Subclass 457 changes: a labour agreements perspective

It has been a year of change for the subclass 457 visa program. In our previous blog post about the 457 program in July, Kate wrote about the changes to the subclass 457 visa and how they will affect Australian businesses. In this blog post we will review the changes from a labour agreements perspective.

While the majority of changes to the subclass 457 visa will affect sponsors under the standard business sponsorship program, there are some changes that will apply to new and existing labour agreements.

About three per cent of all subclass 457 visas are granted under labour agreements. At June 2013 there were 162 labour agreements in effect and a further 71 under negotiation.

Some of the legislative changes that affect both labour agreement sponsors and their sponsored workers include:

  • Commencement of work—sponsored 457 visa holders must commence work with their sponsor within 90 days of arriving in Australia.
  • Finding a new sponsor—subclass 457 visa holders who cease employment with their sponsoring employer have 90 days to find a new sponsor or depart Australia.
  • English language requirement—occupational English test score of ‘B’ in each of the four test components is now accepted for 457 visa applications, bringing this element of the subclass 457 program into alignment with the Employer Nomination Scheme.
  • English exemptions—-occupation based exemptions to the English language requirement have been removed, with the assessment of generalist occupations strengthened.
  • Skills assessments—applicants nominated in a generalist occupation, such asprogram and project administrator and specialist manager not elsewhere classified, must now undertake a formal skills assessment.

More information about the 1 July subclass 457 visa reforms is available on our website.

Existing and prospective labour agreement sponsors should also note that the temporary skilled migration income threshold increased from $51 400 to $53 900 on 1 July 2013.

For more information about labour agreements, visit the department’s website or email the specialist team for your industry:

Resources sector employers: resource.agreements@immi.gov.au
On-hire employers: on-hire.industy@immi.gov.au
Meat processing employers: meat.industry@immi.gov.au
All other industries and employers: labour.agreement.section@immi.gov.au

Latest news about labour agreements

The department has introduced new specialist teams to manage labour agreement requests. In addition to the specialist teams for meat processing companies and labour hire employers, we now have specialist officers for fishing and fast food industry labour agreements and a large team dedicated to managing the unique needs of resources sector employers.

We have also updated our information packs for standard, on-hire, and meat industry labour agreements. Each pack includes a PDF booklet and Word document containing a business case form and consultation template letter. These are all attached below.

In the six months to 31 December 2012, the department received 48 requests for access to a labour agreement. During the same period, 33 labour agreements were approved, 15 were declined and a further two were withdrawn.

Those approved included employers in agriculture and food processing, transport, specialist construction and engineering recruitment.

The main reason proposed agreements were declined was failure to demonstrate a genuine labour market need to recruit workers from overseas. Employers seeking a labour agreement are required to provide extensive evidence of their efforts to recruit locally first. Without this, we cannot negotiate an agreement.

For more information about labour agreements, visit the department’s website or email the specialist team for your industry.

Resources sector employers: resource.agreements@immi.gov.au

On-hire employers: on-hire.industy@immi.gov.au

Meat processing employers: meat.industry@immi.gov.au

All other industries and employers: labour.agreement.section@immi.gov.au

The attachments referred to in the above post are now outdated and have been removed.

Can my business get a labour agreement to keep a working holiday maker perfect for the job?

In this post I’ll be discussing a common question we are often asked.

‘I’ve got the perfect employee who is on a working holiday visa. Can my business get a labour agreement to keep them?’

We normally get this enquiry when the occupation in question is not on the Consolidated Sponsored Occupations List so the employer can’t use standard employer sponsored options such as the subclass 457 visa. The first thing we ask is how much are you paying an Australian worker in this occupation?

If the answer is less than the current temporary skilled migration income threshold (TSMIT) of $51 400, a labour agreement is unlikely to be an option. The TSMIT principle applies to labour agreements just as it does to the subclass 457 visa. The second question we ask relates to labour market need. Have you made genuine efforts to recruit from the local Australian labour market for an extended period of time and can you provide evidence of your efforts?

No matter how great that working holiday maker seems, if there’s a local worker who can do the job or could be trained to do the job, that needs to be your first focus. But if you can show that you’ve seriously tried to recruit a local and that you pay above TSMIT, have a look at our information pack to see if you meet the other requirements, such as a commitment to the training of Australians.

Labour agreements—busier, but faster than ever—and with new information packs

Hello again from Labour Agreements Policy section. In this post we won’t be going into what a labour agreement is because we’ve covered that ground before in previous blog posts. Instead, we’ll be reviewing the past 12 months and talking about further improvements to our program.

In short, this year has been busy—between 1 September 2011 and 1 September 2012 we have received 103 formal requests for a labour agreement. During the same period, 75 labour agreements were approved, five were declined and a further 14 were withdrawn.

We are now turning around labour agreement negotiations in a median timeframe of six months—a vast improvement on where we were two years ago when the average negotiation time was 11 months. A number of streamlining measures were implemented in the negotiation and approval processes to improve these timeframes.

We’re also hoping for even quicker processing with the introduction of a new labour agreements information pack launched this week. The pack includes templates to help employers understand the program requirements and prepare better quality submissions to the department. This additional resource for employers should lead to better quality submissions and supporting information, which will mean it is easier and faster for us to assess.

Please note though, there is a significant backlog of work and we usually process requests in the order they are received. At the moment, there is about a six to eight week wait for new submissions to be assigned to a case manager.

See here for the new information packs for standard, on-hire and meat industry labour agreements.  Each comes with a PDF booklet and word document containing a business case proforma and consultation template letter.

The attachments referred to in the above post are now outdated and have been removed.

Tourism template labour agreement consultation

The department has received a number of industry submissions in relation to a discussion paper about a proposed template labour agreement to meet the semi-skilled labour needs of employers in the tourism and hospitality sector.

The discussion paper is now closed for comment. Submissions are currently being considered and can be viewed online. Not all respondents agreed to give permission for their submission to be publicly available.

Clarifying who can enter into a labour agreement

Any legally operating Australian business entity, including an industry association, can request access to overseas workers through a labour agreement, provided they meet all the requirements of the program. 

One of the major requirements underpinning employer-sponsored migration is the direct relationship between the sponsor and employee. A direct relationship means the sponsor has complete responsibility for managing the employee, including their pay, work duties and welfare. Overseas workers are best protected in this arrangement.

Recruitment agencies which wish to sponsor and then hire out overseas workers may negotiate an on-hire template labour agreement which allows for on-hire to other businesses while the recruitment agency remains legally responsible for the worker.  

On-hire agreements are only for workers in highly skilled occupations and sponsors must participate in a rigorous assessment process. The sponsoring recruitment agency must meet training benchmarks and bear full responsibility for the sponsorship obligations including paying the overseas worker appropriately.

Industry bodies have an important and valued role in labour agreements and are usually consulted by employers as part of negotiations. The industry bodies can provide advice on core labour agreement issues such as labour market demand for certain occupations, market salary data and skills assessment advice. In some industries, the industry body is also an industry training fund, which means they can assist employers meet training benchmarks through receipt of training funds.

Leave a comment below if you have any questions or would like more information about labour agreements.

February labour agreement termination a first

The department recently terminated a labour agreement with a company that was found to be in breach of its obligations by employing workers on a casual basis, underpaying them and providing false and misleading information to the department. The breaches were uncovered during a monitoring exercise by the department. The termination means that the company can no longer employ overseas workers.  

Labour agreements are formal arrangements that a number of Australian employers have with the Australian Government to bring skilled and highly specialised workers toAustraliato fill critical vacancies where suitably qualified Australian workers can’t be found to do the job. Overseas workers must be employed full time and on the same salary and conditions as Australians doing the same work at the same location, which protects overseas workers from exploitation and maintains wages and conditions for Australians.

One of the main types of labour agreement is the on-hire template agreement that allows recruitment companies to sponsor highly skilled overseas workers on 457 visas and then place them with other businesses.  These workers are often critical in filling the skills shortages being driven by very strong employment growth in the resources sector. 

Under the template on-hire labour agreement, the recruitment company must still meet their sponsorship obligations to their sponsored workers, even though they are on-hired to another company.

While the vast majority of sponsors do the right thing, the department will continue to follow any leads that suggest misuse of our visa programs or exploitation of overseas workers.  In this case, visa holders affected by the termination have been given a reasonable amount of time to find alternative employment with other approved sponsors.

Ideas for a labour agreement for the tourism industry

The Department is working together with other government agencies to try to help address the shortage of workers in the Australian tourism and hospitality sectors. On 24 January 2012, we released a discussion paper asking for feedback on ideas for a template labour agreement that might meet the needs of Australian employers in these industries where standard immigration products like the 457 program aren’t an option.

Tourism injects about $35 billion a year into the Australian economy but is looking at a shortfall of about 36 000 workers in jobs including experienced waiters, chefs, bar attendants and hotel managers.

A labour agreement is a formal contract between the Australian Government and an employer which provides flexible immigration solutions underpinned by strong integrity measures. Where a number of employers in the same industry are seeking to sponsor workers in the same occupations, we can look at developing an “industry template” labour agreement for all employers in that industry, provided that they meet a series of important requirements. These include a commitment to the employment and training of Australians, paying market salary rates above the temporary skilled migration income threshold (TSMIT) and being able to demonstrate that there is a genuine need to employ overseas workers, having first exhausted all options to recruit Australians.

Before we can develop a template labour agreement, we ask for broad stakeholder input through consultations and discussion papers.

 This discussion paper floats a range of questions to see what Australian employers in the tourism and hospitality sectors are really needing in terms of assistance in meeting their skilled and semi-skilled worker needs. We are asking for input on a range of topics including occupations, salaries, qualifications, English language ability, training, and risk mitigation.

There is a media release about this at: Minister for Immigration and Citizenship

 You can view the discussion paper here: Tourism Labour Agreement Discussion Paper

 There is an article about it in the Financial Review at: The Pub with no Aussies

 The discussion paper is open for comment until 16 March 2012.

 

Introducing Labour Agreements

First things first, hello from the Labour Agreement team. 

There’s no denying Labour Agreements can be complicated but I hope that after reading today’s blog they will seem less daunting.  

The first question that must be answered, “What is a Labour Agreement”?

A Labour Agreement is a flexible product that enables a business to employ specialised overseas workers when no other visa program meets the employer’s needs.  Labour Agreements are most commonly used by companies seeking semi-skilled labour or by companies in the on-hire and meat industries.  In short, they are a form of negotiated contract to employ overseas workers when you just can’t find locals to do the work. This is often the case in remote areas, in niche occupations that few Australians are qualified in, and where there aren’t domestic workers available.  

Typically, these are also the kind of occupations that are not covered by the standard Subclass 457 program which is only for skilled workers.  Under a Labour Agreement, we can help Australian businesses meet unique labour needs, while imposing a strong integrity framework that ensures workers are not exploited and Australian wages are not undermined. 

In negotiating a Labour Agreement, a number of requirements have to be met and thorough evidence provided. The most significant of these is the need to demonstrate what we call “labour market need”.

To meet this requirement, the employer needs to show us that they have made extensive, genuine attempts to fill their vacant positions with local labour.  We expect that before coming to us, the business would have tried to fill the required positions by regularly advertising online or in print, or by using a government job program or a recruitment agency.  Further to this, we examine company retention strategies and training programs aimed at retaining and up-skilling the existing workforce.

Once we are satisfied that the employer has made a genuine attempt to recruit, we will examine other evidence of labour market need such as local unemployment rates, nearby competing industries or projects and remoteness of location.  The key message is – before you come to us for help you must demonstrate that you have tried to help yourself.

In addition, there is an expectation that the occupation the employer is seeking is specialised and at least semi-skilled.  The Labour Agreement program does not cater for unskilled occupations, regardless of the labour market need.

We do understand that times are tough at the moment for businesses in certain areas seeking skilled or specialised workers.  We understand that mines and large construction projects may be drawing skilled and semi-skilled workers away from other jobs, making it difficult to find local recruits.    

It’s important though, in considering requesting access to a Labour Agreement, to have realistic expectations about the process.

To begin with, there is a cost.  To reiterate what Henry said in his 11 July post, hiring overseas workers is more expensive than hiring an equivalent Australian worker.  In addition to this, the Labour Agreement process requires a lot of information to be provided to the Department which in turn requires a lot of time to prepare. 

This in turn leads to the issue of time.  The volume of information we require means that a lot of time has to go in to analysis and assessment.  Although we at the Labour Agreements Section endeavour to finalise all requests for Labour Agreements within six months, our ability to do so is largely dependent on what the employer is asking for and the quality of the information sent to us.

For example, if an employer is seeking substantial concessions from the standard Subclass 457 visa program, negotiations will probably take longer than six months.  How much longer than six months is highly dependent on the scenario and how much work we will have to do with the employer to ensure that overseas workers will receive every entitlement, protection and opportunity they should, while also ensuring that Australian workers are not disadvantaged.

If successful, a Labour Agreement will give your business access to the global labour market.  I will leave it for you to decide what this could mean for your business. 

In the hope of not making this blog too longwinded, I have only touched on some of the many nuances and requirements of the Labour Agreement program.  I have attached our information pack below which sets out these requirements.  If you have any questions after reading this blog or information pack please feel free to email us @ labour.agreement.section@immi.gov.au

On a closing note, there is no guarantee that a request for a Labour Agreement will be approved, even if you believe that your proposal ticks all the right boxes.

The attachment referred to in the above post is now outdated and has been removed.