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Victoria to Introduce New Licensing Scheme for Labour Hire Providers


The Victorian government is introducing a suite of reforms for the labour hire industry, designed to screen out the “rogue operators”.

This move is a response to the 2015-2016 Victorian Inquiry into the Labour Hire Industry and Insecure Work. According to the Inquiry, there was widespread abuse and exploitation of workers across Victoria. The industries that were particularly affected agriculture, transport, and cleaning.

Issues identified included underpayment of workers, not ensuring proper safety standards, abusing worker visas, and undermining the minimum standards of employment. These were also named in a recent research released by the Australian Institute of Criminology - Labour exploitation in the Australian construction industry: risks and protections for temporary migrant workers.

“The inquiry exposed the shocking underbelly of worker abuse and proved that the industry has been left unregulated for far too long – and now we’re changing that,” Victorian Premier Daniel Andrews said. “Every worker has the right to be treated with fairness and respect. Under our tough new laws rogue operators will no longer be able to get away with exploitation or abuse.”

The reforms will have an impact on the construction sector. 

The reforms will have an impact on the construction sector.

The Housing Industry Association, Victoria, in its submission to the Inquiry noted that “labour hire provides effective short-term labour to many building projects, especially for specialised tasks and skills sets such as scaffolding and excavation.

“Depending on the trade required or skill involved, labour hire arrangements may be utilised by the principal contractor/builder or trade contractor.”

Under the reforms, any labour hire provider utilised by either a builder or a trade subcontractor will need to conform to a new universal licensing scheme.

The government proposes that a license can only be obtained through passing a “fit and proper person test” and by demonstrating compliance with workplace, labour hire industry, and migration laws and minimum accommodation standards. Licensed Providers will be listed on a public register and employers will be required to only use licensed labour hire providers. In order to oversee and enforce the scheme, a new independent, fit-for-purpose, statutory authority – headed by a Commissioner – will be established. They will be able to inspect and raid premises.

“Businesses will need to show they treat their workers fairly and become licensed or face hefty penalties,” Ms Hutchins said. 

Operators that do not comply or attempt to evade the scheme by entering into avoidance arrangements will be liable for both civil and criminal penalties. Victorian Minister for Industrial relations Natalie Hutchins said the scheme will “bring some much needed transparency to the labour hire industry”.

“Businesses will need to show they treat their workers fairly and become licensed or face hefty penalties,” Ms Hutchins said.

The legislation is expected to be introduced into Victorian Parliament before the end of the year.


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