In brief - This article provides a reminder of what employers need to know about their current sponsorship obligations when it comes to employees sponsored on 457/Temporary Skill Shortage (TSS) visas.

Recent developments of COVID-19 have caused major disruptions to businesses and their ability to continue to operate and employ staff. As of 31 December 2019, there are 64,590 primary 457/TSS visa holders in Australia1 who will likely be affected, as businesses shut down or temporarily operate at reduced capacity. These visa holders could have their work hours reduced, be temporarily stood down or be made redundant.

The impacts of COVID-19 do not seem to be contemplated by the current employer sponsor obligations framework in regards to Leave Without Pay (LWOP) or stand down. Where there is a reduction in pay, there is likely a breach/non-compliance with sponsor obligations. The Department of Home Affairs (the Department) will assess compliance on a case by case basis. Employers should seek immigration and employment law advice to consider potential compliance implications before a decision is made to change the sponsored employee's terms and condition of employment. 

There is limited information currently available to confirm whether there are temporary concessions granted to sponsoring employers who are affected by COVID-19. We expect that further information will be released in the coming days addressing the Department's approach regarding sponsorship compliance. In the interim, we recommend that businesses wait for further information to be made available before decisions are made regarding overall operations and staffing, particularly those on 457/TSS visas. 

We present below some of the considerations employers should take into account regarding the Department's current position on common sponsorship obligation questions we have received to date in the wake of this global health crisis.

Key points

1. Employers need to be aware of their sponsorship obligations and maintain ongoing compliance with these obligations.

2. Changes in the terms and conditions of employment of a sponsored employee can trigger certain sponsorship obligations and notification requirements to the Department.

3. There are no exemptions because of COVID-19 from employer sponsor obligations requirements or visa conditions 8107/8607 in regards to LWOP or stand down. Where there is a reduction in pay, there is likely a breach/non-compliance with sponsor obligations.

Employer sponsor obligations

Employers who sponsor employees on 457/482 TSS visas are subject to a set of sponsorship obligations. Some of the obligations apply beyond the term of sponsorship approval. For a full list of Standard Business Sponsorship obligations, please see here.

Failure to comply with sponsorship obligations can result in business sponsorship cancellation and/or fines and sanctions imposed. Businesses who do not comply are named and shamed on the Department's website.

The Department of Home Affairs sponsor monitoring unit conducts site visits and audits sponsoring employers. If a monitoring request is issued, employers will need to be in the position to provide a response by providing the requested information and address any identified breaches of sponsorship obligations.

Common sponsorship obligation questions during COVID-19

Question: Can I reduce the TSS visa holder's current work hours?

Department's current policy position:
Yes - but only if it is in connection with:

  1. Return from parental leave

  2. Sick leave or work based injury

  3. Significant personal reasons

and:

  1. The pro-rata hourly rate of the approved nominated salary of the sponsored person does not decrease

  2. There has been no change in the role and duties in the nominated occupation.

  3. This arrangement is mutually agreed upon by the sponsor and sponsored person and documented.

Under employment law obligations such changes cannot be made unilaterally. Reference should be had to the employee's Award, Enterprise Agreement, Contract and the Fair Work Act before implementing such a change.

Relevant Sponsorship Obligation/visa condition: Reg. 2.79
Obligation to ensure equivalent terms and conditions of employment
 
Reg. 2.86
Obligation to ensure primary sponsored person works in nominated occupation

Assessment: Yes, but under very limited circumstances. A COVID-19 shutdown does not fit within any of the categories listed above.
 
A reduction in work hours will not meet sponsorship obligations as actual earnings will be less than the nominated earnings. This will be considered as an underpayment, which is a breach of a sponsor obligation.
 
However, action will not be taken against employers in all instances where there has been an identified breach. The Department will assess breaches on a case by case basis.
 
This suggests that there may be scope to reduce hours provided that there are no changes made to the TSS visa holder's hourly rate or role and work duties and that it is mutually agreed.
 
Again, reference should be had to the specific employment obligations including an employee's Award, Enterprise Agreement, Contract and the Fair Work Act before implementing such a change.

 

Question: Can I temporarily stand down a TSS visa holder?

Department's current policy position: If a TSS visa holder is temporarily stood down due to downturn in the industry, they may be considered to have ceased employment and the visa holder may be in breach of condition 8607 if:

  1. the Department has not been advised accordingly; and

if more than 60 consecutive days has elapsed since lay-off.

Relevant Sponsorship Obligation/ visa condition: Visa condition 8607 - must not cease employment for more than 60  consecutive days

Assessment: Yes. It appears that a temporary stand down period of less than 60 days is not considered a breach of condition 8607.
 
Employers should consider whether the TSS visa holder is still required to fill a full time positon in the business if circumstances do not change at the end of the 60 days.
 
You must also consider your employment obligations in regards to such changes. Reference should be had to the Fair Work Act, contracts and, Awards, Enterprise Agreements to determine whether you can stand an employee down without pay. 

 

Question: Can I put the TSS visa holder on Leave Without Pay (LWOP)?

Department's current policy position: LWOP is generally acceptable if it is for maternity/paternity leave, sick leave, a work based injury, or significant personal reasons.
 
LWOP should normally not exceed three months, unless the sponsor is obliged to provide the leave under Australian workplace laws.
You must also consider your employment obligations in regards to such changes. Reference should be had to the Fair Work Act, contracts, Awards and Enterprise Agreements to determine whether you can stand an employee down without pay.  

Relevant Sponsorship Obligation/ visa condition: Reg. 2.79 Obligation to ensure equivalent terms and conditions of employment.
Condition 8607

Assessment: No - if it is a COVID-19 related stand down. Business downturn does not appear to meet policy guidelines regarding LWOP and will not necessarily meet the stand down provisions of the Fair Work Act either
 
Yes - if LWOP is required due to mandatory self-isolation or recovery from contracting COVID-19. This would satisfy LWOP policy guidelines, in that accrued personal leave might be available as an alternative to LWOP.

 

Question: What are my obligations if I have let a TSS visa holder go/terminated their employment?

Department's current policy position:
Notification to the Department is required within 28 days of cessation date of employment.
 
Pay travel costs if a written request is received within 30 days and notify the Department within 28 days of actioning the request.

Relevant Sponsorship Obligation/ visa condition: Reg. 2.84 Obligation to provide information to Immigration when certain events occur.
 
Reg. 2.80 Obligation to pay travel costs to enable sponsored persons to leave Australia.
 
Reg. 2.81 Obligation to pay costs incurred by the Commonwealth to locate and remove unlawful non-citizen.
 
Condition 8607 - must not cease employment for more than 60 consecutive days.

Assessment: The TSS visa holder will have 60 days from cessation of employment to apply for another visa that they are eligible for, find another sponsoring employer or make arrangements to depart Australia.
 
If visa holders are not able to depart due to availability of flights, they should be able to remain in Australia as long as their visa is still valid and that they depart as soon as practicable.
 
If they are not able to find another employer to take over their sponsorship, they will be in breach of their visa condition 8607.
 
Employers need to ensure that sponsored visa holders do not remain in Australia unlawfully as they can be liable for costs of up to $10,000 incurred by the Commonwealth to locate and remove an unlawful non-citizen.

Compliance with the Migration Act 1958 and the Fair Work Act 2009

Please note, employers who sponsor 457/TSS visa holders must comply with both the Migration Act 1958 and Fair Work Act 2009 legislation, applicable Awards and Enterprise Agreements, contracts and any other relevant federal or state legislation at all times. 

A sponsored person’s terms and conditions of employment that meet the requirements under the Migration Act will not automatically meet the requirements under the Fair Work Act. It is important that professional advice is sought to ensure that all relevant obligations are discharged on both sides.

_______________________________
1 Department Home Affairs: Temporary Resident (Skilled) report 31 December 2019 Summary of key statistics and trends: https://www.homeaffairs.gov.au/research-and-stats/files/temp-res-skilled-rpt-summary-31122019.pdf

This is commentary published by Colin Biggers & Paisley for general information purposes only. This should not be relied on as specific advice. You should seek your own legal and other advice for any question, or for any specific situation or proposal, before making any final decision. The content also is subject to change. A person listed may not be admitted as a lawyer in all States and Territories. © Colin Biggers & Paisley, Australia 2020.

Related Articles