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Secondment exceptions in the Australian Labour Hire Licensing Schemes - a sporting analogy

With new labour hire licensing schemes now introduced in Queensland, Victoria and South Australia, there is more than a little confusion in some circles about just what the new legislation means for employers and labour hire providers.

In a recent story published by Andrew C Wood Hon FRCSA (Life) Workforce Relations Advisor with WorkAccord, an Australian Lawyer looks at the “secondment” exception which can be found within the legislation in each state.

In the piece, he uses the scenario of the Melbourne Storm rugby league club sending a player to join the Sunshine Coast Falcons team in Queensland and whether the Storm would subsequently be required to produce Victorian and Queensland labour hire licences for the secondment to be “legal”.

In this scenario, Wood suggests that a hypothetical agreement between the Storm, a professional rugby league team, and the Falcons, who play in a semi-professional competition, might often see players from Melbourne sent to the Coast to play as part of their preparation for returning to the top tier of the game.

“At this point, it’s starting to look a lot like a familiar triangular labour-hire arrangement,” Wood explains. “A worker (Storm player) is supplied to another person (Falcons) to perform work (play footy) in and as part of the business or undertaking of the other person (Falcons).

“It doesn’t matter that the clubs are in two different states – both states have labour-hire licensing schemes that operate beyond state boundaries. “It doesn’t matter whether the player is an employee or independent contractor according to the strict legal distinction. It doesn’t matter if there is no contract between the Storm player and Falcons.

“It doesn’t matter whether the work is performed under the control of Storm or Falcons. And it doesn’t matter whether Storm places the player directly with Falcons or does so indirectly through one or more intermediaries.

“It does matter, however, that the player is a “worker” for Storm – i.e. the player is an individual and Storm is obliged to pay the player in whole or in part for the work, either directly or indirectly through one or more intermediaries.”

As such, it would fit the classic labour-hire arrangement and indeed gives rise to the question of whether the Storm are required to hold Victorian and Queensland labour hire licences and whether the Falcons can acquire labour from an unlicensed provider if they do not.

“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,” Wood continues in his piece.

“Did anyone think this would be an outcome when the schemes were 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 ignored.

“So, what we’re left with is the possibility that the schemes in both States (and in South Australia) cover this type of arrangement. And that is why the exceptions are extremely important.”

Each of the three states has a “secondment” exception within its labour hire licensing legislation.

In Queensland, the exemption in reg 4(1)(c) allows that an individual will not be considered a “worker” for a provider if they are an in-house employee working for another person on a temporary basis.

In Victoria, the exception under 4(1)(a) states a n individual is not a “worker” for a provider if they are seconded to provide services to other people except in cases where the provider is predominantly in the business of providing the services of workers to other people.

In South Australia the exemption "operates as a direct exemption from the requirement to hold a licence in cases where the provision of labour-hire services is not a ‘core function’ of the provider”, Wood continued.

Wood said there are a number of factors which providers who second workers or place them ‘on loan’ need to consider in the face of the new legislation including how it applies to them.

“As with most of the exceptions, it should be apparent that this one comes with plenty of traps and pitfalls”, Wood said.

To read the full story as it originally appeared on WorkAccord’s blog Recruiters’ Casebook here.

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