• Compliance & enforcement

Several labour hire providers are under investigation for alleged illegal phoenix activity and non-compliance with relevant laws, following unannounced visits to farms in Koo Wee Rup by multiple agencies on 22 October.

The ‘Day of Action’ by members of the national Phoenix Taskforce saw labour hire providers in the horticulture industry visited by officers from the Labour Hire Authority (LHA), Fair Work Ombudsman (FWO), Australian Taxation Office (ATO) and Australian Border Force (ABF).

During the operation, officers identified evidence of alleged illegal phoenix activity, as well as several other areas of alleged non-compliance by labour hire providers, including:

• operating without a labour hire licence
• engaging unlicensed subcontractors
• underpaying workers.

Workers were allegedly engaged to work at one farm for several years, with their employer’s details changing several times over the same period.

Hosts should be aware of unusual patterns of behaviour by providers, such as frequent changes in business name or bank account details, as this may indicate illegal phoenix activity.

The operation also uncovered alleged licence fraud, including an unlicensed provider passing off the valid labour hire licence of a different business as their own.

Officers interviewed workers, and key staff from hosts and providers, and collected financial documents to enable thorough investigation of any alleged illegal phoenix activity or other unlawful conduct by labour hire providers.

Under the Labour Hire Licensing Act 2018 (Vic), providers must comply with all relevant workplace laws and may have their licence cancelled for non-compliance.

Joint activities with other regulators ensure non-compliance can be investigated and enforced across different workplace laws and obligations that fall under each regulator’s jurisdiction.

The site visits are the latest in ongoing inter-agency collaboration to tackle non-compliance in the horticulture industry, following visits to farms earlier this year in:

• Melbourne’s south-east in April 
• the Yarra Valley and Mornington Peninsula in July
• north-west Victoria in August.

Beware of 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.

Hosts can take steps to protect their businesses from illegal phoenix activity by looking out for the following signs:

• quotes lower than market value
• company directors previously involved with liquidated entities
• requests for payments to a new company or bank account
• changes to a company's directors and name, while the manager and staff remain the same.

For more information on how to spot potential red flags related to illegal phoenix activity, visit the LHA website.

About the Phoenix Taskforce

LHA is a member of the national Phoenix Taskforce and works closely with the ATO, FWO and other Commonwealth and state agencies, focusing on illegal phoenix activity and the significant harms to workers and legitimate businesses it can cause, including:

• unfair disadvantages for compliant providers and hosts
• loss of revenue for unpaid suppliers and sub-contractors
• loss of wages and entitlements for workers
• loss of tax revenue used to provide services to the community.

The Phoenix Taskforce was established in 2014 to detect, deter and disrupt illegal phoenixing.

Led by the ATO, the Taskforce includes 46 Federal, State and Territory government agencies, including LHA, the Australian Securities and Investments Commission, the Department of Employment and Workplace Relations, the Fair Work Ombudsman and Australian Border Force, to take a whole-of-government approach to combating illegal phoenix activity.

Phoenix Taskforce agencies share information and use sophisticated data-matching tools to identify those promoting or engaging in illegal phoenix activity.

The Taskforce acts against phoenix operators by:

• working together to disrupt their business model and make it financially unviable
• removing their ability to operate
• applying financial penalties
• prosecuting the worst offenders.

As at 30 September 2024, the Phoenix Taskforce has raised more than $2.45 billion in liabilities from audits and reviews of illegal phoenix activities, and returned more than $1.08 billion to the community.

For more information on illegal phoenix activity, or the Phoenix Taskforce, visit the ATO website.