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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2025-10-29 Daily Xml
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Labour Hire Licensing (Scope of Act) Amendment Bill

Introduction and First Reading

The Hon. A. MICHAELS (Enfield—Minister for Small and Family Business, Minister for Consumer and Business Affairs, Minister for Arts) (15:49): Obtained leave and introduced a bill for an act to amend the Labour Hire Licensing Act 2017. Read a first time.

Second Reading

The Hon. A. MICHAELS (Enfield—Minister for Small and Family Business, Minister for Consumer and Business Affairs, Minister for Arts) (15:50): I move:

That this bill be now read a second time.

I am pleased to introduce the Labour Hire Licensing (Scope of Act) Amendment Bill 2025. This bill proposes to amend the Labour Hire Licensing Act 2017 to broaden the regulatory framework for the oversight of labour hire in South Australia. The amendments proposed in this bill will deliver on the government's commitment to strengthen South Australia's labour hire licensing laws by ensuring that all labour hire firms and workers are covered by the same laws and regulations.

Labour hire licensing is a regulatory measure designed to protect labour hire workers and ensure that labour hire service providers operate within fair standards. South Australia's labour hire licensing laws set minimum standards for labour hire providers with the aim of protecting workers from being exploited. Currently, labour hire providers are only required to be licensed in five sectors: horticultural processing, meat processing, seafood processing, cleaning and trolley collection. There is concern that the current legislation leaves the other labour hire workers without important protections and labour hire providers free to operate without needing to meet licensing criteria, such as police checks and fit and proper requirements for those responsible for the day-to-day management and operation of labour hire businesses.

The bill proposes to return the industry to largely the same arrangements that were in place when labour hire licensing first commenced in South Australia before the law was amended in 2020 to limit its application. The 2020 amendments effectively narrowed the scheme to only apply to labour hire providers operating within certain industries where workers were at particular risk of exploitation. The expansion of labour hire licensing laws will address the potential for exploitation of vulnerable labour hire workers in other industries and inappropriate labour hire business practices across South Australia. The proposed changes will bring South Australia's labour hire licensing laws in line with corresponding labour hire licensing schemes in place in other restrictions, namely, Victoria, Queensland and the ACT.

The strengthening of South Australia's labour hire licensing laws addresses the potential for exploitation of vulnerable labour hire workers and inappropriate labour hire business practices, and establishes a broadened mandatory licensing scheme for all labour hire service providers operating in South Australia. The broadened scheme proposed within the bill has many benefits. It will ensure that all labour hire service providers and labour hire workers are covered by the same laws and regulations.

It will promote a level playing field so that all labour hire service providers do not face unfair competition from unscrupulous operators and labour hire workers are not subject to exploitation, whilst keeping administrative burdens to a minimum. It is likely to deter unscrupulous labour hire service providers from avoiding responsibilities by creating a new company to continue the business of the company that has deliberately closed to avoid paying its debts, including employee entitlements and taxation obligations, also known as 'phoenixing'.

Being licensed reassures hosts and labour hire workers that labour hire service providers are held to a high standard, reducing the risk of unethical practices. For labour hire workers it ensures fair wages, safe working conditions and legal recourse in case of disputes. It will reduce risks for labour hire workers who may experience job insecurity, poor working conditions and lower pay compared to staff who work directly for a business.

In addition to removing provisions that limit the application of the act to horticultural, meat, and seafood processing, cleaning and trolley collection, the bill proposes to retain section 46 of the act. Retaining section 46 of the act will continue to provide for the ability to exempt certain persons or classes of persons through the Gazette.

To keep the use of exemptions to a minimum and, ideally, avoid having to make use of exemption provisions at all, the bill revises the definitions of 'labour hire services', 'labour hire worker' and 'supplier' to ensure clarity regarding the scope and coverage of the legislation. The changes to the definitions of 'labour hire services', 'labour hire worker' and 'supplier' within the bill have been informed by detailed benchmarking analysis of related definitions contained in corresponding interstate labour hire legislation.

Overall, this bill proposes to strengthen South Australia's labour hire licensing laws by addressing the potential for exploitation of vulnerable labour hire workers and inappropriate labour hire business practices by broadening the scheme to cover all labour hire service providers operating in South Australia. I commend the bill to the house and seek leave to have the explanation of clauses inserted in Hansard without my reading it.

Leave granted.

Explanation of Clauses

Part 1—Preliminary

1—Short title

2—Commencement

These clauses are formal.

Part 2—Amendment of Labour Hire Licensing Act 2017

3—Amendment of section 6—Interpretation

This clause inserts definitions for annual wages, director, remuneration and senior manager, and deletes definitions for aquatic animal, cleaning work, fishing, horticultural processing work, meat, meat processing work, prescribed work, seafood, seafood processing work and trolley work.

4—Amendment of section 7—Meaning of labour hire services

Subclause (1) amends the circumstances where a person does not provide labour hire services, adding the following circumstances:

where an individual is supplied to a host to undertake work by a body corporate that has not more than 2 directors and the individual is a director or senior manager of the body corporate and is the only individual who is supplied by the body corporate to undertake work for another person;

where an individual is supplied to a host to undertake work by a business carried on by a partnership comprised of no more than 2 persons and of which the individual is a partner;

where an individual is supplied to a host to undertake work by a business carried on by the individual operating as a sole trader;

where an individual is supplied to a host to undertake work for which the annual wages for the individual are equal to or more than the amount of the high income threshold within the meaning of the Fair Work Act 2009 of the Commonwealth and the individual's employment is not subject to or covered by a modern award or enterprise agreement under that Act.

The amendment in subclause (2) provides that a person may provide labour hire services to a host regardless of whether an individual supplied by the person to undertake work is an employee of the person or a contract is entered into between the worker and the person or between the person and the host.

5—Amendment of section 8—Meaning of labour hire worker

This clause amends the circumstances where an individual is not a labour hire worker for another person, adding the following circumstances:

the individual is an employee of the other person, where the other person is 1 of a group of entities that carry on business as a group, and the employee does work for another entity in that group;

the individual is a public sector employee within the meaning of the Public Sector Act 2009 who is seconded, transferred, provided or made available to do work for another person or entity pursuant to an Act.

6—Amendment of section 20—Duration of licence, periodic fee and report

This is a consequential amendment to the definition of prescribed information in section 20.

Schedule 1—Transitional provisions

1—Application of sections 11 and 12 of Labour Hire Licensing Act 2017

This clause sets out transitional provisions related to the application of sections 11 and 12 of the Act.

Debate adjourned on motion of Mr Batty.