Independent Contracting: Back in the Spotlight

Photo by tyler hendy on Pexels.com two spotlights.

Labour hire providers should note that there are currently two appeals before the High Court, which challenge accepted approaches to the characterisation of independent contractors. The outcomes could upset independent contracting arrangements that are overly dependent on the technicalities and “deep entrenchment” of the Odco system and may lead staffing agencies to a fresh need to review their use of independent contractors.

CFMMEU v Personnel Contracting[1]

Trial

A young UK backpacker, who “had no aspect of a business or intended business, no expressed desire to act in any capacity other than as a builder’s labourer, and merely sought remuneration for the deployment of his labour on a building site supervised, directed and controlled by the builder”[2] was characterised, at first instance,[3] as an independent contractor on an application of the multi-factor test and Odco principles.

Appeal

The Full Court of the Federal Court of Australia upheld the finding despite the absence of any business clearly having been carried on by the worker.[4] However, in doing so, the Chief Justice expressed a preference for a different outcome though feeling constrained by intermediate appellate decisions which had previously supported Odco contracting arrangements.[5]

Special Leave

The High Court granted special leave to appeal in February this year. The Appellant’s submissions were filed last Friday (16 April 2021).

At issue is a question of whether the multi-factor test was correctly applied in a labour-hire context. There is a related question about the need for workers to be carrying on their own independent businesses in order to be independent contractors.

ZG Operations Australia Pty Ltd v Jamsek & Ors[6]

Trial

The case concerned the various entitlements of truck drivers, who derived their sole income by working for same business for nearly 40 years – and the corresponding obligations of the company for which they worked. It’s not a labour hire case, but it raises similar characterisation questions about the role of the business test in determining whether workers are employees or independent contractors.

The drivers were required to purchase a truck to retain work and contracted with the company through their family partnerships, which owned the trucks.  The drivers were required to be available to work during set hours. The company logo was displayed on drivers’ trucks and company branding appeared on the drivers’ clothing. Although the drivers theoretically may have had the ability of sell their goodwill, they had no practical capacity to generate any goodwill of their own.

On an application of the multi-factor test the drivers were held to be independent contractors.[7] A deciding factor was that the workers were held to be running businesses of their own.[8]

Appeal

The Full Federal Court reversed the decision on appeal.[9]  Wigney J’s judgment highlights the problems facing those who rely too much on cleverly crafted documents and overly sophisticated or artificial arrangements.

To my mind, the primary judge concluded as he did by giving primacy and excessive weight to contractual labels and theoretical possibilities and insufficient weight to the reality and totality of the working relationship between the parties, as demonstrated by the way they actually conducted themselves over many years.”[10]

Although the drivers’ arrangements displayed some of the trappings of carrying on their own businesses, that was not sufficient to displace the reality, observed after consideration of the whole work relationship, that they were employees.[11]

Special Leave

The case is to be heard together with CFMMEU v Personnel Contracting. The Appellant’s submissions were filed last Friday (16 April 2021). At issue are questions about whether the drivers were “employees” for purposes of Fair Work Act 2009 (Cth), Superannuation Guarantee (Administration) Act 1992 (Cth) and “workers” for purpose of Long Service Leave Act 1955 (NSW).

What next?

Respondents’ submissions in both cases are due to be filed in May, and any replies in early June. After that, the matters will be listed for hearing.

In light of these developments, it might be prudent for staffing agencies to review their independent contracting arrangements, and make contingency plans for managing any that could unravel should the High Court hand down a decision that indicates that they may no longer be sustainable.

Andrew C. Wood


[1] Construction, Forestry, Maritime and Energy Union & Anor v Personnel Contracting Pty Ltd [2021] HCATrans 30 (12 February 2021).

[2] As described by Alsopp CJ on appeal. see fn.5 below.

[3] Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2019] FCA 1806 at paras [171] to [181].

[4] Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2020] FCAFC 122

[5] At para [31].

[6] ZG Operations Australia Pty Ltd & Anor v Jamsek & Ors [2021] HCATrans 27 (12 February 2021).

[7] Whitby v ZG Operations Australia Pty Ltd [2018] FCA 1934.

[8] At para [213].

[9] Jamsek v ZG Operations Australia Pty Ltd [2020] FCAFC 119.

[10] At para [19].

[11] At para [248].

“Employer-of-Record” vs “True Employer”

The recent NSW Supreme Court decision in Branded Media Holdings[1] holds some important lessons for recruiters and others who are considering the use of outsourced employer-of-record (EoR) services – especially if they imagine that using EoR services will protect them, in all cases, from liability as the “true employer”.  That’s because statutory and common law liabilities generally rest with the true employer, irrespective of where formal documents might be trying to direct them

In Branded Media, liquidators and deed administrators of two related companies sought directions from the court as to the identity of the employer of specified employees within the Branded Media Group.

The companies were Branded Media Holdings Pty Ltd (in liq) (Holdings) and Brand New Media Pty Ltd (subject to a deed of arrangement) (BNM). The liquidators and deed administrators’ position was that Holdings was the employer.

The Commonwealth intervened to contend that BNM was the employer. The Commonwealth had advanced more than $1 million in respect of the employees’ unpaid entitlements under the Fair Entitlements Guarantee Act 2012  and stood to recover a substantially higher amount if BNM was held to be the true employer.

The contest was clouded by uncertainty because, whilst the formal documents recorded Holdings as the employer, day-to-day management of the work relationship was conducted by BNM.

The court held that the true employer was BNM. Some telling factors included:

  • Holdings did not conduct any business by which it generated income;
  • Holdings was not the recipient of the services of the employees;
  • the employees provided their services to BNM;
  • Holdings was wholly dependent upon BNM to meet its financial obligations;
  • Holdings did not operate any bank accounts;
  • Holdings did not in fact pay the employees;
  • BNM in fact paid the salaries and wages of the employees;
  • BNM had its logo on some employment forms;
  • business cards used by the employees bore the logo of BNM;
  • the sign-off section of emails sent by the employees referenced BNM;
  • the website referencing the Employees referenced BNM.

You might already be getting a sense of how some of those factors might play out in a case where a staffing agency supplies workers to one of its clients, managing their shifts, providing them with agency uniforms, and binding them to agency policies; but arranging for those workers to be employed “on-the-record” by an outsourced payroll company.  

The Branded Media case is important because the Court clarified the principles that are used to determine which of the two companies was the actual employer. In doing so, it made clear that:

The Court must look to the “substance and reality” in identifying the true employer in these circumstances and would look beyond contractual documentation and to the reality of the manner in which the parties conducted themselves in order to do so.[1]

[The Court may also] have regard to whether the suggested arrangement had an “intelligible business objective” which is “consistent with the financial and administrative organisation of the business”.[2]

The case is also helpful to the extent to which it clarifies that employment-of-record is not a distinct category of employment, but nothing more than an expression to describe an arrangement by which certain of the true employer’s statutory or contractual responsibilities are performed by someone else.

Such an arrangement will not necessarily relieve the true employer of those responsibilities if the EoR fails in performance. And some liabilities, such as the employer’s vicarious liability at common law, may continue to rest with the true employer to the extent to which they derive from the true employer’s notional control of its employees.

The need to identify the true employer will also arise in the context of labour hire licensing prosecutions to the extent to which it may be necessary to determine whether workers of an unlicensed provider who has sought to outsource the obligation to pay its workers to an EoR payroll company may be left with the residue of the statutory obligation to pay sufficient to necessitate the holding of a licence -despite having passed to the EoR a contractual obligation to pay the workers.

Andrew C. Wood


[1] In the matter of Branded Media Holdings Pty Limited (in liquidation); In the matter of Brand New Media Pty Limited (subject to a Deed of Company Arrangement) [2020] NSWSC 557 at [14] adopting Counsel’s submission to that effect.

[2] At [26], developing a further dimension to the test which may be effective to challenge sham arrangements directed at avoidance.

“Tuesday TalkAbout” Summer 2020 Program to Address Recruitment & Staffing Sector “Waypoints”

Tuesday TalkAbout takes a new direction for its Summer 2020 Program of free, short webinars, as we discuss some larger themes at work in the recruitment and staffing sector.

Now, I certainly don’t claim to be a seer or a futurist. I observe and interpret. So, I’m not going to attempt to predict the course of the decade or anything like that.

Instead, I’ll describe the “waypoints”, which I think the recruitment & staffing sector in Australia and New Zealand has reached in eight key areas. ‘

A “waypoint” can be understood as a place on a route or pathway, a stopping point, or a point at which one’s course can be changed.

What the future holds from that point forward largely flows from the decisions and commitments which recruitment & staffing professionals make for their own organisations and professional lives – either intentionally or by default.

The observations and insights that I hope to share reflect experience gained over four decades in legal and workforce consulting practice and in recent work done with RCSA, designing its new Code for Professional Conduct, its grievance intervention guidelines & protocols, its StaffSure certification program, and many of its key resources and templates.

The eight key areas we’ll be discussing are:

1. Professional Conduct (21st January)

RCSA’s new Code for Professional Conduct has been authorised by the ACCC to commence on 8 August 2020. How is it different from previous codes or other industry codes? Why is it different? What statement does it make about emerging professionalism? How might recruitment & staffing professionals respond to it? How is it enforced and administered?

This webinar has now been archived. Please contact me if you would like a link.

2. Quality Management (28th January)

What does “quality” mean in the context of the work undertaken by recruitment & staffing professionals as labour market enablers and intermediaries. Does the ISO 9001 definition of “quality” say it all? How well does the “customer focus” requirement stand up to the professional conduct responsibilities of recruitment & staffing professionals? Is quality perceived as outcome or experience? Is it even an either/or question?

This webinar has now been archived. Please contact me if you would like a link.

3. Risk Management (4th February)

We know (at least I hope we do) that risk is defined for the purposes of risk management and quality management standards as the “effect of uncertainty on objectives”. But how might risk be categorised to be more manageable for recruitment & staffing professionals? What sorts of risk do recruitment & staffing professionals face in 2020? At what points does risk intersect with professionalism and quality? How can risk be managed to minimise its effects on professional and quality objectives?

This webinar has now been archived. Please contact me if you would like a link.

4. Collaboration (11th February)

What is “collaboration”, really? Why is it important for recruitment & staffing professionals in 2020? Is collaboration possible with customers and clients? Candidates? Competitors? Consultants? If so, how is achieved? How is it managed and maintained?

This webinar has now been archived. Please contact me if you would like a link.

5. Doing Business (18th February)

Something is wrong if you’re not upgrading your terms of business at least as frequently as your mobile phone! Wonder why you’re getting pushback from clients who won’t pay you that “introduction fee”, or who won’t sign up to your “all-care-no-responsibility” conditions? Terms of business modelled on 1980s recruitment & staffing practices and 1980s legal culture are no longer viable. In this session, we explain why and talk about what you can do about that.

This webinar has now been archived. Please contact me if you would like a link.

6. Conflict & Dispute Resolution (25th February)

Even for those who might be energised by conflict, there comes a point when stocks of energy and finances to meet the crushing cost of feeding conflict, run low. What is your conflict/ dispute profile? Do you still handle business disputes like it’s the 1980s and you’re a bank? Or have you found a better way? What are your options in 2020? What distinguishes the way you handle conflict and disputes as “professional”?

View the recorded Conflict & Dispute Resolution “Waypoint” webinar here

7. Employment Shaping (3rd March)

What is the difference between legitimate employment shaping and sham contracting or avoidance? How much flexibility is there to shape an employment relationship to suit labour market conditions in 2020? What are the limits? How do you know if you are approaching or transgressing them? Are there any “golden rules”. If so, what are they and how do you apply them?

View the recorded Employment Shaping “Waypoint” webinar here

8. Independent contractor on-hire (10th March)

What are the main challenges to independent contractor on-hire in 2020? Is the business integration test still reliable? What investigations should a recruitment & staffing professional undertake to ensure that independent contractor engagement and on-hire models are compliant with a wide range of regulatory requirements and are not exploitative?

Register for the Independent Contractor On-Hire “Waypoint” webinar here

I do hope you’ll join me when WorkAccord’s Tuesday TalkAbout Summer Program returns at 8:30 am AEDT on Tuesday 21 January 2020 and I’d love to learn of any questions you might have in advance.

 

Andrew C. Wood

Labour Hire Licensing Laws: Do they apply outside their home states?

ExtraterritorialityQueensland, South Australia, and Victoria have now all passed separate labour hire licensing laws[1].

All three acts contain provisions that attempt to extend their application beyond state boundaries.[2] The exact wording in each case is different but basically, they attempt to extend the laws to the maximum extent of the legislative power of their respective Parliaments. No one knows for sure exactly what that is because it hasn’t been tested in this context. But it seems generally correct to say that, provided there is some real connection (or nexus), with the home state, the laws are capable of applying in some other state (or country). Continue reading

Here’s what I’m thinking about: “Exploitation” and “Wage Theft”

“Exploitation” and “Wage theft” are emotive and pejorative terms that are used freely by commentators and policymakers calling for harsh penalties. But can any “breach of minimum employment standards”[1] count as exploitation?

Is an employer guilty of exploitation or wage theft for “not complying with the minimum legal entitlements of their employees”?[2] or is something more required to earn the badge of iniquity? Something that colours the non-compliance as misconduct or unconscionable?

What do you think?

Slide1

You’re cordially invited to come along and have your say in WorkAccord’s next Tuesday TalkAbout, on November 26, when we’ll be talking about “Modern Slavery, Exploitation and Vulnerable Worker Protections”.

I hope you’ll join me!

Andrew C. Wood

 

[1] The understanding conveyed by New Zealand MBIE’s Consultation Paper on Temporary Migrant Worker Exploration, Oct 2019.

[2] The understanding conveyed by the Australian government Migrant Worker Taskforce in its report, March 2019.

Collective Bargaining in the Freelance, Contracting and Gig Economies

Young people work in modern office.As job-based employment seemingly evolves toward job-based entrepreneurship in the freelance, contracting and gig economies, we may soon witness the emergence of new models of workforce organisation and worker representation. That is, if the ACCC’s plan to grant a class exemption allowing small businesses to bargain collectively with their customers and suppliers goes ahead.

Collective bargaining, in this context, involves two or more competitors getting together to negotiate with a supplier or customer (the “target”) about terms, conditions and/or prices.

It is distinguished from bargaining under the Fair Work Act in that the parties who get together are not employees; they are actual business competitors.

They include many contractors and freelancers, working in the on-hire and gig environments.

They may be technology contractors, medical locums, project managers, professional science & engineering contractors, designers & creatives, book-keepers, contract cleaners, contract logistics operators, or translators.

Indeed, they may be any small business that undertakes professional, skilled, or trade work that is done by workers who perform their work in, and as part of, their own businesses.

Recruitment, contracting, and staffing agencies would therefore do well to follow this new development closely; and begin to think about the challenges and opportunities that the ACCC’s proposal presents.

For example, what might an on-hire or IT contracting agency expect from a scheme that allows a pool of  its IT contractors to bargain collectively with it on price, terms and conditions of engagement?

Who might represent them? Should the current restriction on trade union representation apply? If it did, might we witness the emergence of contractor “guilds” that would be able to operate outside the Fair Work bargaining framework?

How might the ACCC’s concept of joint procurement bargaining play out, if it allowed that same pool of IT contractors to bargain simultaneously with their IT contracting agency and its clients?

What might small recruitment agencies, working in the creative or medical locum industries, gain from being able to bargain collectively with clients on price, terms and conditions of supply – without the need for any notification or authorisation?

What might the competition impact be on medium and larger businesses, who fall outside the scope of the class exemption; or who may be the targets of collective bargaining?

How might the role of industry associations develop to support members looking for collective bargaining resources and solutions?

These are just a few questions that recruitment, contracting, and staffing agencies (and their industry associations) might now be asking. No doubt there are many others.

The ACCC would like to hear about them by 21 September 2018.

 

Andrew C. Wood

ACCC Proposed Class Exemption to Allow Agribusiness Collective Bargaining: Unintended Labour Market Consequences?

Strawberry Harvest in Central CaliforniaEarlier this year, I was asked to outline 10 steps that providers and users of labour hire services could take to prepare for the anti-competitive labour hire licensing schemes that were about to start in South Australia and Queensland (and more recently, Victoria).  

It now looks like step #9  – Anticipate and adjust to changes in the market – may prove especially important if the ACCC’s plan to grant a class exemption allowing agribusinesses to negotiate collectively with their suppliers goes ahead.

Step #9 highlighted the importance of appreciating that:

  • not everyone would get a licence;
  • this would leave gaps in the market, especially in regional areas, that would require new networked services supply models; and
  • consolidation and rationalisation would occur around licensed providers, giving them  increased market power and a significant market advantage over licence applicants, many of whose applications are still pending.

The ACCC’s plan to allow a collective bargaining class exemption would “provide a ‘safe harbour’, so businesses that qualify can collectively bargain without the risk of breaching competition law”. 

That would significantly offset any increase in market power or competitive advantage that a licenced provider might obtain.

Buyers and sellers of labour hire services should now be thinking strategically about how that offset could be harvested to best advantage to produce service and pricing models, which do not simply drive prices down again to levels that compromise the ability of reputable labour hire providers to meet safety net, decent work, and accommodation standards.

The relationship between sustainable business modelling, bargaining, and labour exploitation was beginning to be explored in the Fels Wage Fairness Panel Inquiry into the 7-Eleven Franchise.

Although there is still much work to be done, the ACCC’s plan is likely to advance the discussion of that relationship … but only if labour hire, contracting, and staffing services providers join the debate.

The ACCC is inviting submissions on its proposed plan by 21 September 2018.

 

Andrew C. Wood

 

 

 

Preparing Stormy Labour Hire Licence Challenges in the “Sunshine State”

dog with an umbrella going for a walkIn an earlier post, I forecast that a rough “Storm Season” could be brewing for some Queensland labour hire providers, if indications coming from Labour Hire Licensing Queensland and the Hon. Grace Grace MP, Minister for Industrial Relations are anything to go by.

In this post, we look at some essential preparations that providers can make in order to meet or avoid a worst case scenario.

If your agency is one of the 500 or so, whose application for a labour hire licence seems to have been held up; or if you’ve been issued with a licence but are facing objections, or have concerns about whether a licence may be vulnerable to suspension or cancellation either because of incorrect information (e.g. about the use of visa workers) supplied with the application, or because of non-compliance with one of the myriad of relevant laws – it might be worth taking a few steps to prepare for what could turn out to be a worst case scenario.

These are not nice topics to have to write about. Many might worry that “rocking the boat” could put them “on the regulator’s radar”. However, it’s sometimes good to address them head on, and to briefly outline some of the preparations that you might begin to make.

Finding out what’s going on with the delays

One of the worst things about delayed applications is that you won’t necessarily know what’s happening. Rumours abound, and speculation runs rife. It is often best to try to get to the facts – or at least as many of them as you can discover.

Broad inquiries

At a broad level, the problem might be addressed by having your industry association raise the issue of general delay with the regulator and seek information about why the scheme does not seem to be working as smoothly as planned.

It would be reasonable to ask the regulator for some general information about the results of its State-wide audits, conducted back in May and June 2018. So far it hasn’t said a lot about those.

Your members of Parliament might similarly ask questions and seek information from the responsible Minister.

Information obtained, at that broad level, might not quite put your mind at ease; but it should yield some context that will help you to plan your next steps. Importantly, it will put the providers’ interest “in the game”, without singling out any particular applicant or licence holder.

Provider-specific Inquiries

At a provider-specific level, the lack of information can often be addressed by an exploratory call to the regulator.

You might point out that the regulator’s website says that it anticipates that licence application decisions will be made within 28 business days from the date the application was lodged. You could (politely) ask whether there is any reason (that the regulator can tell you) why your application seems to be taking longer. You could ask when you might expect to receive a decision.

If there are particular circumstances that require an answer sooner rather than later – e.g. an upcoming tender – you could let the regulator know about that, so that you are not disadvantaged against other tenderers by having your application still undecided.

Right to Information (Freedom of Information) and Information Privacy

In some cases, you might consider exercising your rights to obtain information under the Right to Information Act  or the Information Privacy Act.

You can ask the regulator how you would go about doing that. You might even ask the regulator whether it would consider giving you informal access, which is usually simpler and faster than making a formal application.

Queensland’s Office of the Information Commissioner provides a great resource on Busting Myths about the Right to Information. It’s worth reading if you want to know more about the process.

Even if you make a formal application, you might not get every piece of information because some information may be exempt – e.g. some complaint information; but if there are objections or complaints in the wind, you may be able to find out the general nature of them and then begin to prepare your case to address them – either upon inquiry by the regulator; or by correction procedure, if the information is personal information; or upon formal internal or external review (discussed below).

Dealing with adverse decisions

Information Notices

If you receive an adverse decision – e.g. a suspension or cancellation decision; a licence refusal; or the imposition of adverse conditions – you should receive an “information notice” given by the Chief Executive under the Act.

An information notice  is a notice stating—

  • the decision; and
  • the reasons for the decision; and
  • that the person has a right to have the decision reviewed under s. 93; and
  • how, and the period within which, the person may apply for the review.

The information notice will provide a good place to start, because it should outline the matters you will have to address.

QCAT Information Notice

A different type of information notice, called a QCAT Information Notice, must be given by the Chief Executive, when providing a decision after review under s.97 of the Act.

Receipt of a QCAT Information Notice triggers the right to appeal to QCAT (Queensland’s Civil and Administrative Appeals Tribunal) under s. 98.

s. 93 Review

The Act provides for decisions of the Chief Executive to be reviewed internally by someone other than the person who made the original decision.

Review applications have to be made in the approved form and within 28 days after being given the Information Notice.

When applying for review, you should set out your grounds and state the decision that you want the Chief Executive to make. That becomes important later on, when the Chief Executive has to decide whether to give you a QCAT Information Notice, in case you should want to appeal further.

Obviously, the strength of your review submission depends on the extent of your preparation and the quality of the advice and support you have received in preparing your submission. This is an area where you might do well to have your legal support team well prepared in advance.

s. 96 Stay of Decision

A “stay” is an order that suspends a decision and stops it coming into effect, while review rights are pursued.

Merely applying for a review of the Chief Executive’s decision, or appealing from a review decision, does not stay the decision.

To get a stay, you would have to apply IMMEDIATELY to QCAT.

Being in a position to apply immediately, probably requires you to have done some advance preparation and to have your legal support team well briefed so that they can move quickly.

You might need to ask QCAT to stay the decision for long enough to allow a review decision to be made by the Chief Executive under s.97 (see below) plus additional time to enable an appeal to QCAT to be concluded in case the s.97 review decision is adverse, and you wish to appeal under s. 98 (see s.98 appeals below).

S. 97 Review Decision

The Chief Executive, must, within 21 days after receiving a review application:

  • review the original decision;
  • make a review decision; and
  • give notice of the review decision (a “review notice”).

If the Chief Executive does not give a review notice within the 21 days, the Chief Executive is taken to have made a review decision confirming the original decision.

That would mean that you should track the 21 days very carefully.

s. 98 Appeals

If the review decision is not the decision you wanted, you should receive a QCAT Information Notice.

You then have 28 days from the day when you were notified of the review decision to commence your appeal.

A QCAT Information Notice must state the following—

  • the decision;
  • the reasons for the decision;
  • you have a right to have the decision reviewed by the tribunal;
  • how, and the period within which, you may apply for the review;
  • any right you have to have the operation of the decision stayed under s. 22 of the QCAT Act.

Just keep in mind that failure to comply with those requirements does not invalidate the decision.

Failure to make any decision at all – s. 22 Judicial Review Act.

Occasionally, a decision maker might fail to make a decision within the time specified in the Act which confers decision making authority; or if no time frame is specified, within a reasonable time.

What is a reasonable time, depends on all the circumstances.

The Act does not stipulate a timeframe within which the Chief Executive is to make a licence application decision. But remember that the Regulator anticipates being able to make decisions within 28 business days of receiving the application for a licence. That would tend to suggest that there may be some licence applicants, who might now be wondering what their rights are if the Chief Executive fails to make a decision within a reasonable time.

Under s. 22 of the Judicial Review Act 1991 (Qld), a person who is aggrieved by the failure of the Chief Executive to make a decision can apply to the Court for a statutory order of review in relation to the failure to make the decision on the ground that there has been unreasonable delay in making the decision.

The order will not confer the licence; it will merely direct the Chief Executive to make a decision. However, the Court can additionally make:

  • an order declaring the rights of the parties in relation to the making of the decision; and
  • an order directing any of the parties to do, or to refrain from doing, anything that the Court considers necessary to do justice between the parties.

Other remedies

In any given case, there may also be other remedies that might be available.

Hopefully, you will not need them. But it is always a good idea to canvass them with your legal support team; and to do so well in advance of the time when you might need them so that you can move quickly and with confidence.

 

Andrew C. Wood

Rough Storm Season Brewing for Queensland Labour Hire Providers?

Multiple eletric lightning strikes over river in BrisbaneOne might wonder what sort of Storm Season could be brewing for Queensland’s labour hire providers.

When Queensland’s labour hire licensing scheme commenced on 16 April 2018, many labour hire providers jumped right in and lodged their applications. Since that time, approximately 2,400 applications have been approved, with a further 600 still waiting for approval as at 10 August 2018.

What’s interesting about those 600 pending applications is that about 500 of them date back to the lodgement cut-off date of 15 June 2018. Two hundred go back as far as April and May. Nine of them date back to Day 1 of the scheme.

A quick scan of the pending applications list also suggests a significant representation from amongst labour hire providers to the horticulture and farming sectors.

Is this “normal”?

Labour Hire Licensing Queensland’s website advises:

How long does it take?

Once you have made your application and paid your licence fee it is anticipated a decision on your application will be made within 28 business days.[i]

So, why is it taking so long for these applications to be processed?

Let’s have a look at what might be going on behind the scenes.

On 4 May 2017, just three weeks after the scheme commenced, Labour Hire Licensing Queensland (LHLQ) issued a bulletin, highlighting problems it had identified with several applications and signalling its intention to take action on a number of complaints.

We have identified several applications in which we suspect inaccurate information has been supplied about the supply of visa workers.

We work closely with other State and Commonwealth Government agencies to ensure the accuracy of information received, including the Fair Work Ombudsman, Australian Border Force (Home Affairs), Workplace Health and Safety Queensland, WorkCover Queensland, Queensland Fire and Emergency Services and local councils.

Labour hire providers must ensure that they are providing accurate information in their applications to enable us to properly assess their suitability to obtain a licence. Strong penalties apply for providing false and misleading information. We will suspend licences obtained as a result of the provision of incorrect or misleading information, and will cancel licences granted to those who are no longer fit and proper persons.

We will also be acting on a number of complaints received from the public about unscrupulous labour hire operators.[ii]

Now let me be perfectly clear about this – just because an application has not been processed and has been outstanding since April or May does NOT mean that the applicant is an “unscrupulous labour hire provider”, or that it has provided incorrect information in connection with its application.

Applicants on the pending application “Green List”, who lodged their applications on or before the 15 June cut-off date, can continue to provide labour hire services until a decision is made and the application is removed from the list. If the licence is granted, they will move to the register of licence holders. If it is refused, they have review and appeal rights; and can apply for a stay whilst the decision is reviewed.

However, on the same day, LHLQ issued a second bulletin in which it announced its intention to conduct a visitation program for “labour hire providers, users and workers to provide information about their obligations and rights under the new laws”.

Somewhat ominously, the bulletin concluded:

During the visits, we’ll conduct audits to ensure applicants and licensees have provided accurate information in their applications and have kept the required evidence to support their declarations (e.g. fit and proper person declaration).[iii]

Shortly thereafter in May, and without any further fanfare, LHLQ suspended the licence of one provider – RJP Contracting Service Pty Ltd. The reasons were not published at the time.

Finally, on 7 August 2018,  Industrial Relations Minister, Grace Grace, confirmed that RJP’s licence had been cancelled. The reason stated was that RJP:

…was found to have provided false information about the supply of visa workers on their application and had also breached the Fair Work Act 2009.

The Minister continued:

Labour hire providers should be aware that if you do the wrong thing, you’ll be found out and you’ll be dealt with accordingly,

We make no apologies for taking a tough stance against dodgy operators or unlicensed operators, who don’t do the right thing by their workers.[iv]

The decision to cancel RJP’s licence may yet be overturned on review or appeal. That matter should not be regarded as having been concluded and it still has some way to run.

But why has there been only one suspension and cancellation if the problems were as widespread as LHLQ indicated back in May? And what might LHLQ’s decision forecast for other providers?

On one optimistic view, RJP was the only provider to have come unstuck in the LHLQ audit sweep.

On another, it looks like LHLQ could be running a sort of test case to see how well its processes work, getting all its ducks lined up in readiness for more refusals, suspensions and cancellations to come.

And if that is the case, some Queensland labour hire providers could be in for a rough Storm Season come November.

 

Andrew C. Wood

 

[i] https://www.labourhire.qld.gov.au/i-provide-labour-hire/licensing

[ii] https://www.labourhire.qld.gov.au/news-media/news/correct-information

[iii] https://www.labourhire.qld.gov.au/news-media/news/compliance

[iv] https://www.labourhire.qld.gov.au/news-media/media-releases/labour-hire-provider-loses-license-operate-queensland

Qld Treasury Consultation Papers on Regulations to Support Labour Hire Licensing Act: Quick Observations

Queensland Treasury has just released two consultation papers on the regulations to support that State’s Labour Hire Licensing Act 2017.

One paper deals with operational issues (including the fit and proper person test and reporting); the other is about coverage and exclusions.

Looks like there needs to be some work done; and that an attempt will be made to resolve with policy what can’t be resolved by regulations.

Coverage problems are now surfacing; and the consultation papers are still strangely silent on anything much to do with licence conditions.

Licence fees range between $1,000 and $5,000.

Reporting requirements may be expanded – but, it would be a good idea to start with a clear statement of why the government needs additional (including confidential) information; how it proposes to handle it; and what it proposes to do with it.

Some regulatory solutions to the challenges posed by a hastily assembled Act seem possible; but they will not be easy to achieve. Internal labour hire within corporate groups is proving to be “particularly problematic”, as the government tries to work itself out of a tight corner.

Submissions are due by 2 February 2018.

You can read about the release and find the consultation papers here.

https://www.treasury.qld.gov.au/fair-and-safe-work/industrial-relations/regulation-labour-hire-industry/consultation-labour-hire-licensing-act/

Businessman & Newspaper

Andrew C. Wood