Do EMAs matter?

by 06 Jul 2012

Fragomen AustraliaRon Kessels, Special Counsel, Fragomen

The recently announced Enterprise Migration Agreement (EMA) for the Roy Hill project has been the cause of intense union, media and political scrutiny about the employment of overseas workers in the resources sector, but for the majority of employers in that sector sponsoring an overseas worker is still a relatively straightforward process.

Which workers can be sponsored from overseas?

Most Australian businesses are able to use the temporary 457 visa process to sponsor overseas workers into skilled roles and more than 65,000 temporary 457 visas are likely to be granted this year. Provided an employer can demonstrate a genuine commitment to employing and training Australians, that the overseas workers will be paid no less than an Australian doing the same work and has the relevant skills for the role, the standard 457 visa sponsorship system permits the employer to bring in an unlimited number of overseas skilled workers to fill critical roles. This includes a large number of specialists including engineers, project managers, geologists and drillers.

Other workers such as truck drivers, miners, riggers, steel fixers and mobile plant operators can also be sponsored once an employer has negotiated an immigration Labour Agreement with the Federal Government. Unlike the standard 457 visa program, Labour Agreements typically take a considerable number of months to assemble and negotiate and a higher level of demonstrated and future commitment to employing and training Australians is expected.

What is an EMA?

An EMA is a five year agreement between a project owner or the Engineering Procurement and Construction (EPC) contractor and the Australian Government that allows sub-contractors engaged on the project to sponsor overseas workers for 457 visas through a Labour Agreement specific to that project. An EMA regulates the occupations that can be sponsored, the number of visas that can be granted and the criteria for those visas. It also imposes on owners and sub-contractors specific commitments to employ and train Australians.

How does an EMA help?

Whilst media attention has focused on the perceived ‘benefits’ that have been conferred on the Roy Hill project, the reality is that an EMA is not a new type of visa, nor does it provide employers on that project with access to workers that they could not already sponsor under existing immigration laws. In reality, the benefit of an EMA is that it provides a degree of certainty to the project owner or EPC about access to overseas workers as well as providing an expedited sponsorship process for sub-contractors working on those projects as terms and obligations that would apply to the sub-contractor have already been established and the union consultation process finalised.

Who does an EMA help?

Projects with a capital expenditure of over AUD2 billion and a peak construction workforce of more than 1,500 people will be eligible to apply for an EMA although many projects that meet those criteria may not see the value in doing so. The reality is that we are likely to see a handful of EMAs at most.  For all other projects, the standard immigration rules will continue to apply.

So what’s the fuss?

Given the relative ease with which overseas workers can be sponsored under the standard 457 visa program, it is worth considering why there has been so much focus on the fact that the Roy Hill EMA permits up to 1,700 foreign workers to be engaged on the project. In truth, the real concern for unions about EMAs is probably not the number of visas, but that these are allocated to occupations that are not on the standard 457 visa occupation list. This includes occupations such as scaffolding, rigging, steel fixing, concreting, mobile plant operation and truck driving.

However, what has not been made clear is that any employer can seek access to these occupations by negotiating an immigration Labour Agreement with DIAC without needing to go through the EMA process. Many businesses in Australia already have these agreements in place and are sponsoring workers from overseas into these and other ‘off-list’ occupations.

What has also not been explained in any detail is that the 1,700 visas are spread over five years amongst all of the contractors on the project and does not mean that the project will in fact import this number of workers. Given the costs of engaging a foreign worker and the obligations under the EMA, in relation to giving preference to Australian workers, there is little doubt that Australians will be offered first choice at any roles and that foreign workers will only be used when there is genuine shortage of supply.  This is not just rhetoric. The number of 457 visas applied for and granted each year correlates closely to unemployment which demonstrates that employers may only use the program when there are genuine shortages in the Australian market.

Table created by Fragomen using data from DIAC and the Australian Bureau of Statistics
 *Table created by Fragomen using data from DIAC and the Australian Bureau of Statistics.

Should we worry?

For most employers the debate surrounding the Roy Hill EMA will be of little practical consequence as  they will be able to access the workers they need under the standard 457 visa process or under an immigration Labour Agreement. What is of concern is that the intense media interest has focused attention on the 457 visa program and has caused the Federal Government to rethink its strategy about EMAs with the likely consequence that the process will have more red tape.  The media interest has caused some owners and EPCs to consider whether an EMA is worth the trouble. There is no doubt that there are advantages to the EMA scheme and that major projects will need to weigh the potential impact of not having an agreement in place, however the resources sector in general will certainly not grind to a halt if no further EMAs are ever negotiated.

 

 

 

Ron Kessels

 

Special Counsel

 

T: +61 2 8224 8528

 

E: rkessels@fragomen.com

  www.fragomen.com

Fragomen Australia

 

 

 

Other topics:

  • Centre for International Employment and Migration (CENTIEM) – a Fragomen initiative and business unit within Fragomen Australia www.centiem.com