The Labour Hire Licensing Act 2017 (SA) and the Labour Hire Licensing Regulations 2018 (SA) require certain labour hire service providers in South Australia to be licensed.

The Act aims to protect workers from exploitation by labour hire services. The Act also provides some protection from predatory business practices who may be unsuitable to be licensed to provide labour hire services. The Act establishes higher standards and compliance requirements that licensed labour hire services and host organisations must adhere to.

As at 20 July 2020, labour hire service providers that provide workers to undertake labour hire services in the industries listed below must be licensed. Failure to do so can attract significant penalties.

The prescribed industries are:

Labour hire service providers in these industries must provide specific information (as determined by the Commissioner) to the labour hire worker at the time they are first employed by the provider, and each time the labour hire worker is supplied to a host organisation to undertake work [reg 5A Labour Hire Licensing Regulations 2018 (SA)].

Exemptions

Section 46(1) of the Labour Hire Licensing Act 2017 (SA) allows for an exemption to be made by the Commissioner from the requirement to be licensed (under section 11 of the Act) in prescribed circumstances.

An exemption currently applies in the following circumstances:

1. A person who is a body corporate with no more than 2 directors who provides a person to another person to do work, where the person provided by the body corporate is a director of the body corporate who participates in the management of the body corporate, or shares in its profits.

2. A person who is a sole trader or partner in a partnership consisting of no more than two individuals, where the person provided to another person to do work is the owner of the business who participates in its management, and shares in any profits.

An exemption from the operation of section 12 of the Act to 'any person who enters into an arrangement for the provision of labour hire services' with any of the persons listed in paragraphs 1 and 2 above (inclusive) also applies.

An example of labour hire services

B is employed by A, a labour hire business. A supplies workers to undertake work for other host organisations. In the course of conducting the business, A agrees with C to supply B to undertake meat processing work for C at C's meat processing business. A sends B to C to undertake the work, for which A will pay B as their employer. A provides labour hire services in supplying B to C.

In the above example, the individual (B) is an employee of A's labour hire business, and is entitled to the minimum national employment entitlements under the Fair Work Act 2009 (SA).

For information about on-hire workers that are engaged as independent contractors, please visit the Fair Work Ombudsman website.

The labour hire service provider (A) and host organisation (C) must both comply with work health and safety laws, and general employment protections legislation.

Anti-discrimination, equal opportunity, work health and safety, workers compensation, tax, superannuation, pay and leave entitlements will apply to employees of labour hire service providers.

For example, in Australian Building and Construction Commissioner v CoreStaff WA Pty Ltd [2020] FCA 893, the Federal Court of Australia held that a labour-hire company took adverse action against a 70-year-old grader operator on the grounds of his age, when it declined to engage him for placement with a client.

For more information on labour hire services and employment conditions, please visit the Fair Work Ombudsman website.

For information on the South Australian labour hire licensing scheme, please visit the Consumer and Business Services website.