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Labour hire licensing in the building and construction industry

Example Is a license required?

1. An unlicensed or licensed subcontractor contracts to a licensed trade contractor to provide workers on an hourly rate basis to perform work for the trade contractor’s business.

The subcontractor does not provide materials, is not responsible for rectifying defects and is not engaged to produce an outcome. 

The subcontractor is providing labour hire services to carry out work as directed by the trade contractor. 


The subcontractor is a labour hire provider and needs a labour hire licence.

The trade contractor is a user of labour hire and must ensure they use only licensed labour hire providers.

2. A builder owns a construction company that builds houses. During a house build, a crucial delivery is delayed, and the builder's workers cannot continue work until the delivery is received. 

Until the delivery arrives, the builder temporarily loans his workers to complete work on a different site instead of forcing them to take leave. 


The workers are in-house employees of the builder (as defined in the regulation). This is not labour hire and if this is the only way the builder supplies workers no licence is required.

NB: Employers should be aware that where 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.

3. A builder contracts an unlicensed or licensed subcontractor to produce an outcome e.g. frame the house, install windows and doors, install a roof, place and finish a concrete slab, install electrical wiring etc. 

The trade contractor or builder purchases the materials, but the subcontractor is responsible for rectifying defects and is engaged to produce an outcome. 


This arrangement is not labour hire and no licence is required.

Workers work for the subcontractor, not for the builder, and the only exception to a typical subcontracting arrangement is that the builder is providing the materials to do the work.

4. A building company has won a contract to develop a new block of apartments. They subcontract out the electrical work to an electrical contracting company. 

The electrical contracting company sends a worker to complete the electrical work.  


This is not labour hire and no licence is required. This is because the worker is carrying out work for the electrical contracting company, rather than being supplied to work for the building company in the sense of a labour hire arrangement.

5. A construction business is comprised of a number of companies responsible for different aspects of the business. Workers are employed by one of the companies (the ‘employing entity’) and are supplied to work for one or more of the other companies within the construction business. The workers are not supplied outside the business.


The workers are supplied within a ‘single recognisable business’ and are not considered to be labour hire workers. If this is the only way workers are supplied, no licence is required.

6. An earthmoving company is engaged to dig drains on a large retail construction site. The company provides equipment and operators to dig the drains. 

The earth moving company is responsible under the contract to ensure the drains are dug according to plans and are responsible for rectifying defects in the work and damage caused. 

The earthmoving company is not considered to be providing a labour hire service and no licence is required. This is because the equipment operators are not supplied to work for the builder. Rather, they work for the earthmoving company in fulfilling its obligations under the contract. 

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.

Last updated 04 July 2018