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In its 2022-23 annual report, the Labour Hire Authority (LHA) highlights progress towards its strategic objective to create and maintain a fair and lawful industry.

“Based on our outcomes from the past year, it’s clear that labour hire is moving towards becoming a more fair and lawful industry,” said Labour Hire Licensing Commissioner, Steve Dargavel.

“As our licensing, compliance, enforcement and engagement efforts continue to grow, I’m confident that we’ll continue to build on this progress in the months and years ahead.”

Identifying and responding to high-risk licence applications

In 2022-23, LHA improved its ability to identify applications that present a high risk of non-compliance, using varied intelligence including data and information from a range of Victorian, interstate and Commonwealth agencies.

LHA has expanded its work with interstate agencies in 2022-23, such as working with the Queensland labour hire regulator to address multiple licence holders engaged in non-compliance.

LHA refuses licence applications where appropriate – preventing non-compliant providers from providing labour hire services – and applies appropriate and proportionate conditions on other providers to ensure they comply with their legal obligations to workers.

“Working alongside other regulators across Australia is an important way to ensure labour hire providers are meeting their obligations, within Victoria and interstate,” said Commissioner Dargavel.

Sham contracting

During the licence application process, LHA pays close attention to providers who supply or intend to supply workers as independent contractors, where there is a risk that those workers are misclassified.

This year, LHA published Guidance for labour hire providers engaging workers as independent contractors. Making information available to an applicant about their obligations from the start, improves their understanding of their obligations as a licensed labour hire provider.

LHA has also refused or cancelled licences in response to misclassification of workers or sham contracting and where appropriate, introduced licence conditions.

Illegal phoenix activity

Illegal phoenix activity occurs where a company is liquidated, wound up or abandoned in a deliberate attempt to avoid paying its debts. A new company is then started to continue the same business activities without the debts.

LHA works closely with the ATO and other government agencies under the national, 40-agency Phoenix Taskforce to stamp out illegal phoenix activity across the labour hire sector.

In 2022-23, LHA published guidance on red flags businesses should be aware of to help them avoid illegal phoenix activity by providers.

Unlicensed provision of labour hire services

Where there is information that a licence applicant has been providing or advertising labour hire services without a licence, LHA may grant the licence for a period less than three years, refuse the application, or prosecute those in breach for contravening the Act, depending on the circumstances.

LHA had multiple high-profile enforcement activities in 2022-23 regarding unlicensed provision of labour hire services, including a case filed in May 2023 alleging A L Star Express Pty Ltd was unlicensed when it provided workers to pick fruit and vegetables.

The right wages and conditions

To help prevent worker exploitation, LHA pays close attention to the ways a licence applicant will make sure that their workers get the right pay and conditions, including by checking the accuracy of the award or agreement nominated in the application form.

LHA imposes conditions on some licences requiring additional reporting of payroll information, so that we can monitor a provider’s compliance on pay and conditions. If LHA is not satisfied with the information provided, it may refuse an application.

Annual reporting obligations and licence fees

Licence holders must report annually about their business activities and their compliance with relevant laws. Licensees must also pay an annual licence fee, which funds LHA’s oversight of the labour hire licensing scheme.

Reporting obligations are critical to monitoring labour hire providers, and LHA takes non-compliance with these obligations seriously. LHA notifies licence holders through the online portal and via SMS when annual reports and licence fees are due.

More information

To find out more about LHA’s activities to create and maintain a fair and lawful labour hire industry, download the Labour Hire Authority Annual Report 2022-23.