Security businesses: Contract prices are indicators of significant risk of non-compliance with legal obligations

The Labour Hire Authority (LHA) is urging all security industry providers to review their contract rates to ensure they can sustainably meet their legal obligations.

The LHA recently refused a licence application received for Innovative Security Pty Ltd and cancelled the licence of Ceek Solutions Pty Ltd after becoming concerned that they had been charging their head contractor for the supply of guards for 24/7 coverage at rates below $30 per hour (including GST).

Based on these low rates, the LHA formed the view there was a significant risk that both Innovative Security and Ceek Solutions were not compliant with their obligations to pay appropriate wages, superannuation, portable long service leave levy, workers’ compensation insurance and GST.

Both businesses failed to respond when payroll and other business records were requested to ensure compliance. As a result, the LHA could not be satisfied that either business was compliant with their legal obligations and took appropriate action.

In addition, Ceek Solutions had failed to lodge its annual reporting with the LHA in accordance with their obligations under the Labour Hire Licensing Act 2018 (Vic).

Where providers are found to be charging their clients at unsustainably low rates, the LHA will look more closely to ensure workers are being paid properly and other obligations are met. Licensing action is likely where non-compliance is found and providers don’t engage to rectify their behaviour.