No change made to 457 restrictions

by 13 May 2008

The decision by the Federal Government to keep the rules restricting recruitment firms from sponsoring labour hire workers on 457 visas is unsubstantiated and serves only to exacerbate the current skills shortage, says the Recruitment & Consulting Services Association (RCSA).

The regulations, which were introduced by the former Liberal government, mean that labour hire recruitment companies must sign a Labour Agreement if they wish to sponsor skilled workers on a 457 visa.

“Our disappointment has been compounded by the Minister for Immigration’s public adherence to evidence-based policy, when there is no evidence being provided to support this decision” said Julie Mills, CEO of the RCSA.

“The Labor Government inherited a flawed policy that was rushed through the back door by former Immigration Minister Kevin Andrews just weeks out from the last election,” she said.

“By imposing a Labour Agreement with conditions that 9 out of 10 members can’t meet, the regulations effectively prevent recruiters from sponsoring temporary skilled migrants in labour employment.”

The Federal Government, however, said that changes to the 457 visa program would make it easier for businesses to quickly sponsor skilled migrants. Businesses with a strong track record of hiring overseas workers will enjoy dramatically shorter processing times under the recommendations, it said.

“The recommendations made ... are designed to respond to the immediate labour market pressures facing Australian industry, while complementing broader labour market skills strategies and maintaining the integrity of the temporary skilled migration program,”said Immigration Minister Chris Evans.

Some of the recommendations include fast-tracking visas for ‘low risk’ employers and additional staff to clear the 457 visa backlog. But while business could benefit from many of the measures in the report, it has failed to address onerous training programs that are hurting many recruitment businesses, the RCSA said.

Recruitment businesses that bring workers into Australia via labour hire arrangements are required to satisfy estensive training requirements under regulations introduced by the Howard government last year and this has seen a dramatic drop in the number of 457 visa applications lodged by recruitment firms.

One of the most frustrating aspects of the situation, says the RCSA,, is that the government has not been able to provide any evidence to explain why the labour industry is the only one to have had its access to 457 visas restricted in this way.

“When Minister Andrews introduced the change, he was never able to provide an explanation about why the labour industry was targeted,” said Mills. “Nor has the current Government, - and now they have turned Andrews’ bad decision making into their own policy,” she said.

The RCSA says that the training conditions imposed by the Labour Agreement terms are unworkable for most members. They require a labour agency to employ 5 per cent graduates or 15 per cent apprentices or spend 2 per cent of total payroll (not just for 457 workers) on structured training –a figure that would stretch to millions of dollars for the largest companies.

These conditions apply whether the member firm employs one 457 professional or 100.

“While these requirements are well-intentioned, in reality they’re unworkable; they were designed for traditional employment arrangements rather than for the way Australians work in 2008. Labour employees often aren’t interested in structured training, don’t have time for it, or it’s already being provided by their host employer,” said Mills.

The impact will be felt most acutely in skills-short professions, with a survey of 151 RCSA and ITCRA (Information Technology Contract & Recruitment Association) members finding that 3128 projected 457 sponsorships will not go ahead.

The highest proportion of these labour employee sponsorships are for roles experiencing chronic skills shortages (professionals -1444, technicians and trade workers -1182) and industries struggling to fill jobs (mining – 849, health care and social assistance – 880).

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