Brendan O'Connor (Gorton, Australian Labor Party, Minister for Immigration and Citizenship) Share this | Link to this | Hansard source

I move:

That this bill be now read a second time.

The purpose of this bill is to propose a package of integrity measures that seek to enhance the government's ability to deter sponsor behaviour which is inconsistent with the policy intent of the s ubclass 457 visa program and other temporary employer sponsored visa programs. Together with proposed amendments to the Migration Regulations 1994, this bill presents a comprehensive package of reforms which would balance the interests of Australian workers with the need to strengthen protection for overseas workers.

Importantly, the bill gives powers to the Fair Work Ombudsman (and Fair Work i nspectors) to monitor and investigate compliance with sponsorship obligations, to ensure workers are working in their nominated occupation and being paid market salary rates.

It will require sub class 457 sponsors to undertake labour market testing in relation to a nominated occupation, in a manner consistent with Australia's relevant international trade obligations, to ensure that Australian citizens and permanent residents are given the first opportunity to apply for skilled vacancies in the domestic labour market.

The government has always said that the s ubclass 457 visa plays an important role in allowing employers to address skill shortages when skilled local labour is unavailable. It is intended as a vehicle to allow employers to quickly supplement the Australian labour market, including the use of enterprise migration agreements and regional migration agreements, where a genuine skill shortage exists.

It is an important component of our overall non-discriminatory migration program, wh ich is roughly comprised of one-third families and two- thirds skilled migration. Just over half of the current holders of sub class 457 visas go on to apply for permanent residence , and we think that i s appropriate.

The use of the s ubclass 457 visa program has been growing strongly in recent years. The number of primary sub class 457 visa holders in Australia has risen from 68 , 400 in June 2010 to 106 , 680 as at 31 May 2013, an increase of 56 per cent.

Many growing industries , including those connected with the resources boom, such as mining, as well as non-resource - sector users of the program, such as health care and information and communications technology, accounted for a large portion , over half , of all sub class 457 visa grants in 2011-12.

However, strong growth has also been recorded in industries in which employment has fallen recently, such as accommodation and food service, and retail trade.

It concerns the government that, at a time when the labour market has been flattening and some sectors and regions have experienced lay-offs and increased unemployment, the sub class 457 program has continued to grow.

Coupled with this strong growth is a tendency for some employers to source foreign labour through the sub class 457 program without regard to the Australian domestic labour force.

These trends highlight that current requirements do not commit sponsors to using the sub class 457 program as a supplement to, rather than a substitute for, the domestic labour force.

In the recently released report of the Migration Council Australia, survey data of sub class 457 employer sponsors revealed that 15 per cent of employers say that they have no difficulty finding suitable labour locally and yet they sponsor employees from overseas under this scheme.

Further, seven per cent of primary visa holders surveyed said that they were remunerated differently to their Australian counterparts doing the same work , and a further two per cent stated they were paid well under the minimum salary for a 457 employee which is currently $51,400.

Indeed, the reforms at the heart of this bill are not un ique to the Australian context. As recently as 7 May this year, the Canadian Prim e Minister, Mr Stephen Harper— a conservative —s tated in relation to his country's equivalent of t he s ubclass 457 scheme:

Not only has the government indicated for some time that it would be reforming the temporary foreign workers program, but in the budget last year specifically we brought in measures to better match job vacancies with people who are seeking work or in the employment insurance system. We have been very clear. We need to do a better job of matching the demand for employment insurance and the demand for temporary foreign workers. That is precisely what the government has been doing for a year and a half … The minister brought in changes last year to make sure people who are on employment insurance get first crack at jobs rather than temporary foreign workers.

And on 23 April 2013, the Governor of the Bank of Canada and Governor-Elect of the Bank of England, Mr Mark Carney, said:

The challenge of a skills shortage is not unique to Canada but the solution is training not bringing in temporary foreign workers.

The Canadian government is taking steps to tighten the provisions of their program to ensure that only genuine skill shortages are being filled by temporary overseas labour.

Likewise, academics from the law school of the University of Adelaide recently submitted to a Senate inquiry that the 457 scheme had shifted in focus since its introduction in 1996 from a focus on filling high-skill jobs in areas of skill shortage to satisfying broader employer demand for labour. It is worth noting that back in 1996 labour market testing was a requirement of the scheme.

The Australian Hotels Association underlines this shift in recently arguing for a lowering of the minimum salary threshold of $51,400, such that employers in their industry could use the scheme more extensively. I remind the House that in the past 12 months the use of 457s in the hospitality industry has doubled—yes, it has doubled in the past year.

This bill , together with the package of reforms announced in February 2013, seeks to realign the program to ensure a balance between job opportunities for Australian citizens and permanent residents, enabling employers to fill skills shortages, while protecting overseas workers. The measures will be implemented in a manner consistent with Australia's relevant i nternational trade obligations.

The purpose of the s ubclass 457 visa program is to address genuine shortages without displacing employment and training opportunities for Australian citizens and permanent residents and without serving as the mainstay of the skilled migration program.

The government has concerns that some employers are turning to overseas workers first, rather than investing in local training and recruitment. There has also been evidence of some sponsors paying overseas workers below the market rate, failing to commit to the training requirements of the program, and using the visa fraudulently to help family and friends migrate.

In February, the g overnment announc ed a package of reforms to the s ubclass 457 visa program to strengthen its capacity to identify and prevent employer practices that are not in keeping with the intent of the program.

T hese reforms will build on the w orker p rotection reforms of 2009 that introduced a sponsorship framework designed to ensure that the working conditions of sponsored visa holders meet Australian standards and provided certain cost incentives to encourage employers to seek to recruit Australians before looking to sponsor overseas skilled workers. The 2009 reforms also introduced a civil penalty regime, including infringement notice s to enhance the powers of the d epartment to take action against sponsors who fail to meet their sponsorship obligations.

The proposed changes to the M igration R egulations will seek to reduce the risk of nominations for non-genuine positions; strengthen the market salary rate requirement; align the English language requirement with that of the permanent Employer Nomination Scheme; introduce an obligation that sponsors meet the training requirement for the term of sponsorship approval; remove potential for the exploitation of temporary overseas skilled workers; and restore public co nfidence in the program.

To complement the reforms to the M igration R egulations announced in February 2013, the bill will enshrine in the Migration Act the kinds of sponsorship obligations which are to be prescribed in the M igration R egulations.

This will ensure that the M igration R egulations include existing sponsorship obligations requiring sponsors to among other things:

as well as new and strengthened sponsorship obligations proposed to come into effect on 1 July 2013 to:

The details of these new obligations will be spelt out in the Migration Regulations proposed to commence on 1 July 2013.

The bill will further strengthen the integrity of the s ubclass 457 visa program by expanding the government's capacity to detect and take action against sponsors who do the wrong thing and ensure that overseas workers are not used as a substitute for Australian workers .

The government believes that Australian citizens and Australian permanent residents deserve the opportunity to get local jobs on local projects.

The government also announced in February an expansion of the Fair Work Ombudsman and inspector powers.

This bill expands the government's capacity to monitor and investigate compliance with the temporary sponsored work visa program by enabling Fair Work inspectors to exercise powers for the purposes of the Migration Act.

The bill will make it clear that a Fair Work inspector is also an inspector for the purposes of the Migration Act and is able to exercise all the powers conferred on inspectors by the Migration Act.

The department currently has 32 active inspectors appointed under the Migration Act to monitor compliance with sponsorship obligations. An expansion of inspector powers to over 300 Fair Work inspectors will significantly increase the government's capacity to monitor compliance with the subclass 457 visa program and other sponsored visas.

Fair Work inspectors will focus in particular on monitoring a sponsor's compliance with the following obligations:

The bill will also expand an inspector's powers to investigate a sponsor's use of temporary work visas that have associated work rights but do not have the sponsorship requirement (for example, student or work and holiday visas). This will build in flexibility to allow inspectors to investigate work related offences and question sponsors and visa holders to ensure visa holders are not working in breach of their visa condition.

The Migration Act contains an enforcement framework relating to the sponsor-monitoring regime which includes administrative sanctions (to bar or cancel the approval of a person as a sponsor), an infringement notice and civil penalty scheme.

The bill provides for enforceable undertakings as an additional enforcement option under the Migration Act where a sponsor has failed to satisfy a sponsorship obligation.

Enforceable undertakings are promises enforceable in court which would be agreed between the minister and a sponsor.

Enforceable undertakings would be used as an alternative to, or work in combination with, barring a sponsor or cancelling a sponsor's approval.

Enforceable undertakings might also avoid the substantial legal costs associated with litigation in the courts. They are designed to be flexible and to secure compensation for any loss resulting from contraventions (for example, payments to compensate for underpayment of workers).

The amendment will also allow the minister to publish enforceable undertakings on the department's website. This is an important tool to encourage compliance by all sponsors and a means of providing transparency to the Australian public on the monitoring of sponsors.

A key objective of this bill is to strengthen the government's capacity to manage the T emporary S ponsored W ork V isa program (in particular, the s ubclass 457 visa program). It will seek assurance from employers that they are only utilising the 457 visa program in circumstances where there is a genuine skills shortage in Australia. To enable this outcome, the bill introduces a requirement that sponsors must undertake l abour m arket t esting in relation to nominated occupations, in a manner consistent with Australia's relevant international trade obligations.

In recognition that the subclass 457 visa is the primary visa that delivers our World Trade Organization and free trade agreement obligations for the movement of natural persons, the bill ensures that Australia continues to meet our obligations not to labour market test certain categories of persons.

The bill allows the Minister for Immigration and Citizenship to determine by legislative instrument how to give effect to relevant categories of persons for whom international obligations are owed. The legislative instrument will reflect the relevant commitments with respect to labour market testing under Australia's international trade agreements.

It is proposed that the labour market testing requirement will initially require a sponsor to demonstrate that they have sought to find a suitably qualified Australian citizen or Australian permanent resident within six months prior to submission of an application for nomination approval. This will provide a balance between giving Australians the opportunity to apply for jobs, and ensuring that Australian businesses do not experience undue delays in filling skilled labour shortages which would negatively impact on their businesses.

The labour market testing requirement will be satisfied if the employer provides evidence of attempts to recruit locally, such as details of advertising or participation at relevant job fairs, and details of the results of such attempts which demonstrates that a suitably qualified and experienced Australian citizen or Australian permanent resident is not readily available to fill the nominated position.

The bill proposes a delayed commencement for the labour market testing requirement to allow sufficient time for the implementation of labour market testing and ensure that sponsors are given a period of time to undertake labour market testing.

Further, the bill includes an exemption to the labour market testing requirement in the event of a major disaster, natural or otherwise, in order to assist disaster relief or recovery.

This exemption will give the government flexibility to respond to situations of national or state emergency and would facilitate the speedy entry of overseas skilled workers without the delay caused by requiring a sponsor to undertake labour market testing.

In addition, an exemption to the labour market testing condition will apply to specific occupations, by legislative instrument, within skill levels 1 or 2 as currently described in the Australian and New Zealand Standard Classification of Occupations. I intend to make a legislative instrument to exempt most, but not all, skill level 1 occupations.

The legislative instrument of exemption for occupations in skill levels 1 and 2 will be disallowable by either house of the parliament.

At present all primary subclass 457 visa holders are subject to visa condition 8107, which provides the visa holder must not cease employment for 28 consecutive days. If a visa holder does not comply with this condition there are grounds to cancel their visa.

This bill amends the Migration Regulations 1994 to extend the period from 28 days to 90 consecutive days, enabling a more socially just outcome for visa holders as they will have more time find an alternative job with an employer sponsor or to arrange their personal affairs at the conclusion of sponsored employment.

This amendment is in line with recommendations of the 2008 Deegan review of the subclass 457 visa program and the Migration Council Australia in its report of 11 May 2013.

The government intends to review the efficacy of these reforms within three years of their implementation to ascertain whether further refinements are required. We have some major changes in our labour market over recent years and it is appropriate that we re-examine these policy settings.

The totality of the g overnment's reforms will close loopholes in the current legislative and policy settings to ensure that the program can only be used by appropriately skilled persons and to fill genuine skills shortages , as was intended. Put another way, they aim to ensure the program better meets its overarching intent of acting as a supplement to rather than a substitute for the Australian labour market, in a manner consistent with Australia's relevant international trade obligations.

The government is confident that the revised legislative and policy settings for the s ubclass 457 program will achieve this balance, and will further enhance an already successful program.

I commend the bill to the c hamber.

Debate adjourned.