Labour hire licensing in the broadacre agriculture industry
Is a licence required?
1. A farmer uses harvest contractors to help with their harvest. The farmer contracts the harvesting in its entirety to Grain Harvesters Pty Ltd, who complete the harvest using their own equipment including large combine harvesters and field/chaser bins.
This arrangement is not considered labour hire, because the workers work for Grain Harvesters Pty Ltd in fulfilling their obligations to the farmer, rather than working for the farmer. The size and nature of the equipment provided by Grain Harvesters is an indication that the arrangement is a genuine subcontracting arrangement rather than a contract for labour.
2. Leading on from Example 1, Grain Harvesters Pty Ltd needs additional workers to fulfil its contract with the farmer, and contacts LH Pty Ltd to provide workers.
LH Pty Ltd is a labour hire provider because it is providing workers to work for Grain Harvesters and is obliged to pay the workers. Grain Harvesters is a user of labour hire and must use only licensed labour hire providers. If Grain Harvesters was to directly employ casual labour to increase its workforce, it is not a user of labour hire.
3. Leading on from Example 1, the farmer instead provides the harvesters and equipment and engages Grain Harvesters to provide workers to assist in completing the harvest.
In this case, Grain Harvesters is a labour hire provider because it is providing workers to work for the farmer and is obliged to pay the workers. The farmer is a user of labour hire and must only use licensed labour hire providers.
4. A wool producer engages Shearers Pty Ltd to shear its sheep. Shearers Pty Ltd provides a team of shearers and shed hands, as well as the equipment to perform the shearing. Shearers Pty Ltd have an annual program of shearing sheds that they service each year.
This arrangement is not considered labour hire because the shearers and shed hands work for Shearers Pty Ltd in fulfilling its obligations to the wool producer, rather than working for the wool producer.
5. Leading on from Example 3, Shearers Pty Ltd needs additional shed hands to join their annual shearing program, and contacts LH Pty Ltd to provide workers. LH Pty Ltd pays the shed hands.
LH Pty Ltd is a labour hire provider because it is providing workers to work for Shearers Pty Ltd and is obliged to pay the workers.
Shearers Pty Ltd is a user of labour hire and must use only licensed labour hire providers.
6. Allan organises shed hands to be supplied to a local grazier to help with shearing. He sources them from backpacker hostels and charges the grazier a fee. Allan pays the backpackers.
Allan is a labour hire provider because he supplies workers to work in the grazier’s business and is obliged to pay the workers.
The grazier is a user of labour hire and must use only licensed labour hire providers.
7. A beef producer needs a cattle yard and loading ramp built and engages Fencers Pty Ltd to complete the work. Paul Fencer and his son Peter subcontract Concreters Pty Ltd to complete the concreting part of the job. Each business is responsible for providing materials, and rectifying any defects in the work.
Fencers Pty Ltd and Concreters Pty Ltd are performing work to complete their contracts. Both businesses are not considered to be providing a labour hire service in this case.
8. Farmer A employs farm hands to work on her farm on a regular and systematic basis. The workers have a reasonable expectation their employment with Farmer A will continue.
Occasionally, during down times, farm hands help out other farmers in the area who may have high workloads. However, the workers primarily perform work for Farmer A.
The other farmers return the favour.
Farmer A is not considered to be providing a labour hire service, because the workers are in-house employees of Farmer A in this case.
NB: Employers should be aware that where their workers are performing work for someone else, even on an ad hoc basis, they may still be responsible for obligations relating to that worker, for example, for any injury that may occur while doing that work.
9. Leading on from Example 7, Farmer A regularly employs more workers than required to run her farm. These workers are engaged on the basis that they will regularly be supplied to work for other farmers.
Farmer A charges other farmers a fee for supplying these workers, including a profit component for the farmer.
Farmer A is a labour hire provider because she is supplying workers to other farmers, and is obliged to pay the workers.
The farmers who pay Farmer A for workers are users of labour hire and must ensure they use only licensed labour hire providers.
10. A beef producer needs their cattle mustered and engages Musterers Pty Ltd. Musterers Pty Ltd provides their mustering team and horses, and subcontracts a helicopter pilot and helicopter to perform the contract.
This arrangement is not considered labour hire because Musterers Pty Ltd and the helicopter pilot are performing work to complete their obligations to the beef producer. Both are not considered to be providing a labour hire service in this case.
Please note this information is of a general nature and should not be regarded as a substitute for legal advice in relation to your particular circumstances and/or reference to the appropriate legislation and regulations.