• Legislation & regulations

In October, the Victorian Government introduced a bill to strengthen the Labour Hire Authority’s (LHA) powers to further address unlawful conduct in the construction industry.

The bill proposes changes to the Labour Hire Licensing Act 2018 (Vic), as part of the Government’s response to recommendations from the Formal Review into the Victorian Government Bodies’ Engagement with Construction Companies and Construction Unions, known as the Wilson Review.

Broadly speaking, the Labour Hire Legislation Amendment (Licensing) Bill proposes to:

• add circumstances in which a person may not be a ‘fit and proper person’ to operate a labour hire business, including where a close associate is not fit and proper
• clarify the definition of labour hire services, to better cover arrangements in a supply chain and activities defined in labour hire regulations  
• strengthen LHA’s powers to request information to support compliance monitoring
• broaden LHA’s ability to publish contextual information around licensing actions – such as the circumstances that led to a licence cancellation – to promote compliance and educate hosts and providers.

The Victorian Government also accepted the Wilson Review recommendation to define specific work activities connected to construction as labour hire, to make it clearer which businesses require a licence and to further enhance LHA’s capacity to regulate the construction industry. LHA expects this will be given effect through a change to the Labour Hire Licensing Regulations 2018 in 2026, subject to further processes and consultation coordinated by Government.

The stronger powers granted to LHA will complement work by other agencies, including Victoria Police, to promote compliance across the construction industry.

The review also recommended an alliance of state and federal regulators, law enforcement and other entities, which was established earlier this year. The alliance includes LHA and works to share information, coordinate action and inform government of emerging issues including criminal and unlawful conduct on Victorian Government construction sites.

Targeting non-compliance in construction

LHA’s Construction Taskforce continues its investigations and compliance activities in the industry.

LHA actions in October

On 27 October, LHA issued a cancellation notice to labour hire provider XF Victoria Pty Ltd – taking effect on 10 November 2025.

LHA now publishes the details of recent enforcement actions in the construction industry on its dedicated construction industry webpage: labourhireauthority.vic.gov.au/construction

This move aligns with LHA’s mission to improve transparency in the labour hire industry, and reflects public interest in the integrity of Victoria’s construction industry.

In October, LHA’s Construction Taskforce conducted site visits to a number of Melbourne-based construction businesses to investigate allegations of unlicensed operations.

The site visits were undertaken in collaboration with Victoria Police, investigating companies with potential ties with criminal networks and which may have benefitted from corruption in the sector. 

Officers interviewed key staff from hosts and providers, and collected documents to enable thorough assessment of the claims.

Investigations are ongoing.

Issues and actions in construction

Common issues identified by LHA within the construction industry include:

• undisclosed persons who are not fit and proper controlling labour hire businesses
• unlicensed labour hire providers
• complex, multi-tiered supply chains, which increase the risk of worker exploitation
• misclassification of workers as independent contractors.

To date, LHA has cancelled 129 licences and refused 44 licence applications from businesses in the construction industry, including businesses operated by organised crime or outlaw motorcycle gang figures. LHA has also imposed conditions on 28 licences.

The focus on the construction industry saw the highest total penalty for breaches of labour hire law in Australia issued by the Supreme Court of Victoria in September 2024.

A total of $759,674 in penalties were issued to five companies and three company directors for their involvement in unlicensed labour hire operations. The penalties reflected unlawful conduct across multiple layers of subcontracting.

Under the Act, penalties for using or providing unlicensed labour hire services can exceed:

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