This is the first of our October posts in which we’ll try to untangle the distinction between labour hire providers who need licences and intermediaries who don’t.
The distinction is complex. There’s no way of avoiding that. But it helps if we have a base template that we can use to organize and interpret the similarities, differences and subtleties of the four schemes we are considering.
The Base Template
My challenge is to describe as much of the four state and territory licensing schemes as I can and as accurately as I can in under 100 words.
Here’s my attempt. Note that X is always a provider, and Y is a host or hirer.
Australian labour hire licensing schemes concern arrangements where X supplies, to Y, workers whom X is obliged to pay for the work performed for Y.
South Australia limits the arrangements to prescribed work.
Victoria extends the arrangements: where X is a placement agency that procures accommodation for workers it places with Y and Y must pay them; and where X manages the contract performance of workers whom it recruits, or places with Y, regardless of who pays.
Arrangements between X and Y and between X and its workers need not be contractual and may be made indirectly through intermediaries.
Focus on the Arrangement
The template directs attention to the whole arrangement under which labour hire services are supplied, rather than merely to the narrow transaction between provider and host, or provider and worker. That is useful, when we consider the difference between providers and intermediaries, because the intermediaries stand outside the narrow transaction.
Positioning the Intermediary
Typically, an intermediary is positioned in the arrangement between:
- a provider and a host; or
- a provider and its workers
but is not a provider itself.
Intermediary service network roles facilitate the supply of a labour hire service. They include roles such as sourcing & screening, contractor management, accommodation provision, and payroll.
In some cases, which we’ll look at in more detail in later posts, performance of an intermediary role can result in the person who performs it becoming a provider.
Think about the Victorian extensions referred to in our template.
Think about the Queensland provision that exempts suppliers who are merely private employment agents (direct placement agencies). What if they are doing something more? What if they are handling payroll, resulting in their having an obligation to pay the workers for their work? Does the template help to demonstrate why these questions might be important?
Take Away Lesson No.1
We can say, then, that good governance of labour hire workforce arrangements has to start with a clear and detailed understanding of:
- what everyone is doing; and
- the source of their obligations and responsibilities.
We can’t exercise good labour hire workforce governance and we won’t be able to distinguish between providers and intermediaries if we’ve not examined ALL of the contractual and non-contractual aspects of the arrangement under which the workers are supplied or placed in the workforce.
What do you think? What changes would you make to this base template?
I think it’s about three-quarters of the way there. The missing bits include definitions, exceptions, and deeming provisions.
We’ll continue to develop this template as we explore its elements in more detail in later posts. Nevertheless, I hope it gives us something to work with and helps to place intermediaries roughly in their correct positions.
Andrew C. Wood