What you need to know if you hire labour.
March 16, 2023
Labour hire arrangements offer businesses many workplace advantages, including the ability to match required skills and labour resources for limited periods or at short notice.
One important benefit is that the labour-hire worker remains the employee of the labour-hire company. It is the labour-hire company, and not the business requesting them, that remains responsible for employment issues such as worker wages, tax, workers’ compensation insurance, superannuation, and leave entitlements.
In a labour-hire arrangement, a worker is sent by their employer (the labour-hire company) to work for the business (‘host employer’) requesting them. The labour-hire worker is typically placed under the supervision and control of the ‘host’.
Despite the worker remaining the employee of another, the law recognises that this work arrangement establishes a relationship of dependence and vulnerability between the worker and the host employer. For instance, it is (for the most part) the host employer that controls the workplace and the manner in which the work is done by the labour-hire worker. The tools and equipment needed by the worker to carry out their tasks are also usually provided by the host.
As a matter of law, the labour-hire worker is therefore entitled to look to their ‘host’ employer (as well as their actual employer) to ensure issues of safety and risk at their ‘host’ workplace are properly managed.
How Liability is Apportioned
Because a ‘host’ employer typically provides its labour-hire workers with their place of work, direction, supervision or systems controlling how to do their work, and all necessary plant and equipment, the law holds it accountable for any injury suffered by the worker while they are fulfilling the labour-hire agreement.
Australian courts have consistently decided that the ‘host’ employer owes its labour-hire workers the same high standard of care owed by the actual employer when it comes to safety at work.
The standard of care an employer must meet when it comes to safety in the workplace is high and onerous. An employer owes its employees a duty to ensure their workplace is free from unnecessary and foreseeable risks of harm.
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Note: this article contains general advice only & you should seek further information from your personal Rivers Insurance Broker about the impact of any information provided here on your personal or business needs. ABN: 28 010 242 681 AFS License: 247093 www.riversinsurance.com.au