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Labour Agreements are negotiated between sponsors and the Minister of Immigration to be able to use the 457 program with certain concessions to the usual requirements. Relevantly in relation to the 2017 immigration reforms, these include the ability to sponsor occupations which are not eligible for a subclass 457 visa in the standard program.
Labour Agreements therefore provide a possible pathway to sponsor occupations:
  • that have been removed from the 457 list; or
  • that are subject to caveats (i.e. by negotiating for those caveats not to apply).
The government is prepared to approve Labour Agreements subject to the following requirements:
  • A demonstrated skills shortage in the Australian labour market for the roles for which a Labour Agreement is sought;
  • Demonstrated and exhaustive attempts by the sponsor to recruit locally for the roles;
  • Union consultation in relation to the proposed occupations and number of positions sought;
  • A strong business case that the 457 visa program is an appropriate way to fill the skills shortage (rather than training or reskilling Australians);
  • Demonstration that the number of positions sought in each occupation is reasonable in the circumstances;
  • The sponsor has a sound record of employing and training Australians;
  • The sponsor is of good standing; and
  • The terms and conditions of employment will meet Australian standards.
There are industry template agreements that apply to particular industries. Where these templates apply, the Minister has already determined the eligibility criteria and the available concessions, which cannot be negotiated further.
  • Dairy Industry
  • Fishing Industry
  • Meat Industry
  • Pork Industry
  • Restaurant (Fine Dining)
  • Snow Sports
  • Minister of Religion
  • Designated Area. These agreements are for businesses operating in the Northern Territory. Available concessions include eligible occupations, and lower English and salary levels. Endorsement from the Northern Territory government is required instead of union consultation.
  • On-Hire industry. Note that this template agreement allows on hire of 457 visa holders in eligible occupations. Labour on-hire is otherwise not permitted in the subclass 457 visa program. It is not possible to obtain an on-hire labour agreement which also includes off-list occupations.
The processing time for approval of a Labour Agreement is approximately three months. Once the Labour Agreement is approved, the employer can start to sponsor overseas workers for subclass 457 visas in occupations approved under the Agreement. It is possible to negotiate some changes to the Labour Agreement during the three year approval period, such as an increase to the ceiling number of nominations that can be lodged in any of the three years of the Labour Agreement, adding new occupations to the Labour Agreement or varying the approved locations of employment.
The sponsorship obligations that apply under the standard 457 program apply to visas approved under a Labour Agreement. The Labour Agreement may also vary the standard sponsorship obligations or add additional obligations that apply specifically to the roles sponsored under the Agreement.
Fragomen has a practice group which has assisted many clients in this specialised area of Australia’s migration program. If you have any queries about the how a Labour Agreement may be able to assist your business, please contact us.