Prepared by Andrew Wood FRCSA (Life) Hon.
The proliferation of state and territory labour hire licensing schemes has presented increasingly complex challenges for AMRANZ members who are staffing medical workforces around the country.
That’s because the licensing schemes, which operate across state and territory borders:
are riddled with inconsistencies,
overlap with other licensing schemes,
lack proper definitions, and
as RCSA CEO, Charles Cameron recently commented, fail to meet their objectives because “the capacity of regulators to simply define the modern labour market is greatly constrained.
The problem is exacerbated in the case of medical locum services providers. That’s because of the complexity of many of the financial structures under which health professionals operate and the different business and professional entities that can provide medical services.
Against this background, RCSA has asked me to provide an update and some practical direction around the implications for medical recruiters on a state by state basis.
Australian labour hire licensing in under 100 words
Given that we now have four active labour hire licensing schemes (Qld; S.A. Vic; A.C.T.), it’s becoming harder to describe them concisely with much accuracy. But I’ll have a go. In this description, X is always a labour hire provider and Y is a host or hirer. I think it’s about 80% accurate!
Australian labour hire licensing schemes concern arrangements where X supplies, to Y, workers whom X is obliged to pay for the work performed for Y.
South Australia limits the arrangements to prescribed work.
Victoria extends the arrangements: where X is a placement agency that procures accommodation for workers it places with Y and Y must pay them; and where X manages the contract performance of workers whom it recruits, or places with Y, regardless of who pays.
Arrangements between X and Y, and between X and its workers, need not be contractual and may be made indirectly through intermediaries.
Points to note
The labour hire licensing schemes overlap with private employment agent licensing schemes in S.A. W.A. and A.C.T. They also overlap with residual private employment agency (no-license) regulation in Qld and N.S.W.
Although South Australia’s scheme is now restricted to prescribed work, “prescribed work” includes cleaning work, which in some contexts can extend into the health and aged care sectors – think theatre cleaning and sterilisation.
There is growing uncertainty in distinguishing between a provider (who needs a licence) and a mere intermediary (who doesn’t).
A provider has workers (as defined); an intermediary doesn’t.
The various state and territory definitions of worker differ – both in their primary meanings and in the regulatory exceptions.
To distinguish between providers and intermediaries, you need a detailed understanding of the whole arrangement between your agency and the host and the arrangement between your agency and the locum.
That understanding needs to extend to an awareness of how the locum gets paid, accommodated and managed because those things can determine whether the locum is your worker, whether you need a licence as a provider, or what your responsibilities as an intermediary might be.
I can think of about a dozen practical adverse implications of not having a reasonable and sufficiently detailed level of professional knowledge about the Australian labour hire licensing schemes. I’ll list them here. Some of them might seem obvious – others, less so.
Involvement in unlicensed dealings
Involvement in advertising ability to provide labour hire services when not licensed
Involvement in avoidance arrangements
Breach of intermediary obligations
Breach of reporting obligations
Breach of advertising requirements – provide licence number etc
Delay in gaining market entry
Impaired ability to provide specialist advice on staffing options and models
Impaired ability to react quickly and take up opportunities
Client hesitancy to engage with you
Hesitancy of network suppliers and peers to engage with you
Delayed payment as issues about license status are raised in defence of your payment claims.
Don’t underestimate #12. The technical and complex aspects of the labour hire licensing schemes are more likely to be raised by commercial litigation defence lawyers than by a prosecuting authority.
That’s pretty much where we are at present. In future, we might see a federal scheme. With luck, it will replace the current state and territory schemes. But that might be at the price of settling for a scheme which, unlike the one in S.A., covers all industry sectors – including the health and medical locum sectors.
There are alternatives – including hybrid schemes that provide for registration but require full licensing only in high-risk industries. Whether these receive support may depend on how vocal RCSA and AMRANZ are in support of them and on whether there is any improvement in what our C.E.O. describes as the “ limited capacity of regulators to define the modern labour market”. Your commitment to increasing professional knowledge and advocacy can help.