New Dawn on Licensing Labour Hire Services in SA
The SA labour hire licensing scheme will operate from 31 August 2019. Exemptions to the scheme have been passed by Parliament to prevent certain businesses falling under the scheme. It is important that any business that uses or provides traditional labour-hire services to assess its needs to comply with the scheme.
The South Australian Government announced that the Labour Hire Licensing Act 2017(the Act) will be enforced as of 31 August 2019. Consumer and Business Services (CBS) will commence accepting applications for labour hire licences from 14 June 2019.
Essentially, the Act concerns providers of “labour hire services” and acknowledges that it is unlawful for clients to engage with unlicensed “labour hire services” providers and for unlicensed providers to partake in any service offering.
Who will need a licence?
- If your business provides workers to work for someone else in and as part of that other person’s business
- If you have an arrangement with your workers to supply them to another person to do work
- If the workers you provide to the other person are paid, whether in full or in part, by your business
Who doesn’t need a licence?
If the following applies to you, a labour hire licence will not be required.
- If providing labour hire services is not a core function of the business
- If businesses provide workers to another business within the same group of companies – e.g. a parent company supplying workers to a subsidiary company
- If businesses provide workers to work in another business where both businesses are part of the same franchise
- If businesses provide workers to work in another business that are not part of a franchise but are collectively operating using the same banner, branding or trading name.
These are issues that have been clarified since the original laws were passed under the previous Labor State Government.
What you need to be aware of
When applying for a license, the provider must demonstrate that they are a “responsible person/persons.” This includes compliance with 13 different laws and prior business experience. Upon application the provider must also pay an application fee (which will be less for a natural person registering) and an annual licensing fee. CBS will have a public register of current licensees and applicants available for public view on their website.
What can happen if you don’t comply?
- If you are an unlicensed provider or are a client using an unlicensed provider you may be subject to $400,000 in penalties and/or 3 years imprisonment
- If you are found to be advertising your service and are unlicensed you may be subject to $30, 000 in penalties
- If you are a client or prospective client and are aware that the provider is in breach of the Act, you could also be subject to $30, 000 in penalties
What about other states and territories?
Labour hire licensing legislation is already in place in Queensland and Victoria.
There are no laws regarding labour hire licensing at a Federal level or in other states/territories, however both the ACT and Commonwealth Governments have indicated that they are considering implementing a scheme in the future, particularly for ‘high risk’ industries such as horticulture, meat processing, cleaning and security.
It is important to understand where you fall within this scheme and undertake due diligence to ensure you comply, whether you are a provider or a client.
This Alert is intended as general information only. It does not purport to be comprehensive advice or legal advice. Readers must seek professional advice before acting in relation to these matters.