Do Victoria’s Christmas Talent Agencies and Incorporated Christmas Talent Need Labour Hire Licences?

This Article May Contain Sensitive Material

For any youthful readers of this piece, let me start by saying that we all know that the real Father Christmas lives at the North Pole with Mother Christmas, the Pixies, Rudolph and the other reindeer.

And we all know that all the friendly people who run around in costume – the Santas, Mothers Christmas (I hope that’s the correct plural), the Pixies, the Wise Persons, Shepherds, Angels, and pantomime camels – let’s call them the Christmas Talent – are just helping out. It could be a franchise, I’m not sure. I haven’t looked at it.

At least, I hope we all know that Christmas Talent is mostly pretend. Nevertheless, it’s always fun to see them because we know that when they start popping up in the stores, Christmas is not too far away.

I’m Concerned

Now here’s my concern.

Up until now, a lot of the Christmas Talent have been sourced through talent agencies. Up until now, that’s not been a problem in Victoria – but now it might be.

It might be a problem because if you’re supplying workers (let’s say Christmas Talent) to another person (let’s say a department store) to perform work in and as part of the store’s business or undertaking (seems likely), then you might need a labour hire licence.

This test is sometimes called an “integration test”. It’s not easy to apply, and it can depend on subtle, fact-sensitive inquiries that can only be determined authoritatively by a court. It can also have some pretty unexpected results.

Queensland & South Australia

Queensland and South Australia got this right because in those States talent agencies are subject to private employment agency regulation in addition to labour hire licensing.

So, Queensland and South Australia both created an exemption from the need to have a labour hire licence if you are acting solely as a private employment agency.[1]

Victoria

But there’s no similar exemption in Victoria. So, if you’re supplying a worker to do work in and as part of another person’s business or undertaking, you’ll possibly need a licence (unless you can bring yourself within one of the other exceptions).

Also in Victoria, if you’re sourcing and placing workers (let’s say Christmas Talent) with clients who are engaging them directly as independent contractors, and you continue to handle payroll or other aspects of the placement administration, you’ll possibly need a licence (unless you can bring yourself within one of the other exceptions).

Incorporated Christmas Talent

It gets even more complicated if your Christmas Talent is self-incorporated – i.e. they’re working through their own small company. That’s because their own small company is supplying the individuals who perform the work and therefore needs to hold a licence in its own right (unless it can bring itself within one of the exceptions).

Fortunately, there is an exception for small companies that have no more than two directors and only supply their directors who participate in management or share in the profits.

But that exception will only go so far. An exempt company couldn’t supply say, Three Wise Men – apart from whatever difficulties they might have in sourcing three wise men (old joke). Two would be OK provided they were both directors who participated in management or shared in the profits.

Likewise, a pantomime camel needs two people (front end and back end). That would be OK provided both ends were directors who participated in management or shared in the profits. But if one end gets sick – they’re going to end up with a two-legged camel unless they’ve got a labour hire licence. That’s because substitution requires a third person.

Same deal with Rudolph. And if you’re thinking of hiring the Von Trapp Family Carol Singers – better check their labour hire licence unless they’re incorporated and you’re only wanting two of them!

Although there’s an exemption for incorporated workers, it doesn’t extend to family partnerships or other unincorporated business structures.[2]

Call Me a Grinch!

I could go on… But you’ll have the gist of it by now, and you can perhaps see the problem that arises when labour-hire licensing is introduced on a universal coverage basis without being targeted to the sectors where it’s really needed.

Did anyone think this would be an outcome when the scheme was proposed? Of course, they didn’t. The States were urged to adopt targeted schemes. The Victorian Forsyth Inquiry even recommended it.  But those urgings and recommendations were mostly ignored.

So if you’re hiring Christmas Talent in Victoria this year or if you’re working as Incorporated Christmas Talent, whatever other checks you do, be sure to check that any necessary labour hire licence issues are covered.

Boy Riding Camel

 

 

 

Andrew C. Wood

 

 

[1] It can get tricky if you’re doing more than acting purely as a private employment agency – say handling payroll or administration.

[2] South Australia fixed this up by Gazettal on 26 September 2019. Although the exemption is still limited to a maximum of two workers.

 

Victorian Labour Hire Scheme: Mopping Up

Close up 0370Victoria’s labour hire licensing scheme is fully up and running – though perhaps stumbling forwards might be a better description.

After 6 months only about 380 licences have been granted, with another 50 or so granted subject to payment of fees.

There are more than 3,700 unprocessed applications. They are still coming in despite missing the cut-off date. If you’re in that long queue – or having to join it because you’ve decided you’d like to extend your labour hire business to Victoria – it could be as much as 12 months before you hear the outcome of your application.

Near-Misses

One of the things that did surprise me was the fact that 200 or so applicants missed the cut-off last week by only a matter of days – even hours in some cases.

Cleaning firms seemed to be strongly represented amongst the near-misses, perhaps because of uncertainty about how the complex integration test and deemed worker provisions applied. Though there were others as well, including general labour hire providers, interstate providers, and at least one legal recruiter.

Misses will hurt

Those near-misses are going to hurt because, unless the applicants can fix something up quickly with the Authority, a miss is as good as a mile.

It’s now an offence under Victorian labour hire licensing laws:

  • to provide labour hire services without a licence
  • to advertise willingness to provide labour hire services if you don’t hold a licence
  • to acquire labour hire services from an unlicensed provider
  • to be involved in avoidance arrangements.

Reaction

So, what’s likely to be happening now?

I suspect that there may be more than a few who have obtained their licences, or got their applications in ahead of the cut-off, who’ll be looking closely at the near-misses and perhaps giving their competitors, or their clients, a cordial “heads up”.

The regulator may be looking as well. If you’ve provided details of your clients and their workplaces, the regulator will know where to find them and might consider giving your clients a cordial reminder that the prohibitions are now in effect.

I suspect that there’ll be a few in the near-miss category, who’ll need to look at their supply arrangements to decide how quickly they can get out of them and if they can get out of them now without penalty.

Clients are likely to be looking at the registers to see which side of the cut-off their suppliers fall on. You might find that they are terminating contracts with unlicensed providers and thinking about what action they can take to recover the cost of entering into new or alternative supply arrangements.

There’ll be workers (and their unions) who’ll be wondering whether they still have jobs, and more than a few clients might be wondering how they can transition supplier arrangements.

There’ll also be more than a few who’ll have to fix up their websites and marketing so that they’re no longer advertising a willingness to provide labour hire services.

Maybe it will settle down eventually, but until then it’s a bit of a mess.  Who knows, perhaps a federal scheme that prevails over state laws with a concerted move to dismantle the systems in the three states that now have labour hire licensing will be all that can clean it up.

 

Andrew C. Wood

Do Auto Club Breakdown Contractors Need Labour Hire Licences?

Adac breakdown assistance

The background

Like me, you might be wondering how that question even arises. It shouldn’t be a problem because it should be clear to anyone who hasn’t been overthinking it, that a motor mechanic business is not a labour hire businesses. It should be clear that the labour hire licensing laws, which have now been established in three states,[1] didn’t come about because of any real concern about worker exploitation in automobile club roadside assistance schemes.

But you can throw clarity out the window as soon as you get legislation that tries to cast the widest possible net without too much thought about what it might catch.

And to cast that net, Victoria and South Australia included a provision in their licensing schemes that says you need a licence if you’re supplying workers to another person to perform work in and as part of the other person’s business or undertaking.

Integration test

The critical wording is, “perform the work in and as part of the business or undertaking of the other person”.

It’s sometimes called an “integration test”, and it helps to distinguish ordinary contracting for the supply of services from labour hire. It distinguishes the kind of thing motor mechanics do in their own workshops or on roadside callouts from the kind of thing a labour hire provider does when it sends its workers to help out in that workshop or at the roadside.

The provisions in the different states vary slightly in the way they are expressed, but we needn’t worry about that just at the moment.

The problem also arises in Queensland, where the legislation doesn’t even provide guidance in the form of the integration test.

The question

So, if you are a motor mechanic business that is contracted to an automobile club (or anyone else for that matter) to provide a roadside assistance service, how do you tell if you are supplying workers to perform the work in and as part of the business or undertaking of the host automobile club, rather than in and as part of your own business?

It’s complicated!

If you ask the Victorian Labour Hire Authority, assuming you’re able to get a response before the cut-off date for lodging licence applications[2], they’ll probably tell you that they don’t give legal or business advice. They might, however, direct you to some scenarios which they’ve developed to help explain what they think their general definition of labour hire services means… and leave you to work it out for yourself.[3]

What you’ll read repeatedly is that “no one factor is definitive” and that it’s necessary to “look at the engagement as a whole”.  You’ll see examples of construction workers being sent along to do work alongside workers of a building firm being treated as labour hire workers regardless of whether the firm that sends them self-identifies as a building and construction firm or a labour-hire firm.

Positive factors

You’ll see that the Authority has identified a few positive indicators for identifying a labour hire relationship:

  • the work performed by the workers is a key function of the host’s business;
  • the work performed by the workers is the same as the work performed by the host’s own employees;
  • the host supplies the materials, and directs and supervises the work;[4]
  • the workers are doing work that the host is responsible for completing.

So, you look at the arrangement as a whole, weigh up a set of factors like that, and you reach a conclusion. Should be easy!

Secondee exception?

Once you’ve reached a conclusion. you might have to decide whether any of the regulatory exceptions apply. That can get tricky because they differ from state to state.

But one exception you might consider is the “secondee exception“. I’ve written about that in the context of footy clubs and their loan players.

In Victoria, you’d want to have a good understanding of the contractor’s employment arrangements, the breakdown mechanic’s expectations about continuing employment and whether the mechanic primarily performs work other than as a roadside assistance mechanic. if you’re a host, you’d want some assurance about those things and you’d want notification of any changes.

In Queensland, this would be the in-house employee exemption. it has much the same features as the Victorian secondee exception but only applies if the provider supplies the in-house employee to the other person to do work on a temporary basis on 1 or more occasions. There would have to be some doubt about whether it applies to a roadside mechanic whose primary job is to support an auto club’s breakdown service.

Grey areas

The examples that the regulator gives are mostly the easy ones which fall neatly on one side or other of the boundary. It’s the ones in the grey area that are going to cause the headaches. And that’s why we’re asking the question.

A closer look

Go back and look at the factors that the Victorian regulator identified.

Now imagine that:

  • the auto club provides a 24/7 roadside assistance service for its members (and for members of the public who sign up on a call-out);
  • the club employs its own workers to provide the service in metropolitan areas and during certain hours;
  • the motor mechanic’s business is contracted to provide a “seamless” service to the club to supplement the club’s service and to extend its coverage into areas, and at times, when the club’s own employees aren’t operating;
  • the club allocates an exclusive territory to the mechanic for the purpose of the club’s service; but, from time to time, the mechanic is required to extend service into another territory controlled by the club or to work alongside the club’s own employees – e.g. in order to meet response times during periods of peak demand, or to provide back-up in the club’s areas and during its operating hours;
  • the club requires the mechanic’s vehicles that are used in providing the roadside assistance service to be liveried exclusively in the club’s colours, and may even restrict their use for other purposes;
  • the club requires the mechanic’s staff to wear club uniforms when attending roadside callouts;
  • the club requires the mechanic’s staff to promote club services and authorises them to sign up motorists to club membership and other club services;
  • the club requires the mechanic’s vehicles to stock specified parts or parts that are supplied by the club’s preferred suppliers;
  • the club requires the work to be completed according to KPIs and procedures set by the club;
  • the club operates a complaints handling process and can arbitrate disputes that arise between the mechanic and motorist out of club-authorised services provided by the motor mechanic.

If you’re an auto club or a motor mechanic who’s contracted to an auto club or a roadside assistance service, you probably understand the detail of those arrangements far better than I do. You can likely say whether the scenario I’ve painted is realistic.

Breakdown!

But here’s the question: Keeping in mind that “no one factor is definitive” and “looking at the engagement as a whole”, what would the regulator say about whether the motor mechanic needs a labour hire licence in that scenario. What would it say about whether the club should only be dealing with licensed labour hire providers?

And if all it’s got to say is that it doesn’t give legal or business advice, then that’s not likely to be good enough.

If you apply the tests yourself and the answer you get is “maybe”, “possibly”, or “probably”, what are you going to do?

Safe options?

The safe options would seem to be to apply for a licence and/or change the basis of your service. But you’ll need to be quick. The scheme is already running in Queensland, and the prohibitions against unlicensed dealing will kick in for Victoria on 30 October 2019 and for South Australia on 1 November 2019.

If you’ve applied for a licence before the cut-off date (or if your provider has applied for a licence before the cut-off date), you might be able to continue to provide services until the licence application has been decided.

South Australia – Good sense starting to show

If you’re wondering about how this works in South Australia, you might be encouraged to learn that South Australia has a very sensible exception that applies if the provision of labour-hire services is not a “core function” of the provider.

Unfortunately, there’s not much guidance material to tell you whether the supply of an individual to do work in and as part of the business or commercial undertaking of another person is a “core function” of the provider or not. But the South Australian regulator can move quickly to establish exemptions by Gazettal – and has done so already on several occasions. It may be worthwhile raising the issue through that channel.

One day the courts will tell us

In the meantime, the rest of us will be left with the cost of uncertainty as we wait for a Supreme Court to make the fact-sensitive inquiries that are needed to tell us what the legislation means and how it applies in grey areas into which the regulators haven’t dared to venture …yet.

And let’s hope we can avoid a breakdown.

 

Andrew C. Wood

 

[1] Queensland, South Australia and Victoria.

[2] 29th October 2019.

[3] Tip: MAke sure you read and compare all the scenarios. If you get it wrong, there are hefty fines. If you get it wrong in Qld or SA, there are hefty fines and prison sentences – though you’d be very unlucky to receive a large fine or prison sentence for an honest mistake. The Qld regulator, sensibly, seems to have adopted the practice of issuing warnings before prosecution.

[4] Even though the legislation expressly says that it doesn’t matter who controls performance the work.

Tuesday TalkAbout: a Free Short Webinar Series

contact-us-hand-speech-bubble-copy-space-picture-id1130100468 (1)

Some of you may know from earlier posts that I’m currently exploring how positive attitudes towards continuing professional development can support recruitment & staffing practitioners in meeting regulatory and industry requirements to acquire and maintain prescribed levels of relevant professional knowledge. It’s part of my response to RCSA’s #loveyourwork initiative.

So, I’ve put together a series of ten short (30-minute) webinars covering topics of importance and interest to members of the RCSA-hosted Labour  Hire Licensing & Regulation (Aust & NZ) LinkedIn Group, which I moderate.

The webinars have been scheduled, at members’ request, to take place at 8.30 am on a Tuesday. The webinars are presented using the ZOOM webinar platform. You can ask questions anonymously or send them to me ahead of the webinar if you like.

Here’s the program. It has been designed to inform and to encourage discussion amongst members who are keen to advance their continuing professional development.

You can register for the free webinars by following the links provided. I hope you’ll take part!

 

2019 Program

15/10/19 Independent Contractors: Removing the Grey Areas (Completed)

Join us for our “Tuesday TalkAbout” webinar when we’ll be shedding light on the topic of independent contracting. What is it, really? How is it different from other work relationships like employment? Why does it matter? Register for the free on-demand webinar here

22/10/19 Labour Hire Licensing: Using Conditions to Get Over the Line (Completed)

We launch a discussion about how to access the regulators’ power to grant conditional licences and examine actual conditions that have been used to support the grant of licences that might otherwise not have been approved.  Register for the free on-demand webinar here

29/10/19 Labour Hire Licensing: Rejections, Appeals & Alternatives (Completed)

Our discussion of labour-hire licencing extends into the area of objections, rejections, appeals, and alternatives. We look at some actual objections, suspensions and cancellations and discuss how to deal with them. Register for the free on-demand webinar here

05/11/19 Service Continuity: Tips & Traps for Agency Work (Completed)

What is the status of your agency workers between assignments?  Can they accrue long service leave and other service-based entitlements when not working? Has the status been affected by recognition of the so-called permanent-casual?  We examine two common models of agency worker engagement and discuss their pros and cons. Register for the free on-demand webinar here

12/11/19 Casual Conversion: How to Use Evidence-Based Responses (Completed)

You will be familiar with casual conversion provisions in awards and agreements. But how do you respond to a casual conversion request? We discuss the type of evidence you can use, how to interpret it, and how you might present it when responding to a casual conversion request. Register for the free on-demand webinar here

19/11/19 Labour Contracting, Supply Chains & Service Networks: Explained

Although it is common to talk about labour supply chains, there are actually very few situations where it occurs. That’s because labour is different from other commodities. We discuss different models of labour contracting and look at examples of recruitment & staffing agency service networks to see what is really going on. Register for this webinar here

26/11/19 Modern Slavery & Vulnerable Worker Protections

How are you going to respond when your clients ask for a report about what steps you’ve been taking to combat modern slavery and the exploitation of vulnerable workers in their supply chains? We build on our understanding of labour contracting, supply chains and service networks to discuss how you can respond positively to your client’s (and regulators’) requirements. Register for this webinar here

03/12/19 Certification Schemes as Regulatory Alternatives: Pros and Cons

Can industry certification schemes be viable alternatives to statutory licensing schemes? We discuss different types of certification schemes and consider their pros and cons as regulatory alternatives. In doing so, we’ll also look at Regulatory Impact Statement that supported the Victorian licensing scheme to see how it worked. What assumptions were made? Were they correct? How might a federal RIS and outcome differ? Register for this webinar here

10/12/19 Freelance Platforms: New Idea or New Technology?

You might have a view about whether freelance platforms present a threat to the industry or whether they are part of the industry. But have you ever looked into their terms and conditions to see how they run and where they fit within the industry? We discuss actual examples of some freelance platform terms and conditions to see how they operate and why they are different from your usual terms and conditions. Register for this webinar here

17/12/19 Piece Rates: Explained

We discuss piece rates under some common awards and consider how to manage risk when applying them. What do courts look for? How can you get that sort of information from your clients? How can you protect yourself against underpayment claims? Register for this webinar here

 

Andrew C Wood Hon FRCSA (Life)

Contractor Management Companies under Victoria’s Labour Hire Licensing Scheme.

Victoria’s Labour Hire Licensing scheme may cause some headaches as it tries to extend its coverage to contractor management service providers. That’s because there’s likely to be uncertainty about what a contractor management service provider actually does.

Section 8(2) of the Act provides:

 (2)     A person (a provider provides labour hire services if—

(a)     in the course of conducting a business of providing contractor management services, the provider recruits one or more individuals for, or places one or more individuals with another person (a host ) to perform work in and as part of a business or undertaking of the host; and

(b)     the individuals are workers for the provider, within the meaning of section 9(2)(b).

The explanatory memorandum, which accompanied the legislation in its passage through Victorian Parliament somewhat unhelpfully explained:

Contractor management services” is not defined in the Act, but has its ordinary meaning, which covers services whereby a business recruits independent contractors on behalf of a third party (host) and, following engagement of the independent contractors by the host, continues to manage the performance of the contract between the independent contractors and the host. This might include, for example, providing administration and payroll functions, supervision functions or performance management functions in relation to the independent contractor.

But what if the contractor appoints the business to manage the performance of the contract (or parts of it) – i.e. the business is a contractor appointed CMC (it happens)?  Does it make a difference?

And what if the contractor is not an individual (as required by s. 8(2)(a) and 9(2)(b)), but is an incorporated worker instead?

What if the provider recruits the incorporated entity and leaves it to the incorporated entity to recruit or provide the individual – perhaps under the reg.4(1)(c) exception?

Does the incorporated worker exception still apply if the contractor is supplied as a cleaner in a commercial premises? (see reg. 5(a)).

What other outsourced functions, apart from administration and payroll functions, supervision functions and performance management functions, amount to contractor management services according to the “ordinary meaning” – whatever that is? Would the provision of safety inductions be enough? Would onboarding assistance, or “performance monitoring” for the purpose of managing a candidate replacement guarantee be enough?

These might be the sorts of questions that the Authority would be keen to dismiss as questions “asked by clever lawyers” – as though that were a bad thing. But thank goodness there are some who are asking them and attempting to answer them… because, at some point, they’re going to be contested as matters of black letter law and not merely as a “vibe” picked up from a current affairs programme, a campaign manifesto, or a regulator’s website.

And before we ever get to that point, there’ll be plenty of providers, hosts, and contractors wanting to know where they stand.

If you want to participate in this discussion or learn from it, why not register for WorkAccord’s Intermediate/Advanced Level Webinar on 29 May 2019.

The link below will take you to the Eventbrite registration page, where you can find out more details about the webinar.

https://www.eventbrite.com.au/e/labour-hire-licensing-contractor-management-payroll-outsourcing-tickets-60801308350

The webinar will be recorded and can be accessed on demand following the live presentation.

The cost is $145 for live participation (including access to the recording) and $95 for the recorded version only.

As always, there’s a limited number of complimentary free tickets available, which people registering for the webinar might like to offer to their clients or staff. Please contact me if you’d like to take up one of the complimentary tickets.

I hope you can join me.

Andrew C. Wood

 

It Was All Smooth Sailing Until that Bl@@dy Independent Contractor Problem Raised Its Head…Again!

iStock-536170913.jpgOne of the challenges that will confront Victorian labour hire providers is that of providing the Authority with accurate data about:

  • the total number of employees;
  • the total number of independent contractors; and
  • the total number of workers who have been employed or engaged as both an employee and an independent contractor. 

It shouldn’t be a problem, but it’s clear from the wording of the regulations* that the Authority will be expecting applicants to get the classifications right. And that’s never easy.

Bromberg J, in On Call Interpreters and Translators Agency Pty Ltd v Commissioner of Taxation (No 3) [2011] FCA 366, summed it up pretty well at para [206].

…the absence of a simple and clear definition which explains the distinction between an employee and an independent contractor is problematic. It is troubling that in the circumstances of the bicycle couriers dealt with in Hollis, the parties involved needed to travel to the High Court to obtain a clear exposition of the legal status of the couriers.  Workers and those who employ or engage them require more clarity from the law. That is particularly so when important legislation such as the Fair Work Act (and its predecessors dating back to 1904) have steadfastly avoided defining what is an employee, yet demand (on pain of civil penalty) that there be no misrepresentation as to the nature of the work relationship. (citations omitted)

This time the penalties are likely to include refusal, loss or suspension of a licence and/or penalties for making a false declaration if the information is required to be supported by a declaration under the Oaths and Affirmations Act 2018 (Vic). And that carries penalties of up to about $97,000 or imprisonment for 5 years or both.

And then, there’s the little issue about what the Authority is going to do with the information. Remember, you also have to provide information about the industries into which you supply services and the Awards under which you operate. That information is likely to be matched up.

What do you think is going to happen if an applicant declares that it supplies an uncharacteristically high number of independent contractors to an industry in which independent contracting is not the typical or dominant form of engagement – say nursing or horticulture?

You’re going to want to get this right!

So, to plan your application and give it the best chance to avoid getting tangled up, come along to one of WorkAccord’s Vic Labour Hire Licensing: “Up-Close & Personal” masterclasses or advanced workshops as we work through these issues.

Better still, come along to them all!

You can find out more about the series on our Eventbrite registration pages:

  • Masterclass #1 Reach and Limitations (23/04/19 from 9.00 am to 12:00 pm)
  • Masterclass #2 Managing Adverse Outcomes (23/04/19 from 1.00 pm to 4:00 pm)
  • Workshop #3 Prepare Your Application (3/05/19 – morning and afternoon sessions)

I hope to see you there.

Andrew C. Wood

* Labour Hire Licensing Regulations 2018 (Vic), regs 11 and 12.

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