Is the 457 visa scheme working well?

The Senate Legal and Constiutional Affairs Committee is conducting an inquiry into the framework and operation of subclass 457 visas, Enterprise Migration Agreements and Regional Migration Agreements. Adelaide Law School’s Dr Joanna Howe, Associate Professor Alexander Reilly and Professor Andrew Stewart made a submission to the inquiry, and on Thursday, 23 May, Dr Joanna Howe gave evidence before the Committee. In this post, Joanna explains the Committee’s concerns and the position put forward in the submission to address these.

Last week I gave evidence to the Senate’s Legal and Constitutional Affairs Committee’s inquiry into 457 visas. There appeared to be two central concerns to the Committee: first, the extent to which the current 457 visa scheme was open to abuse and rorting by employers; and second, the ways in which the current scheme could be reformed so that it more effectively meets skill shortages in the domestic economy. The written submission drafted by Associate Professor Alexander Reilly, Professor Andrew Stewart and myself focused on these questions so we were well placed to address the Committee’s concerns.

With regards to the extent of rorts, it is clear that this exists on the margins.[1] The vast majority of employers use 457 visas appropriately. However, in cases where an employer has an ulterior motive for using a 457 visa (ie. for a motive other than to fill a domestic skill shortage) there may be a greater chance for rorts or exploitation to occur. This is when an employer may use a 457 visa to sponsor low and semi skilled workers (despite the intention and design of the 457 scheme being for highly skilled workers) or to create a more compliant and perhaps non-unionised workforce. I drew the committee’s attention to the literature which suggests there are some features of the 457 visa program which render temporary migrant workers more vulnerable to exploitation than Australian workers. This vulnerability is exacerbated when an employer has an ulterior motive for seeking to sponsor a 457 visa worker. There is a growing body of research to suggest that there are other advantages for employers in using the subclass 457 visa scheme that may incentivise use of the scheme in areas where skill shortages do not exist.[2]

In terms of how the 457 visa scheme could be improved, our submission concentrated on reforming the process for identifying whether an occupation is in skill shortage in the domestic economy. The current mechanism for doing this is the Consolidated Skilled Occupations List which is a very lengthy list inclusive of over 600 occupations, many of which are clearly not in shortage. An obvious example is that of print journalists. Under the current 457 visa scheme, so long as an employer nominates an overseas worker to perform an occupation on this list, then the occupation is deemed to be in shortage. Our submission focused on how this list could be more closely attuned to skill shortages. In particular, we suggested that the Australian Workforce and Productivity Agency be given responsibility for compiling this list based on independent labour market testing. This suggestion was well received by the Committee members and supported by the oral evidence given by our ANU colleagues from the Migration Law Legal Workshop program.

For more detailed information on this proposal and the other ideas in our submission, click here.

We await the Committee’s final report with interest.

Dr Joanna Howe

[1] For example, see: SBS report of an Italian national being sponsored on a subclass 457 visa as a restaurant manager but being actually employed as a waiter: SBS,  ‘Are 457 visa holders being exploited?’, 5 November 2012, <> (Accessed 10 December 2012). For emerging evidence of exploitation of foreign workers in the restaurants and hospitality industry more generally, see: Fair Work Ombudsman v Taj Palace Tandoori Indian Restaurant Pty Ltd & Anor [2012] FMCA 258 (30 March 2012); WA News, ‘Perth cafe receives record fine for underpaying migrant workers’, September 29, 2011, <> (Accessed 1 December 2012); Fair Work Ombudsman, ‘Fine imposed for underpayment of foreign workers in Adelaide and Brisbane’, Media Release, 13 February 2013; Fair Work Ombudsman, ‘Court action over alleged underpayment of foreign workers in Tasmania’, Media Release, 26 January 2013; Fair Work Ombudsman, ‘Perth sushi cafe back-pays two foreign workers almost $50,000’, 14 July 2011.

[2] J Tham and I Campbell, Temporary Migrant Labour in Australia: The 457 Visa Scheme and Challenges for Labour Regulation, Working Paper No.50, Centre for Employment and Labour Relations Law, The University of Melbourne, March 2011; B Birrell and E Healy, Immigration Overshoot, CPUR Research Report, Centre for Population and Urban Research, November 2012; Andrew Newman, ‘The Legal Precariousness of Temporary Migrant Work: Common Regulatory Challenges to Security of Employment in Canada and Australia’, Paper presented to the Australian Labour Law Association Conference, 16-17 November 2012, Rydges Hotel Canberra; J Tham and I Campbell, ‘Equal Treatment for Temporary Migrant Workers and the Challenge of Their Precariousness’, Paper presented to the Australian Labour Law Association Conference, 16-17 November, Rydges Hotel Canberra; J Howe (2010) ‘The Migration Amendment (Worker Protection) Act 2008: Long overdue reform, but have migrant workers been sold short?’ 24 Australian Journal of Labour Law.

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