457 visas, skill shortages and Worker Protection.

Author:Jockel, Maria

The author, a specialist in immigration law. outlines the legal framework of the 457 visa program for temporary workers and the aims that it was set up to serve. She then discusses recent legal reforms which have been instituted in order to counter abuses in the program.


The government's migration program ('migration program') encourages employers to permanently sponsor workers in occupations where skill shortages cannot be met by local labour on the basis that labour force growth is a key driver of economic growth and that only immigration will provide net labour force growth.

According to the Minister for Immigration and Citizenship, Senator Chris Evans, Australia is facing a 'demographic shift that fundamentally changes the way we must consider our Migration Program. In Australia over the period 2010 to 2020 more people will retire than will join the workforce ... Over the coming decades we will have a shrinking native-born labour force to supply a growing economy and an ageing population'. (1)

This article covers the subclass 457 visa program, which has played an increasingly important role in the government's aims to ameliorate skill shortages in Australia. The 457 visa is designed to support the Australian economy by providing a mechanism for the temporary entry to Australia of skilled persons to top-up the available domestic workforce and contribute to growth in the Australian economy. (2)

Yet recruiting foreign workers to work in Australia on a temporary basis to meet skill shortages continues to be the subject of controversy and more so because of the recession and concerns to protect Australian jobs, wages and conditions and also to protect temporary foreign workers from being exploited. There is little awareness among commentators on the 457 visa about the complexity of the legislation covering the visa and the range of measures available to the Department of Immigration and Citizenship ('the department') to ensure that the law is complied with.


There are three parts to the application process: the sponsorship application; the nomination (which are both lodged by the employer); and the visa application (which is lodged by the visa applicant).

There is an obligation to lodge complete applications with all supporting documents. The department's aim is to 'deliver efficient, fair and reasonable services using an evidenced and risk-based approach to maintain the integrity of the department's programs and systems'. (3)

While the department offers streamlined processing of well documented low-risk applications, which meet the criteria, many sponsors and applicants lodge their own applications with little regard to, or knowledge of, what is required. Each application must be considered on its merits. The nature and extent of the documents that must be provided in support of an application depends on the nature of the case.

The employer's application to sponsor

To be approved as a sponsor, employers must provide details to:

* show their business is of good standing

* explain how Australia benefits from their business employing overseas personnel

* demonstrate the commitment of their business to training Australian residents or introducing new technology or business skills.

Overseas personnel can be sponsored on a temporary basis of not less than three months and up to four years. With the softening of the local labour market, there is increased emphasis on ensuring that the recruitment of temporary skilled overseas workers, to meet skill shortages, is to the 'benefit of Australia'. (4)

Sponsors seeking to recruit temporary skilled workers must demonstrate that their employment is of benefit to Australia. This must be demonstrated in at least one of the following ways:

i the creation or maintenance of employment for Australian citizens or Australian permanent residents; or

ii expansion of Australian trade in goods or services; or

iii the improvement of Australian business links with international markets; or

iv competitiveness within sectors of the Australian community. (5)

Sponsors must also disclose whether their business has retrenched or significantly reduced the hours of any employees in their workforce. Where this has occurred, details of the type of positions and numbers involved must be provided. (6) The recruitment of temporary skilled overseas workers cannot be used to the detriment of the Australian workforce and Australian wages and conditions.

The employer's application to nominate

The employer must nominate each position they wish to fill with a temporary resident. The nomination must:

* relate to an occupation which meets a minimum skills threshold covering managerial, professional, associate professional and trade occupations

* show that the position to be filled is on the occupations list specified in a legislative instrument for this visa

* show that the nominated position must be remunerated at least at a minimum salary level (MSL), also specified in a legislative instrument for this visa.

Assessment of the visa applicant

The visa applicant must show that:

* the applicant has suitable personal attributes including educational qualifications and work experience for the position

* the applicant can demonstrate that they have the necessary skills to perform the duties of the position

* the applicant will be paid at least the gazetted minimum salary that applies when the nomination was approved (and as specified in the nomination) or, if nominated by a regional employer under regulation 1.20GA, that the salary specified in the nomination, accords with Australian legislation and awards

* the position is not being created solely so the applicant can obtain a visa

* the applicant is nominated for the position by the sponsor who is an approved sponsor.

The nomination application requires the employer to specify the gross annual base salary and the total remuneration package. Salaries and conditions must be in line with the relevant industrial instrument (e.g. award or collective agreement), or the MSL, whichever is the greater.

The MSL is specified in a legislative instrument and is based on a 38-hour week. Overseas workers who are paid at the MSL and work overtime must have that overtime calculated in accordance with the gazetted method and formula. The MSL excludes all allowances and deductions (except for pay-as-you-go [PAYG] taxation and fringebenefits-tax-exempt items, for example reimbursement for work tools and safety/work wear).

All other deductions must be authorised by the 457 visa holders in accordance with industrial law and must not reduce the salary level below the MSL. All authorised deductions must be disclosed in the nomination application, including recruitment and agents' fees and any other payment.

Sponsors and visa holders are required to notify the department of any changes in their circumstances that may affect the basis upon which the sponsorship, nomination and visa application may have been approved.

Approved sponsors are monitored by the department to ensure that they comply with their sponsorship obligations. Increasingly, the department's visa processing arrangements, monitoring and compliance activities are being aligned so as to support the integrity of the 457 visa program and to enable the department and other agencies to identify and respond to breaches of immigration law or other irregularities.

Departmental policy provides considerable guidance to officers as to the action to be taken, even if some minor and technical breaches have been identified in the sponsorship undertaking. These can result in breach notices being issued against the sponsor. The nature of the action taken depends on the severity of the breach, the past conduct of the sponsor and any mitigating circumstances. There is a graded approach to sanctions. A serious breach can, for example, result in the cancellation of the sponsorship and the imposition of a bar on making further applications for approval as a sponsor. Where the sponsored worker has breached the basis upon which the application has been approved, that person's visa and any accompanying family members' visas may be cancelled.


During the economic boom, when Australia experienced both labour and skill shortages, there was a dramatic growth in the 457 visa program. In response to concerns in regard to the 457 visa program and the exploitation of foreign workers, the Minister for Immigration and Citizenship commissioned a number of reviews.

Since 15 October 2007, the 457 visa program has been progressively re-engineered to ensure that overseas workers are not exploited, that there is parity with local wages and conditions and that sponsors meet their sponsorship obligations.

The government is progressively implementing the recommendations made in the Deegan 457 Integrity Review Report (Deegan Report) (7) which aim to ensure that temporary skilled workers are not exploited in a tighter labour market and that Australian jobs are safeguarded.

The current policy settings require:

* strict assessment of the 'benefit to Australia' criterion

* comparison of the nominated salary against the market salary

* greater scrutiny of the skill level of the visa applicant. (8)

This aims to ensure that the program delivers a better targeted and demand-driven outcome which meets identified skills gaps in a tighter labour market and that it safeguards Australian jobs.

On 1 April 2009, the Minister for Immigration and Citizenship announced that the government is developing training benchmarks to clarify the existing...

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