Australia: What is the New Sponsorship Accreditation Scheme?

Last Updated: 14 September 2011

By Ron Kessels & Ashleigh Whittaker

Of great interest to many businesses is the recent announcement from the Department of Immigration and Citizenship (DIAC) of the introduction of a sponsor accreditation scheme which aims to offer priority processing of subclass 457 applications to certain eligible sponsors who meet additional requirements.

Accredited status can be applied for starting 1 November 2011, as part of an existing Business Sponsorship agreement, or as part of a new sponsorship application. Once accredited, sponsors will have access to 'priority processing' for all future subclass 457 nomination and visa applications during the validity of the agreement. We understand that the agreement will be for a period of six years (rather than the usual three years) and would aim to reduce processing times for subclass 457 nomination and visa applications to five working days.

The criteria to become accredited are in addition to the regular legislative requirements for approval as a sponsor and are designed to identify larger users of the program and sponsors with a good track record under the subclass 457 program. We understand that the scheme will be implemented through a policy directive on processing priorities.

This announcement follows other recent announcements by the Government relating to meeting business needs. These include additional funding and the opening of the Brisbane Centre of Excellence aimed at reducing current processing times to ten working days, the reduction of subclass 457 nomination and visa application processing times for companies within the resources sector to five days, the introduction of Enterprise and Regional Migration Agreements to facilitate the entry of foreign workers on 'mega' projects and in regional areas where currently there is significant skilled shortages in the resources and healthcare sectors and in trades and professions.

Key requirements as announced by the Government for sponsors to access this scheme include:

  • a minimum of AUD4million turnover per year in the three years prior to applying;
  • a workforce that is made up of at least 75 percent Australian workers, and a demonstrated commitment to maintain this level;
  • a valid collective or enterprise agreement that will cover all sponsored subclass 457 visa holders earning less than AUD180,000;
  • active subclass 457 visa business sponsorship in the three years prior to applying, without any interruption of more than six months and no interruption due to a DIAC sanction;
  • no record of noncompliance with DIAC or the Department of Education, Employment and Workplace Relations (DEEWR), including no formal warnings or sanctions;
  • an approval rate of at least 97 percent for subclass 457 applications submitted in the three years prior to applying;
  • successful sponsorship of at least 30 subclass 457 visa applications in the 12 months prior to applying; and
  • submission of a high rate of decision-ready applications in the two years prior to applying.

Accredited sponsors must continue to meet each of these additional requirements for the duration of their sponsorship agreement. Failure to do so will result in the revocation of their accredited status and the termination of their access to priority processing. We are unclear as to how the Government will monitor this during the lifetime of a sponsor's accredited status.

The additional criteria appear quite restrictive and raise questions over the purpose of the scheme and who might practically be able to access and benefit from this scheme.

The scheme is clearly targeted at larger organisations, as a sponsor must demonstrate an annual turnover of at least AUD4million for the past three years and have been granted at least 30 subclass 457 visas in the last 12 months. It appears DIAC is also concerned that sponsors will use the program for genuine employment purposes and is seeking to measure this by requiring that a sponsor's visa refusal rate for the past three years be less than 3 percent.

There is then the requirement for a sponsor to have lodged a high level of decision-ready applications over the previous two years. Exactly what constitutes "high level" or "decision ready" has not been explained, however this would most likely include regular lodgment of applications where all the necessary documentation has been provided at the time of application.

One requirement which has caused particular concern is the need to demonstrate that there is no adverse information known about the sponsor, based on DIAC and DEEWR monitoring, including any formal warnings and sanctions. Whilst the incidence of formal sanctions, including sponsorships being cancelled or barred, still remains low overall, DIAC's use of warnings for breaches, such as late notification of cessation of employment, has been much more common. Where a sponsor has received a warning in response to a monitoring request it is not yet clear whether this will in itself exclude the sponsor from accreditation, or whether this will be considered in light of the sponsor's overall compliance with the subclass 457 visa program. This concern is heightened by the varied approach we have seen over the past two years by the Centres of Excellence in Melbourne, Perth and Sydney in the issuance of formal warnings and sanctions.

Perhaps of most concern is the need for a sponsor to have a valid collective or enterprise agreement that will cover all subclass 457 visa holders earning less than AUD180,000. As all employees in Australia are protected by National Employment Standards under the Fair Work Act 2009, and sponsors are further bound by their obligations to subclass 457 visa holders under the Migration Act 1958, there are arguably already sufficient mechanisms in place to protect employees from exploitation. The additional requirement for a collective or enterprise agreement, therefore, seems unnecessary. Furthermore, employers are not obliged to enter into a collective or enterprise agreement to cover any or all of their employees. There is some argument that this criteria discriminates against an employer for not having such an instrument in place, which may amount to a breach of the Fair Work Act.

Fragomen has raised concerns about the scheme and its criteria and is currently engaged in discussions with DIAC. We will be providing further information as it comes to hand.

For further information please contact your usual Fragomen representative.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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