Labour Hire Update: Dishonesty costs labour-hire providers over $480,000

Ensure you notify LHA of any changes in relevant persons.

Following a successful prosecution by the Labour Hire Authority, a Victorian company and its director were fined a total of $483,428.40. (LHA).

The horticulture staffing firm Ung Services Pty Ltd in the Yarra Valley neglected to disclose that Nico Keat, its new director, had previously been convicted of drug trafficking and theft. Mr Keat has previously submitted a licence application as a director of another company. He was appointed a director of Ung Services following LHA’s denial of his application.

Under the Labour Hire Licensing Act 2018 (Vic), providers must notify LHA if their directors or other key people change, or if any key people cease to be fit and proper under the Act.

The LHA plays a significant role in enhancing the integrity of the industry and protecting workers by ensuring that directors and other key personnel participating in labour-hire businesses are fit and proper. To further hold the business accountable for dishonestly seeking to avoid labour-hire licencing requirements, LHA revoked Ung Services’ licence and commenced legal action.

Labour Hire Commissioner Steve Dargavel said that “Ensuring we have fit and proper people running Victorian labour-hire companies is an important way we can protect workers and improve the industry’s integrity. If you meet your obligations and do the right thing by Victorian workers, you have nothing to worry about – if not, you should expect to face the consequences“.

According to LHA investigations, Mr Keat had been found guilty of 12 offences, including drug trafficking, theft, failing to appear for bail, and receiving suspected stolen property and proceeds of crime. The Supreme Court of Victoria fined Ung Services $386,742.72 and Mr Keat $96,685.68, stating in its decision:

The knowing nature of the contraventions by UNG and Keat and their potential to undermine the Authority’s discharge of its protective and regulatory function, place them at the serious end of the behavioural spectrum. The Act was enacted in the light of ‘significant evidence of exploitation of workers in the labour hire industry….… the contraventions strike at the heart of the protective purpose of the Act.”

To protect workers and improve the integrity of the industry, the Act requires directors and other important individuals involved in managing the firm to be fit and proper. The application procedure includes evaluating potential candidates against a fit and appropriate person test. Directors or other pertinent individuals who alter or cease to be fit and suitable in accordance with the Act must notify LHA.

Recommended reading:

LHA- New Guidance for the security industry: cost of meeting your legal obligations.

Important Notice: Employers, Labour Hire Providers, and Host Employers – The National Minimum Wage Increase and How It Affects You

Employers’ New Labour Hire Obligations – State-by-State Guide and Update

By Yon Ta, Updated 13 December 2022.

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The information in this post is strictly for informational and educational purposes only and should not be construed as legal advice. It is not intended to express specific opinions about specific cases. Before acting on any of the issues discussed in this post, seek additional advice. The information provided should not be relied on for any purpose other than to assist you to understand how Workers’ Compensation insurance works. It is for illustrative purposes only and My WorkCover Solutions Pty Ltd does not accept liability for any loss or damage suffered by any person resulting in any way from the use of or reliance on, the information provided. The information in this article is believed to be correct as of the date of publication. However, changes in the applicable laws may have an impact on the accuracy of the material. This article contains general information that is not tailored to any specific person’s situation. This publication may contain information that relates to the regulation of Workers’ Compensation insurance in your State or Territory. To ensure you comply with your legal obligations, we would recommend you refer to the appropriate legislation as currently in force in the State or Territory you conduct your business. You can find up-to-date legislation by visiting each state’s WorkCover Authority website, alternatively contact myWorkCover for updated information.