Provider pays workers and exits industry after LHA investigation

10 July 2023
Provider pays workers and exits industry after LHA investigation

A provider operating in the horticulture industry in Cobram has withdrawn its application to renew its labour hire licence, following an investigation by LHA into a series of complaints.

LHA’s inspectors used their statutory powers to obtain records from the provider and third parties, which indicated the provider:

  • paid workers partly in cash and partly ‘on the books’
  • engaged at least one unlicensed labour hire provider as a subcontractor
  • failed to declare all relevant persons in its original and renewal applications – meaning it had obtained its licence based on incorrect or misleading information about the company’s officers.

LHA informed the provider that it did not intend to renew their licence due to non-compliance with the Labour Hire Licensing Act 2018 (Vic) and other legal obligations. The provider then withdrew its renewal application.

As the provider no longer holds a licence, it is unlawful for them to provide labour hire services in Victoria. The company – and any host business engaging its services – may be subject to penalties exceeding $590,000 for a company and $145,000 for an individual.

Investigation overview

Minimising obligations under taxation and superannuation laws

The provider gave LHA records that showed that the business paid award rates, PAYG and superannuation for its workers. However, LHA’s investigation identified discrepancies between what workers were paid and the hours they worked. During the investigation, the provider paid its workers the money that LHA had identified was owing to them.

LHA concluded that workers were paid partly in cash and partly ‘on the books’, presumably to avoid obligations under taxation and superannuation laws.

Engagement of an unlicensed subcontractor

LHA found the provider engaged an unlicensed provider as a subcontractor – a contravention carrying maximum penalties exceeding $590,000 for a company and $145,000 for an individual.

Hosts are reminded to check LHA’s register of licensed providers before entering into an arrangement with a provider.

Failure to declare relevant persons

LHA found the provider’s nominated officer gave information they knew to be false or misleading in their original licence application – a criminal offence with a penalty exceeding $138,000 for companies.

The provider failed to declare its operations manager and a second director for the company in its original application, preventing LHA from assessing whether they were ‘fit and proper persons’ under the Act.

When making an application for a labour hire licence, providers must include the details of all company directors and secretaries, as well as persons who participate in making decisions affecting the whole or a substantial part of the business.

Non-compliance in the Cobram area

LHA has acted on concerns raised regarding compliance in the horticulture industry in Cobram, with this investigation following on from the cancellation of two other providers’ licences earlier this year:

  • LHA cancelled a provider’s licence after its nominated officer attempted to provide misleading information to LHA to conceal non-compliance.
  • LHA cancelled another provider’s licence after it failed to make its nominated officer available during LHA’s investigation into allegations of non-compliance, a contravention of the Act.

Providers who are refused a licence are prevented from re-applying for three months; cancelled licence holders are excluded from the scheme for two years.

LHA may also prevent persons from operating a labour hire business for five years where the person was either:

  • found by LHA to have contravened a labour hire industry law, or
  • a director, secretary or person involved in making decisions affecting the business of:
    • a company found by LHA to have contravened a labour hire industry law, or
    • a cancelled licence holder.

Continuing spotlight on horticulture

The horticulture industry is a focus of LHA’s expanded program of compliance and enforcement in 2023, along with other key industries.

“Workers picking fruit and vegetables are among Victoria’s most vulnerable, so horticulture will continue to be a focus of our compliance and enforcement activities,” said Labour Hire Licensing Commissioner, Steve Dargavel.

“Investigating and pursuing non-compliant labour hire providers plays an important part in making the industry fairer for businesses and workers alike,” he said.

Read more about LHA’s current focus on horticulture.