How to employ tradespeople from overseas

An edited version of this article appears in the latest issue of AP&P (September/October). As promised, AP&P is publishing the full article by migration lawyer Owen Harris on our website for readers who would like more detail.

 

Immigration overview

In order to come to work in Australia overseas workers require a visa. If the worker has an Australian citizen partner they can apply for a partner visa. Most foreign workers do not have this option. This discussion focuses on working visas.

Visas can provide workers with either temporary residency (typically 3-4 years) or permanent residency.

Temporary residents must show evidence of private health insurance, pay international student rates to put their children through school, and do not have access to safety nets such as unemployment benefits and other social security payments.

Permanent residency, on the other hand, provides access to health care (Medicare), free public schooling, and social security payments.

The Federal Government controls which workers come to Australia by setting high standards based on a range of criteria including:

•  Your occupation (you can only nominate one occupation)
• Skills Assessments
•  Health
•  Jail time if any
•  Age
• English language (the dreaded IELTS test)
• Australian work experience in a nominated occupation or closely related occupation
• Overseas work experience in a nominated occupation or closely related occupation
• Qualifications (eg offshore recognised apprenticeship or Guilds)
• Designated foreign language
• Partner skills
• Sponsorship by State or Territory or family
• Prior study in Australian regional area
• Work in a regional area       

 

Skilled Occupation Lists (SOL)

The general public and the unions are very concerned about ensuring employment for Australians. Therefore, the Federal Government will only let in overseas workers where there is an identified need for those workers. Based on internal analysis and ABS statistics, the Government has developed lists of those occupations which are in demand. The composition of these lists has changed over time.

Not much has changed!

The lists have been in use for over 160 years. In 1848 Australia was applying criteria to prospective emigrants leaving London for Moreton Bay limiting passage to “agricultural labourers, shepherds, female domestic and farm servants, dairy maids, blacksmiths, wheelwrights, carpenters and other country mechanics.”

They were required to be in good health and of good character (both tests remain to this day). The difference being that now they the ship’s surgeon has been replaced by panel doctors.

The Passage Regulations, 1858 (South Australia) provided free passage to those “with the intention of working for hire in that calling. They must be sober, industrious, of good moral character, in good health, free from all mental and bodily defects, within the ages specified, appear physically to be capable of labour, and have been vaccinated or had small-pox”.

The current age imposition of 50 is a little more generous than in 1858, where single divorcees (or those who just wanted to run away from their spouses), widowers and widows with children, single men over 40, married men over 45, single women over 35, and those that owed money to creditors were all excluded from the free passage offer.

Married mechanics (as needed), masons, bricklayers and farriers, wheelwrights, sawyers, carpenters, and gardeners under 45 were OK. When the colony suffered labour shortages mechanics and single men in the prior listed occupations were also provided free passage.

As with our current State Sponsorship arrangements, those coming over had to sign an undertaking to remain in South Australia for at least two years.

The difficulty facing Australia (and every other developed country in the world) is creating barriers which appear on their face to be fair to all whilst at the same time limiting the numbers of people who are eligible from entering the country.

Types of working visas

There are 3 main categories of work visas:

Independent Skilled

Employer Sponsored

State/Territory Sponsored

 

Independent Skilled Visas (eg 175,885 Subclass)

Independent Skilled Migration visas offer permanent residency and the advantage of freedom of movement once the worker gets here. The worker is not tied to an employer for any period of time nor does (s)he need to commit to live in a particular State or Territory.

However, the bar is set quite high for this category of visa.

The worker’s skills must also be assessed as suitable by the relevant assessing authority (typically VETASSESS or TRA).

Whilst the rewards are high, the road to a permanent resident 175 visa is a long one – it takes 18 months to 2 years or more to get a visa.

One of the key requirements is that the nominated occupation be listed on the Skilled Occupation List Schedule. Unfortunately, vehicle painters and panel beaters have recently been removed from Schedule 1, meaning that the independent path is no longer available to them. But there are other options – see below.

 

Employer sponsored visas (457 Subclass)

As part of the Federal Government’s plans to control the types of workers coming here, and in order to satisfy union and industry-group concerns about the employment chances for the current Australian residents and citizens, there has been a move away from the Independent Skilled Migration visa (supply driven) and more focus on employer-sponsored (demand-driven) visas.

The 457 visa is a four year temporary residency visa. This has the disadvantages outlined above (international student fares, no access to free public health care, no access to Centrelink benefits and so on).

There is one major benefit however. Unlike the one to two year wait for an independent visa, 457 visa applicants generally receive their visa within 8-12 weeks. 457 visa applications are not subject to the priority queues most other visas are.

 

Approved Sponsors

Employers wishing to hire overseas workers must be approved sponsors. This requires that you show you are lawfully operating in Australia and have a strong commitment to employing local labour and non-discriminatory employment practices. Generally DIAC will require proof that you are a viable company (ie you have been in business for a while and you can afford to hire the staff you need.

 

Training benchmarks

The sting in the tail for most employers is the new training benchmark regime.

If you have been operating for more than 12 months, you must show that you are committed to training your Australian (permanent resident and citizen) staff. To do this you must have spent 1% of your gross payroll on formal training in the 12 months prior to applying for the sponsorship. This is easy to achieve if you have apprentices or trainees. For many firms however this is quite an impost. If you can’t show this level of training expenditure, you have the option of investing 2% of your gross payroll into a recognised industry training fund for the next 3 years.

Once you are an approved, you can then nominate the job positions to be filled. You must show that you have been unable to find a person locally (this can be done by showing a failed advertising campaign for example).

At this time, you are now ready to hire an overseas qualified worker, providing that the nominated occupation is on the list of approved occupations for the 457 visa.

Minimum wage

Another sting in the tail for some industries is the requirement to pay employees a minimum wage (known as the Temporary Skilled Migration Income Threshold (TSMIT)). The TSMIT is indexed to inflation and is currently set at $49,330 (excluding superannuation) for most occupations.

For many employers in regional areas this is not sustainable. If the employer hires other workers performing the same job, the overseas worker must be paid the same wage. If this wage is less than TSMIT then the other employees must be paid more to at least match the TSMIT or the employer will not succeed in a nomination application. This is often a show stopper where workers are on industry award rates which are less than the TSMIT.

One of the key advantages of this visa from the employer’s perspective is that the employee only holds a valid visa whilst they are employed by you. If leave your employment for whatever reason they have 28 days in which to find another approved business sponsor before their visa runs out. This creates a form of golden handcuff, and there have been numerous reports of employers behaving badly (eg requiring employees to work overtime for free, not paying proper entitlements etc), with employees too afraid of losing their visas to complain.

The good news for readers of this article is that, as of July 14 2011, the following trades are still on the 457 list:

• Panelbeater
• Vehicle Body Builder
• Vehicle Trimmer
• Vehicle Painter

Employer sponsored visas (eg 121,856 Subclass)

There is also a permanent visa option for employer-sponsored workers. The typical pathway is that the worker (who must be under 45 years of age and have vocational level English) will have worked full-time in Australia in the nominated occupation on a 457 visa for the last two years (including at least the last 12 months with the nominating employer), or they have had their skills formally assessed by TRA or VETASSESS and have at least three years full-time work experience in the occupation.

In this case, an employer may agree to sponsor their worker for a permanent residency visa. The downside from the employer’s perspective is that the employer no longer has any control over the employee at that time. Once an employer has been granted permanent residency they are free to work for whomever they like, wherever they like.

 

State/Territory Sponsored temporary residence Visas (eg 176,487 visas)

The majority of interested workers, and particularly those over 40, those who learnt on the job and have no formal qualifications, and/or those where English is their second language, will find it difficult to meet the new points test regime. For these people, the independent path is not an option.

It is also difficult for workers overseas to find an interested employer prepared to go through the somewhat complex and bureaucratic task of becoming an approved business sponsor. Many employers are not interested in employing someone unless they already have a valid work visa. This is perfectly understandable.

The States and Territories have recognised this dilemma. They are keen to attract skilled workers to their shores. This is particularly relevant in Western Australia with the mining industry absorbing many local workers, and in Queensland still recovering from the devastating floods.

The States and Territories will sponsor qualified workers. This means that the workers do not need to find an employer to sponsor them. The sponsorship is worth points and these extra points are often enough to enable workers to qualify for a permanent residency visa.

It is also easier to obtain a visa for those willing to work in regional areas.

Each State and Territory issues lists (State Migration Plans) of which workers they are interested in sponsoring. These lists are updated regularly and are drawn from a pick list issued by the Federal Government (typically annually).  As of July 14 2011, Panelbeaters, Vehicle Body Builders, Trimmers and Painters are still on the States/Territories pick-list.

Presently, the States/Territories are sponsoring as follows (this is subject to change):

State/Territory	Occupations being sponsored include:	Comments
ACT	Motor Mechanic, Motorcycle Mechanic, Auto Electrician, Panel beater, Vehicle Painter	New list likely in September
Northern Territory	Motor Mechanic, Motorcycle Mechanic , Auto Electrician, Panel beater, Vehicle Painter	At least 3 years relevant experience unless already living and working in NT.
NSW	Panel beater	Murray region, Northern Inland
	Vehicle Painter, Auto electrician	Murray Region
	Motor Mechanic (general)	Northern Inland
Queensland	No motor trades
South Australia	Motor Mechanic, Motorcycle Mechanic , Auto Electrician, Panel beater, Vehicle Painter	Conditions apply which essentially limit applicants to international students under 45 years of age who studied in SA, have already started working in the occupation and live in SA.
Tasmania	Motor Mechanic, Motorcycle Mechanic, Auto Electrician, Panel beater, Vehicle Painter	Must obtain job offer or strong interest from a local employer. Overall IELTS of 6.5 and 2+ years of relevant experience.
Victoria	Motor Mechanic, Auto Electrician, Panel beater, Vehicle Painter	Minimum 5 years experience
Western Australia	Auto Electrician, Motor Mechanic

 

IELTS is the International English test. Most native English speaking workers can score 6s in each of the four categories (reading, speaking, writing and listening). The test is NOT easy however and it is advisable to brush up on your writing skills before attempting the test.

The State/Territory sponsored path provides all the benefits of a permanent residence visa as well as allowing the worker to choose which employer they work for.

The drawback with this option is that the States and Territories reasonably expect that the worker will in fact stay in the State/Territory to work and not just leave as soon as they get granted their permanent visa. Workers are required to sign an undertaking (which currently is not legally enforceable) that they will live in the State/Territory for 2 years. This is a small price to pay for a permanent residency visa.

 

July 1 2012 changes

On July 1, 2012 a completely new system will be introduced for general skilled migration. It should not impact negatively on the 457 system but will significantly impact the State/Territory sponsored visas and independent general skilled visas.

Under the proposed system, prospective employees must submit their details. The cream of the crop (based on their points score) will then be invited to apply for a visa on a quarterly basis.

This will allow DIAC to better control who they let in the door (currently if you meet the criteria they must grant you a visa). Under the proposed regime, there will be a discretionary element. This system has been used in NZ for some time with great success.

How this will work in a federal system, with State and Territories vying for workers, remains to be seen.

For more information: www.migrationmatters.com or email info@harriswake.com

 

Owen Harris is the principal lawyer, migration agent and the co-owner of Harris Wake, Migration Matters and Skill Matching all of which provide migration and legal advice to employers, and those seeking to come to Australia to work, as well as recruitment services linking employers with prospective employees.

Owen is very empathetic to the current plight of the industry. His father David is a retired panel-beater and spray-painter with over 40 years’ experience in the industry.