1 July Migration Law Changes: 457 Visa

The Story So Far

In the last three months, we have seen a significant number of changes in the skilled migration landscape, leaving many potential visa applicants (and temporary visa holders wishing to transition to permanent residency) perplexed.

In an earlier article, I looked at changes announced in relation to the 457 and 186/187 visas.

In this series, I look at some of the changes that came into effect on 1 July 2017 – some of which were anticipated; others of which were surprising – starting with the 457 visa.

457 Visa Changes

Changes to Occupations List

In April, the Occupation List for 457 visas was split into two: the broader Short Term Skilled Occupation List (STSOL) and the much narrower Medium Long Term Skills Shortage List (MLTSSL).

The idea was that persons nominated under the STSOL would only be eligible for a maximum stay of 2 years (plus the ability to renew the visa for one further term of 2 years), whilst persons nominated under the MLTSSL would be eligible for longer stays (without any prohibition on renewal) with a concessional pathway towards permanent residency.

Certain occupations placed under the STSOL drew the ire of certain sectors of the economy, particularly the universities and CEOs, who voiced their concerns quite publicly.

As a result, changes were made resulting in occupations such as Chief Executive Office, Corporate General Manager, Faculty Head and University Lecturer being moved to the MLTSSL.

Whilst others have published (including the Immigration Department) summaries of what occupations have been removed and added, it is important to carefully review the relevant legislative instrument to confirm which occupations are on which list.

Caveats

When the STSOL and MLTSSL were introduced in April, we saw the emergence of a new device within the legislative instrument, known as the “caveat”. In addition to specifying the occupations which may be nominated, the “caveats” set out, in relation to certain occupations, additional conditions, e.g. the minimum salary payable, the location of the position and the size of the nominating business.

Many lawyers were concerned about the legality of the so-called “caveats”.

The Full Federal Court case of Twinn v Minister for Immigration and Multicultural and Indigenous Affairs [2005] FCAFC 242 seemed to suggest that the imposition of requirements (other than the specification of occupation) by Gazette Notice (or legislative instrument) would go beyond what the Migration Regulations 1994 (Cth) (“Regulations”) permitted the Minister to do.

So, the Migration Amendment (Specification Occupations) Regulations 2017 was introduced to apparently “clarify” the scope of the Minister’s powers.

New regulation 2.72(10AAA), for example, provides that in respect of an instrument made for the purposes of specifying an occupation for 457 nominations, the Minister may also specify other matters relating to:

• the person who nominated the occupation;
• the person identified in the nomination;
• the occupation;
• the position in which the identified person is to work;
• the circumstances in which the occupation is undertaken;
• the circumstances in which the person is to be employed in the position.

There remains a question as to whether, by amending the Regulations this way, the Minister has exceeded the powers conferred on him by the Migration Act 1958 (Cth).

English Language Exemption

Prior to 1 July, applicants whose salary was over $96,400 were exempt from having to demonstrate English proficiency.

This exemption has been removed for applications lodged on or after 1 July 2017.

The exemption however still applies to applications lodged before 1 July 2017, but not yet finalised.

Police Clearances

For visa applications lodged on or after 1 July 2017, the provision of police clearance certificates will become mandatory.

Mandatory Skills Assessments

Mandatory skills assessments for certain trade occupations will be expanded to passport holders of Pakistan, Bangladesh and Nepal.

Training Benchmark

By March next year, the current training benchmarks will be replaced with a contribution by nominating employers into the Skilling Australians Fund.

In the meantime, however, the training benchmark requirements have been clarified in a new legislative instrument.

The instrument sets out:

• what constitutes “payroll”;
• what types of training are acceptable;
• restrictions on who should receive training.

Much of what is set out in the instrument was already in policy but this now gives it the force of law.

Comment

The 457 changes that came into effect on 1 July 2017 have been unsurprising, as the Minister continues to shore up his power to “legislate by instrument”.

The fact that the Immigration Department has been flexible enough to bend to public pressure in moving occupations between the STSOL and MLTSSL is welcome, and suggests that others who have been dissatisfied with the occupational changes may wish to also engage in lobbying.

However, the flexibility seen in the use of legislative instruments is a double-edged sword as it also creates uncertainty for both advisers and visa applicants engaging in strategic planning.

There is potential for the caveat system to lead to abuse of power. The amended Regulations are broad as to what parameters the Minister may specify in order to approve a nominated occupation. How far can the Minister take this?

Visa holders who have in the past relied on the English language exemption should consider sitting an English test before their current visa is due to be renewed. If there is any shortcoming in their English competency, they should consider ways of increasing their competency levels.

The definition of “payroll” for the purposes of the training benchmark remains a point of contention. Whereas the traditional concept of “payroll” entails amounts paid to “employees”, expanding the net to contractors “if work provided by the contractor is related to the service/product provided by the applicant, regardless of whether such payments are included for payroll tax purposes or not” potentially increases an employer’s exposure under its training expenditure obligation. What is “related to the service/product provided by the applicant” is broad and uncertain. As a lawyer providing legal services, the work done by my IT contractor to troubleshoot my ad hoc computer problems would arguably be related to the services I provide. A better formulation may be to ask whether I am the contractor’s only client, for example.

Finally, if there is any doubt about how these changes affect your current application, or an application you wish to make in the future, it is imperative that you get strategic advice as soon as possible so that you know (as much as it is possible) where you stand.

If you need assistance, please get in touch with us.