• 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 the Yarra Valley by multiple agencies on 26 March.

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:

• unlicensed labour hire arrangements
• licence fraud, which involves persons mispresenting themselves as being a licensed provider
• substandard accommodation provided to workers.

It is important for hosts to have a firm understanding of who is working at their farms and under what conditions. Hosts may face significant penalties for non-compliance in their supply chain, as well as disruption to their business.

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 and/or licence fraud.

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

Officers interviewed workers, and key staff from hosts and providers, and collected financial documents to enable thorough investigation of potential unlawful conduct.

Under the Labour Hire Licensing Act 2018 (Vic), providers must comply with all relevant 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, including alleged illegal phoenix activity identified during site visits in Koo Wee Rup in 2024, and visits to farms in:

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

Investigations are ongoing into alleged non-compliance uncovered during the visits and LHA will continue to work alongside the other agencies on any outcomes.

Beware of illegal phoenix activity

Illegal phoenix activity harms both businesses and workers:

• Legitimate businesses are put at a competitive disadvantage.
• Unpaid suppliers and sub-contractors lose revenue.
• Employees may miss out on wages, superannuation and entitlements.
• Loss of tax revenue used to provide services to the community.

Hosts can take steps to protect their businesses from illegal phoenix activity by looking out for potential red flags when engaging a provider, such as:

• 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 name and directors, while the manager and staff remain the same.

For more information on how to spot potential red flags related to illegal phoenix activity, visit Red flags: Beware of illegal phoenix activity.

Protect your business and your workers – only use licensed providers

Hosts can take two quick actions to protect their business and support LHA in working towards a fairer industry for businesses and workers.

• Check the licence of any current providers on the Labour Hire Licence Register.
• Subscribe to be notified of any changes to providers’ licence status through the Follow my Providers tool.

Before engaging a new provider

• Check the provider is licensed using the Labour Hire Licence Register.
• Do not rely on paper documentation – it could be illegitimate or out of date.
• Check the age of the provider’s company and their industry details.
• Ask for evidence of the provider’s company structure, hierarchy of control and contracting arrangements:
• Confirm that the company offering services is the same as the one listed on the Register - note who is named as running the business, including any nominated officers.
• If the person approaching you is not one of those people, confirm their connection to the licensed provider and authority to act, and ask to see an identity document.
• Contact the provider’s nominated officer using the details on the Register, to satisfy yourself that the person or business is the licensed provider.
• Keep a record of these checks for reference.

When engaging a new provider

• Sign a written contract that properly identifies who they are and ensures workers will be paid the correct wages and entitlements.
• Include clear and specific expectations of the provider, including an obligation to advise you of any subcontracting arrangements or changes to their business or licence status.
• Set clear expectations that the provider must comply with all workplace laws.

For more information, please visit the Check a provider’s licence status page.

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.

The Phoenix Taskforce aims to detect, deter and disrupt illegal phoenix activity.

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.

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