The 457 Temporary Work (Skilled) visa explained

457 Temporary Work (Skilled) visa

Restaurant & Catering Australia sheds light on the proposed changes to the 457 Temporary Work (Skilled) visa and explains what you can do right now to minimise the fallout. By Zoë Meunier

When the government unexpectedly announced last April that the 457 Temporary Work (Skilled) visa would be scrapped in March 2018, many in the restaurant industry panicked. They argue that scrapping the 457 will make it harder and more expensive to get skilled overseas staff.

But while there’s no denying the industry will be impacted, getting properly educated and informed on how the changes affect you and what options are available—and taking decisive action now—can determine how drastic the repercussions will be.

Restaurant & Catering Australia (R&CA) CEO Juliana Payne completely understands the sector’s negative reaction.

“The industry doesn’t understand why limitations should now be put in place in a system that’s been working relatively effectively for a number of years,” says Payne. “The changes were not widely consulted and people felt caught off guard.”

While a complex and nuanced area of migration and law, the most significant changes to the visa can be summarised as follows:

  • The current 457 visa will be replaced with a new Temporary Skills Shortage (TSS) visa.
  • There is now a Short-term Skilled Occupation List (STSOL) which includes cooks, café and restaurant managers, pastry chefs and bakers. Businesses can sponsor overseas employees in these occupations for a maximum of two years, after which they can apply for a TSS visa for two more years, but there is no automatic eligibility to apply for an employer-sponsored permanent residency (186 ENS) visa after this.
  • There is also a Medium- and Long-term Strategic Skills List (MLTSSL) which includes chefs. Businesses can sponsor MLTSSL occupations for a maximum of four years. These occupations can apply for an employer-sponsored permanent residency visa after working for the same employer on either their current 457 visa or a TSS visa for three years.
“The industry doesn’t understand why limitations should now be put in place in a system that’s been working relatively effectively for a number of years.”—Juliana Payne, CEO, R&CA

“I would advise restaurant proprietors to actively encourage their sponsored chefs to apply for company-sponsored permanent residency when they become eligible,” says R&CA’s migration specialist Jules Pedrosa, who’s on board to offer advice to all R&CA members.

Another pathway to permanent residency

Pedrosa admits that things are tricker for those on the STSOL, who don’t have this same automatic eligibility for a 186 ENS visa, but he emphasises there is still another pathway to permanent residency for cooks, café and restaurant managers and others on the Short-term list.

“According to the Department of Immigration’s communique, STSOL workers may still be eligible to apply for the direct entry stream of the 186 employer-nominated scheme,” he says. “I would suggest restaurant owners and proprietors review what qualifications and relevant employment experience their foreign staff have, as they may be eligible to apply under this other stream.”

In essence, an employee is eligible if they can provide a positive skills assessment certificate from the body that assesses their occupation and have at least three years’ relevant employment experience in their skilled occupation after obtaining formal qualifications.

“If their relevant employment status and skills set are deficient, restaurant owners and proprietors should encourage their foreign staff to gain whatever formal qualifications they need to become eligible,” says Pedrosa.

Fighting for the industry

Payne also wants to reassure the industry that the R&CA is working on its behalf to minimise the impact of the still to be finalised changes.

“We’re trying to reason and negotiate some beneficial changes which are still underway and we hope the government will make a good decision once the full package is revealed in March 2018,” she says.

One of the areas of concern for the R&CA is the government’s proposed changes to training levies. Generally, under the current scheme, if employers sponsor a foreign national, they pay a training benchmark fund or spend their existing training expenditure on genuine training and development of their employees, which counts towards this benchmark.

“It’s not a question of seeking cheaper or different labour to replace Australians in the job; there is an actual shortage of appropriate skills to do the job.”—Juliana Payne, CEO, R&CA

“The government is going to change that to make it a flat upfront fee that the employer pays for each sponsored person, regardless of how much money they’re already spending on existing training and development programs for their staff,” says Payne. “So those who are genuinely training and developing their existing staff will be hit with a double whammy when they come to sponsor a foreign national.”

Do we need foreign workers?

When announcing the scrapping of the 457 visa program, Prime Minister Malcolm Turnbull said the reform will “ensure foreign workers are brought into Australia in order to fill critical skill gaps and not brought in simply because an employer finds it easier to recruit a foreign worker than go to the trouble of hiring an Australian”.

The R&CA contends that this is a simplistic argument. “It’s not a question of seeking cheaper or different labour to replace Australians in the job; there is an actual shortage of appropriate skills to do the job,” says Payne. “These are positions that are difficult or impossible to fill and are being filled by appropriately skilled foreign nationals.

“These people coming in are, by and large, highly specialised, such as a French chef or sushi chef or a sommelier bringing his knowledge of wine and what’s happening overseas. They bring skills that they transfer and teach people here and that uplifts our industry, our skills and our ability to service the more than six million tourists who visit each year with very high expectations.”

Pedrosa contends that losing access to foreign workers, combined with the disincentive for companies to spend money training staff due to the tax levies, creates a risk of the quality of staff stagnating. Payne, meanwhile, fears it could fuel the black economy.

“Where there’s increased regulation, increased cost, increased taxation, increased levy, that can often drive poor behaviour,” Payne says. “As people are squeezed at one end, they may look at different options such as paying people cash or having students working more hours than they’re meant to.”

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