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Labour Agreements

Company Specific Labour Agreements are individually negotiated agreements between an employer and the Department of Immigration and Border protection (DIBP), that allow for the employer to sponsor overseas workers to come and work for their organisation in Australia.

When can an organisation request a Labour Agreement?

A Labour Agreement may be a viable option for your organisation in circumstances where you have not been able to find suitable Australian employees to work in a given occupation(s) in your organisation after conducting extensive recruitment efforts in the Australian labour market.

For your application for a Labour Agreement to be successful, your organisation must be able to demonstrate that you have tested the domestic labour market through recent, genuine and repeated efforts to recruit Australian workers in the occupations and locations covered by your proposed Labour Agreement, and that you have been unsuccessful in retaining Australian staff notwithstanding your efforts.

Your organisation must demonstrate that the recruitment of overseas workers is only to supplement to its’ Australian workforce, and that a Labour Agreement will not undermine employment or training opportunities for Australians.

What types of visas are available to foreign workers under a Labour Agreement?

If you successfully negotiate a Labour Agreement with the DIBP, you may be able to sponsor foreign workers in a broader range of occupations eligible for sponsorship under the DIBP’s range of employer based work visas.

A Labour Agreement can be used to sponsor foreign workers to come work for your organisation through the following visas:

1. Temporary Work (Skilled) Visa (Subclass 457);

2. Employer Nominated Scheme (Subclass 186); or

3. Regional Sponsored Skilled Migration Scheme (Subclass 187).

Your request for a Labour Agreement will not be accepted if the occupation(s) you wish to sponsor foreign workers under are available through other migration avenues.

Concessions available under a Labour Agreement

The terms of the Labour Agreement, including any age based, English language based, or salary based concessions, are a matter of negotiation with the DIBP and are considered on a base by case basis.

You must have a strong business case for requesting concessions to age, English language or salary requirements applicable to the given visa your foreign workers will eventually be applying under.

English Language

Overseas workers are generally required to have achieved a score of 5.0 or more on the IELTS test, and a score of no less than 4.5 on each individual component of the test (or equivalent scores on another suitable English language test, such as the OET, TOEFL iBT, PTE or CAE tests).

There are some limited exemptions to this requirement, such as if the visa applicant holds a passport from a certain country or has studied for five cumulative years in an educational institution where all the instruction was delivered in English.

As stated above, you must have a strong business case for requesting a concession to the relevant English language requirement.

Salary

Overseas workers are generally expected to be paid the market rate, which must be no lower than the Temporary Skilled Migration Income Threshold (TSMIT), which is currently $53,900. A concession of up to 10% of the TSMIT is available in limited circumstances where an organisation has a strong business case for requesting such a concession.

Skills

Labour Agreements generally require that overseas workers have a qualification at least equivalent to an AQF Certificate III, as well as three years of relevant work experience.  In addition, overseas workers are expected to be able to meet all industry registration requirements to ensure they have skills to Australian standards.

Variations to the requirements for qualifications and experience may be considered in limited circumstances only, where supported by a strong business case.

Training Obligations under a Labour Agreement

Organisations requesting a Labour Agreement need to demonstrate that they have a strong record of, and an ongoing commitment to, training of Australians.

Throughout the term of operation of an agreement, an organisation must maintain a good record of training Australians through the provision of employment, training and career progression.

Unless varied in an agreement, one of the following training benchmarks must be met in each year the agreement is in force:

1. the equivalent of 2% of gross wages, including superannuation, paid by the employer to an industry training fund; or

2. the equivalent of 1% of gross wages, including superannuation, spent on structured training for the Australian employees of the business.

In addition, you must provide a comprehensive training plan to the DIBP. Your training plan should include details of the training you intend to provide to your Australian workforce covering the period of the requested Labour Agreement. Importantly, you should indicate how the proposed overseas workers will be able to transfer their skills to your Australian workers.

Stakeholder Consultation

As part of the application process, you must conduct extensive “Stakeholder Consultation” with the peak body that best represents to interests of your organisation, as well as the peak body that best represents the interests of your Australian employees (usually the relevant union).

This requirement is designed to ensure that employment and training opportunities for Australians remain the first priority and the recruitment of overseas workers under a Labour Agreement is demonstrably in the national interest.

It is helpful, though not critical, that you get the support of each interested stakeholder body to present to the DIBP, and thorough records of the consultation process (emails, letters, meeting notes etc) are presented to the DIBP.

Suitability of a Labour Agreement

Due to the high level of complexity, you should only consider commencing the process of applying for a Labour Agreement when there are is a significant amount of workers to be sponsored and you genuinely have had ongoing issues sourcing such employees in Australia, and can prove this with verifiable evidence of your recruitment efforts.

Contact Us

Our experienced immigration lawyers will ensure your application is given the best prospects of success.

We offer all our prospective clients an initial meeting, during which we will thoroughly explain the law surrounding Labour Agreements and related visa applications to you and inform you of the process moving forward.

To organize a initial consultation with us, please contact one of our experienced immigration lawyers on (02) 9590 3987.