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457 / TSS visa sponsors in the time of COVID-19: An employer’s (rough) primer (updated: 13 May 2020)

By May 13, 2020May 22nd, 2020No Comments

In response to the COVID-19 outbreak, governments all around the world have clamped down the borders in order to stem the transmission of the virus. Australia is no exemption. Having a well-developed immigration program means that failure to comply with obligations (for both visa holder and visa sponsors) can have significant ramifications. Despite a shifting immigration landscape, this article attempts to provide some clarity on what can and cannot be done (noting that this article is current as at 30 March 2020).

For organisations and employees who are using 457 / TSS visas, it is important to be aware of the various visa conditions and sponsorship obligations designed to ensure continuity as well as a balanced fairness between the employee, the sponsor and the Australian labour force.

This article focuses on the employer side, but we’ve also written a corresponding article for visa holders (see here).

1. What are the employer obligations if you terminate an employee?

It’s never a pleasant process to terminate an employee (from both a personal and legal perspective). When such a decision becomes unavoidable with respect to a 457 / TSS visa holder, employers need to be aware that they have a number of sponsorship obligations. The full list of obligations is detailed here. Specifically related to cessation of employment, these obligations include:

If you terminate the employee
If your business becomes insolvent

A requirement to notify the Department within 28 calendar days if the visa holder’s employment ends, or is expected to end.

If requested in writing, the business also has the obligation to pay for the return travel costs of any sponsored visa holder.

A requirement to notify the Department within 28 days if your business becomes insolvent or the entity ceases to exist.

Be aware that in these cases workplace laws will still apply.

2. What are the employer obligations for your existing employees and can you amend their wages or hours?

A sponsor has the obligation to maintain the terms and conditions that were approved in the nomination for any TSS / 457 visa holders which it employs. This includes a requirement to provide the earnings stated in the nomination application. A failure to pay this amount is in ordinarily a breach of the sponsorship obligations.

Yet, particularly in the time of COVID-19 where shut downs and restrictions wreak havoc with cashflow, a sponsor may need to renegotiate terms of employment. With respect to 457 / TSS visa holders, there may be some options:

Lodge a new nomination application

If you wish to renegotiate the salary amount of an employee (to less than what is approved in the nomination application) then a new nomination application must be lodged.

However, the new salary must meet all relevant nomination criteria (see here), including that the position must be full-time, and the salary must be at least equal to the annualised market rate.

Leave without pay (LWOP)

LWOP will generally not meet the above sponsorship obligations due to the visa holder’s earnings being less favourable than that outlined in the approved nomination.

However, policy holds that LWOP may be acceptable if it is for maternity/paternity leave, sick leave, a work based injury, or significant personal reasons.

Although policy is silent on what constitutes “significant personal reasons”, an argument might be made that when the request for LWOP is made from the visa applicant on account of say, staying at home caring for an elderly person or being unable to travel to work due to caring for children due to COIVD restrictions, LWOP might be permissible.

In these circumstances, LWOP should generally not exceed three months, unless the sponsor is obliged to provide the leave under Australian workplace laws.

For any LWOP, it is expected that:

  1. the arrangement is mutually agreed upon by the sponsor and sponsored person
  2. there is a formal application for leave without pay that has been formally approved by the employer (including leave applications that are processed and approved electronically) and
  3. a visa holder must not be forced to take LWOP and the situation must not be prohibited by the Fair Work Act or their contract of employment
Part time work

Part time work is generally a breach of the above sponsorship obligations as it necessarily leads to earnings being less favourable than the earnings in the approved nomination. Where for example, part-time work occurs due to a decline in business, change in business structure or the personal preference by the visa holder, the TSS visa or subclass 457 visa is not the appropriate program. These arrangements are viewed unfavourably and the Department is likely to consider adverse action.

However, policy holds that “action will not be taken in all instances” and that sponsorship obligations would be met where periods of part-time work occur in connection with:

  1. graduated return from maternity leave
  2. sick leave or a work-based injury
  3. significant personal reasons.

Although policy is silent, an argument might be made that when the request to work part time is made from the visa applicant and on account of significant personal reasons (e.g. they are staying at home caring for an elderly person, they are unable to travel to work due to caring for children due to COIVD restrictions), part time work may be permissible.

In such cases, the four conditions must be met:

  1. the pro-rata hourly rate of the approved nominated salary of the sponsored person does not decrease
  2. the role and duties conducted by the sponsored person remain consistent with the position approved at nomination
  3. the nominee is not employed under a Labour Agreement which was restricted to full-time arrangements only
  4. the arrangement is mutually agreed upon by the sponsor and sponsored person. Sponsors should maintain written evidence to demonstrate this agreement and document the reason for the change.

Please note that whether any of the above can be considered will vary significantly depending on the specifics of the situation. Please speak to your Hannan Tew adviser prior to undertaking any of the above.

3. Does a redundancy impact Labour Market Testing?

For TSS nomination applications, unless the nominated occupation is a ‘select occupation’, the approved sponsor must have undertaken Labour Market Testing (LMT):

  • within the 4 month period which ends on the day on which the nomination application is lodged as specified in the relevant legislative instrument or
  • since any redundancies or retrenchments have occurred – if any Australian workers have been made redundant or retrenched from the same or similar occupations in the business of the sponsor (or an associated entity) in the four months prior to lodgement of the application.

You can read our more detailed post about the LMT requirements here.

If the sponsor or an associated entity has made any Australian workers redundant or retrenched from positions in the nominated occupation in a business in the previous 4 months, the Migration Act (1994) (Cth) requires that “information” about these redundancies or retrenchments must also be provided. Specifically, this information must demonstrate that despite the redundancy, there are:

  • no suitably qualified and experienced Australian citizen or Australian permanent resident is readily available to fill the nominated position and
  • no suitably qualified and experienced eligible temporary visa holder (417 / 462) is not readily available to fill the nominated position.

4. Any questions?

Due to the fluidity of the situation regarding COVID-19 and Australia’s borders, the above should be seen as a guide only. We strongly recommend you speak to your Hannan Tew adviser if any of the above applies to you. Feel free to contact us by email at [email protected] or phone +61 3 9016 0484 for a confidential discussion.

THIS DOCUMENT DOES NOT CONSTITUTE LEGAL ADVICE OR CREATE AN ATTORNEY-CLIENT RELATIONSHIP. PLEASE CONSULT AN IMMIGRATION PROFESSIONAL FOR UP TO DATE INFORMATION.
Mihan Hannan

Author Mihan Hannan

Formerly a Senior Associate in one of Australia’s most reputable immigration litigation and review practices, Mihan is solutions focused and well versed in all aspects of Australian immigration law. Mihan also has a subscription addiction, being obsessed with tools to improve the immigration work flow.

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