Labour Hire Amendments

Tuesday, 15 March 2022 at 10:00 pm

Changes to Occupational Health and Safety (OHS) legislation passed in September last year are due to take effect on 22 March 2022. The changes will affect all Victorian Public Sector employers who enter into or have existing labour hire arrangements.

In substance, host employers will owe greater health and safety obligations to labour hire workers and will have a new obligation to consult, cooperate and co-ordinate with labour hire agencies about health and safety matters. The effect of the changes is that Victorian Public Sector employers may need to review their labour hire contracts and the processes they have in place surrounding their engagement with labour hire agencies, so as to be ready for these changes.

Labour hire amendments - labour hire workers are now 'employees'

Labour hire employment is a tripartite arrangement involving a worker, a labour hire provider or agency, and a “host” employer.

In a labour hire arrangement, the worker is directly employed by the labour hire provider. The provider then supplies the worker’s labour to the host employer.

Many provisions of the OHS Act specify that “employers” owe a number of duties to “employees”. From 22 March 2022, a labour hire worker performing work for a host is taken to be the employee of the host for the purposes of these obligations under the Occupational Health and Safety Act 2004(opens in a new window).

Labour hire amendments - a new consultation requirement

From 22 March 2022, the following new offence will appear as 35A of the OHS Act. It applies to a host employer and the employer of a labour hire workers.

Each person who has a duty in relation to the same worker must, so far as is reasonably practicable, consult, co-operate and co-ordinate activities with each other person who has a duty in relation to the same worker. Penalty: 180 penalty units for a natural person; 900 penalty units for a body corporate.

This duty is based on a similar provision in the model Work Health and Safety Act which applies in other Australian states and territories, and seeks to ensure that when providers and hosts owe the same duties to the same worker, the provider and host are working together to ensure those duties are met.

There have been several prosecutions in jurisdictions outside of Victoria based on this provision, with duty holders being held criminally responsible for a failure to consult, coordinate and/or cooperate with the related employer in relation to safety matters during the life of the placement. The prosecutions are often initiated following an incident, where a regulator identifies that there was a failure as between the employer duty holders to consult, coordinate and/or cooperate in relation to identifying and/or controlling risks to health and safety.

Breach of the new duty under the Victorian legislation is an offence punishable by a maximum penalty of 180 penalty units (currently $32,709) for individuals and 900 penalty units (currently $163,548) for body corporates. This matches the penalty for the existing duty of employers to consult with employees at section 35 of the OHS Act.

While these amendments mean that both labour hire providers and host employers owe health and safety duties to labour hire workers, it is not intended to require providers and hosts to duplicate effort. Instead, the intent of the amendments is for providers and hosts to have overlapping duties, but to cooperate with each other on how those duties are discharged.

Contact our team

Please get in touch with our team if you need assistance with OHS and employment matters.

Frances Anderson
Assistant Victorian Government Solicitor, Workplace Relations and Occupational Safety Branch
T: 0475 834 049

Cassandra Tanner
Lead Counsel, Workplace Relations and Occupational Safety Branch and Inquiries, Prosecutions and Administrative Branch
T: 0456 996 763

Craig Newton
Principal Lawyer, Workplace Relations and Occupational Safety Branch
T: 0429 223 635