Employer Nomination Scheme

Under the current system there is no requirement to prove that an Australian cannot be found to do the job. No advertising or explanations are required in this regard.

In most cases the employer must convince the Australian Government that it:

• Is lawfully operating a reputable business in Australia. All types of businesses are eligible to apply (companies, trusts, partnerships, sole proprietors, franchisees, etc)
• Is substantial enough justify and afford the proposed worker & needs them for a genuine role
• Will employ the worker for two years at a fair market salary
• The job offered is on the government’s list (and, if the worker is upgrading from a 457 visa, is substantially the same job as they were out forward to do on their 457 visa)
• Is committed to training Australians. What is required varies.
  • When upgrading an existing worker (such as one on a 457 visa) prove that 457-sponsorship training obligations have been kept
  • When nominating a worker under the direct entry stream
    • proof of training expenditure ‘last year’ equal to 1% of the business’ payroll; or
    • documents to show money equal to 2% of the business’ payroll was donated to an industry training fund recently

Mismatch between the tasks of the job and the expectations of the Australian Government can result in visa refusal.

Information given to the Australian Government can be used for other purposes. For example,

An employer is upgrading a 457 holder to ENS. They provide a job reference to confirm the employee’s work. The reference mentions that the employee undertook some tasks which were not a part of the job approved by the Australian Government. This could result in an investigation and audit of the employer, and possibly the cancellation of their 457 sponsorship, and all 457 visa staff they have.

The worker must convince the Australian Government regarding

• Age under 50.
  • Concessions exist for Ministers of Religion, certain senior academics and scientists, very high salary earners

• English
  • 457 visa upgrades require a result of 5,5,5,5 or better on the “general” IETLS test.
  • Direct Entry applicants require a result of 6,6,6,6 or better on the “general” IETLS test.
  • Concessions exist for Ministers of Religion, very high salary earners and 457 visa upgraders who were educated in English

• Proof of skill
  • 457 visa upgrades require proof they have done their approved job for at least 2 years
  • Direct Entry applicants need a formal skill assessment, plus three years post-qualification experience is a very similar role. Exemptions exist for Ministers of Religion, New Zealand Citizens and certain senior academics and scientists
  • Concessions exist for Ministers of Religion, certain senior academics and scientists, very high salary earners and New Zealand Citizens

• Any license, membership or registration required to do their job in Australia

• No obligations to the Australian Government for employer or employee
• Results in permanent residence
  • Get unlimited travel rights for five years
  • Get full work rights
  • Have access to Australia’s free health care system (Medicare)
• Can be applied for in or out of Australia. If you apply in Australia, you can stay on a bridging visa while the application is decided.

Employers often ask us if it is better to sponsor an employee for a temporary visa, or for permanent residence. What follows is some thought provoking information, intended as a conversation starter. Get legal advice before making a commitment.

What should we do?

We recommend that employers think about these issues and decide on what ‘company policy’ will be in advance. Being pro-active means you can decide on a logical and objective policy that covers all the issues important to your situation. Even if your policy will be ‘negative’ you should plan to consult with staff about permanent residence, if only to learn their intentions.

Take the initiative and be prepared.

Should employers talk to visa-staff about permanent residence?

Yes. We recommend communicating with staff on this issue on the basis that “its just a discussion”. There is no legal requirement to offer assistance to a staff member who wants to obtain permanent residence in Australia. There are many reasons to have this discussion with staff:

• Many staff are thinking about this issue even if they do not raise it
• People get settled in Australia on temporary visas and want to know what will happen in future
• Open a channel of communication to learn what your staff want; other useful information may be obtained in the course of the discussion
• Avoid surprises; staff may seek other employment if they believe another employer is more open to discussing upgrades to permanent residence
• Employers who decide to offer to assist staff obtain permanent residence can use it as a bargaining chip, or a motivator
• In many cases staff can qualify and apply for permanent residence without the employer’s involvement or assistance; get the recognition for raising it

What policy can we have on this issue?

Your policy is your decision. There is no legal requirement. Your policy may be:

• Positive – for example “All visa-staff will be consulted about permanent residence within their first year of employment”
• Negative – for example “We do not assist employees to obtain permanent residence”
• Neutral – for example “We will consider helping employees gain permanent residence if… and on terms such as…”

Should an employer upgrade a 457-holder to permanent residence?

That is your decision. We recommend you consider the advantages and disadvantages when forming a policy on this important issue. Some of the most common factors are:

Advantages:

• Secure a 2+ year commitment – Immigration requires 2-year contract of employment, so it is not unreasonable to insist that the employee sign a 2-year contract, or even a longer contract to validate the assistance given to the employee to get permanent residence.
• Reduce liability – most 457 sponsorship undertakings cease for an employee once permanent residence is granted. Those liabilities include repatriation, medical costs, reimbursement of commonwealth expenses
• Gain loyalty – Having a planned progression to permanent residence gives the employee something to look forward to, and reduces the chance they may look to change employer. By supporting the employee’s wishes you may retain their services longer. Employees can change employers if they get a new sponsor, or qualify for some other visa (skilled migration, spouse residence, etc)
• Improve Flexibility – the 457 visa system has many inbuilt limitations. Upgrading to permanent residence would allow the employee to be a contractor, be paid commission only, be “benched” during periods of low workload, take unpaid leave, work part-time, work for non-related companies at your direction and so on.

Disadvantages:

• Employee can change employer – just like any other permanent resident. Immigration has the power to cancel their permanent visa, but only tends to act if they believe that the employee had deceived them in the residence application. Ordinarily if employee quits more than 1 year after the grant of residence and has a sound reason for doing so (such as career advancement, moving cities, etc) no action will be taken by Immigration.
• Cost – the government lodgement fees alone are over $4000 (for a single person, more for families). Lawyer fees will be in addition to that and will vary depending on the complexity of the case. The cost may be tax deductible in the hands of the employer as an expense to secure employment (check with your accountant). The cost can be passed on to the employee contractually. Alternately, you may require the employee to pay the cost upfront.

Other factors may also need to be considered, for example: issues relating specifically to your business, employee demographics, workplace issues.

What terms should the employer offer if assisting the employee?

The terms upon which help may be offered are negotiable. Here are some common heads of agreement:

• The employee may be required to achieve agreed objectives or meet KPIs to secure the employer’s agreement to assist with a permanent residence application
• If the employer offers to pay all/part of the cost, the employee must remain with the employer for a minimum term (decided by you) or be obliged to pay back the cost of the permanent residence application (often there is a sliding scale over time)
• The employment contract can contain terms requiring repayment of various other expenses (eg training costs, travel costs) if the employee ceases within a certain number of years.

I have more questions or concerns

Please contact us to discuss. We regularly handle these matters and can advise you about any aspect of the process.

Many concessions are given to cases where the employer operates a business in a regional area and the job offered is in a regional area. Employers may need to gain the endorsement of a regional authority appointed by the Australian Government for this purpose. There is a list of post codes to define which parts of Australia are considered to be ‘regional’. We can check this for you as required.

The employee’s family may be included in the permanent residence visa. Normally a spouse and children under 18 can be included. Children over 18 can be included if they live at home and are a full time student (doing their 1st qualification). It is also possible to include certain other relatives if they live with the employee and are dependent on the employee (we can advise you about this).

For 457 visa upgrades, if a child was included on the 457 visa that child can be included in the ENS application. This is true even if they arte now independent.

We are often asked “What if the Employment Contract is terminated soon after visa grant? Or what if the employee never starts in that job?”

Different rules apply to visas approved under the ordinary scheme and under the ‘regional’ scheme.

If the residence visa is approved under the ‘regional’ scheme, special visa cancellation laws apply. Immigration expects that the visa holder will commence work in the job within 6 months of visa grant and will work in that job for at least 2 years. At the very least, it must be shown that genuine efforts were made towards achieving these goals. Immigration sets its own benchmarks on what is sufficient in that regard. Contact us immediately if you are concerned about any of these possibilities.

In any other case, after the grant of permanent residence the employee will be an Australian resident, so the normal employment laws and rules will apply to any situations. This includes termination of employment. Immigration generally only investigates a case if it appears that there was something false, misleading or dishonest about the original application. If an employee quits or is terminated after visa grant, it does not automatically mean that the visa will be cancelled. Immigration knows that employment relationships do not always last the expected duration. The situation of the employee never starting work is more likely to be investigated by Immigration; even so visa cancellation can sometimes be avoided if sufficient justifications and evidence can be provided. If you have any cause for concern, please contact us to discuss before taking action.

Please contact us for case specific advice on your matter.