The Minister for Financial Services has announced details of the new arrangements applying to temporary employees and locums and on-hire staff and employment agencies under the National Credit Act.
The new arrangements will allow credit businesses to continue to operate without the need to meet additional licensing obligations when they engage individuals to ‘fill in’ for regular employees or they engage employees through an employment or on-hire agency. The arrangements clarify that additional obligations are not required in particular circumstances of engagement where the person is subject to the same level of control and supervision as an employee.
Locums will be treated in the same way as employees of a licensee where they
- replace a person who is absent from work as an employee who is reasonably expected to return;
- be substantially performing the same duties of that employee; and
- be subject to similar control or direction as that employee.
Temporary and on-hired staff
Temporary and on-hired staff will be treated as credit representatives but excused from the requirement to be a member of an ASIC approved dispute resolution scheme and have the licensee notify ASIC of their authorisation subject to the conditions that they:
- be only engaged on a temporary basis;
- be engaged in similar duties and be under a similar level of control, management and supervision as other employees of the licensee;
- not be engaged because they possess particular skills that would prevent the licensee or registered person exercising the level of control that the person can exercise over its actual employees;
- be predominantly remunerated other than by way of commission; and
- be perceived by a reasonable consumer that they are an employee of the licensee.
Employment agencies that only engages in credit activities by providing temporary or on-hired staff will be exempt from licensing requirements where they:
- only engage in credit activities by providing individuals to a licensee, registered person or their representative who engage in credit activities on behalf of the licensee or registered person; and
- these individuals are locums, or temporary or on-hired staff who meet the criteria above.
- These arrangements do not extend to independent contractors engaged to complete a defined scope of work; they will still need to be authorised as a credit representative.