An independent licensing authority will be established in Victoria to crack down on widespread abuse and exploitation of workers across the state.

Laws introduced to the state’s parliament on Wednesday will introduce a universal licensing scheme to protect labour hire workers. To obtain a licence, providers will be required to pass “a fit and proper person test” and show compliance with workplace laws, labour hire laws and minimum accommodation standards. A list of licensed providers will be published on a publicly accessible register.

The Labour Hire Licensing Authority will monitor and investigate compliance with the scheme. Rogue operators who do not comply will be liable for civil and

criminal penalties. Similar laws are being developed in South Australia and Queensland.

Hungry, poor, exploited: alarm over Australia's import of farm workers Read more

Victoria had held an inquiry into insecure employment that also examined work arrangements in the labour hire industry. The inquiry heard from more than 221 witnesses over 17 public hearing days and identified a significant problem with “invisible” labour hire agencies and arrangements that were found to be operating almost entirely outside the existing regulatory framework.

Rogue labour hire operators frequently exploited vulnerable workers, breached workplace and safety legislation, underpaid workers and provided substandard accommodation. In a submission to the commonwealth black economy taskforce made in August, the Victorian government urged the federal government to roll out a similar licensing scheme nationally.

The submission said that “there are various ways in which labour hire workers are treated almost like a ‘second class’ of worker, including ranging from outright exploitation in certain sectors through to differential treatment in respect of issues like health and safety, dismissal and rostering”.

“A licensing scheme which requires labour hire providers to be licensed, and requires users of labour hire to only engage licensed providers, would dramatically reduce the demand for labour hire providers operating in the black economy,” the submission said. “In particular, the requirement that users of labour hire must engage only licensed providers is likely to mean a direct and significant drop in available business for unlicensed providers. Those providers would be forced to either transition into the regulated economy or leave the industry.”

There have been long-held concerns about the use of cheap labour, with seasonal workers from Pacific Islands particularly vulnerable to exploitation. The federal government’s seasonal worker program allows employers in the Australian agriculture industry to hire workers from participating Pacific Islander countries.

In June, the Salvation Army gave evidence to a Queensland parliamentary inquiry into labour hire contracting that seasonal workers were “reliant on our church volunteers who in some instances are doing food drops every week”. The Salvation Army highlighted the death of a 22-year-old man from Tonga, Sione Vakameilalo Fifita, who died while in Queensland on a visa that allowed him to work through the seasonal worker program. The Salvation Army said he was left for eight days without medical care in the caravan park where he was staying while picking fruit on a farm.

An joint investigation by the Weekly Times and the Courier-Mail in Brisbane published on Wednesday revealed that 12 Pacific Island workers had died while employed under the seasonal worker program since it was implemented in 2012. Seven died in the past 13 months, the investigation revealed.