National Labour Hire Scheme – A New Reality

A National Labour Hire Scheme could soon become a reality with renewed discussions between State and Federal Ministers outlining guiding principles for the proposed legislation.

The national scheme is intended to replace current individual State schemes and create a more streamlined and cost effective labour hire system under the oversight of the Fair Work Ombudsman.

The Morrison Government is hoping that the legislation will address systematic and deliberate underpayment of labour hire workers, in response to recommendations from the Migrant Workers’ Taskforce Report and widespread reports of exploitation and abuse within the labour hire industry across the country.

Queensland, Victoria, South Australia and the ACT already have regulated labour hire schemes, and the Western Australian Government has given an in-principle agreement to support a state-based labour hire licensing scheme.  As a result, the Deputy Secretary of the Industrial Relations Group, Martin Heir, has highlighted the need for a coordinated national approach, even remarking the current schemes “all differ and the recommended model from the migrant workers’ taskforce is different again.”

To that end, Federal Industrial Relations Minister Christian Porter wrote to his State and Territory counterparts in October 2019 seeking their involvement in the development of a national labour hire scheme to monitor and ensure compliance with applicable obligations.

In addition to advocating for a national scheme to replace existing State schemes to avoid duplicated regulatory and administrative costs, the Federal Industrial Relations Minister proposed the following list of “guiding principles” for the national scheme:

• Mandatory registration of labour hire operators with the Fair Work Ombudsman under annual subscriptions and requiring disclosure of prescribed information about their owners/operators and the business;
• Coverage of high risk sectors at a minimum, including horticulture, cleaning, meat processing and security (subject to stakeholder consultation);
• Compliance to be monitored by the Fair Work Ombudsman;
• Publication of a directory of registered labour hire operators; and
• Imposition of fines for the use of unregistered labour hire operators.

The Federal Industrial Relations Minister indicated that submissions will be sought from employers, unions and advocates in order to facilitate the protection of vulnerable workers and level the playing field for businesses, with the intention being to avoid any unnecessary conflicts or administrative burdens for businesses regardless of jurisdiction.  The framers of the national scheme will also look to those jurisdictions where labour hire regulations have already been successfully implemented for guidance.

Legislation is yet to be tabled for the scheme, so determining likely consequences is guesswork at best.  Ideally, the national scheme should replace existing State and Territory schemes outright. However, issues such as the intersection between, or gaps in, coverage and arrangements for migration between schemes will need to be addressed in the consultation process and resolved prior to any legislation being enacted.

It is recommended that businesses operating in Queensland, Victoria and the ACT confirm their obligations under existing schemes, and that those in South Australia and Western Australia educate themselves about proposed introductions.

If Federal legislation is enacted it could significantly change the labour-hire landscape. Labour hire providers, and end-users of labour hire, are advised to keep well-informed about any changes at both State and Federal levels.

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