A labour agreement visa is one type of skilled visa which is available under both the temporary and permanent employer sponsored/nominated visa programmes.
The labour agreement stream is designed for employers who have a demonstrated need to fill a position in their business, which they are unable to source from the Australian labour market. Under a labour agreement, an employer can sponsor or nominate suitably skilled overseas workers in accordance with the terms which have been negotiated with the Department in the executed labour agreement (different types of agreements allow for varying levels of flexibility in this regard).
Labour Agreements are not aimed for wide application but rather, are designed to be used in limited or exceptional circumstances where the standard visa programmes are not available. It applies to the following skilled migration visas:
- Temporary Skill Shortage (TSS) subclass 482 visa; and
- Employer Nomination Scheme (ENS) subclass 186 visa.
The subclass 482 visa is an employer sponsored visa which allows the visa holder to temporarily reside in Australia for a period of up to 4 years (the validity period will depend on the terms of the executed labour agreement).
A subclass 186 visa is an employer nominated permanent residence visa which enables the visa holder to permanently settle in Australia upon visa grant.
The TSS and ENS visa programmes also allow specified family members of the visa holder to accompany them to Australia as dependent visa holders.
Each of these visa classes is subject to separate specified valid application lodgement and visa grant requirements. Subclass 482 visa holders must abide by certain visa conditions over the visa term. Visa conditions do not apply to the subclass 186 visa, but holders will be subject to certain obligations declared at time of application lodgement (e.g. to reside in a certain geographical area for a period of at least 2 years from visa grant).
The labour agreement application process comprises of the following 3 steps:
- The proposed sponsoring or nominating employer must enter into a labour agreement with the Department by first applying in accordance with prescribed requirements. If successful, the labour agreement will generally remain valid for a period of 5 years. The employer may already have an existing valid labour agreement in place, in which case only steps 2 and 3 below would be required.
- The employer must lodge a nomination application for the position which they are seeking to nominate for their business in accordance with the terms of the executed labour agreement
- The proposed employee (or ‘nominee’) must separately lodge a visa application on their own behalf, again according to the labour agreement terms.
Each of the above 3 applications must be successfully decided by the Department for the visa to be granted.
In this article, we provide an outline of the requirements and process involved in applying for a skilled visa under the labour agreement stream, for both employers and for potential visa applicants whom they are seeking to nominate.
Be mindful that labour agreements are a special case in that they operate outside of the standard skilled visa programmes. Given the complexity involved, we highly recommend engaging an expert migration agent to provide tailored, detailed immigration application advice and to help guide you through this process.
Information for employers
Labour Agreements are tailored to meet the individual needs and attributes of each employer. There are 5 types of Labour Agreements, as listed below:
- Company specific labour agreements
- Designated area migration agreements
- Project agreements
- Global Talent Scheme (GTS) agreements
- Industry labour agreements
We follow with a more detailed discussion regarding each type of Labour Agreement.
Immigration policy provides comprehensive guidelines regarding the requirements that a business must comply with in order to be approved for a labour agreement. Although not legally binding, policy is nevertheless a very useful guide to how the Department is likely to interpret and apply the migration provisions to each application which comes before it. It is beyond the scope of this article to provide a complete outline of these requirements or to consider every possible scenario that can arise (due to the complexity involved and the volume of material to consider). We therefore strongly recommend if you are considering applying for a labour agreement for your business, that you seek professional advice in this regard.
Company specific Labour Agreement
This type of Agreement is made directly between the employer and the Department, and requires there to be:
- A genuine skills or labour shortage for an occupation which is not already included in an industry agreement; and
- No existing designated area migration agreementor project agreement already in place.
The below criteria must be satisfied to receive approval of a company specific Labour Agreement.
The position/s which an employer is seeking to fill under the proposed labour agreement must be skilled, meaning it must be classified as occupation skill level 1 to 4 as according to the Australian and New Zealand Standard Classification of Occupations (ANZSCO). The position must also not be an eligible occupation for nomination under the TSS visa programme.
There may be exceptions made in limited circumstances where these two requirements are not met. If an employer is seeking to include an occupation which is not considered ‘skilled’ for this purpose, a strong business case must be made, and it must also be in the national interest. Approval is also required to be sought directly by the Minister for Immigration. If the proposed occupation is already eligible for nomination under the TSS programme, an application for a labour agreement should only be made if the employer is seeking a concession to the standard requirements that apply to the nominated occupation.
Skills, qualifications and experience
Skilled overseas workers which the employer is proposing to nominate for a visa under the labour agreement must:
- Have a minimum of 2 years skilled employment experience, in accordance with ANZSCO requirements; and
- Satisfy industry licensing/registration requirements for the nominated occupation.
The proposed nominee must also provide a skills assessment if this would be required under the TSS programme.
If the employer is seeking a concession in relation to required skills, qualifications and/or experience, this will again require approval directly from the Minister for Immigration. A successful application will require a strong business case to be made, and for proposed overseas worker/s to have a minimum Certificate 3 qualification and 3 years’ recent relevant employment experience.
Salary and employment conditions
Proposed salary and employment terms and conditions must comply with the same requirements as those that apply to the TSS Visa programme. These are listed below.
If the proposed nominated annual earnings(referred to as Guaranteed Annual Earnings (GAE)) will be below $250,000, the following criteria must be met:
- the GAE (excluding non-monetary benefits) for the nominated occupation must not be less than the Annual Market Salary Rate (AMSR)for the nominated occupation; and
- the AMSR (excluding non-monetary benefits) for the nominated occupation must not be below the Temporary Skilled Migration Income Threshold (TSMIT), however exceptions may apply in cases where it is ‘reasonable to disregard’ this requirement.
The TSMIT is currently set at AUD $53,900.
The AMSR is a defined term in the migration provisions, and essentially requires the employer to demonstrate that the nominee will be paid no less than what an Australian worker would be paid for performing equivalent work on a full-time basis in the same workplace and at the same location.
The GAE, which is also a defined term, refers to guaranteed wages, including amounts applied or dealt with on the nominee’s behalf or as they direct. It also includes the value of non-monetary benefits. Excluded from GAE are compulsory superannuation contributions.
The migration provisions outline how the AMSR is to be determined, which will depend on whether there is an equivalent Australian worker performing equivalent work on a full-time basis in the same workplace at the same location.
- If there is an equivalent Australian worker, the AMSR will be the salary paid to the Australian worker. The employer must provide evidence of their salary (which may be based on an enterprise agreement/ industrial award or if there is no such agreement in place, or a higher salary is paid, then their employment contract, payslips, etc. must be provided with the application).
- If there is no equivalent Australian worker, again the AMSR will depend on whether there is an enterprise agreement/industrial award in place. If not, the employer must explain how they have used relevant information to determine what an equivalent Australian worker would be paid. At least 2 of the following sources of information must be considered in determining the salary for the proposed nominee:
- Job Outlook data;
- advertisements for equivalent positions in the same location from the last 6 months;
- remuneration surveys; or
- written advice provided by employee unions or employer associations.
English language requirement
The nominee must meet the English language requirement which applies under the short-term streamapplicable to the TSS visa programme.
If an employer is seeking a lower English competency to apply under the proposed Labour Agreement, the Minister for Immigration must provide approval. It must provide a strong business case which demonstrates that reducing the English competency will not cause a risk to workplace health and safety; that nominees will have the ability to participate in the community and transfer their skills to Australians; and the nominees’ English competency will improve over the term of their nomination under the Labour Agreement.
Genuine labour market need
The employer must demonstrate that their business has a genuine need to fill the proposed position/s under a Labour Agreement, which it has been unable to source from the local labour market in Australia. This requires evidence to be submitted which shows that it has recently attempted to genuinely recruit Australians to fill the required position/s.
Evidence should be supplied to demonstrate that the employer has conducted labour market testing which, at a minimum, meets the requirements that apply under the TSS visa programme.
These requirements include the following:
- At least two advertisements must be published on different mediums:
- on a national recruitment website (e.g. jobactive.gov.au)
- a recruitment website ‘with national reach’ is a prominent or professional recruitment website that publishes advertisements for positions throughout Australia
- a general classifieds website (e.g. Gumtree) or an advertisement solely through a social media notification, such as Twitter or Instagram is not an acceptable method
- LinkedIn’s online recruitment platform is acceptable for LMT purposes. Job vacancies restricted to LinkedIn profile members only are not acceptable
- in national print media. Print media with ‘national reach’ includes national newspapers or magazines that are published at least monthly and marketed throughout Australia
- on national radio
- If the advertisement incurred a fee, provide a copy of the advertisement and the receipt for any fees paid
- If the advertisement was free, provide a copy of the advertisement only
- The advertising must have been undertaken within 4 months of the application being lodged
- The advertising must be for a duration of at least 4 weeks (28 consecutive days)
- The advertising must be undertaken in a targeted manner so that a significant proportion of suitable qualified and experienced Australians would be likely to be aware of the position and set out the experience and skills required
- the advertisement must be in English and include the following information:
- the title, or a description, of the position;
- the name of the business; and
- the annual earnings for the position.
Be aware that the above labour market testing criteria, as they apply under the TSS visa programme, are not a legislative requirement applicable to Labour Market Agreement applications. However according to Immigration policy, the Department will generally not approve an application for a Labour Agreement unless the above evidence has been provided (there may be more flexibility and discretion to accept alternative forms of evidence in individual cases). The reason being that this evidence is used to assess whether the employer has made recent and genuine efforts to recruit, employ or engage Australian citizens or Australian permanent residents, which is a legislative requirement for approval of a Labour Agreement (noting there are exemptions in certain circumstances). The employer is also generally required to submit evidence of labour market testing when submitting each nomination application under an approved Labour Agreement (depending on the terms of the labour agreement).
Additional evidence which may help to strengthen an application would include provision of the following:
- participating in job and career expos, with information provided regarding applicable fees, dates and locations and whether any positions were filled as a result;
- Research about the relevant industry and labour market trends published in the 12 months immediately before lodgement of the application; or
- Letters of support from State Government authorities.
Where a business has multiple business locations, evidence should be provided for each location with appropriate explanations as to why each position has been unable to be filled from the local employment market.
Registered business in Australia with good standing
The employer must demonstrate that the business has been lawfully and actively operating in Australia in the 12 months immediately before lodgement of the application.
Evidence must also be provided to demonstrate that the business has the financial capacity to support the number of workers which it is seeking to sponsor or nominate under the labour agreement. This requires a letter of support from an accountant (who must either be a registered Chartered Accountant (CA) or Certified Practicing Accountant (CPA)), outlining key financial information about the business and which confirms the above.
There must be no adverse information known about the business. If there is such known information, the application can only be approved if Immigration deems it reasonable to disregard the adverse information. In this case, the adverse information must be declared in the application with explanations provided as to why this information should be disregarded by the Department.
Adverse information includes where a business has contravened any federal, State or Territory laws (even if it is only at the stage of being investigated or subject to legal proceedings), insolvency, or if the business has provided a bogus document, or false or misleading information that is material, in any of its dealings in relation to migration (e.g. to the Department, a Skills Assessing authority or to the Administrative Appeals Tribunal).
Reliance on overseas workers
The Department is concerned with ensuring that the labour agreement will not have the effect of undermining employment/training opportunities for Australians. As part of its assessment of the application, Immigration will examine the business’ reliance on overseas workers and whether it has demonstrated that it will take steps to reduce its reliance on overseas workers during the term of the proposed agreement.
More specifically, is the employer seeking to enter into a labour agreement as a temporary measure, such that skills can be transferred to the Australian workforce and thereby ultimately benefit the Australian community and economy? If the application instead reflects a plan to rely on the labour agreement indefinitely in meeting the needs of the business and contains no clear plans as to how it will provide training to Australians so that it can meet its labour market needs in the future, the application is likely not to meet this requirement.
If approved, the labour agreement will include a clause stipulating the following:
- Overseas workers will comprise no more than one third of the business’ workforce in any one year over the term of the labour agreement; and
- The business’ reliance on overseas workers will decrease over the term of the agreement.
Industry Stakeholder Consultation
Before applying for a labour agreement, the employer must first consult with relevant industry stakeholders. This is not required if the business seeks to nominate:
- a maximum of 2 overseas workers in skill level 1 or 2 occupations; and
- their nominated annual salary will be at least $145,400 (this is the current Fair Work High Income Threshold and is subject to change).
Relevant stakeholders include:
- the industry body which best represents the business’ interests;
- the union which best represents the interests of an employee in the business (union consultation is necessary even if none of the business’ current employees are union members); and
- any agency or community group that could be impacted by the proposed labour agreement.
The following information must be provided to each relevant stakeholder:
- the proposed nominated occupation/s and number of overseas skilled workers which the business is seeking to nominate in each year of the labour agreement;
- location/s of each nominated position;
- any concessions which the business is seeking, such as English language or skill requirements which would normally apply; and
- the proposed nominated salary including how the business has determined the AMSR and whether an award applies.
Responses from stakeholders should be received within 10 working days of receipt of the business’ request to them for comment. If a response is not received within this time-frame, follow up the request and allow an additional 5 working days for a response.
All documentation relevant to the above industry stakeholder consultations must be supplied to the Department with the application. This includes request/s to each stakeholder, any follow-ups, their response/s, any additional information requested by stakeholder/s, your responses to these requests and any questions and/or issued raised by them.
Be aware that if a stakeholder does not support the business’ application for a labour agreement, this will not automatically result in a refusal. The Department will consider all relevant matters in this regard, including the documentation and explanations provided by all parties, the strength of arguments and evidence presented, and will decide on this basis.
Designated area migration agreement (DAMA)
A DAMA is an agreement between a State or Territory Government and/or regional authority which is designed to operate in a specified region of Australia. Employers within the relevant region covered by the DAMA can then individually apply for a labour agreement for their business. This type of labour agreement is aimed for regional areas with unique economic and/or labour market conditions.
There are currently two DAMA’s which have been executed with the Government. A Northern Territory DAMA II has recently been signed for a term of 5 years. A DAMA has also been executed which covers the Great South Coast region of Victoria and focuses on key agriculture, hospitality and other businesses to fill critical employment gaps.
Discussions in relation to proposed DAMA’s are currently taking place between the Government and several regions around Australia which are experiencing skill shortages, including the Pilbara and the Kalgoorlie-Boulder regions in WA, Cairns in far North Queensland, and the Orana region in central NSW.
A project agreement is available to companies who have projects endorsed by the Department of Foreign Affairs and Trade under the China-Australia Investment Facilitation Arrangement (IFA).
This type of labour agreement is designed to address skill shortages in the local labour market during the construction phase of resource and infrastructure projects.
The relevant project company is required to negotiate an agreement with the Department. Each individual employer must then apply for an individual labour agreement.
Global Talent Scheme (GTS) agreements
A GTS agreement is for businesses who seek to fill a small quantity of highly-skilled niche roles. There are two streams under this type of labour agreement:
- established Business stream; and
- start-up stream.
This programme is currently operating on a pilot basis (as of 1stJuly 2018). It is only available under the TSS visa programme.
Industry labour agreement
Certain industries have negotiated labour agreements with the Department. Individual employers in these selected industries can then apply for a labour agreement to apply to their business.
Where such an agreement is in place for the industry in which a business operates, if approved, the individual labour agreement will contain the same terms and conditions which are specified in the broader industry agreement. The business cannot apply for any concessions, such as exemptions from the standards skilled visa requirements (any relevant concessions would already have been negotiated with key industry stakeholders at the time of negotiating the overarching industry labour agreement).
Labour agreements have been executed for the following industries:
- Minister of religion
- Restaurant (fine dining)
According to Immigration policy, if a business operates in an industry which is already covered by one of the above industry agreements, another type of labour agreement (such as a company-specific agreement) would generally not be available. Individual requests in such cases must be approved by the Minister for Immigration.
What is the process for applying for a Labour Agreement?
An employer can apply for a labour agreement online on the Department’s website and must attach all relevant documents. There is no cost to apply. It can take up to 6 months for the application to be processed.
The application must address each requirement as it applies to the type of labour agreement for which an employer is seeking approval and must be accompanied by supporting documentary evidence.
During processing, the employer may be contacted by the Department requesting further information or clarification, in which case it will have 14 days to respond (subject to any time extensions granted).
If the application is approved, the employer will receive a copy of the proposed Labour Agreement for review and signature. Upon receipt of the signed Agreement, the Department will confirm once the Agreement is in effect.
An employer must lodge a separate nomination application for each overseas worker which it is seeking to temporarily sponsor (for a subclass 482 visa) or nominate for a permanent (subclass 186) visa.
Requirements for nomination approval include the following:
- the nominated occupation must be as specified in the labour agreement (meaning it must be an occupation that the employer has received approval to nominate under the terms of the agreement)
- any requirements as stipulated in the labour agreement, as applicable, have been met (these will vary for each agreement)
- the ‘occupation ceiling’ has not been reached for the relevant year (the labour agreement will specify the maximum number of nominations which may be approved for each nominated occupation for each year of the labour agreement term)
An additional requirement which applies to the subclass 186 nomination is that the labour agreement must include an option for permanent residence.
Nomination applications are to be lodged online with the Department, with all required documents attached. The application lodgement fee for a subclass 482 nomination is currently $330. For the subclass 186 visa, the cost is $540.
For Visa applicants
Each overseas worker seeking an employer sponsorship or nomination under the labour agreement must lodge a separate visa application, addressing all relevant requirements.
Subclass 482 visa
Requirements for visa approval include the following:
- the nominated occupation must be as specified in the labour agreement (it must be an occupation that the employer has received approval to nominate under the terms of the agreement);
- the nominee has been employed in the nominated occupation or a related field for a minimum of 2 years (the Department may disregard this requirement where it considers it reasonable in the circumstances to do so); and
- the nominee has demonstrated that they have the minimum English language skills that are suitable to perform the nominated occupation (this will be specified in the labour agreement).
Visa applications are to be lodged online with the Department, and required documents attached. The application fee for the primary applicant is currently $2,455, payable at time of lodgement.
Subclass 186 visa
Requirements for visa approval include the following:
- the nominee must be aged under 45 years at time of application lodgement (unless this age limit does not apply under the labour agreement);
- the nominated occupation must be as specified in the labour agreement (it must be an occupation that the employer has received approval to nominate under the terms of the agreement);
- there must be no adverse information regarding the nominator or any associated person (unless it is reasonable to disregard this information);
- the terms and conditions of employment must not be any less favourable than would apply to Australians performing equivalent work for the nominating entity at the same location;
- the nominee must have the minimum English language skills that are suitable to perform the nominated occupation (this will be specified in the labour agreement);
- the nominee must have the qualifications, experience and other attributes that are suitable for the position;
- The nominee must have been employed in the nominated occupation or in a related field for at least 3 years (on a full-time basis), unless in it reasonable in the circumstances to disregard this requirement (the labour agreement may provide a concession to this requirement); and
- A skills assessment may be required.
Visa applications are to be lodged online with the Department, with all required documents attached. The application fee for the primary applicant is currently $3,755, payable at time of lodgement.
In conclusion, we note that the above discussion provides an overview of the requirements and process involved in applying for a skilled visa under the labour agreement stream, for both employers and for potential visa applicants whom they are seeking to nominate.
Australia’s migrations laws are complex, and each case is different. We recommend that you seek professional advice before you proceed with applying under the labour agreement skilled visa stream, as being fully informed about the process and requirements that apply will give you the best chance of achieving a successful outcome on your application, and thus lessen the chance that it will be refused. A migration professional can help you to do this.
For up to date advice on the labour agreement skilled visa stream, book your confidential consultation with a migration agent in Adelaide. PAX Migration Australia is a leading immigration advice service based in Adelaide.