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457 Sponsorship Visa Breaches and Taskforce Cadena

Written By Maryke Wylde
Tue, Nov 24, 2015
Maryke Wylde

Since 1 July 2015, Taskforce Cadena has been investigating compliance of the sponsorship requirements applicable to all approved 457 business sponsors as part of a broader operation into incidents of fraud and the exploitation of workers. The taskforce is headed by the Department of Immigration and Border Protection in conjunction with the Fair Work Ombudsman.  The Taskforce will also involve the Australian Federal Police, Australian Securities and Investment Commission, Australian Tax Office and other agencies.

Taskforce Cadena is currently targeting food production and agricultural industries, in particular the middlemen hiring overseas workers on legitimate visas that allow them to work and then supplying this labour pool to other, separate companies. The employment of these visa holders does not require sponsorship by the employer nor are the proposed terms and conditions of employment of the individuals assessed by the Department of Immigration. However, all overseas nationals must still be employed in line with relevant federal and state laws regarding pay, conditions and workplace entitlements.

The taskforce has recently conducted surprise raids on farms in the Bundaberg region of WA and twelve people have been found to be working illegally. One of the workers was on a bridging visa with no right to work, while the others were on visitor visas and had breached their conditions. The raids send a clear message to those in the industry to do the right thing or face prosecution.  Civil penalties for allowing a person to work in breach of their visa conditions are up to $15,300 for an individual and $76,500 for a corporation. Penalties for criminal offences are higher.

On 20 May 2015, the Federal Court of Australia handed down the largest ever court imposed fine for breaches of the Subclass 457 business sponsorship obligations and other workplace relations breaches to Choong Enterprises; a case that is the first of its kind in Australia.

Choong Enterprises, an operator of restaurants and cafes in Darwin acted as a sponsor for 10 employees from the Philippines, paying them as little as $12 per hour and making them work 60 hour weeks in the dry season, when they were supposed to work 38 hour weeks. They were not paid extra for working overtime or on public holidays and they received no paid sick leave or superannuation.

One of the primary obligations of an approved business is to ensure that sponsored employees are employed on the same on terms and conditions as those of an Australian employee for an equivalent role. In addition to minimum employment standards that all employers need to be aware of, the Migration Regulations also provide a minimum salary threshold that must be paid to all 457 visa holders.  The current minimum salary payable to a 457 visa holder is $53,900 + superannuation. In this case, the salaries being paid by Choong Enterprises to their 457 visa holders were below the minimum salary threshold. Choong Enterprises had also not kept proper records and had erroneously passed on costs associated with the visa process to their 457 visa holding employees that they were not permitted to pass on. 

The judgement, handed down in Darwin by Federal Court Justice John Mansfield, ordered Choong Enterprises to pay an extra $125,956 in reimbursement to the Filipino workers it underpaid, as well as $26,460 as PAYG tax payable to the Commonwealth. That was in addition to the $176,200 fine they had already been ordered to pay for breaching sponsorship obligations under the subclass 457 visas program, and $6,400 to the workers for the migration agent costs illegally deducted from their pay.

In response to this finding, a spokesperson of the then Assistant Minister for Immigration and Border Protection Senator Michaelia Cash, said:

“This is further evidence of the Coalition government’s commitment to ensure those who seek to misuse our migration programmes and exploit workers will be targeted and will be prosecuted.”

“We have zero tolerance for those who seek to exploit workers, and today’s judgement is evidence of the significant financial penalties that await those who flout our immigration and employment laws,” the spokesperson said.

If you are currently an approved business sponsor and/or employ 457 visa holders in your business, you must ensure you’re meeting your sponsorship requirements.

The key requirements are:

              1. Obligation to cooperate with Inspectors
              2. Obligation to ensure equivalent terms and conditions of employment
              3. Obligation to pay travel costs to enable sponsored persons to leave Australia
              4. Obligation to pay costs incurred by the Commonwealth to locate and remove unlawful non-citizens
              5. Obligation to keep records
              6. Obligation to provide records and information to the minister
              7. Obligation to provide information to Immigration when certain events occur (change in sponsor’s address or contact details, cessation of employment of the primary visa holder, a change in duties carried out by the visa holder)
              8. Obligation to ensure the primary sponsored person works in the nominated occupation
              9. Obligation not to recover, transfer or take actions that would result in another person paying certain costs
              10. Obligation to provide training

The Department of Immigration can sanction an employer for breaches to the above obligations.  In addition, there can be other circumstances where the Minister may take administrative action outside of breaches of the sponsorship obligations (such as the provision of false or misleading information). 

Please click here for a full list of an approved sponsor’s obligations under the 457 visa program.

If you need assistance with your sponsorship obligations or checking the legal right to work of your employees, please contact TSS Immigration on 1300 877 466.

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