April 11, 2018

update | new Labour Hire Licensing legislation

The countdown is almost over, Monday 16th April the Labour Hire Licensing Act (QLD) 2017 comes into force.

On Friday 6 April 2018 the regulations in support of the Labour Hire Licensing Act 2017 (Qld) were released. Labour hire providers have just 60 days from the commencement of the legislation, to apply for a licence. This update is provided in furtherance of the previously released video alert and in-depth overview of the Act, if you missed it- Click here to view

We were looking to the regulations to provide further explanation and insight regarding:

  1. Who will be considered a labour hire provider?*
  2. What does the ‘fit and proper test’ for nominated officers of labour hire providers entail?
  3. What information will be required for license applications, renewals and the mandatory bi-annual reporting?
  4. How much will it cost to obtain a labour hire license?

    * The Act itself contained a broad definition which was essentially any worker supplied to another person in the course of carrying out business. 

     

1. The Expanded Definition of a Labour Hire Provider

Helpfully, the regulations specify that the following will not be considered a labour hire worker for the purposes of the Act:

  •  A worker who receives an annual income (not including superannuation and other benefits) from his/her employer equal to or more than the Fair Work Act 2009 (Cth) high-income threshold of $142,000 and is not employed under an industrial agreement or a modern award or enterprise agreement. 
  • A sole trader who trades as a corporation (i.e. a sole-director) who does not provide other workers to external businesses.
  • An in-house employee provided to an external business on a temporary basis on one or more occasions, so long as that is not the primary purpose of their employment. The regulations indicate that secondments, consultancy services and workers that work for one business but in a number of different locations in their role (i.e. community care providers) are not labour hire workers. 
  • Workers who are employed by one company and provided to another company in a group of companies to do work, so long as those companies carry on as one recognisable business to the public. The regulations explicitly state that the following arrangements will not be labour hire for the purposes of the Act:
     
    1. “A landscaping business is comprised of a number of companies that are responsible for different aspects of the business. The business’s workers are all employed by 1 of the companies and are supplied to work for 1 or more of the other companies within the business.
    2. “A business that operates a group of medical centres employs workers for the centres through a trust entity. The workers, including doctors, nurses and reception staff, are supplied to the medical centres to perform work.” 

Accordingly, if all your employees fall into any of the above categories, you will not need to obtain a  labour hire license for your business.
 

2. The Fit and proper test

The regulations do not offer any assistance regarding how an applicant's character will be assessed, and it remains to be seen how this will be evaluated by the regulator- we expect the dedicated website may offer some further guidance on this. 
 

3. Information for License Applications, Renewals and Mandatory Reporting

The regulations set out in more detail what information and records will be required to accompany license applications and renewals as well as the mandatory bi-annual reporting. 

Some key points to note regarding lodging an application for a license:

  1.  Individuals are obligated to disclose information about whether a close associate has, at any time, been bankrupt.
  2. A “close associate” includes a spouse, de facto partner, parent, brother, sister, child, step-parent, stepbrother, stepsister, stepchild, member of the same household, a business partner or a person in control to substantially influence the conduct of an individual applying for a license.
  3. Corporations are obligated to disclose information about whether any related corporation has, at any time, executed a Deed of Company Arrangement  (DOCA), has been wound up (voluntarily or by court order) or is in administration, liquidation or receivership.
  4. Individuals must disclose information about whether the individual applying for a license or a close associate has been convicted of a serious criminal offence – licensees are also required to notify the regulator during the term of a license if the licensee as an individual, a nominated officer or an executive officer of the licensee company is convicted of a serious criminal offence.
     

4. License Fees

Three different fees for license applications, renewals and reinstatements which are dependent on a businesses recorded or expected total wage payments to employees:

Tier 1 businesses- $1,000 for 12 months: a tier 1 business has paid in the previous financial year $1.5million in wages or, if this is its first year of trading, projects to pay $1.5million in wages. 

Tier 2 businesses- $3,000 for 12 months: a tier 2 business has paid in the previous financial year more than $1.5million in wages, but less than $5million or, if this is its first year of trading, projects to pay more than $1.5million in wages, but less than $5million.

Tier 3 businesses- $5,000 for 12 months: a tier 3 business has paid in the previous financial year more than $5million in wages or, if this is its first year of trading, projects to pay more than $5million in wages.


Moving Forward

The regulations should give businesses more of an insight as to whether they will be caught by the Act or not and we expect that the rollout of the dedicated website will also provide more clarification. If you are, however, still in doubt, please do not hesitate to contact the team at McInnes Wilson. 

It is important to remember that businesses can start applying for labour hire licenses on 16 April 2018 and need to make sure they lodge an application by 16 June 2018 to ensure they can continue to trade while license applications are processed. 

There is quite a lot of information that will need to be included with a license application which is set out in detail in the Act and the regulations and, we expect, will be set out in the license application documents.

If you would like further information on the new licensing, or if there is anything else we can assist you with please contact Associate, Jack Fairweather of McInnes Wilson Lawyers' Insurance Team