Labour hire changes to OHS Act to commence 22 March 2022
21 March 2022
Important occupational health and safety changes impacting the Victorian labour hire industry commence tomorrow, 22 March 2022.[1] Under the changes, the Occupational Health and Safety Act 2004 (Vic) (OHS Act) definitions of ’employee’ and ‘employer’ will be amended to expressly apply when workers are provided under labour hire arrangements. The changes also impose a new duty on persons to consult, co-operate and co-ordinate activities with other persons who also owe duties to labour hire workers.
Although OHS duties have always had potential application to both labour hire providers and host employers,[2] the changes seek to avoid technical defences being mounted and to overcome the potentially narrower scope of existing duties held by employers to ‘other persons’ and the duties held by persons who have management or control of workplaces.
What are the changes?
The expanded definitions broaden the term ‘employee’ to capture:
- workers supplied by a labour hire service to a host employer
- workers recruited by a labour hire service for a host employer, and
- workers placed by a labour hire service to perform work for a host employer.
‘Worker’ is defined broadly, and essentially includes any individual supplied or recruited by a labour hire provider to perform work for a ‘host’, where the provider is obliged to pay the individual for that work (directly or indirectly and including under an independent contractor arrangement).[3]
The host employer of workers captured by the extended definition is then taken to be the employer of the worker for the purposes of the OHS Act duties. This means, the primary employer duties included in s 21 of the OHS Act will now apply to host employers as well as the worker’s direct employer (usually the labour hire provider).
The changes also create a new duty for labour hire employers to, so far as is reasonably practicable, consult, co-operate and co-ordinate activities with other persons who owe duties to labour hire employees. This means labour hire providers and host employers will need to consult, co-operate and co-ordinate their activities in relation to workers supplied, recruited or placed.
Employers operating in model Work Health and Safety Act jurisdictions will recognise the terminology adopted in the new duty. The objective of the duty to ‘consult, co-operate and co-ordinate activities’ is to “make sure everyone associated with the work has a shared understanding of what the risks are, which workers are affected and how the risks will be controlled. The exchange of information will allow the duty holders to work together to plan and manage health and safety”.[4]
Failure to comply with the new consultation duty can attract a maximum penalty of 180 penalty units (currently $32,709) for individuals and 900 penalty units (currently $163,548) for body corporates.
Do the changes expand the OHS duties of host employers?
Arguably, yes. For example, WorkSafe Victoria claims the “changes ensure that labour hire workers now have the same rights and protections at their host employer’s workplace as employees of the host”.[5] And this is true to the extent that prior to the changes, host employers generally would not owe duties to labour hire workers placed by labour hire providers under s 21 of the OHS Act (i.e. as their employer).[6]
However, host employers have always held duties in relation to the health and safety of labour hire workers placed in their business. For example, duties are already owed to labour hire workers by host employers under the s 23 duty of employers to “other persons” whose health and safety is impacted by the employer’s undertaking. Further, duties are already owed to labour hire workers by host employers under the s 26 duty of persons who have management or control of a workplace.
Host employers are therefore not required to completely re-design their health and safety management systems as a result of these changes. Because of the existing duties, risks to the health and safety of labour hire workers should already have been dealt with in much the same way as risks to the health and safety of direct employees. Any host employer taking a different approach has likely always been exposed to potential prosecution.
Instead, the key takeaway for employers impacted by the changes is the importance of complying with the new duty to consult with other duties holders. The new duty imposes, for the first time in Victoria, an express duty for multiple duty holders to consult, co-operate and co-ordinate their activities.
The new duty to consult recognises that the changes to the definitions of ‘employer’ and ‘employee’ do not seek to duplicate the work required by labour hire providers and host employers to comply with their OHS Act duties.[7] The duty emphasises that the best health and safety outcomes are achieved when an active, imaginative and co-operative approach to health and safety management is adopted by all duty holders who have an ability to impact the health and safety of workers.
This means labour hire providers and host employers will need to establish consultation plans to ensure everyone associated with the work has a shared understanding of what the risks to health and safety are, which workers are affected and how the risks will be controlled.
Note: In other Victorian news, the proposed amendments to the requirements for ‘near miss’ incident notification and the threshold for issuing prohibition notices have received Royal Assent and commenced operation on 17 March 2022. We discussed the changes in detail in this December 2021 article.
[1] These changes were included in a raft of changes to the Occupational Health and Safety Act 2004 (Vic) (OHS Act) and other legislation passed by the Victorian Government in September 2021. We discussed some of the other changes in an earlier article.
[2] As demonstrated by several prosecutions against both labour hire providers and host employers by WorkSafe Victoria in recent years.
[3] See section 9 of the Labour Hire Licensing Act 2018 (Vic).
[4] Work Health and Safety (Work Health and Safety Consultation, Co-operation and Co-ordination) Code of Practice 2015 made under section 274 of the Work Health and Safety Act 2011 (Cth). See also SafeWork NSW v Aceline Plumbing Group Pty Ltd [2020] NSWDC 774.
[5] https://www.worksafe.vic.gov.au/occupational-health-safety-and-other-legislation-amendment-act-2021.
[6] Explanatory memorandum to the Occupational Health and Safety and Other Legislation Amendment Bill 2021 (Vic) (EM), clause 4.
[7] EM, clause 4.
