Contractor management services

Another category of labour hire service providers that are required to obtain a licence is ‘contractor management services’ pursuant to section 8(2) of the Labour Hire Licensing Act 2018 (Vic.).

Contractor management services are labour hire when the provider recruits or places one or more individuals who are independent contractors to perform work in and as part of a host’s business or undertaking, and then manages the contract performance by the independent contractor.

‘Contractor management services’ covers services where a business (the provider) recruits independent contractors on behalf of a third party (the host) and manages the performance of the contractor, even though the contractor may be engaged and paid by the host.

Examples of businesses that are captured by this provision include businesses that recruit or place independent contractors, and then provide ongoing administration and payroll functions, or supervision or performance management functions for hosts.

The examples provided on this page are for illustrative purposes only, and do not constitute legal advice. You should consider your particular circumstances when determining whether you require a labour hire licence. If you are unsure, you should seek legal advice.

Example 1

Excellent Contractors Pty Ltd is engaged by ABC Sports Club Inc to supply relief chefs to their food service team. ABC Sports Club Inc engages the chefs directly as independent contractors, however Excellent Contractors Pty Ltd performs the payroll function and performance management functions in relation to the chefs it supplies. Essentially, the contract is formed between ABC Pty Ltd and the individual contractor, but Excellent Contractors Pty Ltd manages the relationship between the parties.

In this example, Excellent Contractors Pty Ltd is a labour hire provider, and will require a labour hire licence.  This is because in the course of its business providing contractor management services, Excellent Contractors Pty Ltd recruits chefs (who are independent contractors) for ABC Sports Club Inc and then manages the contract performance of the chefs for ABC Sports Club Inc.

Example 2

XYZ Pty Ltd contracts Top Talent Recruiting Pty Ltd to find and place IT professionals in their business. Top Talent Recruiting Pty Ltd finds, interviews and recommends a list of IT professionals to XYZ Pty Ltd, who then engages the independent contractors they want directly. Top Talent Recruitment Pty Ltd does not have any ongoing role in the IT professional’s engagement with XYZ Pty Ltd.

Top Talent Recruiting Pty Ltd is not providing labour hire services in this example, and does not require a labour hire licence in these circumstances. This is because Top Talent Recruiting’s only involvement is to recruit the IT professionals.  There is no payment from Top Talent Recruiting to the IT specialists and Top Talent Recruitment are not involved in the management of the contract performance.