457 Visa Reforms – Is Labour Market Testing a game changer?

by Iain Hopkins12 Aug 2013

One of the main features of the recent changes to the 457 visa regime, and the source of some trepidation in the business community, is the introduction of Labour Market Testing (LMT) before the end of the year.
LMT is used by a number of countries in certain visa streams or categories, to demonstrate that there is no suitable local candidate for a position, before sourcing skilled applicants from overseas. LMT in a subclass 457 visa context was previously used in the early 2000s and allowed Department of Immigration and Citizenship’s case officers to exercise their discretion quite broadly against the requirements at the time. Whether this new LMT regime will reflect a similar discretionary element, and in turn how this will impact on the current 457 visa programme remains to be seen.

Of the details released to date, notably trades, engineering and nursing occupations cannot be exempted from LMT. This is a significant restriction and will affect many industry sectors. Employees currently on a subclass 457 visa which is due to expire may have to brace themselves for additional requirements, if they wish to renew their visa for a further term.

Exemptions from LMT will be limited to occupations at diploma level or higher and must appear on a gazetted list published by the Minister for Immigration. This list has not yet been released and is the subject of considerable lobbying by industry bodies. The list may even become what was previously the “Migration Occupations in Demand List” used in the previous incarnation of LMT. Exceptions may also apply where LMT is inconsistent with international trade obligations specified by the Minister. An example of this could be where a person is transferred from a company’s operations in one territory to its operations in Australia (so-called Intra-Corporate Transferees).

Under the new LMT, businesses will have to show evidence of their attempts to recruit for the nominated position in the four months preceding lodgement of the application. Previously, such evidence included advertisements for the position, de-personalised details of unsuccessful applicants and the reasons for their non-selection.  

A current example of LMT in Australia is in the context of some permanent visas under the regional stream. Various state and territory bodies gazetted to assess whether positions are genuine require scanned copies or invoices of the job advertisement, as well as a signed declaration stating that the business has made a genuine attempt to fill the position with an Australian but has been unable to do so. It also requires information about the number of applicants in total, the number that progressed to interview and the reasons why they were unsuccessful.

Importantly, if there have been any redundancies in the same occupation, advertising will need to be done after the retrenchments. This could affect businesses experiencing significant and unexpected increases in work after a period of redundancies.

The true impact of the new LMT regime will only be known after several months. It will be interesting to see how the new Immigration Minister Tony Burke frames the policy directions and how a possible change of government could affect the entire regime. Until then, businesses have no need to be overzealous in pre-empting LMT requirements. What is important however is that businesses review their overseas recruitment strategies, their internal permanent residence policies, visa renewals for their existing 457 visa population and consider how LMT may affect their operations.

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