Sponsoring an overseas worker has become a little more challenging following the recent changes to the employer sponsored visa legislation. The criteria impacting businesses the most is the introduction of the short term and medium to long term occupation lists where many in demand occupations do not appear on the list. If a business needs to sponsor an overseas worker but the occupation is not on the appropriate list, or the overseas worker doesn’t have the required minimum two years work experience then sponsorship is not available under the Temporary Skills Shortage (TSS) visa. This is where labour agreements come in handy.
What is a labour agreement?
A labour agreement is a formal agreement between the Australian Government and approved businesses to sponsor skilled overseas workers.
A labour agreement can be requested where:
Once a labour agreement is successfully negotiated, businesses can nominate overseas workers under the TSS visa program with the labour agreement being used instead of the standard business sponsorship approval.
Company specific labour agreements
A company specific labour agreement is one which is between an Australian business and the Australian government. This type of agreement will only be considered where:
To request a labour agreement the business must prepare an evidence based submission demonstrating that it has a genuine labour market need to utilise the labour agreement program.
To request a labour agreement a business must:
In addition to requesting sponsorship of specific occupations, businesses can also request concessions to the following criteria:
While labour agreements offer some concessions, businesses must ensure Australian workers get priority. In addition, businesses must ensure that overseas workers are provided with the terms and conditions of employment that are no less favourable than an Australian citizen or permanent resident performing equivalent work. A concession to the Temporary Skilled Migration Income Threshold ($53,900) may be requested however this must be agreed to by the minister personally.
It is important to be aware that labour agreements are considered on a case by case basis and the Department of Home Affairs is under no obligation to enter into a labour agreement.
Alternative labour agreement pathways
Template labour agreement arrangements are in place for particular industries. These arrangements provide for fixed terms and conditions agreed to by the minister in consultation with key industry stakeholders specific to an industry sector.
Templates are currently available for the following industries:
The benefit of an industry wide labour agreement is that much of the hard work demonstrating the labour market need has already been completed and businesses operating in any of these industries can request access.
Designated Area Migration Agreements (DAMA) are negotiated by state or territory governments or statutory authorities. Again, those agencies do the hard work of demonstrating the skills and labour shortages in the specific region.
The Northern Territory is currently the only region to have a DAMA in place however we are aware that other areas particularly regional Queensland and Western Australia are currently negotiating a DAMA.
Is a labour agreement appropriate for your business?
If your business answers yes to the following questions, then a labour agreement may be appropriate:
Currently labour agreements are taking up to 12 months to negotiate with the Australian government however the Department of Home Affairs is introducing streamlined processes in an effort to reduce that time to six months.
Author: Rebecca Macmillan
Rachel Drew, Partner
T: +61 7 3135 0617
T: +61 7 4230 0412
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Published by Rebecca Macmillan