Businesses (and their executive officers) that allow, or refer, individuals who are not Australian citizens to work, will now face the risk of new and increased penalties if those individuals are not legally permitted to work in Australia. Such penalties will include: a fine of up to $255,000 for a body corporate; and a fine up to $51,000 and/or up to 5 years imprisonment for an individual.  

The new and increased penalties came into operation on 1 June 2013 as a result of amendments to the Migration Act 1958 (Cth). We set out below some of the main changes as well as some of the steps that businesses (and their executive officers) should now take if they haven’t already done so.

Allowing an unlawful non-citizen to work or allowing a lawful non-citizen to work in breach of a work-related visa condition

A person will be found to have contravened the Act if they allow, or continue to allow, another person to work and that worker is an “unlawful non-citizen” (in practical terms, this means an individual who is not an Australian citizen and whose presence in Australia is not lawful), unless the first person has taken “reasonable steps at reasonable times” to verify that the worker is not an unlawful non-citizen.

The meaning of allowing a person to work has also been expanded, and will include the following situations:

  • employment under a contract of service;
  • engagement (other than in a domestic context) under a contract for services (i.e. as an “independent contractor” rather than as an employee); and
  • participating in an arrangement, or a series of arrangements, for the performance of work by the worker for themselves or for another participant in the arrangement.

“Reasonable steps” include, but are not limited to, using a computer system prescribed by the Regulations to verify that the worker is not an unlawful non-citizen. The Explanatory Memorandum relating to the amending legislation states that it is intended that that computer system would be the Visa Entitlement Verification Online System (“VEVO”), which can be used to verify whether a non-citizen holds a visa that is in effect, or if that person holds a visa that has a condition which prohibits or restricts them from working in Australia.

A person will be liable to a civil penalty (a fine) of up to 90 penalty units (this would presently equate to up to $15,300) for such a contravention of the Act, but if the person is a body corporate (i.e. a company) the maximum penalty is five times that amount (this would presently equate to up to $76,500). However, a criminal conviction and a greater penalty (in the case of an individual, up to 2 years imprisonment and/or a penalty of up to $20,400, and a penalty of up to $102,000 for a body corporate) may be imposed if there is knowledge or recklessness; such a contravention constitutes an offence.

In other words, fines can now be imposed on a person even if they have no knowledge of the contravention (for example, because they did not make a VEVO enquiry), but if they do have knowledge, or are reckless, the person may be held criminally liable and receive a higher penalty.

Equivalent provisions and penalties apply to a person who allows, or continues to allow, a lawful non-citizen to work in breach of a work-related visa condition.

A person will be also found to have committed an offence and be subject to higher penalties (in the case of an individual, up to 5 years imprisonment and/or a penalty of up to $51,000, and a penalty of up to $255,000 for a body corporate) if the worker falls into one of the abovementioned categories, and is being “exploited”, and the first person knows of, or is reckless as to, those matters (i.e. the worker being exploited and being an unlawful non-citizen, or a lawful non-citizen who is working in breach of a work-related visa condition). Exploitation occurs where a person causes another person to enter into slavery (or a condition similar to slavery), servitude, forced labour, forced marriage or debt bondage.

Referring an unlawful non-citizen for work or referring a lawful non-citizen for work in breach of a work-related visa condition

Similarly, penalties may be imposed on persons who operate a service, whether for reward or otherwise, referring foreign nationals to third persons for work (such as recruitment or migration agencies), if they refer an unlawful non-citizen for work, or refer a lawful non-citizen for work in breach of a work-related visa condition. The levels of the penalties that may be imposed on such referrers are the same as those that can be imposed on persons who allow, or continue to allow, such persons to work as set out above.

Liability of executive officers

Company directors, company secretaries, chief executive officers and chief financial officers of a body corporate, are all classified as executive officers, and may also face civil or criminal liability for a contravention by the body corporate in certain circumstances.

An executive officer of a body corporate will be civilly liable and be fined up to 90 penalty units (this would presently equate to up to $15,300) in the following circumstances:

  1. the body corporate contravenes a civil penalty provision (one that is subject to a fine) in the relevant part of the Act; and
  2. the executive offer knew that, or was reckless or negligent as to whether, the contravention would occur; and
  3. the executive officer was in a position to influence the conduct of the body corporate in relation to the contravention; and
  4. the executive officer failed to take all reasonable steps to prevent the contravention.

Similarly, executive officers will be criminally liable and fined up to $20,400 in the following circumstances:

  1. the body corporate commits an offence under the relevant part of the Act; and
  2. the executive offer knew that, or was reckless or negligent as to whether, the offence would be committed; and
  3. the executive officer was in a position to influence the conduct of the body corporate in relation to the offence; and
  4. the executive officer failed to take all reasonable steps to prevent the offence being committed.

In determining whether the executive officer failed to take “all reasonable steps”, a court must have regard to what action (if any) the executive officer took towards ensuring that the employees, agents and contractors of the body corporate had reasonable knowledge and understanding of the requirements to comply with the relevant provisions of the Act, and what action (if any) the executive officer took when he or she became aware of the contravention or offence.