On 20 May 2015, the Federal Court of Australia handed down the
largest ever court imposed fine for breaching subclass 457 visa
sponsorship obligations. The offending company, Choong Enterprises
operated restaurants and cafes in Darwin, acting as a sponsor for
10 employees from the Philippines, who travelled to Australia on
subclass 457 visas.
The primary obligation of a 457 sponsor is to ensure that the
sponsored employees are employed on equivalent terms and conditions
to Australian employees in an equivalent role and location. In this
case, Choong Enterprises was not paying entitlements such as
loadings, sick leave and superannuation contributions, and was also
paying below the award minimum by paying $12 per hour.
Choong Enterprises fabricated documents in an attempt to
demonstrate compliance with its obligations, and also recovered
agent costs from the sponsored employees, which is prohibited under
the Migration Regulations 1994 (Cth).
The Court imposed penalties totalling $175,400 on Choong
In response to this finding, Senator Michaelia Cash, the then
Assistant Minister for Immigration and Border Protection, said:
"The stiff penalty this company has received should send a
warning to other sponsors: if you fail to meet your requirements,
my Department may impose administrative sanctions, issue an
infringement notice, execute an enforceable undertaking, or apply
to the Federal court for a civil penalty order."
"The overwhelming majority of businesses act in good faith
and therefore have nothing to fear, but we want to send a strong
message that if you breach your obligations, you can expect to face
True to her word, Taskforce Cadena was launched on 1 July 2015
and it has been focusing on compliance in the agricultural and food
To ensure that you are complying with your obligations as a
sponsor of subclass 457 visas, let's recap sponsorship
obligations. The nine key obligations are to:
Cooperate with inspectors in providing access to information
Ensure equivalent terms and conditions of employment
Pay travel costs to enable sponsored persons to leave Australia
at the end of their visa
Pay costs incurred by the Commonwealth to locate and remove
Keep accurate records (Choong's fabrication of records with
intent to deceive was an aggravating factor)
Provide records and information to the Minister
Provide information to the Department when certain events
Ensure the sponsored person works in the nominated
Not recover certain costs from the employee, such as migration
Under strengthened penalty provisions under the Migration Act
1958, any individual or body corporate that allows or continues to
allow an unlawful non-citizen to work, or breach their visa
conditions, or who refers unlawful non-citizens to work for a third
party, could be liable for both civil and criminal penalties. As a
compliance measure, employers should establish the citizenship,
residence or visa status and work rights of their employees, and
review the status of visa holders periodically to ensure they
remain "legal." Recruitment processes should include
review of the relevant documents, and retention of copies, and
contracts should provide for the employee to provide such further
information as may be required from time to time.
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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Recent amendments to the Migration Act and regulations, along with the imminent commencement of the new federal safety net under the Fair Work Act, highlight a number of issues for consideration by employers in documenting terms and conditions of employment for foreign nationals engaged to work in Australia under Subclass 457- Business (Long Stay) visas.
A quick refresher of the rights and obligations for employers (sponsors) when ending a 457 visa holder's employment.
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