High-risk industries under the microscope during inspections of Mildura and Mornington Peninsula businesses

Underpaid workers and health and safety were among issues identified in inspections at Mildura and Mornington Peninsula businesses by the Labour Hire Authority (LHA).

During the inspections of labour hire hosts and providers in high-risk industries, LHA officers witnessed a worker being injured, allegedly due to poor work health and safety practices.

LHA officers also identified evidence of a range of issues, including workers:

• receiving low pay and inadequate award entitlements
• paid cash-in-hand
• unable to identify who their employer was
• not being provided adequate breaks
• working without appropriate health and safety measures.

The issues were identified in two recent LHA compliance operations:

• In March, LHA officers conducted unannounced site visits in Mildura, interviewing workers and key staff of labour hire hosts and providers in the horticulture, meat processing and security industries.
• In April, LHA undertook joint inspections with the Fair Work Ombudsman (FWO) at farms on the Mornington Peninsula, as part of ongoing collaboration to tackle non-compliance in high-risk horticulture regions.

The industries targeted have historically seen significant rates of worker mistreatment and exploitation, including due to their high proportion of temporary migrant and PALM scheme workers.

Investigations are ongoing into alleged non-compliance uncovered during the visits.

New licence conditions in high-risk industries

To further address significant and long-standing issues, new labour hire licences granted in high-risk industries after 1 June 2026 will have new standard licence conditions applied.

The conditions will apply to applicants in:

• horticulture
• commercial cleaning
• security
• meat and poultry processing.
  

The standard conditions will also be rolled out progressively to existing licence holders in high-risk industries from late 2026.

The conditions include a range of provisions to limit risks of unlawful conduct and worker exploitation in industries overrepresented in the prevalence of these issues; they include:

• limitation on the supply of independent contractors
• provision of an LHA Information Sheet to all workers
• reporting obligations and restriction on the use of subcontractors to one tier only
• reporting obligations on the use of payroll service providers
• restriction on the use of cash payments to workers and subcontractors – unless granted variation or emergency payment, to which reporting obligations apply
• obligation to report a change in industry
• provision of PPE without charge
• obligation to comply with minimum accommodation standards when providing or procuring worker accommodation (horticulture, meat and poultry processing only).

As well as complying with any specified conditions, all providers must comply with a range of obligations to maintain a licence, including:

• providing annual reporting
• notifying LHA within 30 days of certain changes to the business
• ensuring all business decision-makers are ‘fit and proper’
• ensuring nominated officers are available to LHA.

Providers must also remain compliant with relevant laws, including employment, taxation, superannuation, health and safety, workers compensation, labour hire industry, migration and transport laws, along with any applicable accommodation standards.

Failure to comply with licence conditions can lead to licensing action, including suspending or cancelling a licence.

Worker injury highlights health and safety issues

During the inspections, LHA officers witnessed a worker being injured, allegedly due to substandard equipment and poor working-at-heights practices.

Officers also identified other concerns with health and safety, with all issues referred to WorkSafe Victoria.

Under the Occupational Health and Safety Act 2004 (OHS Act), hosts have the same occupational health and safety duties to labour hire workers as to any other employee.

Labour hire providers and hosts have shared responsibilities for worker health and safety, including:

• providing and maintaining a safe working environment
• training
• assessing risks
• monitoring the health of employees
• monitoring conditions at the workplace.

They must also ensure the employee is capable and provided with everything they need to do the job safely.

Previous issues in high-risk industries and regions

LHA has identified growers in regions like Mildura and the Mornington Peninsula have engaged unlawful labour hire companies, putting them at risk of fines, disruption and involvement with criminal elements.

With regulators already identifying criminal syndicate involvement in the regions, and issues as serious as forced labour – a type of modern slavery – LHA has found labour hire companies attempting to avoid scrutiny through licence fraud.

Labour hire providers have been found:

• producing fraudulent paper licences
• doctoring digital files relating to their licensing status
• claiming to be a specific licensed company without that provider's knowledge, then giving a host their own contact and bank details for payment.

The use of complex supply chains with multiple layers of subcontracting were also identified during the inspections.

There is an inherent increased risk of non-compliance in complex supply chains, due to the arrangements not always being transparent to regulators.

In addition, potential illegal phoenix activity and low contract prices were identified, which would not enable providers to meet their obligations to workers.

Under the LHL Act, the same penalties apply to businesses found using unlicensed labour hire services or providing those services – maximum penalties per breach exceed:

• $650,000 for a corporation
• $160,000 for an individual.

LHA regularly undertakes unannounced site visits to monitor and investigate compliance in regions identified as high-risk, including activities with other regulators and agencies such as the FWO.