Caution urged on labour agreements

by 10 Nov 2007

CONTRACT PROFESSIONALS on existing 457 visas and those seeking entry into Australia were recently warned to tread with caution when signing on to conditions under labour agreements with on-hire agencies.

In the short-term rush to be first to market, individuals on 457 visas may be left high and dry by on-hire agencies that may not be able to continue meeting the strict requirements in the long run, according to Lindy Northover, general manager of migration at Entity Solutions, which manages the engagement of 2,500 contract professionals.

“The financial obligations on every company subject to these changes are significant, and if not correctly managed, it could mean companies that rush in now let everybody down in 24 months time,” she said.

On-hire is a highly competitive environment, and Northover said there may be the temptation for some organisations to not fully disclose their status under the new rules and regulations.

On 1 October 2007, Kevin Andrews, Minister for Immigration and Citizenship, announced new regulations requiring labour hire firms who sponsor workers from overseas on the 457 visa to enter into a labour agreement with the Department of Immigration and Citizenship and the Department of Employment and Workplace Relations.

The labour agreement mandates for the training of Australian workers and sets the skill level and salary for skilled overseas workers as well as committing the labour hire firm to a range of other obligations including the cost of final return to a skilled overseas worker’s home country and the cost of public hospital services.

Northover’s comments came shortly after an announcement by Brisbane-based recruitment firm, Workforce Solutions, that it had become the first in Australia to finalise a new labour agreement with the Federal Government.

The agreement – entitled On-Hire Industry Labour Deed of Agreement for Entry of Skilled Overseas Workers –allows Workforce Solutions to provide temporary skilled overseas workers to its clients under the 457 visa scheme.

As part of the agreement, Workforce Solutions has agreed to the Federal Government requirement that for each year of the labour agreement, it meets a prescribed benchmark of training of Australian workers, to help alleviate the critical skills shortage.

This requires Workforce Solutions to contribute to the training of Australian workers by devoting 2 per cent of its payroll to training, or at least 15 per cent of its trade workforce to be Australian apprentices or recent Australian apprentices.

Assyl Haidar, CEO of specialist immigration and visa firm LIVE IN, said that overall the first labour agreement was a positive move, in that the 457 program was never really designed to accommodate the on-hire market.

“While the purpose for which it was being used was legitimate, there seemed to be some long-standing tension between the industry and the department about the way in which the visa was being addressed. The 457 was always designed for the employer to be the sponsor, and the on-hire firm was not the direct employer,” he said.

The reality is that it makes it more onerous for on-hire firms than the previous arrangement, Haidar said, but it also allows what they’re doing to be recognised legitimately within the immigration framework rather than having a situation requiring continual justification.

While the changes won’t directly affect traditional recruitment firms or employers that are sponsoring, he said there are some implications for the way certain businesses may approach using overseas skilled workers.

“Where there are significant volumes of staff required and the ongoing need for specific roles, it’s certainly worth a business exploring and their HR company exploring this option,” he said.

“Setting up a labour hire agreement can have some advantages over sponsoring but only if a sustained program is being planned.”

Haidar said that setting up an agreement to use a labour hire firm for overseas workers can take a number of months and is an involved process due to consultation being required with the Department of Immigration and Citizenship and the Department of Employment and Workplace Relations, as well as union review before an agreement can be ratified.

“So for a single large employer or industry organisation seeking a large-scale solution, then a labour hire agreement for overseas workers could be attractive.”


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