Australia’s changing compliance landscape: A closer look


Compliance has become a major business concern in Australia’s labour hiring industry. Businesses that engage labour hire services should not be concerned about whether the provider is compliant. Instead, they should ask whether the provider has the systems and expertise to support and maintain compliance.


In the last five to seven years, Australia’s regulatory environment has undergone significant changes. The result has been more stringent compliance requirements in the labour and employment sector. The need to protect workers and ensure fair treatment has been the main driver of these changes.

Closing Loopholes Act brought in significant reforms to casual employment, contractor arrangements, and labour hire. These changes alter employment relationships fundamentally and impose new obligations on businesses.

Environmental, Social, and Governance requirements set mandatory carbon emission reporting rules that require greater accountability and transparency, forcing organisations to measure, monitor, and reduce carbon emissions in line with broader sustainability efforts.

Modern Slavery Legislation mandates that larger businesses extend their assessment, identification, and mitigation of risks to modern slavery throughout their supply chains. They must also provide annual reports detailing the risks.

State based licensing schemes for labour hire In VIC, ACT and QLD, licensing laws have been implemented that require businesses to hire only licensed operators.


The Hidden Costs Of Non-Compliance


If labour hire compliance is not met, the consequences go beyond the labour hire provider. Due to the accessory provisions in different legal frameworks such as Fair Work laws, clients of labour hire companies may also be held responsible for labour law violations.

Financial and Legal Effects: Non-compliance may trigger investigations, significant fines (upto $792,000 for each breach under the Fair Work Act) and possible litigation. Settlements for wage underpayments have reached tens and even hundreds of millions of dollars in recent cases.

Failures to comply with regulations quickly become public. Labour hire suppliers’ compliance breaches will inevitably affect their clients. As media scrutiny and social-media backlash increase, reputations are damaged. It can cause consumer boycotts and erode trust. It may also harm relationships with clients and stakeholders.

In one case, Coles’s reputation was damaged when it became known that four companies providing trolley pushers for Coles supermarkets were underpaying their workers. The labor hire companies employed the workers but their names were mostly omitted in the media. Coles was left to take the brunt.

Operational disruptions: Regulation investigations can divert attention from management, use resources and even halt operations. In extreme cases, licences for labour hire may be suspended and clients left without the essential workers.


Beyond Surface Level Compliance


When real problems arise, certificates and insurance policies are of little use. It is important to look at the content of these documents.


Compliance with workplace regulations, industry awards and enterprise agreements requires specialist knowledge. Most effective providers integrate compliance with their core operations. They use proactive systems to anticipate regulatory changes, rather than simply reacting to problems as they arise.


True compliance partner ensures compliance considerations are incorporated into everyday activities, from worker classification and payroll processing to issue management.


Assessing Real Compliance Capability


Before evaluating a provider of labour hire, go beyond the surface claims and investigate their substantive capabilities.

Compliance Framework: Are compliance professionals qualified with industry-specific expertise? Do you have dedicated HR and legal resources to ensure compliance with workforce regulations?

Response Systems: The provider’s ability to respond quickly when problems arise is perhaps the most important factor. Consider a provider’s established processes to address compliance issues, their experience in handling regulatory inquiries and their resources for rapid responses.

Regulatory adaptation: Providers who are truly committed demonstrate readiness for new legislation and maintain updated policies that reflect recent changes. They also invest in staff training to meet emerging requirements.


Client organisations as compliance partners


Although providers are responsible for the majority of compliance, clients also play an important role.

Due diligence: Verify licenses required, review compliance histories, and assess compliance systems when selecting providers.

Protective Contracts: Make sure agreements clearly address compliance obligations, reporting, audit rights and remediation expectations.

Ongoing Monitoring: Conduct regular compliance checks, monitor key indicators and establish channels of communication for workers to voice concerns.


Labor hire compliance is a complex issue in Australia, where the regulatory landscape is becoming increasingly complex. Businesses can reduce the risks of non-compliant labor practices by taking a proactive stance in compliance assessment, and working with partners with genuine compliance expertise.


The best protection is not to promise that everything will be fine, but rather, to have confidence that your labour hire provider can respond quickly and effectively when problems arise.


The message for businesses trying to navigate this complex environment is clear: Don’t just tick the box. Look under the hood.

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