Labour agreements play an important role in helping approved businesses to sponsor skilled overseas workers when there is a need that cannot be met in the Australian labour market. These agreements are designed to provide a solution when the standard temporary or permanent visa programs are not available. This article provides a comprehensive overview of labour agreements in Australia.
What are Labour Agreements?
Labour agreements are agreements between the Australian Government (represented by the Department) and employers. These agreements are established to support the needs of businesses that require skilled overseas workers but are unable to fill the positions with local labour.
Labour agreements are generally valid for five years and provide for visas to be granted under one or more of the following visa programs:
Types of Labour Agreements in Australia
Employer Information Labour Agreements are customized to fit the unique needs and characteristics of each employer. There are five types of Labour Agreements, including:
- Industry labour agreements
- Company-specific labour agreements
- Designated area migration agreements
- Project agreements
- Global Talent Scheme (GTS) agreements
We first 3 will be explained in further detail below as they are the most popular.
Note: Immigration policies provide a comprehensive set of guidelines for businesses to follow in order to be approved for a Labour Agreement. Although these policies are not legally binding, they serve as a useful guide for how the Department is likely to interpret and apply migration provisions to each application.
Due to the complexity and large volume of material involved, it is beyond the scope of this article to outline all requirements or consider every possible scenario. For this reason, it is highly recommended that businesses seeking a Labour Agreement seek professional advice.
What are Industry Labour Agreements?
Industry labour agreements are agreements that have been specifically designed for a particular industry. They outline the terms and conditions of sponsoring overseas workers for temporary or permanent residency in Australia.
Some industries have entered into overarching labour agreements with the Department, which allows individual employers from those industries to seek their own labour agreement.
If a business operates in an industry with a labour agreement in effect, their individual agreement, upon approval, will conform to the terms specified in the industry-wide agreement. No exemptions or concessions, can be requested by the business as these were already negotiated during the industry-wide labour agreement’s creation.
The types of industries that already have an industry labour agreement are:
On-hire Industry Labour Agreement:
The On-hire Industry Labour Agreement enables you to sponsor skilled overseas workers for temporary stays in certain occupations. You must remain the direct employer, even if the workers are assigned to work for a third party. The terms and conditions of the agreement are non-negotiable.
Restaurant (premium dining) Industry Labour Agreement
The Restaurant (premium dining) Industry Labour Agreement lets you sponsor skilled overseas workers in Australian premium quality dining restaurants as cooks, chefs, café or restaurant managers and trade waiters for periods of up to 4 years and/or for permanent residence. The terms and conditions of the agreement are set and non-negotiable.
Horticulture Industry Labour Agreement (HILA):
The Horticulture Industry Labour Agreement (HILA) became available for businesses on 1 January 2020. It’s worth noting that from 1 November 2021, new regional concessions were incorporated into the dairy, fishing, meat, and pork industry labour agreements. Changes to the horticulture industry concessions will be available soon.
Dairy Industry Labour Agreement:
The Dairy Industry Labour Agreement allows you to sponsor skilled overseas workers in the occupations of ‘Senior Dairy Cattle Farm Worker’ and ‘Dairy Cattle Farm Operator’ for temporary stays of up to 4 years and/or permanent residency. The terms and conditions of the agreement are non-negotiable, however, the concessions available under the agreement can vary based on the visa subclass and the designated regional location of your business.
Fishing Industry Labour Agreement:
The Fishing Industry Labour Agreement enables you to sponsor skilled overseas workers in six identified occupations for temporary stays of up to 4 years and/or permanent residency. As with the dairy industry agreement, the terms and conditions of the agreement are non-negotiable, and the concessions available will vary based on the visa subclass and the designated regional location of your business.
Meat Industry Labour Agreement:
The Meat Industry Labour Agreement allows you to sponsor skilled overseas workers in the occupation of ‘skilled meat worker’ for temporary stays of up to 4 years and/or permanent residency. The terms and conditions of the agreement are non-negotiable and the concessions available will vary based on the visa subclass and the designated regional location of your business.
Pork Industry Labour Agreement:
The Pork Industry Labour Agreement allows you to sponsor skilled overseas workers in the occupation of ‘senior stockperson (piggery)’ for temporary stays of up to 4 years and/or permanent residency. The terms and conditions of the agreement are non-negotiable, and the concessions available will vary based on the visa subclass and the designated regional location of your business.
The Advertising Industry Labour Agreement lets you sponsor skilled overseas workers in the following five occupations:
- Advertising Specialist
- Graphic Designer
- Multimedia Designer
- Web Developer
The sponsorship periods are up to 4 years and/or for permanent residence. To request an Advertising Industry Labour Agreement you must receive endorsement from the Media Federation of Australia (MFA) and The Communications Council (TCC). The terms and conditions of the agreement are set and non-negotiable.
Minister of Religion Industry Labour Agreement
The Minister of Religion Industry Labour Agreement enables you to sponsor skilled overseas workers in the occupations of the Minister of Religion or Religious Assistants for temporary stays of up to 4 years and/or permanent residency. There is an immediate permanent pathway available under this agreement, but it’s only available to applicants who hold the most senior Minister of Religion position in the religious organisation in Australia or a State/Territory region of Australia. The terms and conditions of the agreement are non-negotiable.
As per immigration policy, if a business operates in an industry that has an existing industry agreement, they typically cannot obtain a separate labour agreement (such as a company-specific agreement). In such instances, individual requests must be granted by the Minister of Immigration.
What is a Company Specific labour agreement?
A company-specific labour agreement is a negotiated agreement between an employer and the government that allows the employer to bring in skilled overseas workers to fill positions that cannot be filled by Australian workers. This type of agreement is only used in exceptional circumstances where a genuine skills need exists, and a standard skilled visa program or designated area migration agreement is not in place.
Requirements for a Company-Specific Labour Agreement
To secure a company-specific labour agreement, you must demonstrate the following:
- Skill Needs You must provide evidence of your exceptional need for niche skills that cannot be met by Australian workers. This includes providing information about the skills you seek from overseas, your recruitment efforts, and a detailed job description. The positions must be at the Australian and New Zealand Standard Classification of Occupations (ANZSCO) occupation skill level 1 to 4. For businesses located in Category 3 regional areas of Australia, consideration may be given to positions equivalent to ANZSCO skill level 5 in exceptional situations.
- Skilled Overseas Workers The skilled overseas workers you bring in must meet the ANZSCO skill requirements for that occupation and any industry registration or licensing requirements. Concessions to standard visa eligibility requirements for the Temporary Skill Shortage visa (subclass 482) and Skilled Employer Sponsored Regional (Provisional) visa (subclass 494) may be requested in a company-specific labour agreement business case. These concessions may extend to the English language, salary, and work experience requirements. A permanent residency pathway may also be requested through the Employer Nomination Scheme visa (subclass 186).
- Workforce Needs The company-specific labour agreement is a temporary solution only. You must show that the workers from overseas will not make up more than one-third of your total workforce and that you have a plan in place to train and employ Australians. The workers from overseas must also meet the English language requirements of the short-term stream of the Temporary Skill Shortage visa (subclass 482).
- Business Standing You must be an Australian registered business with good standing and have been lawfully and actively operating in Australia for at least 12 months. You must also show evidence of financial viability and have no adverse information about your business. You must not be insolvent, nor have provided false or misleading information to any appropriate authority.
- Consultation with Industry Stakeholders You must consult with all relevant stakeholders, such as the industry body, the relevant union, and any community group that may be impacted by the agreement such as schools or health services. You must provide them with information about the number of workers from overseas in each year of the agreement, their occupations, location of their workplace, proposed salary, and details of training for your Australian workforce.
If a business aims to nominate a maximum of 2 overseas workers in skill level 1 or 2 occupations with a nominated annual salary of at least $162,000 (subject to change based on the Fair Work High Income Threshold), it does not need to follow these steps:
- Consult relevant stakeholders, including the industry body that best represents the business’s interests, the union that best represents the interests of employees in the business (even if none of the current employees are union members), and any agency or community group that may be impacted by the proposed labour agreement.
- Provide each relevant stakeholder with the following information:
- Proposed nominated occupation(s) and number of overseas skilled workers for each year of the labour agreement
- Location(s) of each nominated position
- Any concessions requested, such as English language or skill requirements
- Proposed nominated salary and explanation of how the AMSR was determined and whether an award applies
- Receive responses from stakeholders within 10 working days of the request. Follow up the request if a response is not received within this time and allow an additional 5 working days for a response.
- Submit all relevant documentation, including the request and response from each stakeholder, any additional information, and questions and issues raised, to the Department with the application.
Note: A lack of support from a stakeholder does not guarantee a refusal. The Department will consider all relevant information and make a decision based on the documentation, explanations, and strength of arguments presented.
Reliance On Overseas Workers
The Department is concerned with ensuring that the labour agreement will not have the effect of undermining employment/training opportunities for Australians. As part of its assessment of the application, the Department will examine the business’ reliance on overseas workers and whether it has demonstrated that it will take steps to reduce its reliance on overseas workers during the term of the proposed agreement.
More specifically, is the employer seeking to enter into a labour agreement as a temporary measure, such that skills can be transferred to the Australian workforce and thereby ultimately benefit the Australian community and economy? If the application instead reflects a plan to rely on the labour agreement indefinitely in meeting the needs of the business and contains no clear plans as to how it will provide training to Australians so that it can meet its labour market needs in the future, the application is likely not to meet this requirement.
If approved, the labour agreement will include a clause stipulating the following:
Overseas workers will comprise no more than one third of the business’ workforce in any one year over the term of the labour agreement; and
The business’ reliance on overseas workers will decrease over the term of the agreement.
Salary and Employment Conditions for Company specific Labour Agreements
The proposed salary and employment terms must meet the same standards as those applied to the TSS Visa program. These are outlined below.
If the nominated annual earnings (referred to as Guaranteed Annual Earnings or GAE) will be less than $250,000, the following conditions must be satisfied:
The GAE (excluding non-monetary benefits) for the nominated position must not be lower than the Annual Market Salary Rate (AMSR) for the same position. The AMSR (excluding non-monetary benefits) must not be below the Temporary Skilled Migration Income Threshold (TSMIT), unless it’s reasonable to ignore this requirement. The TSMIT is currently set at AUD $53,900.
The AMSR, as defined by migration provisions, requires the employer to prove that the nominee will receive a salary equivalent to what an Australian worker would receive for the same position, working full-time in the same workplace and location.
The GAE, also defined by migration provisions, refers to guaranteed wages, including non-monetary benefits and amounts paid on behalf of the nominee. However, compulsory superannuation contributions are excluded from the GAE.
The method for determining the AMSR is outlined in the migration provisions and depends on whether there is an equivalent Australian worker for the same position in the same workplace and location. If there is, the AMSR will be the salary of the Australian worker, and the employer must provide evidence of the salary through an enterprise agreement/industrial award or employment contract, payslips, etc. If there is no equivalent worker, the AMSR will depend on whether there is an enterprise agreement/industrial award in place. If not, the employer must explain how they determined the salary based on at least two of the following sources:
- Labour Market Insights data
- Advertisements for the same position in the last 6 months in the same state/territory
- Remuneration surveys
- Advice from employee unions or employer associations.
What is a Designated Area Migration Agreement (DAMA)?
DAMAs are a unique immigration framework that allows regions in Australia to access a larger pool of overseas workers than what is available under the standard skilled migration program. These agreements are established between the Australian Government and regional, state, or territory authorities and provide a flexible framework for regions to address their specific economic and labour market needs.
DAMAs are structured as a two-tier framework covering defined regional areas. The first tier is the overarching five-year Deed of Agreement (head agreement) signed with a Designated Area Representative (DAR). This is usually a regional body such as a Chamber of Commerce, Regional Development Australia office, or Shire Council. The second tier consists of individual labour agreements signed with endorsed employers under the head agreement for that region.
The head agreements contain a range of occupations and agreed terms and concessions to skilled visa eligibility criteria that are negotiated between the Australian Government and the DAR. Once a head agreement is established, businesses in the region may seek individual labour agreements under the head agreement terms and concessions.
Individual labour agreements are signed between the Australian Government and endorsed employers and are generally in effect for five years. They use the subclass 482 Temporary Skills Shortage (TSS), subclass 494 Skilled Employer Sponsored Regional (Provisional), and subclass 186 Employer Nominated Scheme (ENS) visa programs.
Employers must first be endorsed by the DAR before they can lodge a labour agreement request online through Immiaccount. The online form outlines the requirements and supporting documentation required for the labour agreement request.
When a labour agreement is approved, the business can nominate and sponsor skilled and semi-skilled overseas workers for specific occupations (as defined in the head agreement). Employers must also demonstrate a genuine effort to recruit Australian citizens and permanent residents before gaining access to a DAMA labour agreement.
DARs work closely with employers and stakeholders in their region to understand their unique labour needs and the broader community views. They also conduct annual reviews of DAMA terms and operation and endorse individual requests from businesses seeking access to DAMA arrangements before the business lodges a DAMA labour agreement request with the Department of Home Affairs.
What areas are cover by a Designated Area Migration Agreement (DAMA)?
There are currently 12 DAMAs in place. Below is a list of those DAMAs with links to the respective Designated Area Representative websites that contain information on how to access each DAMA as well as which regions/locations/shires are covered:
- Adelaide City Technology and Innovation Advancement, SA: Skilled & Business Migration
- East Kimberley, WA: East Kimberley Chamber of Commerce and Industry
- Far North Queensland, QLD: Cairns Chamber of Commerce,
- Goulburn Valley, VIC: Goulburn Valley
- Great South Coast, VIC: Warrnambool City Council
- Northern Territory, NT: Northern Territory Designated Area Migration Agreement
- Orana, NSW: Regional Development Australia – Orana, NSW
- Pilbara, WA: RDA Pilbara
- South Australia Regional, SA: Skilled & Business Migration
- South West, WA: Shire of Dardanup
- The Goldfields, WA: City of Kalgoorlie Boulder
- Townsville, QLD: Townsville Enterprise Limited
How can a registered migration agent help with a labour agreement?
A registered migration agent can play a crucial role in helping companies and individuals navigate the complex and ever-changing landscape of labour agreements in Australia.
For industry labour agreements, a migration agent can help assess whether a company is eligible for this type of agreement, which is typically negotiated between the government and industry groups for a specific sector. They can provide guidance on the requirements for the agreement, such as demonstrating the need for overseas workers and the steps taken to recruit local workers.
For company-specific labour agreements, a migration agent can assist with the negotiations between the company and the government. This type of agreement is tailored to meet the specific needs of a company and provides more flexible terms and conditions than other options. The agent can provide support in preparing the necessary documentation, negotiating terms, and ensuring the company is in compliance with all regulations.
For DAMAs, a migration agent can provide guidance on the application process and help the company determine if it is eligible for a DAMA. They can help with the negotiations for a head agreement between the government and the designated area representative, and assist with preparing the individual labour agreement between the government and the endorsed employer.
In general, a registered migration agent can help companies and individuals understand their options and navigate the complex labour agreement process. They can provide valuable expertise and support, helping to ensure the agreement is tailored to meet the specific needs of the company and that all requirements are met. They can negotiate terms, assist with compliance and obligations and liaise with the Department and stakeholders on your behalf to ensure a smooth process throughout. The can also assist the visa applicants with preparing and lodging their visa applications and also assist with representing clients with decision reviews.
What is the process of applying for a Labour Agreement?
An employer can apply for a labour agreement by submitting the Labour Agreement Request form on the Department’s ImmiAccount website, along with supporting documents. There is no fee for the application, but the processing time may take up to six months, in some cases longer. The application must fulfill the criteria specified for the type of labour agreement and be accompanied by appropriate supporting evidence. During the processing, the employer may be requested to provide additional information. If the application is approved, the employer will receive a copy of the proposed Labour Agreement for review and signature. Once the signed Agreement is received, the Department will confirm that it is in effect.
An employer must lodge a separate nomination application for each overseas worker they are sponsoring temporarily through the TSS or SESR visa pathway). The nomination requirements include:
- The nominated occupation must be listed in the labour agreement, or be on the skilled occupation list shown on the agreement.
- Any additional requirements specified in the labour agreement must be met.
- The “occupation ceiling” for the nominated occupation and year has not been reached. (This refers to the maximum number of nominations allowed under the terms of the labour agreement.)
For the SESR and ENS nomination, an additional requirement is that the labour agreement must include an option for permanent residency. The nomination application must be submitted online with the Department, along with all required documents.
Visa application for the Overseas Worker
Each overseas worker seeking employer sponsorship or nomination under the labour agreement must submit a separate visa application that meets all relevant requirements. The requirements will vary depending on the visa subclass, their occupation and various other factors.
What are Labour Agreements in the context of Australian immigration?
Labour Agreements are a type of immigration arrangement that allow Australian employers to bring foreign workers to Australia to fill skill shortages in their specific industry. They provide a tailored solution for employers facing skill shortages and provide a streamlined process for visa applications for foreign workers
What is a Company Specific Labour Agreement?
A Company Specific Labour Agreement is a tailored immigration arrangement made between the Australian government and a specific company. It allows the company to bring in foreign workers to fill skill shortages that cannot be met by the local Australian workforce and provides a more streamlined process for visa applications.
What is an Industry Labour Agreement?
An Industry Labour Agreement is an immigration arrangement made between the Australian government and an industry sector. It allows employers in the sector to bring in foreign workers to fill skill shortages in the industry and provides a more streamlined process for visa applications.
What is a Designated Area Migration Agreement (DAMA)?
A Designated Area Migration Agreement (DAMA) is an immigration arrangement made between the Australian government and a designated regional area. It allows employers in the designated area to bring in foreign workers to fill skill shortages and provides a more flexible process for visa applications.
What is a 482 visa nomination?
A 482 visa nomination refers to a nomination by an employer to sponsor a foreign worker for a Temporary Skill Shortage (TSS) visa. This visa allows the foreign worker to work in Australia for up to 4 years in their nominated occupation.
What is a 494 visa nomination?
A 494 visa nomination refers to a nomination by an employer to sponsor a foreign worker for a Skilled Employer Sponsored Regional (Provisional) visa. This visa allows the foreign worker to work and live in designated regional areas in Australia for up to 5 years.
What is a 186 visa nomination?
A 186 visa nomination refers to a nomination by an employer for a permanent residency visa for a foreign worker. There are two main streams for this visa: the Direct Entry Stream and the Temporary Residence Transition Stream. The 186 visa provides a pathway for foreign workers to gain permanent residency in Australia.
How do Labour Agreements benefit employers and employees?
Labour Agreements provide benefits for both employers and employees. For employers, they provide a streamlined process for visa applications and allow them to fill skill shortages in their industry. For employees, they provide a more secure pathway to work and live in Australia and contribute to the Australian economy.
It is important to note that the specific requirements and conditions for each type of Labour Agreement may vary, and it is recommended to seek advice from a registered migration agent or a specialist immigration lawyer for specific circumstances.
In conclusion, labour agreements in Australia play a crucial role in meeting the demands of businesses for skilled overseas workers. With five types of agreements to choose from, employers are able to find the solution that best suits their needs. Whether you operate in one of the nine industries with existing agreements or require a tailored solution, it’s important to understand the requirements and processes involved in establishing a labour agreement.