Restructuring? Make Sure There Are No Immigration Headaches
February 28, 2014
Country / Territory
Corporate restructures, sales or takeovers can be turbulent times for many organisations and immigration compliance is often overlooked in this process. Changes in the corporate legal structure of Australian companies can significantly impact foreign workers holding Temporary Work (Skilled) subclass 457 visas (subclass 457 visa) in a number of ways and require careful planning.
Has the legal entity employing any 457 visa holders changed?
In all cases an assessment will need to be made as to whether the legal entity employing any 457 visa holders has changed. This determination can be a complex assessment and expert advice should be sought.
All sponsored subclass 457 visas are subject to a condition that requires the visa holder to be employed by the 457 sponsor or an ‘associated entity’ of the sponsor (there are a few limited exceptions to this). In turn, all sponsors are obligated to ensure that the person is only engaged as an employee of their business (or of an associated entity) and does not work in an occupation other than the nominated occupation.
Any 457 visa holder who is employed by an acquiring organisation that is not the approved sponsor (or an associated entity) would be in breach of their visa, which could then be subject to cancellation. In addition, the organisation may also commit an offence under the employer sanctions provisions within the Migration Act for employing a foreign worker in breach of their conditions.
Where the 457 sponsor has changed its business name or structure but has retained its original Australian Business Number (ABN), the Department of Immigration and Border Protection (DIBP) will not generally regard this as a change of sponsor as the legal entity of the sponsor has remained the same.
However, where the 457 sponsor is taken over by another business and registers under a different ABN, or is integrated into a business and adopts the ABN of the subsuming business, DIBP may find that the legal entity has changed. In such cases, to ensure compliance with the 457 conditions, the acquiring organisation will need to lodge new nominations for any sponsored 457 visa holders. In some cases, labour market testing may be required to satisfy DIBP that there is no suitably qualified and experienced Australian who is readily available to fill the nominated positions.
Has DIBP been notified of the changes?
All 457 business sponsors must comply with a number of sponsorship obligations which include obligations to notify DIBP of specific changes to the corporate structure within ten working days, including circumstances where:
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The sponsoring entity ceases to exist;
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There is a change of address or contact details;
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New directors are appointed.
DIBP also needs to be notified of any 457 visa holders who have ceased employment as a result of the restructure.
Have you considered the impact on eligibility for permanent residence?
The permanent employer sponsored programs allow Australian businesses to nominate foreign workers for permanent positions in Australia. Within these programs, the Temporary Residence Transition (TRT) stream is the main eligibility pathway for 457 visa holders where they have been directly sponsored by their nominating employer and have been working in their nominated positions for at least two years in the three years immediately before lodging their permanent visa application.
Under current immigration policy, periods of time working for associated entities can be counted towards the claimed two-year employment period. However, any changes within that time in the structure or legal status of the entity in which the 457 visa holder has worked could mean that the employment cannot be counted and the two-year period is reset. This applies even if the person is still working in the same position, performs the same duties, and has the same working conditions.
A final consideration if issuing new employment contract
Immigration compliance is not restricted to 457 visa holders. If new employment contracts are being issued, remember that the organisation must ensure that all employees continue to have permission to work, even those employees believed to be Australian citizens or permanent residents. In the case of Australians, a single check is generally all that is required by sighting some form of government issued document proving their citizenship or permanent residence status, together with photo identification. However, be careful when relying on Australian birth certificates as due to changes to the Australian Citizenship laws, not all persons born in Australia are entitled to Australian citizenship and additional evidence will need to be sighted (for example, an Australian passport or confirmation of enrolment to vote in Australian state or federal elections).
The work rights of temporary visa holders may need to be re-checked from time to time and the organisation must ensure that it has appropriate processes in place to continue to check and monitor this.
Fragomen can help your company during this restructure process. We offer a range of services, including specialist visa assistance, audits, briefing sessions and reviewing employment contracts, policies and procedures. Speak to Fragomen today about how your organisation can benefit from our tailored assistance.
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