The Labour Hire Licensing Act 2018 mandates that anyone who provides labour hire services in Victoria must hold a current labour hire licence issued by the Labour Hire Authority (LHA).
Businesses providing labour hire services without a current licence can face serious consequences – civil penalties of over $500,000 can apply – so it’s important to know your obligations.
Can I provide labour hire if my licence application has not yet been approved?
No. It is not sufficient to have only made an application for a licence – you must hold a current labour hire licence unless your application was made during the transitional period.
All providers with a current labour hire licence will appear on the Register of Licensed Labour Hire Providers with their licence status as ‘In Force’. Any other status means they do not currently hold a labour hire licence and are, therefore, not allowed to provide labour hire services in Victoria.
The only exception to this is where the provider made an application during the transitional period.
I have more than one company that provides labour hire. Does each one need to be licensed?
Yes. Each legal entity – be it a corporation or individual – that provides labour hire services must have a labour hire licence.
It is not sufficient for one entity in a ‘group’ to hold a licence, and labour hire licences cannot be held jointly by corporations.
EXAMPLE: A Pty Ltd and B Pty Ltd have the same directors and shareholders and are ‘grouped’ for payroll tax purposes. Both A Pty Ltd and B Pty Ltd are employing entities and hold contracts to provide workers to the hospitality industry.
In this instance, both A Pty Ltd and B Pty Ltd must have a labour hire licence that is in force. It is not sufficient for just one of the companies to have a labour hire licence.
If my business has transitioned to a new legal entity, do I need to apply for a new licence?
Yes. If the legal entity that supplies workers to a host changes – for example, transitions to a new company name but maintains the same director and/or shareholder – the new entity must apply for a labour hire licence. The new entity cannot provide labour hire services until the licence is granted.
Frequent changes to the legal entity a labour hire business operates through may be an indicator of illegal phoenix activity. If a host has any concerns about their provider changing legal entities, they should contact us to discuss this.
EXAMPLE: C Pty Ltd provides crowd controllers to hotels and holds a labour hire licence. It ceases to trade and the business transitions to D Pty Ltd, a different corporation with a different ACN and ABN but the same director and shareholder.
In this instance, D Pty Ltd must apply for a labour hire licence and cannot provide labour hire services until a licence is granted. The director of D Pty Ltd must also declare if C Pty Ltd was insolvent or externally administered when making the new application.