State government cracks down on labour hire industry

The horticulture industry is among those which uses labour hire agencies to recruit seasonal workers. Photo: File.

The horticulture industry is among those which uses labour hire agencies to recruit seasonal workers. Photo: File.

The state government has announced it will crack down on South Australia's labour hire industry, a major source of workers for some of the Murraylands' biggest businesses.

Labour hire companies will be subject to a licensing scheme if draft laws proposed by Attorney-General John Rau make it through Parliament.

Companies would have to complete annual reports and pay a fee that would fund compliance and enforcement activity by agencies such as Return to Work SA.

Company directors and owners would have to prove they were "fit and proper" for their roles.

It would be illegal for labour hire companies to operate without a license, or for employers to use unlicensed companies.

Mr Rau said it was critical that the government crack down on "dodgy" operators who were driving honest employers to the wall.

"Rogue operators are underpaying workers, failing to ensure proper safety standards and abuse worker visas," he said.

Rogue operators are underpaying workers, failing to ensure proper safety standards and abuse worker visas. - John Rau

"These actions undermine minimum standards of employment for workers and undercut those businesses doing the right thing."

The labour hire industry was plagued by "phoenixing", he said: where companies were continually wound up and re-incorporated under new names to avoid paying tax, workers' compensation, superannuation or wages, or providing appropriate workplace conditions.

The industry has been subject to an investigation by the Fair Work Ombudsman, which criticised the practices of several labour suppliers to Thomas Foods International, as well as state and federal parliamentary inquiries.

However, not all state MPs agree on the solution to the problem.

Member for Schubert Stephan Knoll, who participated in the state inquiry, was one of three Liberals who opposed the licensing scheme when it was first suggested last October.

He said it would only increase costs for businesses, and that the activities it focused on were already illegal.

Mr Rau hoped a national licensing scheme would eventually be introduced.

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