Chapter 3
Issues
3.1
The committee's short timeframe for conducting this inquiry has required
the matters discussed in this short report to be confined only to the broad,
key issues that emerged. A number of other issues were raised in submissions,
but in the time available the committee can do little more than identify these
in general terms.
3.2
It appears to the committee that there are four key issues which emerged
repeatedly during the inquiry. These were in relation to:
- obligations and enforcement; and
- the application of new obligations to existing sponsors (referred
to by some submitters as retroactive or retrospective provisions)
3.3
Other issues that the committee does not explore in detail in this
report included:
- lack of clarity about certain terms;
- employer hopping on the part of subclass 457 visa holders; and
3.4
A number of organisations that gave evidence either supported the intent
of the bill or said that it was largely unobjectionable in itself. However,
many pointed out that the bill does little more than provide a framework. The
detail, and in particular the nature of the obligations to be imposed on
sponsoring employers, will be in regulations. This detail is as yet unknown but
was a major concern to those who gave evidence. As such, many of those who gave
evidence were responding to the discussion paper on the proposal, not on the
bill itself. Many of those organisations that made submissions to this inquiry
had also responded to the discussion paper issued by the Department on Business
long stay subclass 457 and related temporary visa reform in June 2008, and
attached their responses to the paper to submissions made to this inquiry.
Need for the Bill
3.5
This legislation received a mixed response from stakeholders during the
inquiry. While many submitters were broadly supportive of the overall
objectives of the bill (some expressing concern about the details to follow in
regulations), others openly questioned the need for the initiative.
3.6
The Australian Chamber of Commerce and Industry (ACCI) submitted that
the changes 'seem disproportionate to the actual scale of sponsorship
problems.' The ACCI pointed out that according to the Department's own
statistics, published in the 2006-07 Annual report, only 1.67 per cent of
sponsors were found to have breached their sponsorship obligations.[1] The ACCI submitted
that it was concerned that a number of the measures proposed would have a
detrimental effect on Australian business, especially on small to medium enterprises.
The ACCI also thought that the cost of the measures might be prohibitive for
many businesses and would discourage the use of the program by Australian
employers experiencing genuine skills shortages.[2]
3.7
In evidence to the committee at the public hearing, the ACCI
representative reiterated the view that there were only a very small proportion
of sponsors who abused the system, and that those breaches that had come to
light had been over-sensationalised by the media.[3]
3.8
A range of other witnesses from other organisations representing
industry made similar comments. Many saw the legislation as a disproportionate
response, and the term 'using a sledgehammer to crack a nut' was used by
several. A representative of the Australian Mines and Metals Association (AMMA)
told the committee that 'we seem to be at odds as to where the justification
for such a bill comes from'.[4]
3.9
The Association of Consulting Engineers of Australia (ACEA) also
questioned the need for the legislation, telling the committee that many breaches
involving subclass 457 visa holders are in fact industrial relations breaches, rather
than breaches of sponsor obligations. The representatives said that such
breaches should be dealt with through the appropriate mechanisms.[5] The ACEA told the
committee that abuse of sponsor obligations in white collar professional
industries was extraordinarily low, and sought consideration of a two tiered
system that differentiated between migrant employees who were acknowledged as
potentially at risk, and those who were more likely to be capable of looking
after their own interests. This proposal is discussed briefly later in this
report.
3.10
The committee received several submissions from trade unions, all of
which welcomed the legislation. The ACTU submission said that, over time, there
had been a significant shift in the nature of employer demand for subclass 457
visas, with more persons in the trades and lower skilled areas entering the
country. The ACTU submitted that:
Over the past few
years, the 457 visa program has proven time and time again to be incapable of
protecting temporary overseas workers. As it is currently constituted, the
subclass 457 visa program places the rights and interests of Australian workers
and temporary overseas workers at risk. The ACTU believes that the current situation must not be
permitted to continue...Temporary overseas workers are more vulnerable to
exploitation and abuse by unscrupulous employers than permanent residents. The
risks inherent in temporary overseas worker programs are widely acknowledged by
international organisations and labour migration experts.[6]
3.11
The Association of Professional Engineers, Scientists and Managers
Australia (APESMA) was also critical of the current subclass 457 visa system,
supporting the ACTU submission.[7]
3.12
The CFMEU also welcomed the legislation, submitting that 'we regard this
Bill as a long overdue start on better regulation in this area'.[8] The CFMEU witness
who gave evidence at the public hearing told the committee that he thought the
legislation did not go far enough, and that there should be criminal penalties
applied in some cases.
3.13
The CFMEU disputed the view that the extent of abuse of the subclass 457
visa provisions was minimal and the exploitation of migrant workers was
relatively uncommon, although the representative conceded that breaches were
more likely to occur in relation to immigrant workers at the ASCO 4 and above
skill levels.[9]
The representative was critical of the Department's investigation of breaches:
I have taken a close
personal interest in a lot of the abuses in recent years and monitored it all
fairly closely. I am highly critical of the department in terms of their
failure to address the exploitation in a serious enough manner. It does not
surprise me that the department would continue to try to paint the picture that
it is a tiny minority of breaches. I am critical of the fact that the
department do very few random inspections. Most on-site inspections the
department do are announced. In other words, the sponsor gets prior warning that
they are coming.[10]
3.14
Asked to substantiate his view that the extent to which sponsorship
obligations are breached is underreported, and to provide examples of such
breaches, the CFMEU provided a dossier of material which the committee has
posted on its website as Additional Information. The representative maintained
that abuse of migrant workers is widespread.
There are abuses in
construction, hospitality, engineering workshops and nursing homes. I have seen
abuses in a whole variety of industries. The area of work that I would draw the
inquiry’s attention to is at the ASCO 4 level, from skilled down to semiskilled
grades. The 457 visa was meant to be a skilled visa, but you probably know that
in the regions you can go down, I think, as far as ASCO 9, although I am
prepared to be corrected on that. Anyway, you certainly can have semiskilled
workers in the regions. The meat industry is another industry where there have
been a lot of abuses as well.
I have seen all
manner of abuses in the last three or four years and publicised many of them. I
have seen workers killed at workplaces where they did not have English language
capacity. Workers were sent to do jobs they were patently not trained to do. I
have seen all manner of abuse. I have seen workers put up in accommodation that
is appalling and that no Australian would live in. I have seen middlemen who
control the bank accounts of these workers. I have seen middlemen take huge
fees off these workers. I have seen workers that are in fear that if they ever
disagree with the boss or they ask for a day off that the sponsorship may well
be cancelled and they can be tossed out of the country. I would be here for a
long time if I wanted to put before you all of the examples that I have
personally seen, and I know the detail of many of them.[11]
3.15
The government's reasons for introducing this bill appear to coincide
with the concerns referred to by union movement representatives and were
explained in the Minister's second reading speech.
Over the last five
years Australian employers have increasingly turned to the temporary skilled
migration program to bring in the skilled workers they need. However, the
sudden growth of the scheme in recent years, coupled with its expansion into
lower-skilled occupations and increasing numbers of workers with lower levels
of English language skills have placed new pressures on the integrity of the
Subclass 457 visa program.
Community confidence
in the scheme suffered under the previous government following a series of well
publicised abuses of workers on Subclass 457 visas.
The negative
perception of the Subclass 457 visa program is a very serious problem for the
employers and industries that rely heavily on it. The economy desperately needs
access to temporary skilled labour, but this is only sustainable if the
community is confident that temporary overseas workers are not being exploited
or used to undermine local wages and conditions. That is why the Rudd
Government is placing such a high priority on both improving the responsiveness
of the Subclass 457 visa program and restoring integrity to the program.[12]
3.16
The committee notes the following statistics about the subclass 457 visa
program:
Table 3.1 Subclass 457
visa grants to applicant type and financial year of visa
grant[13]
Applicant Type
|
Financial Year of Visa Grant
|
1997-98
|
1998-99
|
1999-00
|
2000-01
|
2001-02
|
2002-03
|
2003-04
|
2004-05
|
2005-06
|
2006-07
|
2007-08
|
Primary
|
16 550
|
16 080
|
17 540
|
21 090
|
18 410
|
20 780
|
22 370
|
27 350
|
39 530
|
46 650
|
58 050
|
Secondary
|
14 330
|
13 250
|
13 530
|
15 810
|
15 100
|
16 020
|
17 130
|
21 250
|
31 620
|
40 640
|
52 520
|
Total
|
30 880
|
29 320
|
31 070
|
36 900
|
33 510
|
36 800
|
39 500
|
48 590
|
71 150
|
87 310
|
110 570
|
|
|
|
|
|
|
|
|
|
|
|
|
Note 1: Excludes Independent Executives
Note 2: Up until 1 April 2005, medical practitioners
applied for a visa in Subclass 422 Medical Practitioner. From that date,
medical practitioners have been encouraged to apply for a Subclass 457 visa
Note 3: 'Secondary' refers to a spouse, interdependent partner,
dependent child or other relatives
|
|
Table 3.2 Subclass 457 visa grants to primary applicants by ASCO
Major Group of the Nominated Occupation[14]
Figures rounded to the nearest 10 |
|
|
|
|
|
ASCO Major Group of the Nominated Occupation |
Financial Year of Visa Grant |
2003-04 |
2004-05 |
2005-06 |
2006-07 |
2007-08 |
1
Managers and Administrators |
3
500 |
3
860 |
4
100 |
4
230 |
5
520 |
2
Professionals |
13
650 |
16
080 |
21
510 |
27
210 |
33
890 |
3
Associate Professionals |
2
870 |
3
430 |
4
480 |
5
580 |
7
590 |
4
Tradespersons and Related Workers |
1
810 |
3
370 |
8
430 |
8
640 |
10
060 |
5
Advanced Clerical and Service Workers |
10 |
10 |
10 |
10 |
10 |
6
Intermediate Clerical, Sales and Service Workers |
220 |
300 |
360 |
330 |
320 |
7
Intermediate Production and Transport Workers |
150 |
220 |
480 |
540 |
390 |
8
Elementary Clerical, Sales and Service Workers |
50 |
60 |
70 |
30 |
0 |
9
Labourers and Related Workers |
20 |
10 |
20 |
<
5 |
0 |
Not
specified |
100 |
20 |
80 |
120 |
260 |
Total |
22 370 |
27 350 |
39 530 |
46 680 |
58 050 |
|
|
|
|
|
|
Note 1: Excludes Independent Executives |
|
|
|
|
|
Table 3.3 Subclass 457 Departmental
monitoring[15]
Measure
|
2005-06
|
2006-07
|
2007-08
|
Active sponsors (sponsors
with primary visa holder in Australia at the end of the financial year)
|
N/A
|
15 410
|
18 750
|
Sponsors monitored
|
6 471
|
6 463
|
5 293
|
Sponsors site visited
|
1 717
|
1 553
|
1 759
|
Sponsors formally sanctioned
|
3
|
95
|
192
|
Sponsors formally warned
|
99
|
313
|
1 353
|
Referrals to other agencies
|
45
|
167
|
218
|
A two tiered approach?
3.17
While acknowledging that there had been some abuses but disputing that
these had been as widespread as reported, several industry representatives questioned
the appropriateness of treating all migrant workers on subclass 457 visas as
one group, seeking to differentiate professional workers such as engineers. Representatives
submitted that engineers and other white collar workers are clearly less in
need of a stringent enforcement regime.
3.18
The ACEA for example submitted that there should be a two tiered system:
One of the things
that we would like to suggest is that the 457 program—and in fact we have
suggested this on a number of occasions—is that there really needs to be almost
a two-tiered system. The minister has recognised this and in fact has indicated
that there will be some form of accreditation program for the types of
employees that we represent—people, for example, not only in professional
engineering and technical services firms but in the financial services sector
and legal professionals. When you are talking about university educated,
white-collar professionals, they really need to be dealt with in a different manner
from 457 visa holders who are unskilled or from non-English-speaking
backgrounds and who are therefore not as capable of determining their rights
and negotiating their conditions.
The abuse in our
industry is extraordinarily low, as we believe the abuse within the overall
system is very low. But it is extraordinarily low in those white-collar,
professional industries. One of our concerns with these amendments is that we
are using a sledgehammer to crack a peanut for our industry; that an industry
that is so desperately in need of skills is going to be disincentivised from
bringing in those skills through onerous obligations.[16]
3.19
Similarly, the AMMA submitted that the legislation and regulations
should only target those visa holders who may be at risk of exploitation. AMMA
proposed a threshold salary of $75 000, above which visa holders would not be
subject to the full extent of the legislation and regulation protection regime.[17]
Effects on industry
3.20
A range of witnesses told the committee that the broad effects of the Bill
and the overall reform package would be to burden industry and discourage the
use of the subclass 457 visa system. Several portrayed this as
counterproductive, particularly in light of the overall skills shortage, and
the government's objectives to address the financial crisis by bringing forward
infrastructure projects:
As Governments across
Australia announce record infrastructure spending, the engineering industry has
warned that many of these planned projects will be delayed, over budget or
completely shelved because there aren’t enough skilled engineers to get the job
done. Australia’s ability to design and deliver an estimated $400
billion in infrastructure projects over the coming decade is under threat.[18]
3.21
For its part, the ACEA highlighted the shortage of engineers in Australia,
telling the committee that:
- the shortage of engineers is systemic, not cyclical;
- Australia has an annual shortage of about 28 000 engineers;
- only 6000 engineering graduates are produced by Australian
universities each year; and
- approximately 4 652 engineers currently in Australia are on S457
visas.
3.22
The ACEA and others argued that the changes in the bill would discourage
the use of the subclass 457 visa system and would exacerbate what is already an
acute shortage of labour:
Increasing penalties
and costs for potential and unforeseen circumstances will make the 457 visa
migration scheme unusable as employers will become too burdened by cost.
Legislation which places too many restrictions and burdens on employers essentially
makes the 457 visa scheme unusable.[19]
3.23
The ACCI made a similar point, emphasising that the extra costs
associated with increasing the number and scope of obligations to be imposed on
employers sponsoring a subclass 457 visa migrant would be prohibitive,
particularly for small employers:
It is ACCI’s concern
that a number of the measures proposed will have a detrimental effect on
Australian business, especially on small to medium enterprise. These proposed
changes include requiring employers to pay for sponsored employees’ income
protection insurance, travel to Australia, removal costs, recruitment and
migration agent costs, licensing and registration, certain medical costs or
health insurance; and school-aged dependants’ public education costs. We are
concerned that the costs to employers of many of the proposed changes will be
prohibitive for many businesses and will discourage use of the program by
Australian employers experiencing genuine skilled labour shortages.[20]
3.24
In a similar vein, the Migration Institute of Australia (MIA) submitted
that:
While being broadly
supportive, the MIA believes that the Bill and its outcomes can be enhanced, primarily through
the striking of a better balance between worker protection and industry
protection...
Detailed sponsorship
obligations are not yet known as they will be specified later in Regulations.
There are, however, indications in the Bill that the balance set by the Bill and in
subsequent regulations, in combination, may weigh heavily against the
sponsoring employer. If this proves so, Australian employers will avoid
sponsoring overseas workers they need in the Australian labour market, the
employers will either fail or take business offshore. This we suggest is not a
desired or intended outcome. Getting the balance correct is the major
challenge.[21]
3.25
A submission from the Ethnic Communities Council of Queensland (Council)
put a similar position to that of the MIA in relation to balancing obligations
and sanctions, although this was expressed from the perspective of the visa
holder, rather than the employer. The Council argued that if the legislation
and regulations are too severe, visa holders themselves may be themselves
disadvantaged by the measures.
Whilst the intent of
better defining employer and sponsor obligations appears to be better protect
against exploitation of the migrant – a goal which ECCQ fully supports – it
must be remembered that putting unnecessarily onerous or costly obligations on
employers may have the consequence of preventing an employment opportunity
being provided at all.
It is particularly
problematic if an employment opportunity is withdrawn once a migrant worker,
and potentially also their family, has already entered the country – often
expending significant resources in the process. People in Australia on
457 visas are particularly vulnerable if their employment is withdrawn. The low
level of rights the migrant has in this situation, and the resultant level of
powerlessness, can leave them more at risk of exploitation, regardless of the
legal obligations on the employer.
...
Any action taken by
the government against an employer, no matter how completely justified it may
be, has the potential to impact unfairly and negatively on the migrant who may
find themselves having a very short period of time to find a new job before
they are at risk of being removed from the country.[22]
3.26
It is clear from the Explanatory Memorandum that this bill has multiple
objectives, which must be balanced against each other. While the bill is
largely intended to improve the operation of the subclass 457 visa system, and
ensure that migrant workers' working conditions meet Australian standards, it
is also intended to preserve the integrity of the Australian labour market. In
a supplementary submission, the Department of Immigration and Citizenship stated
that this department considers that the bill strikes an appropriate balance
between facilitating the entry of overseas workers to meet genuine skills
shortages, preserving the integrity of the Australian labour market, and
protecting overseas workers from exploitation.[23]
3.27
The committee notes the concerns of industry representatives, who
consider that imposing an excessively stringent and costly set of obligations
on employers runs the risk of making the subclass 457 visa system unviable in
the face of a severe shortage of certain professions. The committee also is
conscious of concerns that some migrant workers, particularly those in the ASCO
4 and above skills groups, many of whom may lack language skills, are
vulnerable and in need of greater protection than is afforded under the current
legislation. However, in the absence of the detail of the new obligations that
will be contained in regulations, it is difficult for the committee or anyone
else to assess whether the right balance has been struck.
Obligations and Enforcement
Sponsor obligations framework
3.28
The Explanatory Memorandum states that the proposed amendments are to
enhance the framework for the sponsorship of non-citizens and that one of the
ways in which the sponsorship framework will be improved is by:
...providing
the structure for better defined sponsorship obligations for employers.[24]
3.29
The department expanded on this in its submission to the committee:
By
clearly defining the sponsorship obligations framework, the Worker Protection
Bill clarifies a sponsor's responsibilities in relation to their approval as a
sponsor and in relation to the visa holders they sponsor. It is anticipated
that the obligations prescribed in the Migration Regulations will clearly set
out the period of time in which an obligation must be satisfied, and the manner
in which the obligation is to be satisfied.[25]
3.30
Some concerns have been raised with the committee about whether a new
framework is needed and others support the new framework. Aside from the issue
of support or concern, the framework provides an opportunity to outline a key
concern highlighted in evidence from a wide range of organisations. A
significant complaint made to the committee is that the really important issue
is that the content of the regulations is not available. Witnesses frequently
commented that it is very difficult to comment on the impact the bill will have
because the detail is not known. A sample of the concern expressed is:
What we
are all doing is sitting around making submissions and discussing a bill which
is essentially just a framework, but the real substance that is going to make
the real difference is unknown at this stage, and this is the fundamental
problem.[26]
3.31
The evidence given also referred to the impact this is already having on
employers currently considering sponsoring worked on subclass 457 visas:
...employers
who are already a little bit shy at the moment about what their future
employment and growth decisions are going to be are saying, 'Hang on, how is this
going to affect our decisions to employ and continue?'[27]
3.32
The department has explained that:
...The
policy settings that underpin any draft regulations are dependent on
recommendations yet to be made by the [Interdepartmental Committee] and the
Skilled Migration Consultative Panel...as well as the integrity review presently
being conducted by Ms Barbara Deegan.
The
Department expects that a draft of the proposed regulations would be available
in the first part of 2009...any regulations made under the amendments proposed in
the Bill will be subject to scrutiny in the Senate and by the Senate Standing
Committee on Regulations and Ordinances, and would be disallowable.[28]
3.33
The committee notes the explanation provided, but agrees with the
concern expressed that it is very difficult to properly inquire into the bill,
including the sponsor obligations, when it is not possible to assess its role
in the full legislative scheme.
Enforcement
Civil penalties
3.34
The concern about the unavailability of the content of the regulations
is also particularly relevant to the issue of enforcement.
3.35
Broadly, to the extent that it was raised with the committee, there was
support for strengthening the integrity of the visa program by the proposed
inclusion of a civil penalties framework and in addition to maintaining the
administrative sanctions available. However, a number of concerns were raised
with the committee about elements of the detail of the proposed civil penalty
scheme.
3.36
The bill seeks to insert two civil penalty provisions into the Act:
140Q Civil
penalty—failing to satisfy sponsorship obligations
(1) A
person contravenes this subsection if:
(a) the
regulations impose a sponsorship obligation on the person; and
(b) the
person fails to satisfy the sponsorship obligation in the manner (if any) or
within the period (if any) prescribed by the regulations.
Civil penalty:
(a) for
an individual—60 penalty units; and
(b) for
a body corporate—300 penalty units.
(2) A
person contravenes this subsection if:
(a) the
person (other than a Minister) is a party to a work agreement; and
(b) the
terms of the work agreement:
(i) vary
a sponsorship obligation that would otherwise be imposed on the person by the
regulations; or
(ii) impose
an obligation, identified in the agreement as a sponsorship obligation, on the
person; and
(c) the
person fails to satisfy the sponsorship obligation in the manner (if any) or
within the period (if any) specified in the work agreement.
Civil penalty:
(a) for
an individual—60 penalty units; and
(b) for
a body corporate—300 penalty units.
3.37
If a person contravenes one of these provisions, it is proposed that new
Part 8D (subsection 486R(1)) will provide that the Minister may apply to
the Federal Court or the Federal Magistrates Court for a pecuniary penalty order
against the person. The maximum amount of the penalty is determined by the
applicable number of penalty units. One penalty unit is currently equal to $110
so the maximum civil penalty for an individual per offence would be $6,600 and
for a body corporate it would be $33,000.
3.38
Many of the concerns raised with the committee relate to the lack of
detail about the proposed civil penalties on the face of the legislation and to
the unavailability of the detail of the sponsorship obligations and the way/s
in which these will need to be satisfied. As noted earlier, these details will
be prescribed by regulations which are not yet available.
3.39
The concerns about the proposed civil penalty framework include:
- it is not clear that an element of
'fault' will be required;
- there are no statutory defence options;
and
- no Ministerial discretion is apparent
on the face of the legislation.
3.40
A number of these matters are the subject of discussion in the
Commonwealth's A Guide to Framing Commonwealth Offences, Civil Penalties and
Enforcement Powers such as the principle that civil penalties should be
'stand alone' provisions, and the principle that they require or exclude fault
in clear terms.[29]
3.41
The concerns raised with the committee are heightened by one of
the other major themes arising in relation to the bill – that the effect of
proposed transitional arrangements will be that current sponsors will have to
comply with the new sponsorship obligations (and accompanying civil penalties)
when the new provisions commence and these regulations may in turn be amended
or replaced by future regulations (see the section titled The application of
new obligations to existing sponsors for a more detailed discussion of this
aspect of the bill).
3.42
In relation to the issue that a significant level of the detail of the
civil penalties provisions will not be included in the primary legislation, the
department argues that detail needs to be in regulations:
...to
ensure that there is flexibility for effective and responsive administration of
the sponsorship framework through the regulations.
This
flexibility is necessary because:
- over time sponsor
behaviour might change and new obligations will be required;
- there may [be] a need
to give visa holders more/less protection as time goes on and this can more
swiftly be done by way of regulation; [and]
- the sponsorship
framework is intended to apply to a number of different visas with different
criteria, and the dynamic nature of the immigration and economic environment
means that different obligations will apply to different current and future
visas.[30]
3.43
In relation to the complaint that the provisions should require or
exclude 'fault' in clear terms the department explains that new section 140Q:
...does not
specify a fault element because the appropriate fault element may differ
according to the obligation in question. Similarly, not specifying the offence
as being 'strict liability', allows the Regulations to include fault elements
as appropriate.[31]
3.44
The department did not specifically address the issue of the inclusion
of statutory defences in relation to the civil penalties provisions, though the
committee notes that it follows from the above evidence that it should be
possible to include them to be prescribed by regulation as appropriate.
3.45
In relation to ministerial discretion, the department observed that the
Minister will not be required to take civil penalty action where an obligation
has been breached and it is also clear from the wording of Part 8D
subsection 486R(1) that the Minister's decision to take pecuniary action in
response to the contravention of a civil penalty provision is discretionary.[32]
The committee also notes that in determining a pecuniary penalty, proposed
subsection 486R(3) directs the court to 'have regard to all relevant matters'
including four specified matters.
3.46
Generally in relation to enforcement, the department also advised the
committee that:
The
Department's intended approach to compliance with the various provisions
proposed in the Bill will be such that the most appropriate
action will be determined by considering all the circumstances. In the case of
minor or inadvertent first-time breaches the Department will likely take no
action, while in the case of serious, deliberate and repeated breaches the
Department will likely take civil legal action. The other enforcement tools are
intended to deal with the range of conduct in between these extremes. The
discretion to choose the most effective tool in particular circumstances is a
fundamental feature of the program's design.[33]
3.47
The committee notes the points the department makes about the overall
approach taken to the civil penalties regime. The committee also notes the information
provided by the department about its intended approach to compliance.
Notwithstanding the reasons put forward for the delay in providing detail of
the proposed regulations, it is possible that the concerns raised would be
alleviated by the availability of the detail of the forthcoming regulations.
The committee understands that in its absence those who will be affected by the
proposed legislation are anxious about the actual detail.
3.48
Important policy principles provide the foundation for the approach
outlined in the A Guide to Framing Commonwealth
Offences, Civil Penalties and Enforcement Powers. While taking into
account the department's explanations about the proposed approach, the
committee retains serious misgivings about some aspects of it and is of the
view that for penalties of this significance it is arguably appropriate for the
scheme to clearly include elements of fault or the availability of relevant
statutory defences, or both, and for this to be apparent from the face of the
legislation and to not be left to prescription by regulation.
Administrative sanctions
3.49
One aspect of the proposed amendments to 'maintain and enhance the
existing sanction and enforcement tools in relation to sponsorship'[34]
attracted concern from some witnesses. This is that the proposed section 140L
test for circumstances in which a sponsor may be barred or have their approval
cancelled is unsatisfactory. The section requires that the Minister is
'reasonably satisfied that a person has failed to satisfy a sponsorship
obligation'. Witnesses queried what this means:
...there is
a civil penalty for an employee’s sponsor who fails to satisfy the sponsorship
obligations. That is a very novel way of creating an offence, in one sense.
There is no definition of what failing to satisfy a sponsorship obligation is.
That could mean anything when one comes to a court and faces prosecution.[35]
3.50
Fragomen Global noted:
The issue
of the Minister's 'reasonable satisfaction' and how it was derived would be one
area that would no doubt be open to considerable inquiry and challenge.[36]
3.51
The department maintains that:
The use of the term
'satisfied' is common throughout the Migration Act and the statute book
generally and has been used effectively in other contexts. The Department's
view is that the proposed formulation of the provision, as drafted, is
appropriate.[37]
3.52
Other problems raised with the committee about the proposed enforcement
provisions include that the proposed mandatory sanction provision in subsection
140L(2) could be harsh and unworkable[38]
and that the absence of an upper limit to the total penalty that can be imposed
for multiple breaches 'could do significant economic damage' to small
businesses.[39]
In relation to partnerships and unincorporated associations the penalty applies
per 'wrongdoing' partner or committee member with no maximum limit for the
partnership or unincorporated association as a whole:
For example, if 20 partners were found to be collectively
responsible for a contravention then the maximum penalty would be $132,000 (20
x 1/5 of $33,000) A corporation would only be liable to a maximum penalty of
$33,000 for an identical contravention. [40]
3.53
The department's response to this concern is that the approach taken is
consistent with other Commonwealth acts including the Corporations Act 2001
and the Telecommunications Act 1997.[41]
The department also noted generally in relation to penalties that courts always
retain a discretion to impose a penalty of less than the maximum.[42]
Inspectors
3.54
Overall, there was no broad concern identified about the proposed scheme
for inspectors. However, there was again significant concern expressed to the
committee about some of the detail.
3.55
Proposed section 140X will permit an inspector to enter a sponsor's
premises if the inspector has reasonable cause to believe that there is
information, documents or any other thing relevant to determining whether a
sponsorship obligation is being complied with. A concern has been raised that
the basis for the entry power should be stronger: for example that for
unannounced visits an inspector should be required to have a reasonable
suspicion that a breach has occurred.[43]
3.56
The Explanatory Memorandum notes that the proposed powers are not in
accordance with the A Guide to Framing Commonwealth
Offences, Civil Penalties and Enforcement Powers, but argues:
...it is necessary for
inspectors appointed under new section 140V to have similar powers as Workplace
Inspectors, as it is probable that Workplace Inspectors will also be appointed
as inspectors under new section 140V. If so, it would be intended that the
Workplace Inspectors will exercise their powers for the purposes of both the Workplace
Relations Act 1996, and the purposes in section 140X(1) concurrently.[44]
3.57
In addition to any impracticality, the argument was also made to the
committee that the proposed scheme of inspectors is, in effect, workplace
compliance for migrant workers.[45]
It is therefore appropriate that it be equivalent to the scheme for domestic
workers.
3.58
The committee agrees that the approach proposed in the bill in relation
to inspectors is appropriate.
3.59
The committee also notes that one of
the submissions observed that there is no enforcement power for paragraph
140X(2)(b).[46]
3.60
A further issue raised with the committee relates to proposed section
140Z. This section seeks to create a criminal offence punishable by up to six
months in prison for a person who contravenes the requirement to produce a
document or thing to an inspector by a specified time (not less than seven
days). A concern has been raised that there is no defence available for
reasonable failure to provide inspectors with information in the time
requested.[47]
3.61
The department has advised the committee that statutory defences are not
required to be specifically included in the proposed legislation because Part
2.3 of the Criminal Code Circumstances in which there is no criminal
responsibility applies. The defences include mistake, ignorance of fact,
duress or intervening conduct.[48]
3.62
The committee agrees that although they are not apparent from the face
of the legislation appropriate defences do apply to this proposed provision.
The committee suggests that it may be useful for the bill to include a note to
explain the availability of the Criminal Code defences.
3.63
A concern was also raised about the ambiguity and breadth of the
proposed paragraph 140X(2)(c) requirement, by written notice, to produce a
'document or thing' to an inspector.[49]
The Department noted that this was common drafting practice.[50] The committee also notes that
section 25 of the Acts Interpretation Act 1901 includes a standard
definition of 'document'.
The application of new obligations to existing sponsors
3.64
A very significant issued raised repeatedly with the committee was
described by many who provided submissions and evidence to the committee as the
'retrospective' operation of the proposed sponsorship obligations.[51]
3.65
The transitional provisions seek to provide that the amendments proposed
in the bill will apply to several categories of sponsors:
- a person or organisation who is a sponsor of a subclass 457 visa
holder immediately prior to the date of commencement;
- a party to a 'work agreement' whether the agreement was signed
before or after the date of commencement; and
- all partners and members of the committee of an unincorporated
associations on commencement.
3.66
The department was at pains to point out that the effect of the bill is
not retrospective. Acts or omissions by a sponsor before the commencement of
these provisions cannot found any action under the proposed provisions of the
new bill. The department states clearly that:
All provisions will
apply prospectively from the date of commencement...and will not affect the
status of acts or omissions that occurred prior to commencement.[52]
3.67
Nonetheless, Fragomen Global observed that the effect of proposed
transitional arrangements will be that:
the
fundamental point [is] that sponsors are going to be deemed to accept the new
obligations at the point where they are introduced by regulation.[53]
3.68
Further that the regulations 'can be amended with a much greater deal of
flexibility',[54]
and that the imposition of obligations on sponsors seems to be proposed:
...with
little regard to the impact of these new obligations on either the company or
the individual 457 visa holders.[55]
3.69
The department argues that this approach is necessary for the following
reasons:
- the nature of the sponsorship
obligations which will be required to be satisfied will not be significantly
different from the existing undertakings;
- the possible transitional period
if these existing former approved sponsors are not transitioned into the new
sponsorship framework is impractically long (up to six years) for the large caseload;
- the administrative complexity for
sponsors, the Department of Immigration and Citizenship, and other stakeholders
of administering two sponsorship frameworks makes the alternative unworkable
for the large caseload; and
- existing sponsors will have
sufficient notice to terminate the sponsorship of their Subclass 457 (Business
(Long Stay)) visa holders if they are not prepared to satisfy the new
sponsorship obligations in relation to those visa holders.[56]
3.70
Even those with concerns about the approach recognised that there are
substantial difficulties for the department in managing the transition of
existing sponsors to the new scheme:
We do appreciate the
difficulty of having multiple sponsorship regimes with different employers
being accountable for different obligations at different times depending on
when they were approved as a sponsor.[57]
3.71
However, the objections and potential costs of this approach were
identified in a number of submissions made to the committee. For example,
ACCI is strongly
opposed to the retrospective application of any of the proposed changes to
existing sponsors and visa holders. Not only is this grossly unfair to
compliant sponsors who have sponsored 457 workers in good faith under the
current obligations framework, but it will also represent a significant
administrative burden on existing sponsors who may need to redraft and
renegotiate contracts and revise many aspects of current business practice.[58]
3.72
This view is also held by the ACEA:
If the Bill varies the
Migration Act so that all 457 visa holders currently employed by Australian
firms are subject to new regulations, this will undoubtedly mean contract
re-writes, additional payments (either to the Government or the visa holder)
and costly internal policy change. These kinds of costs will make the visa
scheme less attractive and essentially unusable for a number of Australian
businesses who require the scheme to bring in highly skilled professionals.[59]
3.73
Comments made by the Australian Industry Group not only outline concerns
about the potential cost burden of applying new obligations to existing
sponsors, but the added complexity of assessing the impact of the bill because
a significant amount of detail is not yet known and will be subsequently
prescribed by regulation.
We strongly oppose
this approach as it has the potential to significantly increase sponsors'
financial liabilities. While the regulations associated with the Bill are yet to
be finalised, there are a number of measures which have been widely canvassed
for possible inclusion in the legislation. One example of this is the
suggestion that sponsors will be required to pay health insurance costs for
visa holders.
In many
cases sponsors will have made arrangements with existing visa holders...as long
as [they do] not reduce their salary below the designated Minimum Salary Level.[60]
3.74
These concerns were also echoed in other evidence provided to the
committee.
3.75
Another aspect of importance illustrated by the Australian Industry
Group evidence is the idea that sponsor and visa holder arrangements in place
at the time the new provisions commence have been negotiated outside the
framework of the new provisions. Even though the proposed detail of the bill is
now available, the content of the regulations is not yet known. The imposition of
new arrangements could detrimentally affect sponsors and visa holders. The AMMA
even asserted that:
We say that that
would be improper where people have entered into a four-year arrangement to
bring someone to Australia from overseas on the basis of the existing
arrangements and are then told, even though there might be a lead-in period of
time, that there are new rules and obligations and that they have to meet
those.[61]
3.76
The committee notes the reasons outlined by the department for taking
the proposed approach, but also notes the impact that business expects it to
have. On balance, the committee accepts that it is not practical for the
department (and sponsors who continue to recruit subclass 457 visa holders
after the provisions commence) to manage two systems for up to six years,[62] but suggests that
consideration be given to allowing a sponsor to seek an exemption from the new
obligations (and to continue to be bound by existing obligations) in cases
where the new obligations would impose extreme hardship. For example, if the
sponsorship arrangement will only apply for a short period after the new
provisions commence or if existing arrangements between the sponsor and visa
holder already satisfy a new obligation.
Committee view
3.77
Overall the aims of the bill are commendable. However, the committee
notes that because the legislation is 'framework' legislation and a significant
amount of detail for the framework will be contained in future regulations it
is very difficult to assess the impact of the full legislative scheme.
3.78
The committee notes that most evidence, including that which expressed
strong reservations about the detail of the obligations that are to be imposed
by subsequent regulation, indicated that the bill itself is largely supported.
3.79
The committee notes that many important aspects of the bill such as the
requirements of civil penalty provisions are to be prescribed in regulations.
The committee considers that such provisions are usually more appropriately
contained in the primary legislation. Combined with the fact that the bill
proposes that new obligations will apply to existing sponsors from the date of
commencement, the committee is of the view that the examination of the
legislation and the overall impact of the scheme would have benefited from
having the regulations available.
3.80
However, this concern needs to be considered in light of the
justification advanced by the department for including details in regulations
rather than in the bill. This justification is that flexibility is essential
for the effective program operation in such a dynamic area and that more visa
types may be brought within the new sponsorship framework which will require
additional obligations to be prescribed.[63]
Recommendation 1
3.81
The Committee recommends that the operation of the legislation, as
amended by this Bill, be reviewed within three years after the commencement of
the provisions.
Recommendation 2
3.82
The Committee recommends that the Senate pass the Bill.
Senator Trish Crossin
Chair
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