Articles > Contracts

What is a Labour Hire Agreement?

February 17, 2021   Jethro FoxPhilip Evangelou

Under a labour hire agreement, the workers (labour) are directly employed by a labour hire company, who then ‘on-hires’ them to other organisations to complete tasks required of them. 

Put simply, a labour hire agreement is a contract that sets out all the terms and conditions of the agreement between the labour hire business and the host employer. 

The labour hire company is responsible for the payment of workers, as well as other employee entitlement, whilst the on-hire company is responsible for directing the tasks of the workers.

As the host firm has no contract with the workers themselves, it is important that the labour hire agreement sets out all the necessary terms. 

Having a well drafted agreement will protect the labour hire business, and the rights of the workers.  

What Should Be Included? 

The agreement should set out the rights and responsibilities of the parties involved and have reference to liabilities and indemnities in the case of disputes. 

Labour hire agreements will vary depending on the industry or role of the work required.

Ultimately, it is recommended that the following clauses be included in the agreement: 

  • Services and Fees – a clear outline of the services to be provided, as well as the fees payable
  • Term of Employment – should be reference to the length of the employment under the agreement, as well as an outline of the hours/days of work required 
  • Workplace Health and Safety – an outline of the responsibility of each party in ensuring safe working environments and safety of workers 
  • Insurance – clearly set out who is responsible for obtaining insurance for the labour 
  • Non-Solicitation – a clause of this nature will prevent the host employer from directly engaging your workers for a certain period of time. This helps protect your business, by ensuring that host employers must go through your business if they wish to hire labour
  • Termination – outline how and when the hire agreement may come to an end 
  • Dispute Resolution details of how to resolve disputes if they may arise 

To Sum Up 

Due to the complex nature of labour hiring, it is important to have a well drafted agreement in place. This will help protect the rights of all parties involved. 

It is always recommended that you obtain advice from a legal professional if you are entering into an agreement with another party. 

If you require assistance on an issue, please feel free to contact our employment lawyers at 1300 337 997, or fill out the contact form on this page. 

About Jethro Fox

Jethro FoxJethro is a paralegal. His main legal interests are with Intellectual Property, Technology and Innovation, as well as areas of Corporate Law. He is in his final year of a Bachelor of Laws/Bachelor of Economics double degree at the UTS.

About Philip Evangelou

phillipPhil is a director at OpenLegal. He has over 16 years experience working in private practice and in-house counsel in Sydney and London, giving him expertise in employment law, IP, finance, leases, dispute resolution, insurance and contracts.