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457 Sponsorship


On 20 April 2017 the Prime Minister announced that the 457 was being abolished, to be replaced in March 2018 with a work visa of 2 years and 4 years depending on the occupation. On that day of announcement the skill list was reduced in scope for 457 visas until then. Details of the new visas will not be available in legislation for some time. In the meantime advice can be provided on the probable new format and the strategies that can be adopted by business. 

The “457” is designed to meet the needs of Australian based employers to locate urgently needed skills to meet their immediate business objectives. It simply is for the employee to come to Australia as a unit of labour and return home at the conclusion of the visa period which can be from 6 months to 4 years. Further applications can be made towards the conclusion of the temporary visa for another temporary visa, but these are decided under the law applicable at the time that further application is made. Any new criteria will need to be met. So intervening legislation and policy changes are important to consider while holding a 457 visa or sponsoring such a visa.

The Department of Immigration stresses to employers making a sponsorship application that this visa is not a substitute for procurement of labour from local sources. The circumstances must be that the skilled labour needed cannot be sourced or trained locally. There are over 400 eligible skilled occupations. Sponsorship of a 457 visa is to complement domestic recruitment, not replace it. Sponsorship approvals are only given when the company has a history of providing training and development programmes to existing employees, and has a willingness to take on apprentices, interns and new graduates. There is considerable attention paid to the salary to be offered, ensuring that it is aligned to the market rate of salary on offer to locally sourced employees. This alignment must be ongoing. The Commonwealth and State authorities have the ability to inspect employer records and premises to ensure there is compliance with obligations…it is not only a monitoring process by the Department of Immigration.

There are three stages, completed in sequence, as follows:

Standard Business Sponsorship Approval

The viability of the Australian employer’s proposal is very closely examined, including financial strength, demonstrated need for overseas sourcing, an adequate history of training and planned training of local employees. Monitoring ongoing is undertaken by the Federal government. It must be for direct employment and body hire is not approved, unless there is a very special arrangement negotiated with the Australian government (Labour Agreement). Training of employees of Australian origin in the business must be evident historically and in planning.

Nomination Approval Application for a specific employee required by the employer

At this point the employer has located their chosen offshore employee through intercompany transfer or through recruiting. The position nominated by the employer is detailed in terms of its duties and responsibilities. And the employee details are introduced into the process. The application is for a nomination of a skilled employee and by definition that will mean the salary on offer will reflect that. Any occupations with a market salary below the base salary level expected for this type of recruitment can result in refusal. There is a floor salary in relation to what salary is acceptable called TSMIT.

Visa Approval Application is then considered from the future employee concerned

At this point the employee needs to have a written job offer, have had an Xray (or full medical examination if in a health or teaching position). Occupation qualifications and work references are checked to confirm that the employee is a direct match to the nomination requirements. Any licensing required to work within Australia in the particular occupation must be in place before grant. To warrant grant of the visa, the visa applicant has to show they have eligible experience in the skilled occupation claimed.

When the visa is granted the employee must work only in the occupation nominated and for that one employer only. The work must be in an employer and employee relationship and the employee paid into an Australian bank account on a regular basis. (ABN contracting arrangements cannot be the basis.) Subject to the employer further consenting, the family unit of the employee can be sponsored also to live in Australia with the employee. Adult family members have unrestricted work rights. The employer has an underlying obligation to see that repatriation costs, if any, are met. There is a requirement now that the employee has in place acceptable health insurance.

Note: Overseas companies without subsidiaries in Australia can sponsor employees to work in Australia, for example, with joint venture partners in set up operations. Pay arrangements can vary in these situations.

Labour agreement with the Commonwealth Government

A Labour Agreement is an alternative to the standard 457 business sponsorship when ineligible. These in very very limited circumstances are extending to the subclass 186/187 visa as well.

The Labour Agreement can be considered if the skilled occupation is not listed and there is Australia’s national interest at stake. From experience the process is slow and arduous to negotiate with the Commonwealth. It also requires consultation with stakeholders such as trade unions and industry bodies. By implication the project needs to have a critical mass justifying the effort. The terms of resulting agreements are strictly confidential.

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