Employing overseas workers:

1
Employing overseas workers what you need to
know December 2009
2
What a difference a year makes

• October 2008

3
What a difference a year makes

• December 2009

4
Who we are
5
Format

• Immigration changes introduced in 2009 Jackie
  Hill
• New skills testing requirements Jackie Hill
• Introduction of mandatory labour agreements for
  nominated trades Noelene Merrey
• What constitutes market rate and how this fits
  into the agreement and award system Steve Scott

6

• 2009 Immigration Changes
• New Skills Testing Requirements
• Jackie Hill

7
457 visa program changes in 2009

• From July 2009
• The indexation of the minimum salary level (MSL)
  for all new and existing 457 visa holders by 4.1
  to base salary 45,220
• Increase in English language requirements from
  4.5 IELTS to band score 5 IELTS for 457 trade
  occupations / chefs
• Introduction of formal skills assessment from
  high risk countries in nominated trades and
  chefs
• The extension of the labour agreement pathway as
  the sole pathway, for all ASCO 5 7 occupations
• (Note English language exemption - base salary
  set 81,040 or above where an English language
  exemption for a 38 hour work week can be
  obtained)

8
457 visa program changes in 2009

• From September 2009
• Introduction of a market-based minimum salary
  MSL replaced by TSMIT (Temporary Skilled
  Migration Income Threshold)
• Equivalent terms conditions to Australians
• Employers required to demonstrate commitment to
  employing local labour and non-discriminatory
  practices
• Training benchmarks

9
Migration Act reform

• Worker Protection Act 2008 came into effect Sept
  2009
• Redefined sponsorship obligations
• Equivalent terms conditions
• Pay travel costs from Australia
• Record keeping / reporting
• Greater monitoring / investigative powers
• Greater penalties

10
Formal skills assessment

• Roll-out of first occupations from July 2009
• Welder (first class)
• Metal fabricator (boilermaker)
• Motor mechanic
• Fitter
• Cooks chefs
• From high risk countries
• Brazil, China, Fiji, India, Papua New Guinea,
  Philippines, South Africa, Thailand, Vietnam
  Zimbabwe

11
Second wave of occupations

• From 1 November
• Driller
• Panel beater
• Vehicle painter
• Automotive electrician
• Metal machinist (first class)
• General mechanical engineering tradesperson
• General fabrication engineering tradesperson
• Sheetmetal worker (first class)
• General electrician
• Carpenter cabinetmaker
• Baker

12
The process

• Three providers contracted through Trades
  Recognition Australia
• VETASSESS
• Victorian University / Education Training
  International (WA based)
• Hospitality Training Association (chefs/cooks
  only)

13
Timeline cost

• Two-part process
• First step
• Paper-based evaluation
• Second step
• Web-based technical assessment
• Cost - 2000
• Outcome Certificate III Australian qualification
• Estimated 7 week process from application (???)

14
The challenges

• Applicants are required to demonstrate
  knowledge of Australian industry standards
• No physical hands on testing
• Applicants matched to occupation skills
  criteria, not the position criteria of job in
  Australia
• Teething problems
• Hastily introduced / assessors on learning curve
• Some occupations more easily assessed than others
• Success rate so far ??

15
The big questions

• Who pays? Candidates from high risk countries
  unlikely to have the funds
• How to identify candidates in overseas locations
  that will have a reasonable chance of success?
• When is English testing undertaken? before or
  after skills testing

16
ISA Group experience

• Overseas recruitment experience
• Own Philippines recruitment office / agents
• Partner in IIM skills testing training centre
• One-off placement to labour pooling
• BHP Billiton Rapid Growth Project

17

• Labour Agreements
• Noelene Merrey

18
Mandatory labour agreements

• Required for ASCO 5, 6 7 occupations that
  include

19
What are labour agreements

• Can cover temporary and permanent workers
• In addition to being the avenue to employ workers
  in ASCO 5-7 occupations, can be advantageous for
  any ASCO occupation if
• a large number of workers for relatively short
  term projects and tight timeframes are required
• there is an industry need e.g. an industry body
  can put a labour agreement in place
• Negotiable

20
The implications / challenges

• New territory untested to a degree
• Level of detail
• Need for workforce planning
• DIAC response
• Time cost
• Consultation

21

• Market Salary Rates
• Stephen Scott
• This presentation subject to actual
  interpretations by
• DIAC and DEEWR

22
Market salary rates

• Obligation on sponsor to ensure equivalent terms
  and conditions of employment are provided
• The standard business sponsor must ensure that
  the terms and conditions of employment provided
  to a primary sponsored person are no less
  favourable than the terms and conditions the
  person provides, or would provide, to an
  Australian citizen or Australian permanent
  resident to perform equivalent work in the
  persons workplace at the same location.

23
Market salary rates

• Questions to ask
• Does sponsor have a comparative employee (not
  necessarily an employee who performs exactly the
  same work)?
• Is the sponsored nominee covered by the scope and
  application of a formalised collective employment
  agreement?
• Check both classification and type of work
  against agreement.

24
Market salary rates

• Questions to ask (cont)
• If not covered by formalised collective
  employment agreement, comparative employee will
  be covered by written or verbal common law
  contract that may sit on top of applicable award.
• Award can only be used if it is the document that
  determines the actual terms and conditions of a
  comparative employee.

25
Market salary rates

• Questions to ask (cont)
• If comparative employee is engaged, or is
  envisaged will be engaged, terms and conditions
  of visa nominee should be comparable subject to
• Skills held
• Experience gained overall and with the company
• Qualifications held
• Location of work

26
Market salary rates

• Questions to ask (cont)
• If sponsor does not have established levels of
  remuneration, terms and conditions for
  comparative employee then market rates will
  apply.
• Market levels of remuneration, terms and
  conditions can be established by industry or
  specifically commissioned surveys.

27
Market salary rates

• Exceptions to market salaries
• No primary sponsored employee can be paid less
  than 45,220 per year (Temporary Skilled
  Migration Income Threshold TSMIT), even if
  market, agreement or award allows for less. (e.g.
  hairdressing and some hospitality roles)
• Market rate test does not apply to primary
  sponsored employee if salary is above 180,000
  per year.

28
Market salary rates

• Terms and conditions of employment include
• Earnings for undertaking work on the prevailing
  roster and under the same environmental and
  working disabilities.
• Benefits provided free of charge to others
  undertaking similar work at the same location.

29
Market salary rates

• Base rate is the rate payable for working the
  ordinary hours excluding
• Incentives
• Loadings
• Monetary allowances
• Overtime and penalty rates, and
• Other separately identifiable amounts

30

• Earnings include
• The base rate of pay
• Incentives, loadings, monetary allowances,
  overtime and penalty rates for fixed rosters, and
• Other separately identifiable amounts
• Superannuation contributions over the SGC limit
  only
• The agreed value of non-monetary benefits
• Earnings exclude
• Payments for amounts unable to be determined in
  advance
• Reimbursements, and
• Superannuation payments up to the SGC limit only
  (currently 9)

31
Market salary rates

• Focus
• Ascertain whether the base salary will be in
  excess of 180,000 per annum no market rate
  comparison needed. (This is an area where varied
  interpretation is encountered.)
• If no, ascertain the remuneration, terms and
  conditions that you would realistically use to
  attract and retain an Australian resident
  employee in a position to that envisaged for the
  sponsored nominee.
• Ensure the base rate exceeds 45,220.

32

• Conclusion

33
Concluding messages

• Changes are a reality
• Workforce planning is critical
• Strategic approach essential
• PLAN AHEAD
• labour agreements
• 457 skilled worker requirements
• ADVICE IS AVAILABLE
• Work with the changes
• dont let them disrupt project plans

34
Questions