Labour hire licensing: Governance considerations for councils
Published on 16 September 2026
When does labour hire licensing apply to councils?
Article Joshua Brown, General Counsel & Compliance Manager
Key takeaways
- Councils must not engage a provider for labour hire services unless the provider holds a valid Labour Hire Licence where required by law.
- Labour hire licensing should be considered as part of procurement planning, evaluation and ongoing contract management.
- Local Buy supports compliance through dedicated labour hire Arrangements and contractual requirements requiring suppliers to maintain all licences necessary to lawfully deliver their services.
When procuring services, councils should understand the nature of the engagement and consider whether the proposed arrangement involves the provision of labour hire services under the Labour Hire Licensing Act 2017 (Qld).
Importantly, the legislation places obligations not only on labour hire providers, but also on the organisation engaging labour hire services. Councils should take care to ensure they do not enter into an arrangement for the provision of labour hire services unless the provider holds a valid Labour Hire Licence. Penalties may apply for non-compliance.
Do services provided constitute labour hire? Determining whether an arrangement constitutes labour hire is not always straightforward.
Many contracts involve labour being used to deliver a service. However, the key question is often whether the supplier is engaged to provide a service or outcome, or whether the supplier is effectively providing workers to perform work for or within the buyer's operations.
The legislation definitions labour hire services broadly, including where a provider supplies a worker to another person to perform work. As a result, councils should avoid making assumptions based solely on service descriptions or industry labels. Some practical examples are provided below:
| SERVICES |
SCENARIO |
LABOUR HIRE LICENSING REQUIRED |
| IT help desk staff |
A Queensland council engages a supplier to temporarily supplement its existing IT team while council undertake recruitment process. |
Yes - The character of this arrangement is the supply of personnel rather than the delivery of a standalone IT service. The supplier is providing workers to perform functions within the council's existing operations, with the council retaining responsibility for the management, direction and outcomes of the work. In these circumstances, the workers are effectively being supplied to the council to perform work, and the arrangement is more likely to fall within the scope of the Labour Hire Licensing Act 2017 (Qld). The supplier would therefore be required to hold a Labour Hire Licence.
|
| Construction fit-out services |
Queensland council engages a construction company to undertake renovation to council’s administration building |
No - The character of this arrangement is the provision of construction services rather than the supply of labour. The construction company is engaged to deliver a defined project outcome and remains responsible for managing and supervising the works, providing resources and equipment, coordinating subcontractors, and complying with all relevant project and safety requirements. While labour is required to perform the work, the council is procuring a construction outcome rather than workers to perform functions within its operations. Accordingly, the arrangement would not generally be considered labour hire. |
| Cleaning services |
A Queensland council puts on a successful community event. At the conclusion, the council requires cleaning staff to undertake general cleaning duties, including picking-up rubbish, cleaning port-a-loos and other related tasks, as required. The council engages a cleaning company to provide 10 cleaners for four hours to provide assistance, which is charged to council on an hourly rate. |
Yes - The character of this arrangement is the supply of labour rather than the provision of a complete cleaning service. The cleaning company is engaged to provide personnel, with the council determining the work to be undertaken and retaining responsibility for the overall outcome. In these circumstances, the workers are effectively being supplied to the council to perform work, making the arrangement more likely to fall within the scope of the Labour Hire Licensing Act 2017 (Qld). The cleaning company would therefore be required to hold a Labour Hire Licence. |
| Traffic Management (example 1) |
A Queensland council engages a traffic management company to supply two traffic controllers to redirect traffic for a community event. |
The character of this arrangement is the supply of labour rather than the provision of a broader traffic management service. The traffic management company is engaged primarily to provide personnel, with the council retaining responsibility for the event and the overall outcome. In these circumstances, the workers are effectively being supplied to the council to perform work, and the arrangement is more likely to fall within the scope of the Labour Hire Licensing Act 2017 (Qld). The traffic management company would therefore be required to hold a Labour Hire Licence. |
| Traffic Management (example 2) |
A government-owned corporation engages a traffic management company to provide traffic management services for a major infrastructure project. The traffic management company is responsible for the end-to-end delivery of the traffic management function, including obtaining permits, preparing traffic guidance schemes, providing traffic control equipment and signage, developing site-specific SWMS, and supplying the personnel required to deliver the services. |
No - The character of the contract is for the provision of traffic management services rather than the supply of labour. Although personnel are provided as part of the service offering, the supplier remains responsible for the planning, management and delivery of the traffic management function, including permits, compliance, equipment and supervision. The labour component is incidental to the broader service being provided. |
Governance considerations for Queensland councils
The Labour Hire Licensing Act 2017 (Qld) places obligations not only on labour hire providers, but also on the organisation engaging labour hire services. Under the Act, a person must not enter into an arrangement for the provision of labour hire services unless the provider holds a valid labour hire licence. Penalties may apply where an arrangement is entered into with an unlicensed provider.
This assessment should form part of a buyer's broader procurement and contract management processes to ensure compliance with legislative obligations and minimise regulatory risk.
How Local Buy can help
Local Buy has long recognised the importance of labour hire compliance. In addition to maintaining LB334: Recruitment – Temporary & Labour Hire Services, Local Buy's broader contractual framework requires suppliers to hold and maintain all licences, permits and approvals necessary to lawfully provide the services for which they are engaged.
While these supplier obligations form an important part of the compliance framework, councils should continue to consider labour hire licensing through a procurement and contract management lens. Understanding whether an engagement is for the provision of labour hire services, and verifying any required licensing where appropriate, can help strengthen governance outcomes and reduce compliance risk for both buyers and suppliers.
For further information please contact Joshua Brown, General Counsel & Compliance Manager via email jbrown@localbuy.net.au