Labour hire – what growers need to know

(Source: Fairwork Ombudsman)

Engaging labourers through a third party contractor can seem like an easy option. However, there are risks that growers need to manage.

Contracting out labour for a very low price may result in employees throughout the supply chain missing out on basic rights like minimum wages, penalties, loadings, overtime, allowances and leave.

It may also mean the contractor is engaging in sham contracting arrangements with sub contractors to avoid their legal responsibilities as an employer.

If the price of a proposed contract seems too good to be true, it probably is.

Why should growers care about what happens in their supply chain?

Choosing the contractor who offers the lowest price without looking more closely and asking questions about how they can offer such low prices can:

• damage a business’s reputation and the reputation of a whole growing region
• expose growers to financial penalties if workplace laws are breached.

We are relying on growers and their communities to help us uncover rogue contractors and make sure they are following Australian workplace laws. Contact us to report rogue contractors.

For information about why you should manage your labour contracting, and tips and tools to help you, visit our Contracting labour and supply chains section.

Labour hire checklist

Ask a potential labour hire contractor:

• What is your ABN?
• How are you hiring your workers?
  • If they are engaging employees by the piece, make sure they have written agreements in place.
  • Will you give them a Fair Work Information Statement?
• How are you going to pay your employees?
  • How much?
  • How often?
  • Will you give them pay slips?
  • Do you know which award will cover them?

Growers should make sure they have a written contract with their labour hire contractor outlining what is expected of the contractor, in particular that they will employ employees in line with Australian workplace laws.

You should also check any state requirements as some states have laws where labour hire providers are required to have an appropriate licence. Read about state Labour hire licensing laws in our Library to find out if they apply to you.

Find out more about sham contracting laws on our Independent contractors page.