457 Visas: the new temporary business entry framework and worker protection reforms

With the ageing of Australia’s population and zero population growth, from 2010 it is projected that immigration will be the only source of net labour force growth. By 2010 more people will be leaving than entering the workforce. As Australia’s population ages, it is projected that Australia’s aged-to-working-age ratio will rise to almost 42% by 2047.

The cyclical nature of certain shortages and the existence of transitional periods of skilled labour shortage in certain sectors add to the challenge of workforce planning. The responsiveness of education and training systems to changing areas of labour demand is vital. Workforce retention strategies and increased training and up-skilling programs for the Australian community will help to ameliorate the skill shortages, which Australia continues to experience even in a softening labour market, but it will not solve them.

The Australian Government’s view is that only immigration will provide net labour force growth. Labour force growth is a key driver of economic growth.

The Government is concerned to ensure immigration programs, both temporary and permanent, deliver the right skills in the right numbers to assist with current skill shortages and achieve future economic growth for Australia.

The Minister for Immigration and Citizenship has repeatedly stated that in the current economic market there will continue to be strong skilled migration. Future migration programs will be better targeted and demand-driven to meet employer and regional needs with an emphasis on skill gaps.

The Subclass 457 Visa Programme (“457 Visa”) promotes Australia’s economic interests in the context of global workforce mobility by assisting business to meet key and emerging skill gaps. It seeks to benefit Australia by assisting business to recruit skilled workers from overseas so as to meet Australia’s skill needs, while protecting Australian employment and training opportunities.

Overseas personnel can be sponsored on a temporary basis for up to 4 years. Employers of good standing and who have a demonstrated commitment to training their Australian workforce, can nominate skilled occupations (manager, professional, associate professional and skilled labour occupations) they wish to fill with an overseas worker.

The nomination must relate to an occupation which meets a minimum skills threshold for that occupation, be published on the gazetted list of occupations and be remunerated in accordance with Australian Standards and Awards.

Overseas workers, seeking to fill the position, must demonstrate that they have the skills and qualifications that match the nominated vacancy and be offered employment at not less than the salary indicated in the nominated application (which should be commensurate with other salaries paid by the employer for similar occupations) but not lower than the gazetted minimum salary provisions.

Employers recruiting overseas workers are subject to sponsorship obligations in relation to the sponsored person which include:

• All financial obligations to the Commonwealth incurred by the sponsored worker arising out of the person’s stay in Australia.
• Compliance by the employer with all relevant legislation and awards in relation to any employment arrangement entered into with the sponsored worker in Australia.
• Unless the Minister for Immigration and Citizenship decides otherwise, compliance by the employer and the sponsored worker with the conditions under which the sponsored worker was allowed to enter Australia.

The Migration Legislation Amendment (Worker Protection) Act 2008 (”Worker Protection Act”), which came into effect on 14 September 2009, amended the Migration Act 1958 to enhance the framework for the sponsorship of non-citizens seeking entry into Australia in line with the Subclass 457 Visa Programme, while recognising that not all persons who use these visas are in paid employment. The new sponsorship framework changes relate to the following Temporary Residence Visas:

• Exchange (Subclass 411) Visa
• Foreign Government Agency (Subclass 415) Visa
• Special Program (Subclass 416) Visa (excluding the Pacific Seasonal Worker Pilot Scheme)
• Visiting Academic (Subclass 419) Visa
• Entertainment (Subclass 420) Visa
• Sport (Subclass 421) Visa
• Medical Practitioner (Subclass 422) Visa
• Media and Film Staff (Subclass 423) Visa
• Domestic Worker (Subclass 427) Visa
• Religious Worker (Subclass 428) Visa
• Occupational Trainee (Subclass 442) Visa
• Professional Development (Subclass 470) Visa
• Superyacht Crew (Subclass 488) Visa

The new sponsorship framework aims to strengthen the integrity of Temporary Residence Visas. It seeks to protect the employment opportunities and salaries and wages of local labour and prevent non-discriminatory employment practices which may discriminate against local labour in hiring overseas workers. It aims to enable employment and training opportunities for local labour and to protect overseas workers from exploitation.

The Temporary Residence Visa Reforms provide for streamlined sponsorship and nomination arrangements. All visa applicants must be sponsored irrespective of their intended period of stay.

An enhanced set of sponsorship obligations similar to those proposed for the Subclass 457 Visa Programme, but recognising that not all persons who use these visas are in paid employment, will apply.

Heightened enforcement measures which include a formal monitoring regime and an enhanced sanctions regime for non-compliance with sponsorship obligations apply to all Temporary Residence Visas, except for those people entering Australia under the terms of a work agreement between Australia and another country.

Monitoring inspectors have increased powers to, without force, enter premises, inspect, interview and require production of documentation relevant to the assessment of compliance with the enhanced obligations. These include cooperating with the inspectors, paying the Minimum Salary Level, paying any costs that may be due to the Commonwealth, paying the travel costs of the sponsored worker, keeping extensive records and providing any requested information to the Department of Immigration and Citizenship, within 10 days of being requested to do so.

The Worker Protection Act includes provisions for improved information sharing to provide more information to sponsors and visa holders and also prescribed Government agencies, to ensure compliance with the law.

The heightened enforcement measures include enhanced sanctions, namely a range of civil and criminal pecuniary penalties. In serious cases of abuse, substantial criminal pecuniary penalties and/or imprisonment may apply to those who breach the law.

With the view to ensuring sponsors give effect to their obligations, the Taxation Administration Act 1953 has been amended to allow the Commissioner for Taxation to disclose tax information relating to the holder, or former holder, of a 457 Visa or the sponsor, or former sponsor, to the Department of Immigration and Citizenship under certain circumstances.

The considerable enhancement of the Department of Immigration and Citizenship’s powers in relation to monitoring sponsors, gathering information, conducting site visits and the enforcement and sanctions regime, is part of an ongoing reform program. Its aim is to protect Australian jobs, wages and conditions and prevent exploitation of foreign workers and breaches of the law.

Maria Jockel, the author of  457 Visa Law: Addressing Australia’s Skilled Labour Shortage, will present a paper on this topic at the Migration Institute of Australia’s Conference in Melbourne from 9-11 October 2009.

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2. Worker protection migration laws to commence 14 September
3. Govts sign up for 457 protections