Fair Farms

Helping you manage labour hire risks

by | Feb 8, 2022 | Articles

Using a labour hire provider (LHP) does not mean that labour laws don’t apply to your business. Far from it! If the LHP you use does the wrong thing by its workers, then your business could be liable. The main areas of risk relate to workplace health and safety (WHS), employee wages and conditions, and Right to Work and you should have a system to manage that risk.

STEP 1: DUE DILIGENCE

Your business should apply a process of due diligence before engaging a LHP.

Queensland, Victoria, and South Australia have laws that now require the licensing of LHPs. It’s unlawful to use an unlicensed LHP in those states.

To verify that a LHP is licensed, check the relevant online register:

Labour Hire Provider or contractor?

The business you are considering engaging may claim that they do not need to be licensed because they are a contractor and not a LHP. It is unlawful to enter into an arrangement that is designed to avoid licensing obligations. Whether or not a business meets the definition of an LHP under State laws depends on a range of factors.

Making sure a LHP has a current license is just the first step.

Below is a checklist of red flags and good practices to consider when preparing to engage with a LHP.

The LHP can’t provide a certificate of currency for insurances such as workers compensation and public liability.
The LHP has WHS policies and procedures, and a process for induction and supervision of employees.
The LHP has been prosecuted for breaches of WHS, Fair Work or Migration laws.
The LHP has a system for checking that employees have the right to work in Australia (eg. VEVO).
The LHP can’t identify the correct industrial instrument (Award) and pay rates.
The LHP maintains good time and wage records, and pay slips are provided to employees.
The LHP has written employment agreements and does not use ABN’s.
The LHP won’t rule out subcontracting to another LHP without consent.
The LHP is currently registered (ABN or ASIC) and has been in business a while.
The LHP has quoted rates that may not enable obligations to employees to be met.
The LHP is a Staffsure certified provider (see www.staffsure.org).

 

STEP 2: GET IT IN WRITING

The cost of labour is likely to be one of the most significant expenses your business will bear. With so much at stake it’s just good business practice to have a written and legally enforceable agreement. If your LHP does do the wrong thing by their employees and regulators are asking you some hard questions, a written agreement will help in establishing that your business should not bear any liability. A good agreement will require the LHP to provide your business with evidence that it is meeting its legal obligations and should ensure that there is no sub-contracting without consent.

STEP 3: ONGOING MONITORING

Effectively managing the risk to your business involves implementing a system to regularly check that the LHP is doing the right thing. Check time and wages records on a regular basis and spend some time talking to the employees of the LHP working on your farm. Make sure you investigate any complaints or issues that come up.

Applying this process may take a little time and effort but it could prevent a lot of expense and heartache.

Want to know more? You can access free training videos online. Just visit: www.growcom.com.au/projects/managing-labour-hire-risks/

Growcom’s Fair Farms program has standards and training modules that help farm businesses to keep up to speed on legislative requirements set at both the state and national level. Become a member of Fair Farms today to access an Australian-centric training and certification program including online training modules, one-on-one training and over-the-phone support that helps your business showcase ethical employment practices to the supply chain.