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  • Alberto Fascetti

On-Hire Labour Agreements

Delving into the world of on-hire labour is increasingly relevant for our recruitment clients, especially those in healthcare, technology, and construction sectors.

Why Consider On-Hire Labour?

On-hire labour agreements are pivotal for legally assigning foreign workers to third-party employers. This arrangement enables recruitment agencies, IT consulting firms, and staffing companies to excel in sourcing, recruiting, placing, and retaining international talent. Consequently, Australian companies can access this talent effortlessly without undergoing the recruitment process themselves.

What This Means for Recruitment and Staffing Firms

On-hire labour agreements stand out as a strategic tool, positioning recruitment, staffing, and consultancy firms as essential bridges in the global talent search. These agreements are particularly beneficial for agencies adept at navigating international recruitment, offering a more streamlined process for employers.

Key Aspects of On-Hire Labour Agreements

An On-Hire Labour Agreement permits your firm to hire temporary skilled workers from overseas for positions listed on the various Skilled Occupations List, provided no suitable Australian candidate is available. Entering into such an agreement designates your business as an approved sponsor, enabling you to nominate and recruit overseas workers for approved roles.

It's crucial, however, for your business to remain the direct employer of the sponsored workers, ensuring their pay and conditions align with Australian standards, regardless of their assignments.

Understanding 'On-Hire'

'On-hire' refers to the business activities around recruiting and supplying labour to another business. It involves a provider supplying one or more individuals to perform work as part of the host's business, with the provider responsible for paying the individuals.

The distinction between on-hire workers and independent contractors hinges on the nature of the engagement and the direct provision of services to the business, impacting the applicability of an On-Hire Industry Labour Agreement versus an SBS.

Applying the test/definition of 'on-hire'

The Fair Work Ombudsman has provided the below table to illustrate how ‘on-hire’ arrangements can work. The table can provide a framework to assist you in reviewing existing contractual arrangements, to ensure the clauses reflect the intention of the arrangements and parties.

Final Considerations

The on-hire labour agreement offers a promising avenue for recruitment industries to navigate the current challenges within the domestic labour market. By positioning as a crucial link in the international talent search, recruitment firms can not only alleviate industry-specific shortages but also drive their growth in a competitive landscape.

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