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 as program 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.
More information is provided in the updated information packs for standard, on-hire, and meat industry labour agreements included below. For more information about labour agreements, visit the department’s website or email the specialist team for your industry:
Resources sector employers: email@example.com
On-hire employers: firstname.lastname@example.org
Meat processing employers: email@example.com
All other industries and employers: firstname.lastname@example.org
We have been providing regular posts about the employer-sponsored program reforms that will be introduced on 1 July. A key element of these reforms is that Skill Level 4 occupations or ‘semi-skilled’ occupations will no longer be eligible for the regional sponsored migration scheme under ‘exceptional circumstances’.
Employers who need specialised semi-skilled workers from overseas will instead need to negotiate a labour agreement.
Labour agreements provide a robust integrity framework for the entry of semi-skilled workers who are likely to be more vulnerable than highly-educated, highly-paid and highly-skilled workers.
Where this change affects a number of employers in the same industry with similar specialised semi-skilled needs, the department can look at developing template agreements for all businesses in that industry or sector; for example, specialised animal attendants or machinery operators in the agricultural sector.
More information about labour agreements is available on the department’s website.
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.
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.
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 @ email@example.com
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.