The long-running saga over whether visa requirements apply to workers engaged on offshore resource projects has finally ended, following the High Court’s recent decision in Maritime Union of Australia v Minister for Immigration and Border Protection [2016] HCA 34 (MUA v Minister for Immigration).

This decision has significant implications for employers in the offshore oil and gas industry, the main one being that foreign workers engaged on vessels and facilities will now be required to obtain visas in order to work on these facilities.

The application of visa rules also means that the high cost and often restrictive framework of minimum wages and employment conditions under the Fair Work Act 2009 (Cth) and other applicable industrial instruments will now apply to the relevant workers.

Unless the Commonwealth Government is able to achieve a legislative fix, this will inevitably affect the competitiveness of the offshore oil and gas sector in Australia.

MUA v Minister for Immigration: The background of the case

On 31 August 2016, in MUA v Minister for Immigration, the High Court of Australia struck down a Determination made by the Assistant Minister for Immigration in March 2015, which had negated certain visa requirements applicable to non-citizens engaged on offshore resource projects.

The lengthy history of this matter is covered in several previous Corrs In Briefs[1], but in summary:

  • In Allseas Construction SA v Minister for Immigration and Citizenship [2012] FCA 529, the Federal Court found that certain offshore pipe-laying vessels fell within an exclusion under the Migration Act 1958 (Cth) (Migration Act). Therefore, non-citizens engaged on those vessels were not within the migration zone and did not need Australian work visas.

  • Following this, the then Labor Government passed the Migration Amendment (Offshore Resources Activity) Act 2013 (Cth) to override the Allseas decision and to require all non-citizen offshore works to hold Australian work visas.

  • Next, the new Coalition Government sought to overcome the effect of Labor’s legislation through the Migration Amendment (Offshore Resources Activity) Regulation 2014 (Cth). When this regulation was disallowed in the Senate, the Assistant Minister made a Determination under s 9A(6) of the Migration Act having essentially the same effect as the regulation. However, that Determination was successfully challenged by maritime unions in AMOU v Assistant Minister for Immigration and Border Protection [2015] FCAFC 45.

  • The Assistant Minister immediately responded by making a further Determination (2015 Determination), which was the subject of the High Court challenge. The 2015 Determination had the effect of excepting from the definition of ‘offshore resources activity’ in s 9A(5) all operations and activities to the extent that they use any vessel or structure that is not an Australian resources installation.

MUA v Minister for Immigration: The High Court’s decision

The High Court found that the 2015 Determination exceeded the limited terms of the power conferred on the Minister by s 9A(6) of the Migration Act. The more significant reasons for the Court’s decision were as follows:

  • The Court considered that the power of exception vested in the Minister in s 9A(6) is to except an operation or activity from the operation of s 9A, but ‘is ill adapted to the exception of an operation or activity to some or other specified extent, still less to the exception of all operations or activities to that specified extent’.[2]

  • Further, in the Court’s view, ‘the 2015 Determination is opposed to the apparent statutory purpose of s 9A(6)’.[3] Given that s 9A(1) had been enacted to extend the operation of the visa regime, it should not ‘be supposed that s 9A(6) was enacted with the object of enabling the entire negation of that extension’.[4] Rather, its purpose was only to provide for limited exceptions of certain activities/operations from the visa regime from time to time:

By entirely negating the extension of the visa regime to non-citizens on vessels or unmoored structures who are in an area to participate in or support an offshore resources activity, the 2015 Determination purports in effect to repeal the operation of s 9A(1) and thereby to thwart the legislative purpose.[5]

What does this mean for offshore resource sector employers?

The practical effect of this ruling is that foreign workers engaged on vessels and facilities in the offshore oil and gas sector in Australia will be required to obtain visas in order to work on such facilities.

This will restrict the ability of the industry to utilise its international workforce and its international contractors often because of the need for specialist skills, not easily sourced within Australia.

Further, when the employers do obtain the relevant class of visa to enable engagement or deployment of such workers, the high cost and restrictive Australian employment regulation through the Fair Work Act and other applicable industrial instruments will apply to these workers and have to be complied with.

This will inevitably affect the competitiveness of the offshore oil and gas sector in Australia unless the Australian Government is able to achieve a legislative fix.

In these challenging political times, the Government may shy away from tabling new legislation and use its statutory power to exempt certain activities from the visa requirements in a more targeted way. One approach could be to exempt specific aspects of the offshore resources industry, particularly those for which there is little Australian content.

Offshore drilling, pipeline laying and sub-surface works may be worthy of consideration.