Labour-hire Shake-up Continues in Victoria

28 June 2017

The Victorian Government has agreed to adopt the national model Work Health and Safety Act (2011) (Vic) (“WHS“) definition of worker and consultation obligations, as recommended by a 2016 inquiry into the labour-hire sector.

The Victorian inquiry found that an alarming number of employees working under labour-hire arrangements were subject to poor safety standards and “outright exploitation”. As a result, the inquiry made multiple recommendations, including that Victoria adopt similar legislation recently introduced by the Queensland State government, and going the step further to advocate for a national labour-hire licensing scheme.

Rather than placing duties on organisations to conduct labour-hire businesses in strict adherence to relevant regulations and legislation, the inquiry has suggested placing these duties on the individuals and directors directly involved in conducting the business. This approach, it was suggested, would be a more appropriate and an effective method to guarantee the safety of Victorian workers than the current legislative regime.

In response to the inquiry, the Victorian Government announced that it supports the adoption of model WHS provisions, and would seek to ensure that labour-hire employees “are not disadvantaged in comparison to direct employees”.

The official statement was quick to add that further work would be necessary to investigate what changes need to be made to ensure appropriate coverage for these workers. In the words of the statement itself:

“This work will include examining the extent of legislative change that may be required, as well as canvassing stakeholder views. Care will be needed to ensure that any proposed changes to the scope or coverage of legislation do not have unintended consequences.”

State Government support is similarly cautious with regards to recommendations to improve the collection of data on occupational health and safety (“OHS“) risks for labour-hire workers, and on the proposed criteria for obtaining a license.

The proposed criteria will require that labour-hire operators:

  1. have no past involvement in OHS breaches, fraud or insolvent businesses;
  2. can show that any accommodation provided complies with State and local regulations;
  3. are registered with WorkSafe and pays workers’ compensation premiums; and
  4. have systems in place for ensuring the health and safety of workers at host organisations.

For labour-hire operators across Victoria the first and final points are likely to have the most significant impact on the manner in which labour-hire businesses are currently being operated. Labour-hire operators are encouraged to be on the front foot in the event these changes are implemented.