On 18 November 2013, the Department of Immigration and Border Protection (‘the Department’) confirmed that Labour Market Testing for the Subclass 457 Visa program will come into effect on and from 23 November 2013 and full details of this requirement have now been released.

The Department first announced a series of amendments to the 457 visa program on 1 July 2013, which included the proposed introduction of Labour Market Testing, as well as increases to the market rate and English language exemption thresholds, and variations to the terms of approval of sponsorship agreements.

With the introduction of Labour Market Testing, where applicable, approved business sponsors will need to provide sufficient evidence to the Department outlining their attempts to fill a vacancy with an Australian worker, and how they have determined there is no suitably qualified person located in Australia to fill the position.

While the majority of highly skilled occupations approved for the 457 visa program will be exempt from the Labour Market Testing requirements, it will be important for business sponsors to ensure that redundancies and retrenchments are recorded and disclosed to relevant internal parties with responsibility for recruitment and immigration matters. It is also timely for business sponsors to identify how recruitment efforts can be monitored and recorded for future use if required.

Who will be impacted by Labour Market Testing?

As anticipated, the majority of professional occupations currently approved for the 457 visa program are exempt from this new requirement.

  • Labour Market Testing will be required where a sponsor is seeking to nominate an individual in one of the following occupation groups:
  • Engineers – including Engineering Managers, Professional Engineers, Engineering Technicians and Draftspeople.
  • Nurses – including Registered and Enrolled Nurses and Midwives.
  • Trades & Technicians – all approved occupations in these categories.
  • Where a sponsoring business has retrenched or made redundant an Australian employee in the four month period prior to lodging a nomination for the same occupation group (see below for details).

What must be submitted as proof of Labour Market Testing?

Where a business sponsor is seeking approval to nominate an occupation in one of the groups included above, it will need to have conducted Labour Market Testing in the 12 month period prior to lodging the relevant nomination, with evidence to be included at the time of applying.

It is a mandatory requirement that this evidence includes details of the sponsor’s attempts to recruit suitably qualified employees from the Australian labour market (citizens, permanent residents and/or eligible temporary visa holders1), as follows:

  • Evidence of any paid or unpaid advertising relating to the nominated occupation.
  • Evidence of advertising through social media channels (i.e. Facebook, LinkedIn).
  • Evidence of recruitment undertaken on behalf of the sponsor by a third party such as an external recruitment agency.
  • Evidence of advertising placed directly on the sponsor’s own website.

Sponsors may rely on the same evidence for more than one nomination provided it is relevant to the occupation it is seeking to fill and the evidence is still within the 12 month validity period (to be backdated from the date of lodgement of each individual nomination).

Effect of redundancies and retrenchments

If an occupation would ordinarily be exempt (e.g. professional occupations), Labour Market Testing will be required if the sponsoring business has retrenched or made redundant2 an employee working in the nominated occupation in the four month period prior to lodgement of a nomination application.

Where applicable, nominations lodged under these circumstances will also require the sponsor to provide information in relation to the redundancies or retrenchments and Labour Marketing Testing will need to have been conducted after those events have occurred.

This will only apply if the redundancy or retrenchment were in the same occupation. For example, if a business had made a Sales Manager redundant and then subsequently applied for approval to nominate a Software Programmer, this would not result in a need to provide evidence of recruitment attempts.

Exemptions – International Trade Obligations and Major Disasters

Exemptions to the Labour Market Testing requirement will be available for all occupations in the following circumstances:

  • It would be inconsistent with one of Australia’s international trade obligations to request this, or
  • The nominee would be providing assistance in relation to a major disaster which has occurred in Australia.

Exemptions relating to major disasters can only be given directly by the Minister for Immigration and Border Protection (in writing).

To claim an exemption from Labour Market Testing on the basis of an International Trade Obligation, one of the following must specifically apply:

  • The worker is a citizen of Chile or Thailand or is a citizen or permanent resident of New Zealand.
  • The worker is a current employee of a business which is an associated entity of the sponsor, and that business is located in an ASEAN3 country, Chile or New Zealand.
  • The worker is a current employee of an associated entity of the sponsor, which operates in a country that is a member to the World Trade Organisation (currently 158 member countries), and the worker is being nominated for an ‘Executive or Senior Manager’ level position4 and will have responsibility for the entire or a substantial part of the sponsor’s operations in Australia.
  • The sponsor’s business currently operates in a World Trade Organisation member country and is seeking to establish a business in Australia, and is nominating an occupation at ‘Executive or Senior Manager’ level (as specified for the purposes of this exemption, see footnote below).
  • The worker is a citizen of a World Trade Organisation member country and has worked for the sponsor in Australia on a full-time basis for the two years prior to lodging the nomination.