Media Release: Labour hire provider agrees to refund workers for sub-standard accommodation

29 July 2022
Media Release: Labour hire provider agrees to refund workers for sub-standard accommodation

Victoria’s labour hire regulator has imposed licence conditions on labour hire provider MADEC Australia to review and improve the standard of accommodation it provides or procures for labour hire workers. MADEC also agreed to provide refunds to workers who had been placed in accommodation that did not meet minimum standards.

The LHA’s investigation and subsequent decision comes off the back of hearings conducted by the Commonwealth Senate Select Committee on Job Security, where seasonal workers employed by MADEC raised several allegations against the company, including providing or procuring sub-standard accommodation.

The LHA subsequently inspected accommodation procured by MADEC for their labour hire workers in a regional Victorian town and observed it did not comply with minimum accommodation standards referenced in the Labour Hire Licensing Act 2018 (the Act). In particular, there were concerns about overcrowding, with many rooms accommodating double the permitted number of people for their size over a period of up to six months.

During the LHA’s investigation, MADEC conceded that they had not been aware of these specific minimum accommodation standards, which raised concerns for the LHA that other accommodation may be similarly sub-standard.

The licence conditions imposed by the LHA require MADEC to procure an independent and suitably qualified auditor to complete an audit of all accommodation provided or procured by MADEC to ensure compliance with the standards and to ensure that standards are met in the future.

MADEC also agreed voluntarily to repay labour hire workers a portion of the deductions from their wages for accommodation that was non-compliant with minimum standards.

Labour Hire Licensing Commissioner, Steve Dargavel expressed his appreciation for MADEC’s proactivity and cooperation with the LHA’s investigation and decision. He noted that prior to these licence conditions being imposed, MADEC had already paid just under $70,000 back to its labour hire workers in acknowledgement of the issues identified.

While imposing licence conditions was appropriate in MADEC’s case due to their willingness to work with the LHA to rectify the issues identified, Dargavel warns labour hire providers that in some circumstances non-compliance with legal obligations may result in cancellation of their licence.

Failure to comply with licence conditions such as those imposed in this case can also result in licence cancellation.

For more information about accommodation standards, refer to the LHA website and the Public Health and Wellbeing (Prescribed Accommodation) Regulations (Vic) 2020.

Quotes attributable to Labour Hire Licensing Commissioner, Steve Dargavel: 

“This case is proof that suitable legislation has the power to effect positive change across industries and workplaces and protect our most vulnerable workers from exploitation.”

“Labour hire providers should view this case as a cautionary tale. When it comes to providers’ legal obligations to labour hire workers, the legislation is clear: providers must comply or face licensing action.”

“A loss of licence is a very real consequence of non-compliance with the Labour Hire Licensing Act 2018.”