Little in the skilled migration space is anymore misconstrued than the Labour Agreement settings and reasonings behind government justification which drives a process largely disengaged from legislative assessment and decision-making practises as we know it.

Made under the Migration Act, a Labour Agreement or Work Agreement is a formal arrangement between an employer and the Commonwealth, represented by the Minister of Immigration, Citizenship, Migrant Services and Multicultural Affairs and the Minister of Education, Skills, Employment.

Whilst there is no overarching legislative framework governing Labour Agreements, once an agreement is ‘in effect’, any visa grants pursuant to it are the framework of the Migration Act.

At first glance, it seems somewhat odd that the immigration Minister and the employment Minister whose respective portfolios have seemingly diametrically opposing views on skilled migration are parties to this type of agreement.

A greater understanding of why these two portfolios are involved with this sphere of skilled migration reveals that a Commonwealth Labour Agreement is entirely centred around the economic aspect of the domestic workforce, the labour market, employment and training of Australians to the perceived benefit of the domestic economy, not positioned around the residing interests of any business, organisation or workers from the international marketplace, and more importantly, not the aspirations of potential migrants who do not meet various standard visa program subclass criteria.

In an effort to direct the number of skilled migrants in the labour force, the Commonwealth’s default position and strategy is unequivocally clear. Various working visa subclasses are in place to carefully manage the numbers entering and remaining in the workforce. Moreover, the entry of skilled migrants must not be to the detriment of Australian workers.

To meet the program’s intention, like Australia’s other temporary skilled migration programs, the Labour Agreement stream is intended to supplement and complement the Australian domestic workforce, not to replace or reduce opportunities for Australian workers who are expected to be employed, trained and upskilled as an employer’s first option.

As a result, the political circumstance and flow-on effect surrounding any decision to approve a Labour Agreement is without doubt, the greatest challenge to business today.

Labour Agreements are certainly not new. However, the introduction in late 2007 of the On-Hire Industry Labour Agreement signified the modern-day Agreement as we know it. Since that time the framework has not fundamentally changed. What has changed is that the Labour Agreement as a sponsorship framework option for certain visa streams has both been subsumed and elevated into the skilled migration program at an increasing scale.

The On-Hire Industry Labour Agreement was introduced to prevent a cohort of Standard Business Sponsors the capacity to access the Migration Regulations regarding their ability to nominate occupations on the then Migration Occupations in Demand List.

This seismic shift was how the Commonwealth separated the accessibility and the decision making process of the Standard Business Sponsorship framework, to the subjective practice of disengaging the legislative requirements and placing into the hands of Immigration (or Employment) Minister justifying powers to enter into Labour Agreements derived from general executive power under s61 of the Constitution to directly intercede and make an administrative decision to approve a Labour Agreement where the regulations are not met.

This then provides the Minister the capacity to approve or decline a request without the constraints and prescriptive duty any prevailing legislation, regulation or policy directs.

Regardless of their capacity to personally approve a Labour Agreement, since 2007 successive Ministers have been particularly mindful of party-political ramifications of these decisions. To this end, Ministers are wary of having to explain their position on this issue countering any hostile claim that the government is supplementing program numbers via the Labour Agreement stream.

Unlike the Standard Business Sponsorship program where an employing entity applies to become a sponsor for a designated visa subclass, a Labour Agreement submission is a not a request to become a sponsor. It is a request of the Commonwealth to enter into consultation to access the Labour Agreement program via a valid work Agreement.

Only once the Agreement is ‘in effect’ does the party become a sponsor of a designated subclass of a visa/s under the Agreement and bound by the sponsorship obligations pursuant in the Migration Regulations These will largely mirror those which apply under the standard business program, or as varied. Additional obligations may also apply.

Through a negotiated Agreement it is possible for Australian employers to obtain the entry of a specified number of workers from overseas currently via the temporary TSS or subclass SESR visa and/or the permanent ENS visa programs through a Labour Agreement, some of which may contain certain employer or employee concessions.

In order to do so, the Commonwealth must be fully satisfied that arrangements entered into are based on a sustainable employer business model which is not wholly or overly reliant on overseas workers, based on sound evidence and a genuine demonstrable need to employ skilled overseas workers where suitable Australian workers are unable to be sourced through domestic recruitment attempts and the local labour market.

Not intended to create a position for migration purposes, nor to facilitate the entry or stay in Australia for a person/s or obtaining a visa outcome for that purpose, it is important to recognise that the Labour Agreement stream cannot be viewed as a magical solution or an alternative sponsorship option to indiscriminately use in lieu of the Standard Business Sponsorship framework.

Its focus is centred around an occupation considered in demand where the labour market cannot satisfy that demand, not about a particular nominee/s. Once an Agreement is ‘in effect’ it becomes then the responsibility of the Labour Agreement sponsor to find nominee/s who meet the terms and conditions of the Agreement as approved.

The skilled migration program has legislative criteria which both a nominating business and a nominee must meet. This in most cases this includes the ideal skilled migrant profile of an individual who is under the age of 45, has demonstrated qualifications, skills, training and experience they can pass on to employers. Anyone outside this profile snapshot does not ideally fit the intention of the program.

The Labour Agreement stream provides an important element of flexibility within the Australian migration program that allows the Government to respond to niche circumstances in a way that balances support for Australian business with any ‘risks’ associated with a particular circumstance.

For Labour Agreement requests, the Minister does not vest his decision-making powers to departmental officers in business processing centres, but instead to senior authorised departmental officers in Home Affairs Canberra to approve or decline particular Labour Agreement requests according to Ministerial directions.

Cases where the Minister intercedes directly are those requests which contain certain defining aspects the Minister considers exceptional, sensitive, those likely to have media or stakeholder interest, circumstances effecting the domestic economy, Australia’s national interest, or those which seek a concession beyond those pre-agreed by the Minister already contained in an agreement template.

Where the employer demonstrates there is compelling evidence of labour market need, the Commonwealth must be fully satisfied that arrangements entered into are based on a demonstrable need to employ skilled overseas workers where Australians are unable to be sourced through mandatory and enhanced local advertising recruitment attempts to meet the program’s purpose.

The reason why most Labour Agreement requests are not successful is that the Department of Home Affairs assess the merit of a request using a number overarching and intractable risk criteria satisfying both the Minister of Immigration and Minister of Employment, least of all, the genuine labour market need for overseas skilled workers to fill a position/s where there is no standard or suitable skilled visa pathway available.

Regardless of the seemingly politically driven settings one must navigate and at times concede, the Labour Agreement stream has been embraced by government as an integral component of the Australian skilled migration program landscape not only nowadays, but the foreseeable future.

For some years now the Commonwealth have been considering consolidating the number of occupations on the various skilled occupation lists and considers one possible way to achieve this goal is to progressively remove any number of occupations from those lists rendering them only possible to sponsor through the Labour Agreement stream.

Moreover, as the government looks for solutions to complex labour challenges in the economy, the stream is progressively being reshaped to include agreements which have ‘multipliers’ of semi-skilled and skilled occupations contained within, like Designated Area Migration Agreements and for specific industry sectors in place of skilled occupation lists which do not represent real time labour market occupations in demand, to then expand to encompass a range of other visa subclasses beyond those purely in the skilled migration program.

As the they continue to do so, it will develop into an extremely savvy political method of controlling the approved number of temporary working migrants in our labour force whilst seemingly maintaining the appearance of integrity for the skilled migration program through legislative instruments. This then becomes an effective, highly discretionary, non-reviewable gateway to an administrative decision.

Governments that find those types of economic measures attractive and will seek to expand such control methods.

This article has been edited from the original published in LexisNexis*.

*LexisNexis is the leading global provider of legal, government & corporate information solutions

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