Mr Purcell said he believed the relationship between employers and employees should be a direct one. 

In one of his first statements as an upper house MP, the Vote 1 Local Jobs party leader said that when labour hire firms set wages, it “opened the opportunity for unscrupulous employers to take advantage of employees”.

His call came while commenting on claims by a British backpacker that a Mildura labour hire firm didn’t issue pay slips and forced employees to work up to 14 hours in 40-degree heat.

He said he was not aware of exploitation of workers by labour hire firms in the south-west, but it was a problem in fruit-picking areas. 

Mr Purcell said he did not believe labour hire firms played “a positive part in the relationship between employer and employee” when acting as employers to provide workers to clients.

Companies were “giving away their responsibilities” by having labour hire firms act as employers for workers, he said.

Mr Purcell said labour hire firms could recruit workers or handle apprenticeships for employers but that “needs to be the end of it”.

Labor pledged last year to create a licensing system for labour hire companies where only properly accredited operators could provide third-party labour to Victorian workplaces.

Under Labor’s proposal, any labour hire company seeking a licence will need to demonstrate capacity to comply with their payroll and superannuation obligations.

A spokesman for Premier Daniel Andrews this week said the government would establish an inquiry into insecure work — including the labour hire industry. 

A spokesman for the Recruitment and Consulting Services Association (RCSA) said many of its member firms acted as employers and hired workers to clients. The RCSA had a professional conduct code for its members that required them to adhere to set disciplinary and dispute resolution procedures if issues arose, the spokesman said. 

However, the spokesman said only about 30 per cent of employment service firms were RCSA members.