There are three main reasons why a Labour Agreement may be chosen over a direct entry 186 visa application. These include:

  • The occupation you work in is not on the Medium to Long Term Skills Shortage List (MLTSSL);
  • You are over 45 years old;
  • You do not have competent English

We will look at each of these reasons in detail below. However, first, it is important to recap the criteria for the 186 visa subclass.

What is the Subclass 186 Visa

The 186 Employer Nomination Scheme Visa (186 visa) allows employers with a skill shortage to nominate skilled workers. This results in the 186 visa being broken into two stages: a 186 nomination (by the employer) and a 186 visa (by the employee).

Within the 186 visa there are three streams. The eligibility criteria for each stream are in the table below.

Occupations List

Skill Assessment

Work Experience (full-time)


English Language

Direct Entry (DE) Stream



3 years at any time in the past

Under 45*

Competent English*

Temporary Residence Transition (TRT) Stream



3 years on a 482/457 in the same occupation

Under 45*

Competent English*

Labour Agreement (LA) Stream

Any occupation approved in the LA


3 years at any time in the past+

Under 45+

Competent English+

*narrow exemptions may apply
+unless otherwise agreed in the Labour Agreement.

As is apparent from the above table the LA Stream is far more flexible than the other two streams within the 186 visa.

  • The occupation you work in is not on the Medium to Long Term Skills Shortage List (MLTSSL)

The most common reason for the choice to go down the LA Stream is that the occupation the employee works in is not on the MLTSSL and does not come with the narrow exemptions allowed to this under the DE and TRT streams.

Negotiating a Labour Agreement allows companies to give employees access to permanent residence that would not have any option under the other two more traditional 186 streams. We have recently assisted Personal Care Workers, Complex Avionics Instructors, and Bakers to obtain a pathway to permanent residence using this exemption.

  • You are over 45 years old

If you are over 45 years old and not eligible for one of the narrow exemptions to the age criteria (salaries over $162,000 and doctors working in regional areas) a Labour Agreement is your best option to achieve permanent residence.

The LA Stream in the 186 visa allows employers to negotiate with the Department of Home Affairs to obtain approval to sponsor employees over 45 years of age.

  • You do not have competent English

If you are unable to achieve competent English (the equivalent of 6 in each module in an IELTS test) a Labour Agreement is a good option. Employers are able to negotiate to drop the English language requirement below competent English.

We recently assisted an aged care provider whose residents were from a non-English speaking background to obtain a Labour Agreement in which the English requirement for its staff was dropped to functional English.

Why choose Labour Agreements?

Labour Agreements are the most flexible option to sponsor employees for permanent residence in Australia. With the significant skills shortage, Australia is facing, we are seeing more and more Labour Agreements being approved to help employers who are desperate for staff.

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.