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How Do Labour Hire Companies Work?

By fastlabourhire • Jan 16th 2021
How Do Labour Hire Companies Work?

Labour hire companies are a valuable resource for the busy business owner or manager.

They differ compared to recruitment agencies in that labour hire companies hire the labour and are responsible for their pay, insurances and other entitlements, whereas the employer is responsible for all aspects of an employee’s working conditions when hired by a recruitment agency.

How Do Labour Hire Companies Work?

Labour hire companies interview workers and place them in employment suitable to the workers’ skills set and the employer’s specific needs.

The labour hire company will vet the worker’s qualifications and experience and check any licences and permits they hold. Information, instruction and training should be provided to cover any gaps in knowledge and/or experience.

The labour hire company should find out from the prospective employer what the worker’s job title will be, a summary of their tasks, the duration of the contract, who their supervisor will be (and their contact details) and the hours and nature of work (shift, split shift, expected overtime).

How Do Labour Hire Companies Work To Ensure Worker´s Safety?

labour hire safety

Even though the labour hire agency and the employer have responsibilities in the areas of training, assessing risks and monitoring the workplace, the labour hire company as the employer should assign employees only to a safe workplace.

The company needs to assess the workplace and monitor that OH&S requirements are being met. This should be done continually throughout the duration of the contract.

The labour hire company will find out about the procedures for reporting incidents and who the safety issues are reported to, who the OH&S representative is, and if they have any authority to represent labour hire workers.

If the workplace is a high risk one (for example, many Australian businesses in the construction and mining industries engage labour hire employees), the labour hire company will identify hazards such as dangerous machinery, chemicals, heavy loads and loud noises. To do the job properly and safely, they will see that personal protective equipment is provided.

If the work includes such dangers as asbestos removal, the storage or transport of dangerous goods, working from heights or in confined spaces, a risk assessment should be carried out by someone with specialist knowledge. The Occupational Health and Safety Regulations 2017 provides more details.

The labour hire company will arrange a site visit. An appropriate employee trusted by the host who knows the job and the workplace should accompany the labour hire company person during the risk assessment.

This is the time when the labour hire company representative can see if the job matches the one described by the host and negotiate conditions on behalf of the worker, such as improving measures to control risks.

If the host cannot provide health and safety policies, the labour hire company is permitted to oversee tight supervision of the worker’s job situation and may even decide not to place workers with that employer again.

The visit is not just to check on workplace safety but to see if there are facilities such as a kitchen and showers on site.

The rep will use this opportunity to discuss with the host who the employee will be reporting to, the procedures for inducting and training new staff and the arrangements for supervision and effective consultation with employees.

A smart labour hire company rep will also be alert if the host is trying to offload more dangerous work to labour hire employees rather than his regular employees, thus divesting risk and cost of injury to the labour hire company.

Having consulted with someone who already performs the task required and the host’s HR rep, the labour hire rep will break down the job into its component parts, identifying each risk associated with each part (and which law is applicable) and recording what actions need to be taken to minimise the risks before the employee starts working there.

As documentation is essential in ensuring workers’ safety, the information will be delivered to the worker before beginning employment, during induction or on the job.

Job Safety Analyses (JSAs) are signed, dated and retained as evidence of the employer’s commitment to safety, and become a useful tool for labour hire companies when deciding whether to send future employees to work with that particular employer.

Other documents include a hazard register, to be shared with the employee, and the employer’s health and safety paperwork. The labour hire rep will check that the manuals, policies and procedures are current, relevant and updated regularly to comply with current legislation.

When on site, the labour hire workers follow the processes and procedures of all other employees and are under the same industrial awards, but are hired by the labour hire company, not the employer.

The labour hire company is essentially the worker’s employer. As such, the labour hire company is responsible for the workplace conditions and safety of their employees, under the Occupational Health and Safety Act 2004 (OHS Act).

As such, they are responsible to ensure that there is an on-site health and safety management system with policies and procedures that cover a commitment to safety, who is responsibile for whom and what, management of injury and hazards, rehabilitation and claims management, incident reporting and investigation, training and emergency planning.

How Do Labour Hire Companies Work To The Advantage Of The Employer?

labour for hire

The employer, or ‘host’, pays a fixed fee that covers payroll, taxes, insurance, superannuation, worker entitlements and so on.

This fee is comparable with the time and cost of recruiting from in-house, and ensures a reliable and skilled workforce available when needed, especially in seasonal periods of the business cycle.

It saves time and effort in training inexperienced new workers, and means that specialised workers don’t have to be employed on a full-time basis.

The big advantage of using a labour hire company is the size of their network, easily larger than what an individual business could draw upon. They can therefore fill vacancies at extremely quickly in short-term and emergency situations.

If saving time and effort by employing labour hire sounds attractive, give us a call on (03) 9078 4804 to get a quote or contact us to find out how we can help you.

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