Restructuring? How to avoid immigration headaches

by 30 Jan 2014
Corporate restructures, sales or takeovers can be a turbulent time for organisations and it is easy for immigration compliance to be overlooked. Yet changes in a corporate legal structure can significantly impact Temporary Work (Skilled) subclass 457 visa holders – and their employers.

Has the legal entity employing 457 visa holders changed?

In all cases an assessment needs to be made as to whether the legal entity employing 457 visa holders has changed. Determining this can be complex and needs expert advice.

For example, if the 457 sponsoring employer is taken over by another business and registers under a different ABN, or is integrated into another business and adopts its ABN, employees with 457 visas will be affected.

In such cases, to ensure compliance with the 457 visa conditions, which generally only allow the visa holder to work for the approved sponsor (or an associated entity of that sponsor), and the employer sanction provisions within the Migration Act, the acquiring organisation needs to lodge new nominations for sponsored 457 visa holders.

Has the Department of Immigration and Border Protection (DIBP) been notified of the changes?

All 457 business sponsors must comply with a number of sponsorship obligations. These include notifying DIBP of specific changes to the corporate structure within 10 working days, including circumstances where:
  •  The sponsoring entity ceases to exist;
  •  There is a change of address or contact details; and
  •  New directors are appointed.

DIBP will also need to be notified of 457 visa holders who have ceased employment or changed positions as a result of the restructure.

Is there any impact on eligibility for permanent residence?

Changes in corporate structure may also impact 457 visa holders who are considering permanent residence.
Under the permanent employer sponsored programs, one of the common pathways to permanent residence requires 457 visa holders to have worked for their sponsoring employer for at least two years. Any changes to the structure or legal status of the sponsoring employer within the claimed two years could mean that their employment cannot be counted and the two year period re-set. This applies even if the person is still working in the same position, performs the same duties and has the same working conditions.

A final consideration if issuing new employment contracts

Immigration compliance is not restricted to 457 visa holders. If new employment contracts are being issued, organisations must ensure that all employees continue to have permission to work, even those employees believed to be Australian citizens or permanent residents.

Be careful when relying on Australian birth certificates. Due to changes to the Australian citizenship laws, not everyone born in Australia is entitled to Australian citizenship and additional evidence needs to be sighted.

Just as importantly, the work rights of temporary visa holders will need to be re-checked from time to time, so it is vital to have appropriate processes in place to monitor this.

Fragomen can help your company during a corporate restructure. We offer a range of services, including specialist visa assistance, audits and briefing sessions, and reviews of employment contracts, policies and procedures.  For information, call us now on (02) 8224 8572.

Solicitor, MARN: 0004980



  • by Dee 30/06/2014 11:24:34 AM

    When taking over a business and changing ABN number, name and address of company, do we have to be recessed to be able to sponsor again (original company had already been accessed and allowed) ?