MADEC Australia to conduct an audit, and refund AUD 70,000 (USD 49,323) back to its labour-hire workers in acknowledgment of the issues identified.
Spread the love

MADEC Australia to conduct an audit, and refund AUD 70,000 (USD 49,323) back to its labour-hire workers in acknowledgment of the issues identified.


Karma Global is in the business of establishment and vendor compliance management.  It has hundreds of elite domestic clients on its excellent service dispensing list.  The expert staff on its roll deals with thousands of regulatory compliance acts on a Pan India basis,  some of the acts being state-specific while others are enacted by the Central Government.

Karma Management has now become Karma Management Global Consulting Solutions Pvt. Ltd. which was incorporated in the year 2004 and has now completed almost 18 years of its existence.

As late as April 2021, Karma Global took a very bold step of venturing into foreign shores in terms of shoving up its business in countries like the US, UK, UAE, Canada, Philippines, and Asia. 

It has already made its mark in terms of providing excellent services in the areas of payroll, outsourcing, recruitment and talent acquisition, and regulatory compliance.

In fact, the CVO and MD, Pratik Vaidya of Karma Global were selected by SME Forum to lead a Select US Summit last month where he took along a delegation of over hundreds of SME Members for business discussions with the authorities in the States as well as with the entrepreneurs and Innovators of many countries who were present in this forum.

Karma Global thus entails the compliances of global clients in these countries as well, and in keeping with the global scenario, it does keep a very hard track of global compliances all around the world and especially so, it keeps an update on what is happening as far as people,  work and benefits are concerned.


We now take a peek at what is happening in the Southern hemisphere and we go down to Australia. 

Australia is situated entirely in the southern hemisphere, between the Indian and the Pacific Oceans, south of Maritime Southeast Asia, and north of the Antarctic. With an area of 7,617,930 km², Australia is almost (95%) as large as the continental USA (excluding Alaska).

It has now been gathered that there is an issue at MADEC Australia, which supplies housing for the labourers it hires out to farms,


What is Labour Hire and what does it hold for the labourers in Australia? 

Labour-hire can be defined as an arrangement whereby a labour-hire company or agency provides individual workers to a client or host,  with the labour-hire company being ultimately responsible for the worker’s remuneration 

The essential quality of a labour-hire arrangement is the splitting of contractual and control relationships: the worker works at the site and under the practical day-to-day direction of the host or client organization; the worker is paid by the labour-hire firm and has a direct (contractual or employment) relationship with them; the client firm pays a contract fee to the labour-hire firm for the provision of that labour and thus also has a contractual relationship with the labour-hire firm. 

On the face of it, it looks like these relationships appear to be relatively straightforward and attractive on paper but actually, when one starts practicing,  they perhaps become complicated as ever. 

First, there is typically a control relationship but not a contractual relationship between the worker and the client or host company. In a labour law context predicated on the assumed existence of a bipartite employment relationship between employer and employee,  the law has struggled to establish where liabilities should rest in some labour-hire cases. 

Second, the character of the legal relationship between the worker and the labour-hire firm may not always be clear. For example, while some labour-hire workers might be employees of the labour-hire firm, labour-hire firms often describe their workers as ‘associates’ or ‘contractors’ and seek to construct them as contractors rather than employees. 

Third, the extent to which the worker is working under the control and direction of the host company or the labour-hire company might be disputed. The issue can be critical for ascribing responsibility to occupational health and safety. 

The complicated legal character of labour-hire arrangements in practice is therefore problematic for ascertaining liability in a number of instances – 

·        where there has been a breach of OH&S regulations, 

·        where a labour-hire worker is injured and neither client company nor labour-hire company is prepared to assume responsibility for the rehabilitation and return to work, 

·        and, in unfair dismissal cases where both client and labour-hire firm might seek to deny that the aggrieved worker is their employee



The state of Victoria’s labour-hire regulator has imposed license conditions on labour-hire provider MADEC Australia to review and improve the standard of accommodation it provides or procures for labour-hire workers, according to the Labour Hire Authority.

MADEC  also agreed to provide refunds to workers who had been placed in accommodation that did not meet minimum standards.

The Labour Hire Authority’s investigation and subsequent decision come off the back of hearings conducted by the Commonwealth Senate Select Committee on Job Security, where seasonal workers employed by MADEC raised several allegations against the company, including providing or procuring sub-standard accommodation.

The Authority then inspected accommodation procured by MADEC  for their labour-hire workers in a regional Victorian town and found that it did not comply with minimum accommodation standards referenced in the Labour Hire Licensing Act 2018 (the Act). In particular, there were concerns about overcrowding, with many rooms accommodating double the permitted number of people for their size over a period of up to six months.

During the investigation, MADEC  conceded that they had not been aware of these specific minimum accommodation standards, which raised concerns for the Authority that other accommodations may be similarly sub-standard.

The license conditions imposed by the Authority require Madec to obtain an independent and suitably qualified auditor to complete an audit of all accommodations provided or procured by Madec to ensure compliance with the standards and to ensure that standards are met in the future.

Madec also agreed voluntarily to repay labour-hire workers a portion of the deductions from their wages for accommodation that was non-compliant with minimum standards. Madec had also already paid just under AUD 70,000 (USD 49,323) back to its labour-hire workers in acknowledgment of the issues identified.

Labour Hire Licensing Commissioner, Steve Dargavel, said, “This case is proof that suitable legislation has the power to effect positive change across industries and workplaces and protect our most vulnerable workers from exploitation.”



The labour-hire industry likes to portray its business as the provision of flexible labour that can conveniently be brought in to workplaces to help employers cope with fluctuations in demand, a short-term need for specialist skills, or the covering of staff absences. 

The reality, however, is that over the past ten years the labour-hire industry in Australia has grown beyond this benevolent ‘temp employment agency’ model. 

The deliberate use of labour-hire to drive down labour costs and even to substitute existing workforces with lower cost, more compliant workers, and the attempts by client employers to avoid or minimize their responsibilities and liabilities have created an urgent need for policy reform.

The problematic aspects of the labour-hire industry may be tempered by reforms such as those recommended by the NSW Task Force, but most of them will persist until the key issue of pay rate and working conditions equivalence on work sites is finally addressed.

“Labour hire providers should view this case as a cautionary example. When it comes to providers’ legal obligations to labour-hire workers, the legislation is clear: providers must comply or face licensing action,” Dargavel said. “A loss of license is a very real consequence of non-compliance with the Labour Hire Licensing Act 2018.”

Like said above, Karma Management Global Consulting Solutions Pvt. Ltd. which is a keeper of all laws and regulations on behalf of the clients whose compliance services it handles, is also of the strongest opinion that in our country as well, legislations are made for the benefit of all the stakeholders, be it the employers or the employees and therefore, the same has to be adhered with in the strongest sense of its functionalities or face action at the hands of the authorities.

Risk Management has become a major issue for the private and public organizations for which the organizations are assessed for compliance with economic, social, and environmental norms and measures.

In order to keep the risk at the lowest ebb, it is advisable and desirable for establishments facing hassles in maintaining compliances, to reach out to Karma Management Global Tech Firm who are top-class executors of compliance services operating on Pan India basis and also in some of the foreign countries as well. 


Proprietory blog of Karma Management Global Tech Firm

This blog has been compiled by the internal staff of Karma Management with the knowledge and expertise that they possess, for its monthly newsletter Issue 03 of September 2022 in case of specific or general information or compliance updates for that matter, kindly reach out to the 

Marketing Team – /

Leave a Reply

Your email address will not be published. Required fields are marked *

Translate »