Temporary worker exploitation and the politics of people

On 17 March 2016 the Senate Education and Employment References Committee released their report on temporary work visa holders and its effects on Australia’s labour market. The title of the report, A National Disgrace: The Exploitation of Temporary Work Visa Holders, gives a pretty clear indication of what the report has found.

The report addressed concerns from many different angles and for many different temporary visa categories: employer sponsored (457) visas, student visas, Special Category visas, temporary graduate, and working holiday makers, to name a few. It also looked at the impact overseas nationals had on the training, skills and graduate opportunities of Australians.

The committee made 33 recommendations for reforms. Some can be said to be straightforward and logical, others, if implemented, would have a profound impact on Australia’s migration programmes, and in particular the 457 regime. The more contentious recommendations, in this author’s opinion, to the 457 programme are:

• The Temporary Skilled Migration Income Threshold (TSMIT) be indexed to average full-time weekly ordinary time earnings (AWOTE) as at 1 July 2015 and that indexation occur each financial year. The AWOTE for the period of 1 May 2015 – 31 October 2015 according to the Commonwealth Superannuation Corporation was $1499.30. This would mean that the TSMIT would be in the order of just under $78,000 per annum, which would place a number of occupations well out of the realm for business to nominate.
• Employers sponsoring a 457 visa professional would be required to also employ an Australian tertiary graduate in the same enterprise on a one-for-one basis. Alternatively, employers sponsoring a 457 visa trade worker would be required to demonstrate that apprentices represent 25 per cent of the sponsor's total trade workforce (with the threshold for this requirement being the employment of four or more tradespersons). Just how this can be enforced is something to ponder especially if it became a sponsor obligation.
• The current training benchmarks be replaced with a training levy set at up to $4000 per 457 visa worker. While the end of the training benchmark would be taken as good news by many, the extraordinary levy of $4000 per nomination proposed by the ACTU would be the equivalent of 2% of a $200,000 per annum salary. The previous review suggested a levy of between $400 and $800 per worker.

A person with a jaded outlook would view the above recommendations and accompanying submissions to the inquiry as tainted with the political outcomes their authors are trying to ultimately achieve. From unions, to large corporate immigration firms, and industry associations, it leaves a layperson with the impression that small and medium employers have no business using the 457 visa programme to assist them with their business objectives. Many would say that they are the reason for the ills in the report, however, some allegations of breaches and misdeeds came from very large companies. Examples cited include clauses in an employment contract that required the 457 visa holder to pay for their return travel costs, and a worker who was made redundant and effectively replaced by an overseas national.

What is startling is the lack of recognition given to the just how the 457 programme has adjusted by changes to other parts of the migration framework. For example, the report questions the correlation between the number of 457 visas granted to the unemployment rate (at page 45):

However, a similar association between the unemployment rate and the granting of visas did not materialise between 2010-11 and 2012-13. During this period, the unemployment rate rose from approximately five to five and a half per cent and yet grants for primary 457 visas also rose from approximately 45 000 to approximately 70 000.

Someone should have pointed to the possible effect of changes to the independent General Skilled Migration (GSM) programme may have had on 457 visas, namely that on 8 February 2010 the Migration Occupation in Demand List was abolished and was later replaced by a Skilled Occupation List which significantly reduced the nominating occupations available. The aftermath of such a change meant that many overseas student who were preparing to apply for a GSM visa were now unable to. Some of these potential applicants in Australia may have found solace with their current employer on a 457 visa, which would then have presented a pathway to a permanent visa. Certainly it could account for any increase in the number of cooks and chefs being sponsored because the “traditional” independent pathway to a permanent visa had closed. Clouding this assertion is of course the impact of the global financial crisis, which many countries are still recovering from.

If the above listed recommendations are implemented, just how will Australia go about meeting its labour demands either temporarily or permanently? The SkillSelect model is grossly underrepresented in trades according to the number of invitations given in these occupations. For instance, of a total cap of 2475 for this programme year (that will end on 30 June 2016) currently only 93 invitations have been issued for chefs. Of a total number of 1134 panelbeaters there have only been 2 invitations given. Many of these occupations are better represented in the demand driven employer sponsored temporary and permanent visas. However, no doubt trade occupations would be a group of occupations severely affected by the proposed increase in the TSMIT.

The powers that be will need to give serious thought about how they want to effectively manage Australia’s permanent skilled visa programme, which along with business skills visas constitute 68 per cent of the total number of available places. Some excellent observations can be drawn on the precarious balancing acts required between:

• Permanent skilled migration and the trend of a global and temporary migrant workforce
• Specific labour shortages and the needs of rural and metropolitan Australia
• Independent and demand driven visas
• A highly responsive and fair occupation list
• Supplementing a workforce with experienced overseas nationals and providing training opportunities for young local workers

To conclude there is no confirmation yet that any of the recommendations have been implemented or are going to be implemented so nobody should be hitting the panic button just yet. However, with a federal election this year, you can expect that all aspects of Australia’s migration programme will feature heavily in the chase for votes.