Sponsoring An Overseas Worker – Do You Need A Labour Agreement?

By 14 November 2018Business, Workplace

If a business needs to sponsor an overseas worker but sponsorship isn’t available under the Temporary Skills Shortage Visa (TSS Visa) because:

  • the occupation is not included in the approved occupation lists; and
  • the worker does not have a minimum of 2 years work experience in the occupation,

then the business will need a labour agreement.

TSS Visa

A TSS Visa enables a business to address a labour shortage in the business by bringing in genuinely skilled workers where they cannot source appropriately skilled Australian workers.

The TSS Visa replaces the now abolished (and more commonly recognised) 457 visa.

The length of stay permitted by a TSS Visa ranges from 1 to 4 years and is dependent on the nominated occupation, the stream of the TSS Visa and the worker’s individual circumstances.

There are three streams of a TSS Visa:

  • short term;
  • medium term; and
  • labour agreement.

This article focuses on the labour agreement stream.

Labour Agreement

A labour agreement is a formal agreement between the Australian Government (represented by the Department of Home Affairs) and approved business owners permitting a business owner to sponsor skilled overseas workers.  A labour agreement may be industry or company specific.

A business may request a labour agreement where:

  • the business can demonstrate that there is a genuine labour market need for an overseas skilled worker to fill a position in Australia;
  • there is no standard visa pathway available; and
  • the proposed labour agreement is not inconsistent with Australia’s national interest.

The Department of Home Affairs (Department) is under no obligation to enter into a labour agreement.

If a business is successful in negotiating a labour agreement with the Department, the labour agreement will remain in effect for five (5) years.

Upon entering into the labour agreement, a business may nominate overseas workers under the TSS Visa program using the labour agreement stream as opposed to the standard business sponsorship approval under the short term or medium term streams.

Industry labour agreements

There are currently eight (8) industry labour agreements:

  • dairy;
  • fishing;
  • meat;
  • Minister of Religion;
  • on-hire;
  • pork;
  • restaurant (fine dining); and
  • snow sports.

The above industry labour agreements contain fixed terms and conditions to ensure a level playing field across an industry by cementing a set of unique terms, conditions and concessions for certain occupations within that industry sector.

If you are a business which falls into one of the above categories, the good news is that some of the hard work has already been done for you – it has been demonstrated that there is a need in the labour market of that specific industry.  As a business in that industry, all you need to do is request access to the industry labour agreement to get the process started.

As for new industry agreements, these will only be considered where an industry can demonstrate:

  • there is evidence of ongoing labour shortages within that industry; and
  • significant negotiation and consultation with the relevant industry has occurred.

Company specific labour agreements

A company specific labour agreement is made between an individual business and the Department.  Any terms and conditions of the company specific labour agreement are considered and will be determined on a case-by-case basis.

A company specific labour agreement will only be considered where:

  • a genuine skills or labour shortage exists, for an occupation which is not already provided for in an industry agreement; and
  • a designated migration agreement or project agreement is not already in place.

To request a company specific labour agreement a business must make an evidence-based submission which demonstrates they have a genuine labour market need to utilise the labour agreement program and meet the following requirements:

  • are an Australian registered business with good standing – the business has been lawfully and actively operating in Australia for 12 months prior to the request and is financially viable;
  • are seeking to fill skilled occupations which are not currently eligible under the TSS Visa program (short term or medium term streams);
  • are able to meet the salary and employment conditions of the overseas workers;
  • demonstrate a genuine labour market need which cannot be filled through the local labour market and their recruitment efforts to date;
  • demonstrate a reliance on overseas workers is a temporary reliance only; and
  • demonstrate consultation with relevant industry stakeholders.

If a company specific labour agreement is approved, for a temporary visa to be granted under that agreement, the overseas workers will need to:

  • meet the English language requirements;
  • have two (2) years’ work experience in the relevant skilled occupation or a related field;
  • meet the skills and requirements for the relevant skilled occupation; and
  • meet any industry registration and/or licensing requirement,

however, a business may seek concessions to these requirements from the Minister of the Department.

Australian priority

A business must ensure Australian workers get priority.  Whilst TSS Visas and the like were designed to target genuine skill shortages, Australian workers are not to be displaced or seen as less favourable.

Moving forward

If you are a business owner who thinks a labour agreement is appropriate for your business and require any advice or assistance, please contact us.

Contact Information

Direct Line: 07 4616 9834