Security Industry

To prevent worker exploitation, LHA targets specific harms common within the labour hire industry when assessing licence applications and through compliance activities on licence holders.

Key issues affecting the security industry include:

• Engaging workers as independent contractors
• Illegal phoenixing
• Subcontracting arrangements

For providers operating in industries with higher risks of worker exploitation and unlawful conduct, LHA applies standard conditions to all new licences, as well as progressively to existing licences. 

These standard conditions act to further: 

• increase transparency, by ensuring all workers receive information on their rights, and through reporting on the use of subcontractors, payroll services, and any change in industry 
• enforce integrity, through restrictions on cash payments, the use of independent contractors and subcontractors, and clear requirements around accommodation and provision of PPE. 

For more information and guidance visit the Licence conditions page.

• Security industry guidance: Providers and Hosts (PDF) (482KB)
• Follow my Providers
• Labour Hire Licence Register

Cost of meeting legal obligations guidance

Low contract prices can signal a heightened risk of non-compliance with a provider’s legal obligations, including those related to workers’ pay, entitlements, and taxes.

To support providers and hosts of security services to address this risk, LHA publishes guidance on the cost of meeting minimum legal obligations to security workers.

LHA updates the guidance annually, as a benchmark for assessing risks of non-compliance.

Some security businesses use the guidance to support their own compliance, and to highlight to clients the cost of meeting legal obligations to workers. Industry feedback suggests it is a valuable tool in contract negotiations.

Download the 2026-27 Guidance for the security industry: cost of meeting your legal obligations.

The examples below are for illustrative purposes only. You should consider your particular circumstances and seek legal advice if you are unsure.

Scenario 1

Shop with Us Ltd (Shop with Us) owns and operates several large shopping centres. As part of its business it is required to meet basic security and safety expectations of tenant retailers and their customers, and to fulfil insurance obligations. Shop with Us arranges for external security to fulfil these requirements and obligations. Shop with Us considers these arrangements to be services contracts.

Safety First Pty Ltd (Safety First) provides security guards to Shop with Us. The guards patrol the shopping centre during retail hours and are subject to the overall direction of shopping centre management. Safety First invoices Shop with Us based on the hours worked.

Gardit Pty Ltd (Gardit) provides a 'gate checking' service to the Shop with Us shopping centre. Gardit's staff perform occasional after-hours checks to:

• verify that the facility is secured internally and externally
• provide an alarm monitoring service
• report damage or refer matters to police where appropriate.

Gardit manages the service independently and is not subject to Shop with Us’s direction or control. Gardit provides its own equipment, which includes uniform, vehicles, and communication devices. Payment is for the delivery of a defined scope of services.

Both Safety First and Gardit are licensed under the Private Security Act 2004 (Vic), administered by Victoria Police. These licences impose character and other regulatory requirements on the businesses and their staff.

Question: Is Safety First a labour hire provider?

Answer: Yes. Safety First is a labour hire provider. It supplies workers to perform work under the direction and control of Shop with Us, and invoices based on hours worked. Considering the arrangement as a whole, its character is wholly or principally for the supply of labour.

Although Shop with Us considers the arrangement to be a services contract, the legal character is determined by the substance of the arrangement—what occurs in practice, not merely the contractual description applied by the parties.

Question: Is Gardit a labour hire provider?

Answer: No. Gardit is not a labour hire provider. The arrangement is for the provision of a security service, not the supply of workers. Gardit delivers a defined outcome, provides substantial non-labour inputs, and operates independently of Shop with Us’s direction and control. Payment is based on services delivered rather than labour time.

Question: Is a private security licence enough for an individual or business to comply with the Labour Hire Licensing Act 2018 (Vic)?

Answer: No. A business that provides labour hire services must hold a licence under the Labour Hire Licensing Act 2018 (Vic). Holding a private security licence does not remove this requirement. A business may need to hold multiple licences or accreditations. In this scenario, Safety First requires both a labour hire licence and the relevant private security licences because it provides labour hire services while also providing regulated security services.

 

Scenario 2

Market Festival Pty Ltd (Market Festival) holds weekly night markets in Melbourne. Market Festival employs 20 security guards to perform crowd control at the night markets. Under its contract with the local council, Market Festival must have 20 security guards working each night that the night market operates.

A security guard employed by Market Festival phones in sick on the day of the night market. To cover the sick security guard and fulfil its obligations under its contract with the local council, Market Festival enters into an arrangement with Protect Pty Ltd (Protect) to supply guards. Protect is a business that provides security guards to other businesses who run public events.

Sam is an employee of Protect. Under the arrangement between Market Festival and Protect, Sam works as a security guard at the night market to cover the sick Market Festival security guard. Sam patrols alongside the remaining 19 security guards employed by Market Festival.

Question: Is Protect providing labour hire services to Market Festival?

Answer: Yes, Protect and Market Festival have entered into a labour hire arrangement.

• Protect is a labour hire provider – Protect has entered into an arrangement to supply Sam to Market Festival to perform security work and must pay Sam.
• Sam is a worker – he has an arrangement with Protect under which Protect supplies him to Market Festival to perform work.
• Market Festival is a host – Protect supplies Sam to perform work for Market Festival business.

Protect must hold a labour hire licence under the Labour Hire Licensing Act 2018. Protect is a labour hire provider whether or not it supplies Sam on a temporary or ongoing basis.

 

Scenario 3

SafeParty Pty Ltd (SafeParty) is a company that provides security guards for birthday parties held at residential homes. SafeParty enters into a contract with John and Joan Smith (the Smiths) to provide a security service for their daughter Mary's 18th birthday. The Smiths pay an agreed fee to SafeParty which is not based on time worked by Matt but on the delivery of the service.

SafeParty sends one of its employees, Matt, to be the security guard for Mary's party. The contract between SafeParty and the Smiths states that Matt's job will be to attend the Smiths' home to provide the security service. Matt's main task is to ensure that only invited guests gain entry to the party. Matt works for four hours and was not managed and supervised by the Smiths.

Question: Does SafeParty require a licence?

Answer: No. SafeParty is not a labour hire provider.

It is engaged to deliver a security service for a private event for an agreed fee. SafeParty determines how the service is performed, provides its employee to deliver the service, and Matt is not subject to the Smiths’ direction or control. Considering the arrangement as a whole, its character is the provision of a security service, not the supply of labour.