Labour hire employees are employed by a labour hire employer who sends them to another host employer. The labour hire employer is responsible for providing the labour hire workers with their pay and entitlements pursuant to the relevant contract, award or enterprise agreement.

Labour hire workers covered by the national system can apply to the Fair Work Commission for a regulated labour hire arrangement order. Under a regulated labour hire arrangement order, labour hire employees working for a particular host must be paid no less than the same rate of pay they would receive under the host's enterprise agreement. This is know as a protected pay rate. For more information, visit the Fair Work Ombudsman - Protected pay rates for labour hire employees webpage and the Fair Work Commission - Labour hire employees' protected rates of pay webpage.

Licensing

Under the South Australian Labour Hire Licensing Act 2017 (SA) and the Labour Hire Licensing Regulations 2018 (SA), labour hire service providers in South Australia must be licensed.

The Act aims to protect workers from exploitation by labour hire services. The Act also provides some protection from predatory businesses that may be unsuitable to be licensed to provide labour hire services. The Act establishes higher standards and compliance requirements that licensed labour hire services and host organisations must follow.

From 20 July 2020 until 29 January 2026, labour hire service providers were only required to be licensed in 5 industries: horticulture processing, meat processing, seafood processing, cleaning, and trolley collection. The licensing regime was expanded from 29 January 2026 to include all industries. Labour hire service providers not previously included in the licensing regime have a 6 month grace period in which to organise appropriate licensing. From 29 July 2026, penalties apply to labour hire service providers who operate without a licence, and anyone who enters into an arrangement for labour hire services with an unlicensed provider [Labour Hire Licensing Act 2017 (SA) ss 11, 12].

Labour hire service providers must provide specific information (as determined by the Consumer and Business Services Commissioner) to a labour hire worker at the time they are first employed by the provider, and each time the labour hire worker is supplied to a host organisation to undertake work [Labour Hire Licensing Regulations 2018 (SA) reg 5A].

Exemptions

The Consumer and Business Services Commissioner may grant an exemption from the requirement to be licensed under s 11 [Labour Hire Licensing Act 2017 (SA) s 46]. The following exemptions were published in the Government Gazette on 10 September 2020:

An exemption from the operation of section 12 of the Act to any person who enters into an arrangement for the provision of labour hire services with any of the exempted persons listed in the dot points above also applies.

An example of labour hire services

B is employed by A, a labour hire business. A supplies workers to undertake work for other host organisations. In the course of conducting the business, A agrees with C to supply B to undertake meat processing work for C at C's meat processing business. A sends B to C to undertake the work, for which A will pay B as their employer. A provides labour hire services in supplying B to C.

In the above example, the individual (B) is an employee of A's labour hire business, and is entitled to the minimum national employment entitlements under the Fair Work Act 2009 (SA).

For information about on-hire workers that are engaged as independent contractors, please visit the Fair Work Ombudsman website.

The labour hire service provider (A) and host organisation (C) must both comply with work health and safety laws, and general employment protections legislation.

Anti-discrimination, equal opportunity, work health and safety, workers compensation, tax, superannuation, pay and leave entitlements will apply to employees of labour hire service providers.

For example, in Australian Building and Construction Commissioner v CoreStaff WA Pty Ltd [2020] FCA 893, the Federal Court of Australia held that a labour hire company took adverse action against a 70-year-old grader operator on the grounds of his age, when it declined to engage him for placement with a client.

For more information on labour hire services and employment conditions, please visit the Fair Work Ombudsman website.

For information on the South Australian labour hire licensing scheme, please visit the Consumer and Business Services website.