Closing Loopholes and Using Labour Hire Providers

Smart practices when using labour hire

For many vegetable growing businesses, using a Labour Hire Provider (LHP) is the only practical option to source and manage workforce requirements, particularly given the current challenges facing the sector. In the context of the recent heightened focus from federal and state governments on issues relating to farm workers, there are many additional compliance issues and complexities to consider when engaging an LHP.
Despite the solid practices that many growers have in place to look after workers, it is important to know that engaging an LHP can also make that business liable for wrongdoing or illegal behaviour by that LHP.
Penalties for businesses are significant – including hefty fines and even jail time – so it is important for growers to have measures in place to protect themselves and their businesses.
We have prepared the following information and resources for growers to consider in their dealings with LHPs.

Protect yourself with a written contract

Regulators from the Fair Work Ombudsman (FWO) and labour hire licencing authorities can drop into your farm at any time.
If your LHP does do the wrong thing by their employees – and regulators are asking you some tough questions – a written agreement will help in establishing that your business was not a knowing participant in misconduct.
Prepare a contract to discuss with the LHP and have them sign it so you are both aware of the requirements and obligations of your arrangement.

Things to include may be:

• LHP identification (e.g., ABN, company director IDs, full names, physical address, phone and email)
• immediate advice by the LHP of changes to the office holders of the business
• immediate advice of any change to the LHP’s labour hire licence status (if in a participating state)
• no subcontracting allowed, or only upon request so you can check details first (businesses doing the wrong thing often hide under other businesses)
• terms for worker wages and entitlements
• requirement to comply with workplace laws
• agree to provide legal financial documents for review at regular intervals
• agree it’s illegal to use Electronic Sales Suppression Tools (ESSTs) and that the LHP will not do so*
• WHS requirements met for workers
• all workers engaged have Australian working rights
• necessary information provided to workers for your farm (e.g. dress code, lunch and water requirements etc.)

* Recent reports from the FWO have indicated that non-compliant LHPs are creating two sets of paperwork – one for the host employer, and one for their actual business, to trick host employers.

Have a read through our tips and warning signs below, to feel more confident in your relationship and requests to your LHP.

Tips to avoid non-compliant LHPs

1. If there is a labour hire licensing authority in your state, check your LHP has a valid licence and tag them through the authority’s website to receive updates on their licence status.
2. Use the Visa Entitlement Verification Online (VEVO) website or app to check that workers have the legal right to work in Australia and on your farm.
3. Ask workers for a copy of their payslip to check they are being paid as per your agreement with the LHP.
4. Cross check your LHP’s time and wages records on a regular basis.
5. Ask your LHP for a copy of their quarterly superannuation statement and tax statements to cross check that they are lodging super and tax correctly for their workers.
6. Check the LHP has provided written employee agreements and is not subcontracting workers on individual ABNs.
7. Check if the LHP has been in business for a while and has good reviews.
8. Ask the LHP about their WHS policies, employee induction, training, and supervision practices.
9. Spend some time talking to the employees of the LHP working on your farm and observe if they seem happy and willing to chat.
10.  Make sure you investigate any complaints or issues that arise.

Warning signs your LHP is non-compliant

1. The LHP can’t provide a Certificate of Currency for insurances such as workers compensation and public liability.
2. The LHP has been prosecuted for breaches of WHS, Fair Work or Migration Laws.
3. The LHP can’t identify the correct Award and pay rates for their workers.
4. The LHP is angry or annoyed when you request any paperwork from them or their workers. All LHPs should know this is the law and have no issues.
5. The LHP subcontracts workers without your consent.
6. The LHP brings workers in and out of your farm throughout the day without your knowledge or consent, cycling them through surrounding farms.
7. The LHP punishes you for asking questions, and takes away your best workers.
8. The LHP came to Australia as part of the PALM scheme or on another temporary visa and their business owner is not in Australia.
9. The LHP is paying workers in cash and not providing payslips.
10. Workers ask you for extra work on weekends (without the LHP) as they have not been paid or need more money.
11. There are unlawful deductions on worker payslips for things like access to kitchen and laundry.
12. Workers complain of substandard accommodation or overcrowding.
13. The LHP has several different business names and operates in different states. (This doesn’t necessarily mean they are doing the wrong thing but it’s common for unethical LHPs to go underground when things go wrong for them, and to move between states changing business names often.)

Speak up

If you see something, say something.
Without growers reporting the unethical behaviour they are witnessing in growing regions, it’s impossible for labour hire authorities to chase illegal contractors down.
You can report anonymously on the Australian Border Force (ABF) website, or to your state labour hire authority.
Any information you can share may be helpful to an active case, however authorities really need the below information in order to act:

• Business name
• Contact person
• ABN
• Address / phone
• Payslips or evidence from affected workers

Communicate workplace policies

Your business should have policies in place to ensure that all staff are safe, understand workplace processes and practices, including what is acceptable and unacceptable behaviour in the workplace.
It’s important to remember that you are equally as responsible for the workers employed by your LHP, as you are for your own workers.
Make sure your LHP and staff have access to the same policies as your own team. You could share them via email, via social networking groups alongside rosters, on a portal on your website, and have them printed in your workplace or on posters. Staff should know who they can talk to if they have a concern, and the grievance policy if the concern is with their direct supervisor.
Make sure to review your policies at regular intervals and ensure compliance.
The Horticulture Showcase is a great place to get some advice on the sort of things that should be in your workplace policies. NSW Government has a great example of how to set workplace policies here, or try your state workplace safety authority. More information can also be found below under Fair Work Ombudsman.

Resources

Labour hire licencing schemes
AUSVEG has long advocated for a National Labour Hire Licencing Scheme to target and remove unethical labour hire contractors from industry.
Currently, there are only some state level organisations.

• Queensland
• ACT
• South Australia
• Victoria

Click on the above states to view the relevant labour hire authority website, or click here for an update on where the remaining states and territories sit with this matter.
Having this scheme in your state means that LHPs must register with the authority for a licence (which you can check on their websites), and you can feel safer knowing that the LHP has passed a variety of clearance checks.

Fair Work Ombudsman (FWO)
The FWO has developed resources to assist you in managing your labour contracting, including guides and tools you can use. Read about Contracting labour and supply chains and Managing your labour contracting.
You can also check out FWO’s Horticulture Showcase webpage: Using Labour Hire.

Assurance schemes
StaffSure is an ethical labour sourcing scheme for labour hire providers. It was developed by their peak industry body Recruitment, Consulting & Staffing Association. Checking if your LHP is certified is a good way to feel assured that you are dealing with a reputable company.
Fair Farms is an industry-led initiative aimed at fostering fair and responsible employment practices in Australian horticulture. Consider joining Fair Farms for more support and information on ethical employment and support with LHPs. Alternative international schemes commonly used for ethical employment are Sedex and GlobalG.A.P.