, undergo a financial review of the business, demonstrate business knowledge and compliance with relevant legislation, as well as undertake background checks.
A public register will be established containing business and licence details of all licence holders in South Australia. Once a licence is granted, licence holders will be subject to regular reporting requirements and must update the Commissioner about any relevant changes in the business.
Professional staffing companies should be aware that a designated third-party could potentially object to an application or appeal the granting of a licence on the grounds that one of the Directors or responsible persons in an organisation is not a fit and proper person.
Heavy penalties of up to $140,000 for an individual and $400,000 for a corporation will apply for breaches of the Act. Although the Government’s decision to reduce the term of imprisonment for breaches from 6 years to 3 years is a small win, it is still a significant penalty. As part of the monitoring and enforcement process, authorised officers will have extensive entry and inspections powers.
APSCo Australia Managing Director, Julie Mills, commented, “As APSCo Australia informed members last year, the South Australian licensing scheme has accounted for our concerns and recommendations made in our submissions to the Government regarding the broad definition of “labour-hire services” and the undesired effect of potentially capturing Pty Ltd Contractors. In a welcome addition to the South Australian legislation, Pty Ltd Contractors who ‘supply’ personnel to perform services for clients of members are excluded from the application of the scheme.
“Despite our submissions that professional contracting and staffing services should be exempt from the licensing scheme, the definition of labour-hire services is still considerably broad and would be likely to apply to Members who provide contracting services and contractor management services to clients in South Australia.”
“While we support the Regulations in principle, we will continue to lobby on behalf of our members to minimise the overall impact of multiple labour-hire licensing arrangements operating in Australia and assist companies to achieve success in their license applications through APSCo’s Labour-Hire Licensing Preparation Service,” she added.