Visa 457 update

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It has been a busy week or so on the 457 visa front. Much new information on the operation of the visa was extracted by Labor senators during another marathon Senate Estimates committee hearing on 30 October (following an earlier session in May 2006); and the Immigration Minister made several announcements.

Key points to emerge include the following:

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  • More 457 visas could be granted in 2006-07 than in 2005-06 when a record 40,000 visas were issued. In the first 3 months of 2006-07, 11,060 primary 457 visas were granted, equal to an annualized rate of around 44,200 if that throughput was sustained over the whole year — an increase of about 12% over 2005-06. Those figures do not include visas for any family members accompanying 457 visa-holders.
  • The Immigration Minister announced nearly $24 million over four years to fund ‘investigative mobile strike teams’ to bolster employer compliance with their 457 visa undertakings, including paying temporary foreign workers the correct salaries; and to improve negotiation and management of ‘Labour Agreements’ — see below.
  • A record of over $650,000 in back-pay was recovered by the Office of Workplace Services (OWS) on behalf of 38 Chinese construction workers on 457 visas employed at a Sydney factory by Hunan Industrial Equipment Ltd, a labour hire company owned by the Chinese government. The same week the OWS also announced recovery of almost $93,700 in back-pay for another four Chinese workers on 457s at a Melbourne printing business.
  • The Immigration department monitored fewer 457 employers in 2005-06 than in 2004-05, despite the number of 457 visas granted growing from 28,000 to 40,000. ‘Monitoring’ here means paper-based monitoring (getting a pro-forma questionnaire to fill out and return) or getting a site visit from DIMA compliance officers. Only 63% of employers were subject to any monitoring (down from 96%), and the proportion monitored by way of site visits to employers’ workplaces fell from 25% to only 18%.
  • In 2005-06, DIMA managed only 1,790 site visits to 457 employers, down from 1,845 the previous year. That was despite the number of ‘active’ 457 employers growing from around 8,000 to 10,000.
  • In October 2006, DIMA was ‘investigating’ 190 employers of 457 visa-holders for possible breaches of their 457 visa undertakings, about five times as many as the 30-40 being investigated in May 2006. About one third of these employers were identified through DIMA’s own monitoring, one third identified by the 457 visa-holders approaching the department and one third came via action by ‘the unions, media or other sources’. It is not clear how many 457 visa-holders are employed at these 190 employers.
  • Surprisingly, given the level of public concern about wages paid to 457 visa-holders, DIMA officials were unable to tell the Senate committee how many 457 employers had been referred to another government agency specifically about wages issues.
  • Of the 10,000 ‘active’ employers of 457s in 2005-06, only 4 employers were barred from being a 457 sponsor, but 6 employers have been barred in the four months between July-October 2006. Under the current 457 visa sanctions regime, being barred from being a sponsor is the most severe penalty available under the Migration Act (although fines are available for employer breaches of other Commonwealth and State laws such as occupational health and safety). The Immigration Minister has previously said the option of fines for 457 employer breaches was being investigated, and testimony to the Senate Estimates confirmed this.
  • Overseas employers of 457s and overseas labour hire companies may be beyond the reach of Australia’s migration and other laws intended to protect temporary foreign workers (e.g. workers compensation laws).
  • It is not uncommon for Chinese temporary foreign workers in the meat industry to pay $20,000 to an overseas recruitment agent or labour hire company as a fee to effectively get into the 457 visa queue — a measure of how desperate some foreign workers are to get access to the Australian labour market.

The extra $24m announced for employer compliance etc will mainly go towards additional DIMA staff — ultimately 40 extra staff by 2010-11 comprising 13 in the national office and 27 in State and territory offices, plus one extra vehicle for the strike teams.

Labour agreements are agreements usually between the Commonwealth departments of Immigration and Workplace Relations on the one hand, and an individual business or industry group on the other, which approve a certain number of 457 visas for temporary foreign workers in return for specific commitments to employ and train Australians.

The meat industry has been a highly contentious user of 457 visas. On 31 October the Immigration Minister announced a Labour Agreement had been signed between the Commonwealth government, the State government of Western Australia and meat processing company International Exporters Pty Ltd. The agreement was also said to provide commitments for training indigenous Australians, humanitarian entrants (refugees) and long-term unemployed Australians.

Another labour agreement in the meat industry is being negotiated with the Australian Meat Industry Council. The government’s position is that unions are not parties to this agreement, a view confirmed in Senate estimates.

All this means there will be even more interest in the Commonwealth-State report on changes needed to the 457 visa scheme, expected to come before COAG in December this year.

It will be interesting to see if and how this report addresses the basic operational principles that should underpin a temporary work visa scheme, including the main ones: that 457 visas should only be granted where no Australian resident (citizen or permanent resident) is available who can do the work; and that employers of 457 visa-holders should be required to pay the going market rates.

These in turn rest on the principles that Australian citizens and residents have a stronger moral right to the work available in Australia than non-residents; and that the Australian government has a duty to protect these moral rights of Australian citizens.

These principles, unfashionable in the era of globalization, will be explored further in a forthcoming article in the Centre for Policy Development.

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