• Legislation & regulations

The Labour Hire Authority (LHA) has recently updated its cost guidance for the security industry for the 2024-25 financial year.

LHA uses its 2024-25 security industry guidance: cost of meeting your legal obligations as the benchmark for assessing contract pricing in the industry, to inform its compliance activities.

Contract prices can be a strong indicator of the risk of non-compliance with a provider’s legal obligations, including around workers’ pay and entitlements.

Security businesses use the guidance to inform their own compliance, as well as to highlight to hosts the minimum contract prices required to comply with legal obligations to workers – a useful tool in contract negotiations, based on industry feedback.

Risks in complex supply chains

The security industry can involve complex supply chains – where a client or host business engages a provider to supply security workers, and the provider acts as a principal contractor, sourcing workers from subcontractors to on-supply to the client/host.  

While subcontracting can be legitimate, there is an inherent increased risk of non-compliance within complex supply chains.

The Fair Work Ombudsman (FWO) has described this risk occurring when “pressures of multiple businesses taking a profit as additional subcontractors are added to the contracting chain, and the perceived ability to hide non-compliance within convoluted business structures”. (FWO, An Inquiry into the procurement of security services by local governments, June 2018).

LHA may impose licence conditions on principal contractors to address risks in their supply chain, improve transparency, or change behaviour across multi-tier supply chains.

If non-compliance is identified, this may result in a warning, licence suspension or cancellation – impacting or preventing a business’s operations.

Tackling non-compliance within the security industry

Companies that supply security guards and crowd controllers to businesses such as hotels, clubs, pubs, events, and retail and commercial premises are generally considered labour hire providers. 

The security industry remains a focus for LHA, in its mission to protect workers from exploitation and improve the transparency and integrity of the industry.

LHA continues to work with:

• hosts and principal contractors to ensure they maintain responsibility and transparency throughout their supply chains, through education and/or licence conditions
• providers, by offering guidance about complying with their legal obligations and imposing conditions where appropriate to monitor compliance.

LHA takes firmer compliance actions where providers are unwilling or unable to comply with their legal obligations.

LHA will be hosting a Security Industry Forum later in 2024. More information and registration details will be provided in a future edition of LHA News.

Read more about LHA’s focus on the security industry:

• Security company refused licence after poor responses to LHA requests for information
• Improving transparency in complex supply chains in the security industry
• Large security services provider has labour hire licence granted with conditions
• VCAT upholds LHA decision to refuse security provider’s licence application
• Case study: Improving compliance in complex supply chains
• Are you correctly implementing individual flexibility arrangements?