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Author: Alan Chanesman

NB: This article has been edited from that originally published in LexisNexis* 2020

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

Made under the Migration Act 1958 (Cth), 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 Employment.

At first glance it seems somewhat odd that the Immigration Minister and the Employment Minister whose respective government portfolios have seemingly diametrically opposing views on skilled migration are parties to a migration Agreement.

A greater understanding of why these two portfolios are concerned 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 visa subclass criteria.

In an effort to maintain the number of skilled migrants in the domestic labour force, the Commonwealth’s position and strategy is unequivocally clear. Their default is that the subclass 482/186 visa program is in place to carefully manage the numbers of skilled migrants 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 in this space.

Labour Agreements are 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 subclasses 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 (MODL).

This was a seismic shift in the way 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 the Immigration (or Employment) Minister the direct ability to intercede and exercise Ministerial discretion favourably to make a decision to approve a Labour Agreement where the Regulations are not met.

This then provides the Commonwealth the capacity to approve or decline a request without the constraints and prescriptive obligations the legislation dictates, including the removal of any legislative right of review and appeal.

Regardless of the Minister’s 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 framework 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 (or as varied).

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 subclass 482 or subclass 494 visa and/or the permanent subclass 186 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 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 approved it becomes then the responsibility of the Labour Agreement holder 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 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 others. Anyone outside this profile snapshot does not fit the intention of the program.

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 certain Labour Agreement.

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 any already contained.

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 criteria which must be meet and evidenced, including a genuine labour market need for an overseas skilled worker to fill a position/s and where there is no standard skilled visa pathway available.

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 local advertising recruitment attempts to meet the program’s purpose.

For some years now the Commonwealth has 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 rendering them only possible through the Labour Agreement stream.

Nonetheless, the Labour Agreement stream has been embraced by government as an integral component of the skilled migration program landscape for now and the foreseeable future.

If they continue to do so, it will develop into extremely savvy political method of controlling the approved number of skilled temporary 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 will seek to expand such control methods.

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

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