Labour Hire Services

Labour hire services

Labour hire workers may be engaged:

• to cover short-term absences
• to meet urgent and unforeseen demands or peak workloads
• to deliver projects with a specific budget allocation.

Labour hire services involve providing suitably qualified and appropriately skilled personnel to perform work for an entity for a defined period.

Entities seeking to engage labour hire workers should include the following information in the Request for Quotation (RFQ):

• the service category
• the job family and job role
• the equivalent APS classification and pay scale for each position
• any security clearances required
• the number of working hours per week, whether full-time hours or part time
• the length of the engagement.

Job families and job roles are generic descriptions based on the APSC Job Family Framework. Entities can use the Job Mapping Matrix to identify service categories, job families and job roles required for the engagement. The tool includes role descriptions to support selection the most suitable job role.

Job Mapping Matrix

The cost of engaging a labour hire worker under the People Panel generally includes:

• the hourly rate paid to the worker
• employment on-costs, such as workers compensation insurance, payroll tax and superannuation
• the service provider’s gross profit margin (GPM)
• the coordinated procurement fee.

The GPM is an hourly rate that depends on the APS equivalent classification of the labour hire worker and whether the worker is referred by the service provider (non-referred) or by the entity (referred).

Referred labour hire workers

A referred labour hire worker is a specific person an entity wants to engage as a labour hire worker. Entities may may decide when it is appropriate to refer a person to a service provider for engagement.

When an entity has identified a referred labour hire worker, it should negotiate the terms of the engagement directly with the person. Terms may include:

• the hourly rate paid to the worker, excluding employment oncosts such as superannuation
• the length of the engagement
• extension options
• work location
• flexible work arrangements, including work from home.

Once the terms are agreed, the person should be informed of the service providers on the panel that are approved for the relevant service category and APS equivalent level. The person can then their preferred service provider. The entity should then issue an RFQ to the selected service provider.

A non-referred labour hire worker is identified and assessed by the service provider and proposed to the entity through the RFQ process. The GPM for a non-referred worker is generally higher, as the service provider undertakes additional work to source and assess suitable candidates.

Bulk engagements

Entities that wish to engage 21 or more labour hire workers through a bulk or express process may do so by completing the bulk engagements section of the RFQ form.

To start a bulk recruitment, entities should include the following information in the RFQ:

• the number of labour hire workers required and their work locations
• any mandatory pre-engagement checks and clearances required.

To support service providers in meeting their reporting obligations, they will request further details about the engagement. This information may include job families, job roles and other requirements, as required for non-bulk engagements.

The bulk engagement process allows entities with large or urgent labour hire needs to begin recruitment quickly. However, supporting information must still be provided to meet panel compliance requirements.

Conversion services

In some circumstances, an entity may offer a labour hire worker the opportunity to become an APS employee. A conversion occurs when a labour hire worker engaged through the panel under an order accepts an offer of employment from the host entity.

The service provider that supplied the labour hire worker may be eligible for a conversion fee if the criteria in the head agreement are met.

A service provider is eligible when all the following conditions apply:

• at the time the labour hire worker accepts an offer of employment, the worker has been engaged by the entity in the relevant position for a total period of less than 12 months
• the entity offers employment to the labour hire worker in either:
  • the same position the worker has filled immediately before accepting the offer
  • a similar role, including a role that the entity publicly advertises.

A ‘similar role’ is substantially the same as the role the labour hire worker performed immediately before accepting the offer of employment. The role must be within the same branch or an equivalent branch.

A conversion fee does not apply if:

• the labour hire worker has been engaged for a total period of 12 months or more under an order before accepting the offer of employment
• the entity offers employment to the labour hire worker in a position that is not:
  • the position the worker filled immediately before accepting the offer
  • a similar role.
• the offer of employment results from the labour hire worker applying for a publicly advertised position with the entity that is not the position filled under the order or a similar role
• the labour hire worker was referred to the service provider by the entity.

If the criteria for a conversion fee are met, either the entity or the service provider may start the conversion fee process by varying the order under which the worker was engaged. The variation form can be found on the webpage and Dynamic Sourcing for Panels. The conversion fee amount is calculated using the formula set out in the head agreement (Schedule 3, clause 2.4).

Introduction services

Introduction services facilitate the introduction of an entity to an APS employee from another entity for the purposes of a section 26 transfer under the Public Service Act 1999.

An introduction fee is payable only when the following conditions are met:

• the initiating entity has a contract in place with the service provider that facilitates the introduction
• the APS employee transfers to the entity under section 26 of the Public Service Act 1999.

Introduction fees are set according to the APS-equivalent classification of the role being filled.

Placement services

Placement services support the sourcing of a candidate for a non-ongoing APS employment role. These services are provided for a one-off fee.

Placement fees are set according to the APS-equivalent classification of the role being filled.

Service provider licencing

Some Australian states and territories require labour hire providers to hold licences to operate. Host organisations also have obligations to ensure that any labour hire providers they engage are properly licenced.

The head agreement requires service providers to hold all licences that are relevant to the services they provide.

Entities should ensure that any service provider engaged via an order holds the correct licences for the jurisdictions where the work will be performed. The RFQ template includes guidance that prompts entities to seek confirmation of licences held by service providers. Entities are strongly encouraged to keep this prompt and consider the responses when assessing quotations.

User guide

The user guide provides information and guidance on Labour Hire Services. It is intended for use by Commonwealth entities, including procurement teams and officials procuring services from the panel.

Labour Hire Services User Guide

The guide covers:

• information about the panel, including the scope and benefits
• which entities can use the panel and how to join
• step-by-step instructions on using the panel, including issuing Requests for Quotes and Work Orders
• an overview of relevant connected policies and requirements.

Reporting

Service provider reporting is completed through CRIIS (Contractor Reporting, Integrity Information Solution).
Labour Hire Workers are required to register in CRIIS.

Service providers must:

• report work orders issued under the panel
• link workers to an order.

Entities are responsible for reviewing and endorsing work order information reported by service providers.

Contacts

For further information or to request access to the panel or supporting systems, contact peoplepanelcontract@finance.gov.au.