FINANCE AND ADMINISTRATION COMMITTEE

1 FINANCE AND ADMINISTRATION COMMITTEE Members present: Mr PS Russo MP (Chair) Mr RA Stevens MP (Deputy Chair) Mr DC Janetzki MP Ms DE Farmer MP Mr SJ Minnikin MP Mr LP Power MP Staff present: Ms A Honeyman ( COMMITTEE Secretary) Ms H Rae (Assistant COMMITTEE Secretary) PUBLIC BRIEFING INQUIRY INTO THE LABOUR HIRE LICENSING BILL 2017 TRANSCRIPT OF PROCEEDINGS WEDNESDAY, 14 JUNE 2017 BrisbanePublic Briefing Inquiry into the Labour Hire Licensing Bill 2017 Brisbane - 1 - 14 Jun 2017 WEDNESDAY, 14 JUNE 2017 _____ COMMITTEE met at am CHAIR: Welcome. My name is Peter Russo and I am the chair of the COMMITTEE . I will not introduce the members unless you request that I do so. Can I ask that you introduce yourself when you first start off for the purposes of Hansard. I declare open the public briefing for the COMMITTEE 's inquiry into the Labour Hire Licensing Bill 2017.

2 On 25 May 2017 the Minister for Employment and Industrial Relations, Minister for Racing and Minister for Multicultural Affairs, the Hon. Grace Grace MP, introduced a bill to the parliament. Parliament has referred the bill to the FINANCE and ADMINISTRATION COMMITTEE for examination with a reporting date of 24 July. In accordance with standing order 202, Di Farmer MP, the member for Bulimba, will attend in the place of Jo-Ann Miller MP, the member for Bundamba, who is unable to attend today's briefing. The COMMITTEE 's briefing today is a proceeding of the Queensland parliament and is subject to the standing rules and orders of the parliament. The proceedings are being recorded by Hansard and broadcast live on the parliament's website. The media may be present and will be subject to the chair's direction at all times. The media rules endorsed by the COMMITTEE are available from the COMMITTEE staff if required.

3 All those present today should note it is possible you may be filmed or photographed during proceedings. I ask everyone present to please turn their mobile phones off or to silent mode. Only the COMMITTEE and invited officials may participate in the proceedings. Any person may be excluded from the hearing at the discretion or order of the COMMITTEE . Today's briefing is to assist the COMMITTEE 's examination of the Labour Hire Licensing Bill. The program has been published on the COMMITTEE 's web page. Hard copies are available from COMMITTEE staff. We will now hear from representatives of the Office of Industrial Relations who have been invited to brief the COMMITTEE on the bill. JAMES, Mr Tony, Executive Director, Industrial Relations, Office of Industrial Relations SPIERS, Ms Kate, Senior Policy Officer, Office of Industrial Relations Mr James: Issues with the labour hire industry in Queensland are well known to the COMMITTEE following its inquiry and report last year.

4 The observations and evidence presented to that inquiry have also been echoed in other labour hire and related inquiries conducted in other states and by the Commonwealth. Those inquiries were identified in the briefing material that was provided to the COMMITTEE on 8 June along with a summary of submissions to the government's issues paper, Regulation of the labour hire industry, which was released in December 2016. The policy objectives of the Labour Hire Licensing Bill 2017 and how these will be achieved through the bill are set out in the explanatory notes associated with the bill along with the notes on provisions. The Office of Industrial Relations and my colleagues are very grateful for the opportunity to attend the public briefing before the COMMITTEE . Mr STEVENS: Welcome again, ladies and gentlemen, to the inquiry on the legislation. Following the report, this COMMITTEE made a recommendation that the matter be followed through COAG in terms of getting all of the companies right across Australia involved in trying to eradicate the bad practices which we all know exist.

5 How does the department in its licensing regime see itself controlling those companies that are external in terms of their licensing, and how they are going to organise that and enforce the Queensland requirements through the courts? Mr James: I refer the COMMITTEE to section 5 of the proposed bill, which is the extraterritorial application of the act. The act applies inside Queensland and it also applies outside Queensland to the full extent of the extraterritorial legislative power of the parliament. We see that this act is a business licensing scheme to operate as a labour hire provider in Queensland, so if a labour hire business supplies labour to businesses in Queensland they will be required to have a licence. Accompanying that obligation is an obligation on businesses to use only registered or licensed providers, so if a Queensland business wishes to put labour hire labour into its business it can only deal with a registered labour hire or licensed labour hire company under the auspices of this act.

6 Public Briefing Inquiry into the Labour Hire Licensing Bill 2017 Brisbane - 2 - 14 Jun 2017 Mr STEVENS: Do all of the national firms have to have a Queensland registration? Mr James: That is right, if they wish to operate in Queensland. Ms FARMER: I am sorry if I ask questions that you may have already provided answers to at a previous hearing; I am just filling in today. I was interested in the point made by the AMIEU in their submission. They raised a concern that smaller scale operators would avoid the regulatory burdens by establishing themselves as contractors rather than labour hire providers. It raised a more general point to me: what are the vulnerabilities in terms of unscrupulous operators being able to bypass the regulatory environment? Mr James: As I said, the bill provides a business licensing scheme for labour hire service providers in Queensland. The meaning of 'provider', 'labour hire service' and 'worker' are in sections 7 and 8 of this bill.

7 I will just turn to those sections. A person a provider provides labour hire services if in the course of carrying on a business the person supplies to another person a worker to do work. An individual is a worker for a provider if the individual enters into an arrangement with the provider under which the provider may supply to another person the individual to do work and the provider is obliged to pay the worker in whole or part for that work. The provisions capture the triangular relationship which is a labour hire business; that is, a labour hire business is a business supplying labour of a worker to a third party. That definition and the scope of this bill leverages the work done by this COMMITTEE in its examination of what is labour hire. The relationship was well explained by the COMMITTEE in its report on page 8, which says that the essential qualities of these arrangements are the splitting of contractual and controlled relationships whereby the worker is under the direction and control of the host employer in relation to the performance of work but is not engaged in a contractual relationship with the host employer; the worker is paid by the labour hire agency and is in a direct contractual or employment relationship with them; and the host firm pays the labour hire agency for the labour provided by the worker and also has a direct relationship with the labour hire agency.

8 The definition in our act recognises variations on the traditional employer/employee relationship and the traditional on-hire relationship, and it also considers other forms of relationships. That is at section 8(2) (a) and (b). We do not rely wholly on establishing an employer/employee relationship between the labour hire provider and the worker because, as this COMMITTEE 's report has previously determined, there are a number of ways that people can enter into a relationship but still be genuinely labour hire. The definition at 8(2) (c) also recognises that a labour hire provider can provide labour to another labour hire provider who then provides it on to another and then up the chain, so there is layering in the industry which again was identified through your inquiry. The definition at 7(1) also provides some examples of what is a labour hire arrangement.

9 In addition, the act in section 11 places an obligation on users of labour hire to comply with the act to engage only licensed providers, so in this way we think that the end user of the labour knows the nature of the arrangement they are seeking. They know whether they will have labour supplied to their business. There are rather large penalties if you breach this legislation. In one way through the supply chain we will lever people who supply labour through a labour hire arrangement. We will leverage the supply chain to also drive this, so in that way the bill itself leverages the supply chain to also moderate and regulate itself. President Hall said, 'If it walks like a duck and quacks like a duck, it's a duck.' This is a broad-based scheme. It does capture labour hire providers in a broad sense. Mr POWER: Is there not a danger that people will restructure their contractual arrangements?

10 They might know what they intend to do, whether they are hiring labour, but they also might know that they can structure their contractual arrangements to bring in some kind of contractual direction to fulfil the terms of the act and therefore not be captured, and therefore unscrupulous providers of labour provide unscrupulous contractors. Mr James: That is a good question, because we know from all of the inquiries now that there is a lot of shapeshifting in the labour hire industry. The majority of operators are ethical and good, but there is that fringe which does cause problems. At section 12 the act also incorporates an anti-avoidance provision, and that effectively means that users of labour hire services and the labour hire service providers cannot conspire to avoid their obligations under other relevant laws. 'Relevant laws' are defined specifically in this legislation in the dictionary at the back, and it lists a host of employment, taxation and other related laws.