Hostname: page-component-745bb68f8f-l4dxg Total loading time: 0 Render date: 2025-01-31T02:27:47.676Z Has data issue: false hasContentIssue false
  • English
  • Français

Is the Net Cast Too Wide? An Assessment of Whether the Regulatory Design of the 457 Visa Meets Australia's Skill Needs

Published online by Cambridge University Press:  24 January 2025

Joanna Howe
Joanna Howe*
Affiliation:
University of Adelaide Law School
Get access Rights & Permissions [Opens in a new window]

Abstract

With increasing use of skilled temporary migration by employers and its significant influence upon Australia's permanent migration intake, the 457 visa has far-reaching implications — both for the domestic labour market and for the long-term composition of the Australian population. The scheme was introduced in 1996 to facilitate the temporary migration of skilled overseas workers to alleviate domestic skill shortages. Predicated upon a premise of business demand, the scheme allows employers to sponsor overseas workers whose occupations are on the Consolidated Sponsored Occupation List. Verification of whether the employer's attestation of a skill shortage is genuine is provided through employer-conducted labour market testing for certain occupations and the market salary rates requirement. This article questions whether these regulatory mechanisms are effective for ensuring the 457 visa program meets its objectives.

Type
Research Article
Information
Federal Law Review , Volume 41 , Issue 3 , September 2013 , pp. 443 - 469
Copyright
Copyright © 2013 The Australian National University

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Footnotes

The author is indebted to the Journal's editor Matthew Zagor and the anonymous referees for their invaluable feedback on earlier drafts of this paper. The author benefitted from presenting this paper at a research workshop with Adelaide Law School colleagues and would like to thank Gabrielle Appleby, Paul Babie, Craig Ellis, John Keeler, Ngaire Naffine, Rosemary Owens, Alexander Reilly, Andrew Stewart and Kellie Toole. All errors are the author's own.

References

1 World Bank, Global Economic Prospects 2006: Economic Implications of Remittances and Migration (World Bank, Washington DC, 2005) 31.Google Scholar

2 Global Commission on International Migration, Migration in an Interconnected World: New Directions for Action (Global Commission on International Migration, Geneva, 2005) 16.

3 The 457 visa was introduced by the Howard Coalition Government on 1 August 1996, through the insertion of a new Pt 457 in Sch 2 of the Migration Regulations (Amendment) 1996 No 76.

4 There were 25 786 subclass 457 visa grants in 1996–1997 compared with 125 070 in 2011–2012: Janet Phillips and Harriet Spinks, Skilled migration: temporary and permanent flows to Australia (Background Note, Parliamentary Library, December 2012) 40, Table 3; Department of Immigration and Citizenship, Trends in migration: Australia 2010–11, (Australian Government, February 2012) 37.

5 Department of Immigration and Citizenship, Population flows: Immigration aspects 2010–11 edition (Department of Immigration and Citizenship, 2012) 66.Google Scholar

6 For more on the recent debate over the subclass 457 visa, see, David Penberthy, ‘The debate over the 457 visa scheme is embarrassing', Herald Sun (Melbourne), 6 April 2013; Daniel Hurst, ‘Labor's talk against 457 visa scheme is “disgraceful” and “racist“: Murdoch', The Sydney Morning Herald (Sydney), 2 April 2013; ‘Strong evidence of 457 visa rorts says PM', The West Australian (Perth), 26 March 2013.

7 The Editor, ‘Skilled migrants a success story: unions must not be allowed to undermine productivity', The Australian (Sydney), 13.

8 Section 140GBA inserted into the Migration Act 1958 (Cth).

9 Section 140GBA(3)(b)(ii) inserted into the Migration Act 1958 (Cth).

10 Section 140UA inserted into the Migration Act 1958 (Cth).

11 Hereafter referred to as ‘the amendment Act'.

12 Mary Crock, ‘Immigration and Labour Law: Targeting the Nation's Skills Needs’ in Andrew Frazer, Ron McCallum and Paul Ronfeldt (eds), ‘Individual Contracts and Workplace Relations’ (Working Paper No 50, Australian Centre for Industrial Relations Research and Training, 1997) 123, 141.

13 Others have raised concerns with the use of occupational lists to meet skill shortages but no scholarly paper has comprehensively investigated this. See, eg, Joo Cheong Tham and Iain Campbell, Temporary Migrant Labour in Australia: The 457 Visa Scheme and Challenges for Labour Regulation, (Working Paper No 50, Centre for Employment and Labour Relations Law, University of Melbourne, March 2011) 19–23.

14 Joint Standing Committee on Migration, Australian Parliament, Business Temporary Entry: Future Directions – Report to the Committee of Inquiry into the Temporary Entry of Business People and Highly Skilled Specialists (1995) 84 ('Roach Report’).

15 Ibid.

16 Kinniard, Bob, ‘Current Issues in the Skilled Temporary Subclass 457 Visa’ (2006) 14(2) People and Place 49, 50.Google Scholar

17 Explanatory Statement, Statutory Rules, Schedule, Migration Regulations (Amendment) 1996) No.76 (Cth).

18 Birrell, Bob, ‘Immigration policy and the Australian labour market’ (2003) 22 Economic Papers 36.CrossRefGoogle Scholar

19 Ibid 39.

20 Migration Regulations 1994 (Cth) reg 1.20H(2) (as in force on 1 August 1996).

21 Roach Report, above n 14, 33. In particular, the Roach Report envisages the visa being used for senior executives within a company, as well as managers, specialists and certain high-level full-time trainees.

22 Migration Regulations 1994 (Cth) reg 1.20B (as in force on 1 August 1996).

23 External Reference Group, In Australia's Interests: A Review of the Temporary Residence Program (Department of Immigration and Multicultural and Indigenous Affairs, Canberra, June 2002) 8.

24 Migration Regulations 1994 (Cth) reg 1.20H(3) (as in force on 1 August 1996).

25 External Reference Group, above n 23, 46.

26 Anthony O'Donnell and Richard Mitchell, ‘Immigrant Labour in Australia: The Regulatory Framework’ (Working Paper No 20, Centre for Employment and Labour Relations Law, August 2000) 12.

27 Ibid.

28 Phillip Ruddock, ‘New Visa Processes to Help Business, Overseas Students and Skill Migration from 1 July 2001’ (Media Release, 1 July 2001).

29 The Minister for Immigration and Multicultural Affairs appointed an External Reference Group of eminent persons to guide the review of the Temporary Residence Visa announced by the Minister on 4 July 2000. These people represented a wide range of community interests and brought their particular areas of expertise and experience into the review process with the objective of providing an important external perspective: External Reference Group, above n 23, 18. For a list of External Reference Group members, see Appendix D.

30 External Reference Group, above n 23, 47.

31 Ibid.

32 Ibid. These criticisms of the 1996 scheme which required employer-conducted labour market testing for an employer seeking to sponsor an overseas worker performing a ‘non-key’ activity will be revisited in Part II of this article when we consider the Labor Government's reintroduction of employer-conducted labour market testing in the Migration Amendment (Temporary Sponsored Visas) Act 2013 (Cth).

33 Migration Regulations 1994 (Cth) regs 1.20D–1.20DA (as in force on 1 July 2003).

34 The Department of Immigration and Multicultural Affairs has since changed its name to the Department of Immigration and Citizenship ('DIAC’).

35 External Reference Group, above n 23, 48.

36 Under Labour Agreements or Regional Agreements, subclass 457 visa holders could be employed in ASCO Groups 5–7 including ‘advanced clerical and service workers', ‘intermediate clerical, sales and service workers’ and ‘intermediate production and transport workers'.

37 Migration Regulations 1994 (Cth) Regs 1.20GA(1)(a)(iii) (as in force on 1 July 2003).

38 Excluded from making a regional agreement were employers in Sydney, Newcastle, Wollongong, Melbourne, Brisbane, the Gold Coast and Perth.

39 Department of Immigration and Citizenship, Temporary Business (Long Stay) — Standard Business Sponsorship (Subclass 457): Concessions for Regional Australia, 2001.

40 Tham and Campbell, above n 13.

41 Joint Standing Committee on Migration, Parliament of Australia, Temporary visas…permanent benefits: ensuring the effectiveness, fairness and integrity of the temporary business visa program (2007) 81.

42 Ibid.

43 Ibid.

44 On 17 February, 2008 the Minister for Immigration and Citizenship, Senator the Honourable Chris Evans, unveiled a package of migration measures designed to address Australia's skills and labour shortages. As part of this package Senator Evans announced the formation of an External Reference Group (ERG) to examine how selected temporary skilled migration measures could help ease labour shortages. Attachment B of the ERG's final report lists the members of the ERG: External Reference Group, Final Report to the Minister for Immigration and Citizenship (Department of Immigration and Citizenship, April 2008).

45 Commissioner Deegan has since been appointed to the Fair Work Commission. For more on the ERG Review and the Deegan Review, see: Howe, Joanna ‘The Migration Amendment (Worker Protection) Act 2008: Long Overdue Reform, But Have Migrant Workers Been Sold Short?’ (2010) 24 Australian Journal of Labour Law 13.Google Scholar

46 Visa Subclass 457 Integrity Review, Final Report (Commonwealth of Australia, October 2008) 32 ('Deegan Report’).

47 Ibid.

48 Ibid 39.

49 External Reference Group, Final Report to the Minister for Immigration and Citizenship, (Department of Immigration and Citizenship, April 2008) 37.

50 Joint Standing Committee on Migration, above n 41, 12.

51 Deegan Report, above n 46, 34.

52 Jonathan Chaloff, ‘Structuring Evidence-Based Regulation of Labour Migration in OECD Countries: Setting Quotas, Selection Criteria and Shortage Lists’ (Paper presented at the Expert Commissions and Migration Policy Making Conference, University of California, April 18–19 2013) 1.

53 Migration Regulations 1994 (Cth) reg 2.59.

54 Migration Regulations 1994 (Cth) reg 2.72.

55 Migration Regulations 1994 (Cth) sch 2, Subclass 457, cl 457.223(4).

56 Section 140GBA inserted into the Migration Act 1958 (Cth).

57 Section 140GBA(4A) inserted into the Migration Act 1958 (Cth).

58 Commonwealth, Parliamentary Debates, House of Representatives, 6 June 2013, 5543 (Brendan O’Connor).

59 Section 140GBC(2) inserted into the Migration Act 1958 (Cth).

60 Section 140GBA(1)(c) and 140GBA(2) inserted into the Migration Act 1958 (Cth).

61 Section 140GBB inserted into the Migration Act 1958 (Cth).

62 Judith Sloan, ‘Why so quiet on the IR front this time around?’ The Australian (Sydney), 17 August 2013.

63 When he delivered this speech to the Australian Mines and Metals Association (AMMA), Scott Morrison was the Shadow Minister for Productivity and Population and the Shadow Minister for Immigration and Citizenship.

64 Scott Morrison, ‘Immigration that Creates Jobs’ (Speech delivered to the AMMA, Brisbane, 8 August 2013).

65 Commonwealth, Parliamentary Debates, House of Representatives, 19 June 2013, 6269 (Don Randall).

66 See, eg, Chaloff, above n 52.

67 Joo Cheong Tham, Submission No 22 to Senate Legal and Constitutional Affairs Committee, Inquiry into the Migration Amendment (Temporary Sponsored Visas) Bill 2013 (21 June 2013) 26.

68 Brendan O’ Connor, Insiders with Barrie Cassidy, Australian Broadcasting Corporation, 23 July 2013.

69 Ibid.

70 Law Council of Australia, Submission No 24 to Senate Standing Committee on Legal and Constitutional Affairs, Parliament of Australia, Inquiry into the Framework and operation of the subclass 457 visas, Enterprise Migration Agreements and Regional Migration Agreements, 21 June 2013, 2.

71 Joo Cheong Tham, above n 67, 23.

72 Martin Ruhs and Peter Martin, ‘Independent Commissions and Labor Migration’ (Paper presented to the Expert Commissions and Migration Policy Making Conference, University of California, April 18–19 2013) 2.

73 One example is the case of the Cohen & Grigsby law firm which made a promotional film in which its lawyers said they would help employers seeking immigrant visas for foreigners they were sponsoring to advertise for local workers in ways that would minimize the chances of finding qualified US workers. Their lawyer said: ‘Our objective is to not find a qualified and interested worker’ during the statutorily mandated recruitment process. See: <http:migration.ucdavis.edu/mn/more.php?id+3434_0_2_0> Accessed 10 June 2013.

74 These included the submissions to the Senate Legal and Constitutional Affairs Committee's inquiry into the Migration Amendment (Temporary Sponsored Visas) Bill 2013. See Business Council of Australia, Submission No 14 (June 2013), Australian Industry Group, Submission No 12 (19 June 2013), Master Builders Association, Submission No 7 (20 June 2013), Australian Chamber of Commerce and Industry, Submission No 10 (19 June 2013), Australian Hotels Association, Submission No 11 (20 June 2013), the Australian Mines and Metals Association, Submission No 9 (June 2013) and Restaurant and Catering, Submission No 13 (20 June 2013).

75 Section 140UA inserted into the Migration Act 1958 (Cth).

76 Paragraph 8107(3)(b) of the Migration Regulations 1994 (Cth).

77 For analysis of how the 28-day requirement has been critiqued as being too harsh on 457 visa holders, see Tham and Campbell, above n 13.

78 For more on minimum salary levels, see Howe, above n 45, 11.

79 Migration Amendment Regulations 2009 (No 5) (Cth) Sch1, inserting reg 2.72(1)(10)(c).

80 For analysis of how some employers avoid the requirement to pay market salary rates, see, Australian Manufacturing Workers Union, Submission to the Department of Innovation National Resources Sector Employment Taskforce (April 2010) 26–30.

81 Tham and Campbell, above n 13, 25.

82 Department of Immigration and Citizenship, ‘Ministerial Advisory Council on Skilled Migration (MACSM) Discussion Paper: Strengthening the Integrity of the Subclass 457 Program’ (Discussion Paper, December 2012) 12 <http://www.immi.gov.au/about/discussion-papers/_doc/strengthening-integrity-457-program.pdf>.

83 Migration Regulations 1994 (Cth) reg 2.72(10AA).

84 Tham and Campbell, above n 13, 26.

85 Hugo, Graeme, ‘Best Practice in Temporary Labour Migration for Development: A Perspective from Asia and the Pacific’ (2009) 47(5) International Migration 23, 59.CrossRefGoogle Scholar

86 See Tham and Campbell, above n 13, 26.

87 Chris Bowen, ‘Simplifying Sponsorship for Permanent Skilled Migrants’ (Media Release, 9 March 2012).

88 Ibid.

89 OECD, Recruiting Immigrant Workers: Germany (OECD Publishing, 2013).Google Scholar

90 OECD, International Migration Outlook: Sopemi 2011 (OECD Publishing, 2011) 113.Google Scholar

91 Chris Evans, ‘New Skilled Occupation List to Meet Australia's Economic Needs’ (Media Release, 17 May 2010). See also <http://www.awpa.gov.au>. AWPA has replaced the organisation Skills Australia.

92 OECD, above n 90, 260.

93 Questions Taken on Notice, Budget Estimates Hearing: 21–22 May 2012, Immigration and Citizenship Portfolio, answer to question by Senator Xenophon, BE12/0213.

94 Richardson, Sue, What is a Skills Shortage? (National Centre for Vocational Education Research, 2007).Google Scholar

95 OECD, International Migration Outlook: Sopemi 2009 (OECD Publishing, 2009) 133.Google Scholar

96 Hugo, above n 85, 59.

97 See, eg, Australian Council of Trade Unions, Submission to the National Resources Sector Employment Taskforce, April 2010.

98 For a fascinating insight into how employers can use subclass 457 visa workers to limit union power in their workplaces, see: Ken Phillips, ‘457 visas about union control', The Australian (Sydney) 2 April 2013.

99 This point as to the precarious labour market position of some subclass 457 visa workers is explored elsewhere in this part.

100 Martin Ruhs, ‘The Potential of Temporary Migration Programmes in Future International Migration Policy’ (2006) 145 International Labour Review 7, 14.

101 OECD, above n 95, 134.

102 Questions Taken on Notice, Budget Estimates Hearing: 21–22 May 2012, Immigration and Citizenship Portfolio, answer to question by Senator Xenophon, BE12/0216.

103 Tham and Campbell, above n 13; Bob Birrell and Ernest Healy, ‘Immigration Overshoot’ (Research Report, Centre for Population and Urban Research, November 2012); Andrew Newman, ‘The Legal Precariousness of Temporary Migrant Work: Common Regulatory Challenges to Security of Employment in Canada and Australia’ (paper presented at Australian Labour Law Association Conference, Rydges Hotel Canberra, 16–17 November 2012); Joo Cheong Tham and Ian Campbell, ‘Equal Treatment for Temporary Migrant Workers and the Challenge of Their Precariousness’ (paper presented at Australian Labour Law Association Conference, Rydges Hotel Canberra, 16–17 November); Joanna Howe (2010) ‘The Migration Amendment (Worker Protection) Act 2008: Long Overdue Reform, but Have Migrant Workers Been Sold Short?’ 24 Australian Journal of Labour Law 13.

104 Many 457 visa holders end up realising this goal through receipt of permanent residency via a permanent employer sponsored visa, see: DIAC, ‘Population Flows: Immigration Aspects 2010–11’ (Statistical Publication, DIAC, April 2012) 66.

105 Deegan Report, abov n 46, 49.

106 Brendan O'Connor and Bill Shorten, ‘Fair Work Inspectors to Monitor Rogue 457 Employers’ (Joint Media Release, 18 March 2013).

107 For a description of ‘Project or Program Administrator', see Australian Bureau of Statistics, Australian Standard Classification of Occupations (ASCO) Second Edition 1997 (24 June 2009) <http://www.abs.gov.au/ausstats/abs@.nsf/0/3F37C3796BC20A3DCA25697E0018504C?opendocument>.

108 DIAC, ‘Subclass 457 State/Territory Summary Report’ (Report, 2012–13 to 30 November 2012) 11.

109 DIAC, ‘Skills Assessments for Generalist Occupations', <wwww.immi.gov.au/skilled/changes-457-program.htm>. Accessed 10 September 2013.

110 Howe, above n 45.

111 National Resources Sector Employment Taskforce, ‘Resourcing the Future’ (Report, July 2010) 10.

112 Ibid, 11, 64.

113 This represented an increase from 540 in 2011–2012 to 1250 in 2012–2013 subclass 457 visa holders working as a ‘cook': DIAC, ‘Subclass 347 State/Territory Summary Report’ (Report, 2012–13 to 30 November 2012) 11.

114 Anecdotal evidence suggests that the occupation of ‘cook’ is one where cases are emerging of foreign workers being sponsored under this job title but performing much lower skilled work and being paid below the minimum rate for 457 visa workers and the Australian award rate. See, eg, SBS report of an Italian national being sponsored on a subclass 457 visa as a restaurant manager but being actually employed as a waiter: Phillippa Carisbrooke, ‘Are 457 Visa Holders Being Exploited?', SBS (online), 5 November 2012 <http://www.sbs.com.au/news/article/1708121/Are-457-visa-holders-being-exploited>. For emerging evidence of exploitation of foreign workers in the restaurants and hospitality industry more generally, see Fair Work Ombudsman v Taj Palace Tandoori Indian Restaurant Pty Ltd & Anor [2012] FMCA 258; Courtney Trenwith, ‘Perth Cafe Receives Record Fine for Underpaying Migrant Workers', WA News (online), September 29 2011 <http://www.watoday.com.au/wa-news/perth-cafe-receives-record-fine-for-underpaying-migrant-workers-20110929-1kyxl.html#ixzz2MWiMrbPD>; Fair Work Ombudsman, ‘Fine Imposed for Underpayment of Foreign Workers in Adelaide and Brisbane’ (Media Release, 13 February 2013); Fair Work Ombudsman, ‘Court Action over Alleged Underpayment of Foreign Workers in Tasmania’ (Media Release, 26 January 2013); Fair Work Ombudsman, ‘Perth Sushi Cafe Back-Pays Two Foreign Workers Almost $50,000’ (Media Release, 14 July 2011).

115 Commonwealth, Parliamentary Debates, Senate, 15 October 2012, 127 (Senator Xenophon).

116 Ibid.

117 Ibid.

118 Australian Bureau of Statistics, Australian and New Zealand Standard Classification of Occupations, First Edition, Revision 1 (3 October 2013) <http://www.abs.gov.au/ausstats/abs@.nsf/Product+Lookup/1220.0~First+Edition,+Revision+1~Chapter~UNIT+GROUP+4517+Travel+Attendants>.

119 Australian Quality Framework, AQF Implementation Handbook (2007) http://www.aqf.edu.au/portals/0/documents/handbook/aqf_handbook_15–35.pdf Accessed 10 June 2013.

120 Unemployment for 15–19 year olds surged to 15% in July 2009 and to 6.8% for 20–24 year olds. The unemployment rate for the former group has not improved since this time and in the case of those in their early 20s this rate has deteriorated to 8.1% by July 2012. The numbers are even worse in lower income metropolitan areas: Birrell and Healy, above n 62, 26.

121 Other aspects of the design of the 457 visa scheme are not discussed here.

122 Chaloff, above n 52, 1; see also ‘Workers Crossing Borders: A Road Map for Managing International Labour Migration’ in OECD, International Migration Outlook: Sopemi 2009 (OECD Publishing, 2009) 77–224.Google Scholar

123 An independent labour market testing model was proposed by the Joint Standing Committee on Migration: above n 41.

124 An occupational shortage list with regional variation was proposed in the Deegan Report: above n 46.

125 Ibid 139.

126 AWPA already does some labour market analysis to prepare the Skilled Occupations List for the permanent migration program. This is explored in more detail in Part II.

127 Earlier this year, the author, combined with colleagues from the University of Adelaide Law School submitted to the Senate Legal and Constitutional Affairs Committee that the Australian Workforce and Productivity Agency be used to independently test the labour market for skill shortages so as to compile a CSOL more responsive to Australia's skill needs: Joanna Howe, Alexander Reilly and Andrew Stewart, Submission No 11 to Senate Legal and Constitutional References Committee, Inquiry into the Framework and Operation of Subclass 457 Visas, Enterprise Migration Agreements and Regional Migration Agreements, 26 April 2013. This recommendation was accepted by the Committee in their final report, see Senate Legal and Constitutional Affairs References Committee, ‘The Framework and Operation of Subclass 457 Visas, Enterprise Migration Agreements and Regional Migration Agreements’ (Final Report, June 2013).

128 Chamber of Commerce and Industry, Western Australia, ‘Building Human Capital', (Discussion Paper, November 2007) 51.

129 Sarah Martin, ‘Lettuce Use Foreign Skills to Grow', The Australian (Sydney) 1 March 2013, 2.

130 Ruhs and Martin, above n 72, 7.

131 Tham, above n 67, 18–22.

132 Ibid 19–20.

133 Ibid 21-2.