Protecting the industry from bad operators by refusing licences

2 October 2025
Protecting the industry from bad operators by refusing licences

In 2024-25, the Labour Hire Authority (LHA) refused over 100 licence applications, to prevent worker exploitation and make the industry more fair and lawful.

To hold a labour hire licence, providers are required to comply with relevant laws, including:

  • occupational health and safety
  • taxation and superannuation
  • migration and labour hire industry laws
  • accommodation standards.

LHA refuses licence applications where the business or persons running it are not fit and proper or compliant with legal obligations, creating a barrier to entry into the industry. LHA may also educate and influence operators who are capable and willing to comply towards compliance, including though imposing conditions on a licence.

To prevent worker exploitation, LHA pays close attention to how a licence applicant will ensure that their workers receive the right pay and conditions. This includes checks on the accuracy of the industrial instrument (such as the award, contract, enterprise agreement or piecework agreement) nominated in the application form.

Identifying and responding to high-risk licence applications

LHA takes a risk-based and intelligence-led approach when assessing licence applications. Applications that present a high risk of non-compliance are identified by LHA through data analysis and information obtained from other Victorian, interstate and Commonwealth agencies.

Assessing applications to ensure relevant persons are fit and proper

Recently, a company intending to provide workers in the security, commercial cleaning, and public administration and safety industries applied for a licence. The company director disclosed in the application that they had been a director of an externally administered company within the preceding five years.

A review of the available creditors’ reports and the winding up reports showed that approximately 150 employees were affected by the administration, with over $1.3 million outstanding in wages and superannuation.

LHA officers considered the circumstances of the administration event and identified the alleged use of unlicensed security guards and ‘off-the-books’ cash payments.

LHA also identified a report from another regulator whose audit uncovered breaches of workplace law and significant cash payments which resulted in referrals to the Australian Taxation Office, the State Revenue Office and the Fair Work Ombudsman.

LHA considered submissions made by the director, including their claim that external factors, including COVID-19, had adversely impacted the security business.

LHA refused to grant the licence because:

  • the non-compliance of the business started before the COVID-19 pandemic
  • the director had previously been unable to meet obligations to workers and to government
  • there was a high risk that these harms could recur if they were granted a labour hire licence.

In another case, a licence application from a company intending to provide workers in the horticulture industry included a declaration from the director that he was a fit and proper person.

LHA conducted a criminal history check which returned an adverse result. It showed the director had been found guilty of an offence involving dishonesty that was punishable by a term of imprisonment of three months or more.

The director was given an opportunity to respond to the LHA’s preliminary decision not to grant the licence and to provide further information about the context of the offending to inform our decision-making.

After considering the director’s response, LHA refused to exercise discretion to grant the licence because:

  • the director did not show candour in disclosing the offences
  • the director made false declarations in the application
  • the conviction related to dishonesty offences which, although they resulted in a minor penalty, went to the director’s character, further aggravated by the lack of candour during the application process
  • the company intended to operate in an industry with a high risk of worker exploitation.

For these reasons, it was considered that the applicant acted without integrity and may not be honest in their dealings with the LHA, placing workers at an increased risk of harm.

Actions for hosts – protect your business

Under the Labour Hire Licensing Act 2018 (Vic), penalties for using or providing unlicensed labour hire services may exceed:

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

Hosts can take two quick actions to protect their business and support LHA in working towards a fairer industry for businesses and workers: