A new watchdog will head Australia’s toughest regulation of dodgy labour-hire outfits, the Victorian government has announced.

Only “fit and proper” people shown to comply with workplace, labour and migration laws will be certified under the new regime, which will also see a public register created.

“For far too long, dodgy operators in the labour hire sector have underpaid workers, exploited workers, using some of the worst practices to enhance their profits, but in essence peddle misery,” Premier Daniel Andrews said on Sunday.

A commissioner will be appointed to oversee provider licensing and prosecute rogue operators. Employers will only be allowed to use firms on a public register.

Mr Andrews said the new laws, to be introduced into parliament by the end of the year, will not add to red tape. rather, he said, the initiative will make sure current laws are more rigourously observed.

Industrial Relations Minister Natalie Hutchins said the current system created two classes of workers, “the have and the have nots”.

“It’s also creating differences across differences across businesses who can’t compete because their competitors are underpaying their workers,” she said.

Victoria joins Queensland and South Australia in toughening labour hire laws.

“We have a preference for a national system of labour-hire regulation, but unfortunately the federal government just hasn’t stepped up in this situation and taken this issue seriously,” Ms Hutchins said.

Victorian National Union of Workers secretary Gary Maas said the changes were needed.

“We hear daily reports of the exploitation of workers who are not employed directly at the sites they work on,” he said in a statement.

“We know that this exploitation won’t cease until this legislation is passed.”

But Opposition Leader Matthew Guy said the number of workplace strikes in Victoria has been on the rise in recent years and the government needed to focus on much wider industrial relations issues.

-AAP