Labour hire in the security industry

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We are a security business. Do we need a licence under the Labour Hire Licensing Act 2018?

Scenario 1:

Shop with Us Ltd (Shop with Us) owns and operates several large shopping centres.  As part of its business undertaking it is required to meet basic security and safety expectations of tenant retailers and their customers, and to fulfil insurance obligations.  Shop with Us arranges for external security to fulfil these requirements and obligations.  Shop with Us is of the view that its arrangement is a services contract.

Safety First Pty Ltd (Safety First) provides security guards to Shop with Us.  Safety First security guards patrol the Shop with Us shopping centre during retail opening hours and are subject to overall direction of the shopping centre management.

Gardit Pty Ltd (Gardit) provides a ‘gate checking’ service to the Shop with Us shopping centre. Gardit’s staff perform occasional cursory, after hour checks, to:

  • verify that the facility is secured internally and externally
  • provide an alarm monitoring service
  • report damage or refer matters to police where appropriate.

The two security businesses (Safety First and Gardit) are licensed under the Private Security Act 2004 (Vic), administered by the Victoria Police.   One of the requirements of their licences is that Safety First, Gardit and their respective staff meet certain character tests and related other requirements. 

Question:  Is a private security licence enough for an individual or business to comply with the Labour Hire Licensing Act 2018?

Answer:  No. It is a mandatory requirement for a business providing labour hire services to hold a licence under the Labour Hire Licensing Act 2018. A business may be required to hold multiple licences or accreditations, for example in this scenario, Safety First and Guardit are required to have valid labour hire licences and security licences. 

Question: Is Safety First a labour hire provider?

Answer:  Yes. Under the Labour Hire Licensing Act 2018 and the Labour Hire Licensing Regulations 2018, Safety First is supplying workers to perform work in and as part of the business or undertaking of the Shop with Us shopping centre.  It is irrelevant how Shop with Us describes the arrangement.

Question:  Is Gardit a labour hire provider?

Answer:  No. Gardit is not supplying workers to work in and as part of the business or undertaking of the Shop with Us shopping centre. It is supplying a service.

Scenario 2:

Market Festival Pty Ltd (Market Festival) holds weekly night markets in Melbourne. Market Festival employs 20 security guards to perform crowd control at the night markets.  Under its contract with the local council. Market Festival must have 20 security guards working each night that the night market operates.

A security guard employed by Market Festival phones in sick on the day of the night market. To cover the sick security guard and fulfil its obligations under its contract with the local council, Market Festival enters into an arrangement with Protect Pty Ltd (Protect).  Protect is a business that provides security guards to other businesses who run public events.

Sam is an employee of Protect.  Under the arrangement between Market Festival and Protect, Sam works as a security guard at the night market to cover the sick Market Festival security guard.  Sam patrols alongside the remaining 19 security guards employed by Market Festival. 

Question:  Is the arrangement between Protect and Market Festival a labour hire arrangement?

Answer:  Yes, the arrangement between Protect and Market Festival is a labour hire arrangement. 

  • Market Festival is a host – Protect supplies Sam to perform work in and as part of Market Festival’s business
  • Protect is a labour hire provider – it supplies Sam to Market Festival to perform work in and as part of Market Festival’s business and must pay Sam
  • Sam is a worker – he has an arrangement with Protect under which Protect supplies him to Market Festival to perform work.

Protect must hold a labour hire licence under the Labour Hire Licensing Act 2018.  Protect is a labour hire provider whether or not they supply Sam on a temporary or ongoing basis.

Scenario 3:

SafeParty Pty Ltd (SafeParty) is a company that provides security guards for birthday parties held at residential homes.  It does not provide any other services.

SafeParty enters into a contract with John and Joan Smith (the Smiths) to provide a security service for their daughter Mary’s 18th birthday.  The Smiths pay an agreed fee to SafeParty.

SafeParty sends one of its employees, Matt, to be the security guard for Mary’s party. The contract between SafeParty and the Smiths states that Matt’s job will be to attend the Smiths’ home for 4 hours on the day of Mary’s birthday party.  Matt’s main task is to ensure that only invited guests gain entry to the party.

Question: Does SafeParty require a licence?

Answer:  No. In this scenario, SafeParty is not a labour hire provider.  Although Matt is a ‘worker’ and is paid by SafeParty, he has only been provided to the Smiths to provide a service at their home.  He has not been provided by SafeParty to work ‘in and as part of’ a business or undertaking run by the Smiths.