As skills shortages continue to rise and the demand for international talent grows, the intersection of migration and employment law has become increasingly relevant for Australian businesses.
Navigating the complexities of these laws is critical, as compliance directly impacts the ability to onboard and retain international employees efficiently. This article provides an overview of the current regulatory landscape, key updates for corporate immigration, and practical insights into how recent employment law changes may affect your business.
Understanding Sponsorship Pathways and Visa Compliance
Businesses looking to employ foreign nationals in Australia must navigate a series of pathways, each with distinct eligibility requirements.
The Temporary Skill Shortage Visa (Subclass 482) remains a popular choice for employers seeking overseas workers, with the Temporary Work (Short Stay Specialist) Visa (Subclass 400) also a frequently-adopted option for shorter-term engagements. However, recent changes to the requirements and the decision-making policy for these visas call for careful consideration to guarantee compliance and ensure a successful visa outcome.
These changes, along with Australia’s evolving skilled and work visa programs, reflect a focus on addressing critical skills shortages. Employers must stay up-to-date to ensure compliance and make the best choices for their workforce.
Employers should also be aware of the government’s periodic review of visa regulations, as these could impact sponsorship obligations or introduce new compliance considerations.
Workforce Planning: Integrating Immigration and Employment Law
With the Australian government tightening its stance on corporate compliance, employers must ensure that their practices align with both migration and employment legislation. Comprehensive workforce planning now includes understanding visa eligibility criteria, adhering to sponsorship obligations, adhering to the requirements of the Fair Work Act 2009 (Cth) (FW Act), and preparing for potential compliance monitoring and audits.
The increasing scrutiny of corporate immigration practices emphasises the need for robust processes and internal policies to manage visa compliance effectively. Employers who fail to meet these standards could face substantial penalties, reputational damage, and even restrictions on future sponsorship opportunities.
Additional Immigration Law Considerations
Employers should be aware of several key considerations specific to Australian immigration law, particularly as they intersect with workforce management:
- Labour Market Testing: Employers sponsoring overseas workers must comply with these requirements by demonstrating genuine efforts to recruit local candidates before seeking overseas talent. Recent changes have further clarified acceptable evidence, emphasising transparency and adherence to fair hiring practices.
- Sponsorship Obligations: Approved sponsors have ongoing obligations, such as notifying the Department of Home Affairs about changes in the employment status of sponsored workers or any relevant business changes. Non-compliance with these obligations may result in penalties, suspension, or cancellation of sponsorship status.
- Visa Conditions and Monitoring: Ensuring that employees on temporary visas adhere to their visa conditions is critical. For instance, visa holders may be restricted to working only for their sponsoring employer or within specified industries or regions. Some visa holders may only have the right to work for the same employer for up to six months, or they may only work for up to 48 hours per fortnight. Employers must be aware of and understand what these visa conditions mean, and monitor that these conditions are met accordingly.
Employer Responsibilities: Sanctions, Standards, and Compliance
The National Employment Standards
The National Employment Standards (NES) are the minimum employment entitlements provided to all employees in Australia. Importantly, employment contracts with foreign employees cannot exclude the NES, nor can they provide for conditions that are less favourable than the NES.
The minimum entitlements of the NES include:
- Maximum Weekly Hours: The NES establish the maximum weekly hours of work, and the circumstances in which an employee may refuse a request to work additional hours (if the hours are unreasonable). As a high-level overview, the maximum weekly hours for a full-time employee are 38, whereas the maximum weekly hours for other employees (like part-time or casual employees) are the lesser of 38 hours and the employee’s agreed ordinary hours of work. In determining whether additional hours are ‘unreasonable’, the courts will consider work health and safety, the employee’s personal and professional circumstances, the compensation received by the employee, the relationship between the parties, the usual patterns of work in the industry, and any other relevant matters.
- Requests for Flexible Working Arrangements: Eligible employees who have worked for their employer for at least 12 months may request flexibility in their hours of work, patterns of work and/or location of work. Whether an employee is eligible for a flexible working arrangement will require an assessment of their personal circumstances (for example, their age, health status, caring responsibilities, or experience with family and domestic violence).
- Casual Employment: Since 26 August 2024, casual employees have had the ’employee choice’ pathway to permanent employment. Under this pathway, eligible casual employees can ‘notify’ their employer in writing of their intention to transfer to permanent employment. Employers must, within 21 days of receiving the request, consult with the employee and they can only reject the change in limited circumstances. Employers should seek legal advice if they receive an ’employee choice’ notification. Employers should also be aware that, for certain employees employed before 26 August 2024, the previous pathways to permanent employment (i.e. employer offer and employee right to request) remain.
- Parental Leave and Related Entitlements: Eligible employees can take unpaid parental leave when a child is born or adopted. There are strict rules around who is eligible for parental leave, how much parental leave eligible employees are entitled to, when and how parental leave can be taken, and the circumstances in which the approved unpaid parental leave can be changed or extended.
- Annual Leave: Under the NES, all employees (except casual employees) are entitled to annual leave. Full-time and part-time employees receive four weeks of annual leave, based on their ordinary hours of work. Accurately determining a part-time employee’s ‘ordinary hours of work’ is particularly important.
- Personal/Carers Leave, Compassionate Leave, Family and Domestic Violence Leave and Community Service Leave: The NES provide employees with various other types of paid/unpaid leave. Whether an employee is eligible for the leave will depend on how they’re engaged, why they require the leave, and the evidence they can provide confirming same.
- Long Service Leave: Under the NES, employees are entitled to accrue long service leave. However, the specific rules around long service leave (i.e. how much an employee accrues, when they’re eligible to take it etc) depend on the long service leave legislation in the relevant state or territory.
- Public Holidays: All employees are entitled to not work on a public holiday, but may do so if reasonably requested by their employer. If an employee does work on a public holiday, they are entitled to different pay and entitlements.
- Superannuation Contributions: Superannuation is an entitlement under the NES. Additional rules around superannuation can be found in the Superannuation Guarantee (Administration) Act 1992 (Cth), modern awards and enterprise agreements. An employee can commence proceedings against an employer to recover unpaid superannuation, provided the Australian Taxation Office has not already commenced proceedings in relation to that super.
- Notice of Termination and Redundancy Pay: Each employee’s termination entitlements will depend on their specific circumstances. The NES provide the minimum notice of termination and redundancy pay an employee is entitled to receive – which is dependent on their length of continuous service. Employment contracts and enterprise agreements can provide notice periods/redundancy pay over and above that set out in the NES.
- Fair Work Confirmation Statement and Casual Employment Information Statement: Employers must give every new employee a copy of the Fair Work Information Statement when they commence employment. If an employee is employed casually, they are also entitled to receive a copy of the Casual Employment Information Statement (at the commencement of their employment and at other set times during their period of service). The Federal Court case of Australasian Meat Industry Employees Union v Dick Stone Pty Ltd [2022] FCA 512 confirmed the importance of providing foreign employees a copy of the relevant information statements.
Sanctions
Employees can commence proceedings against their employer, where there has been a contravention of Australian workplace laws. Depending on the type of contravention, the Fair Work Ombudsman may instead commence proceedings against the employer and ‘any person involved in the contravention’. This can include the employer’s directors, human resource manager(s) and in limited circumstances, external accountants.
Fair Work Act Changes and Their Impact on Corporate Immigration
The Australian workplace and industrial relations landscape has significantly changed over the past few years, particularly with the introduction of The Closing Loopholes Act 2023 and Closing Loopholes No. 2 Act 2024. While this legislation introduced a number of new laws, we consider the following to be the most relevant for businesses employing foreign nationals in Australia:
- Fixed-Term Employment Contracts: From 6 December 2023, there have been significant limitations on the use of fixed-term contracts. In summary, a fixed-term contract cannot be longer than a period of two years, and this includes extensions and renewals. Further, employees cannot be offered consecutive contracts where the contracts are mainly for the same work and there is substantial continuity in the employment relationship. The legislation sets out the narrow circumstances in which the limitations won’t apply (for example, where the employee has specialised skills for a specific task, the employee is a high-income employee, the employee is performing essential work during a peak demand period etc). Where an employer wishes to engage an employee on a fixed-term contract, we recommend that the contract and the circumstances are reviewed to determine whether any of the exceptions to the limitations apply. Where the exceptions do not apply, a bespoke employment contract can be drafted to ensure the engagement complies with the requirements of the FW Act and the Migration Act 1958 (Cth). This is particularly relevant for, say, subclass 482 visa holders.
- Right to Disconnect: Since 26 August 2024, eligible employees have had the right to disconnect. Practically, this means employees who refuse to monitor, read or respond to contact (or attempted contact) outside their working hours are protected from adverse action, provided their refusal is reasonable. While guidance/commentary on how the courts will interpret this new right is scarce, it is clear that the ‘reasonableness’ of an employee’s refusal will be decided on a case-by-case basis.
- Wage Theft: From 1 January 2025, employers will commit a criminal offence where they are required to pay an amount to an employee (under the FW Act or an industrial instrument) and they intentionally engage in conduct that results in a failure to pay those amounts to the employee on or before the day they’re due to be paid. The new offence will only apply to intentional underpayments that happen after the provision takes effect, and it won’t apply where the underpayment occurred unintentionally or by mistake.
Preparing for the Future: Strategic Workforce Management in a Changing Legal Landscape
To assist employers with staying informed of these changes and avoid disruptions in hiring, the key steps include reviewing current workforce plans and documents in consultation with trusted legal advisors and monitoring updates from the Department of Home Affairs and Fair Work Australia.
The current legal environment highlights the importance for employers to take an integrated approach to migration and employment law. Employers are encouraged to stay proactive, seeking regular updates on regulatory changes and consulting with legal advisors specialising in both areas.
As migration and employment law continue to evolve, businesses can benefit from staying informed and preparing early to ensure compliance and seamless workforce management.
For individual advice on navigating these complex changes, the Mullins Migration and Business Services teams are well-placed to provide expert guidance to help employers meet regulatory requirements while achieving their workforce goals.
This article was written by Partner, Corina Chen, Partner, Sam McIvor and Solicitor, Bronte Jackson.