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457 Visa On-Hire Arrangements & Sponsorship /Nomination Limitations: Visa Rules and Labour Entry Examples

These Migration Regulations

• Division 1.4A sponsorship regulation 1.20C(1)
• Division 1.4A nomination regulations 1.20G(1)(c) and 1.20GA(2) and
• Schedule 2 visa provisions 457.223(4)(ba) and 457.223(5)(ca)

have been amended to exclude businesses from the standard business sponsorship stream of the 457 TBE program, in circumstances where:

• the 457 visa holder would be on-hired to an unrelated business and
• the relevant nomination is lodged on or after 1 October 2007
  

(These amendments now do not apply if:

• the Subclass 457 visa holder would be working in the business's own operations or those of a related business or
• the relevant nomination was lodged before 1 October 2007.)

Using nomination regulation 1.20G(1) as an example (see also below), a standard business sponsor cannot nominate if regulation 1.20G(3A) applies - that is

• their business activities include activities relating to:
• the recruitment of labour for supply to other unrelated businesses or
• the hiring of labour to other unrelated businesses and
• the proposed nominated activity is an activity in relation to which the sponsor proposes supplying the services of a sponsored visa holder to another unrelated business.

In Assessing Cases

As a sponsor who falls within regulation 1.20G(3A)(b) will also fall within 1.20G(3A)(a) (as the sponsor's business activities involve the recruitment or hiring of labour for supply to unrelated businesses), immigration case officers should first assess cases against regulation 1.20G(3A)(b).

The two key concepts in regulation 1.20G(3A)(b), namely:

• unrelated business and
• the services of a sponsored visa holder

should be interpreted in practice by a immigration case officer as follows.

Unrelated Business
In assessing whether two businesses are related or not, if both businesses are incorporated, a Division 1.4A case officer delegate should apply the same test that is applied for regulation 1.20D(2)(b)(iv) and related Division 1.4A direction.

If the on-hire firm is not a corporation but the other entity is a corporation, a case delegate can apply the same test as if the on-hire firm were a corporation. If neither business is incorporated, they should be considered to be unrelated businesses for the purposes of the TBE ‚''on-hire‚'' provisions.

The Services Of a Sponsored Visa Holder

Relevant Considerations:
To assess this factor, immigration case officer delegates should consider whether the proposed arrangement would involve the supply of 'business services' to an unrelated business as opposed to supplying 'the services of the sponsored visa holder' by the sponsor/sponsor applicant to an unrelated business.

Business Services:

For the work activities of a visa holder to be considered part of a business service of the sponsor/sponsor applicant, all elements described in direction Identifying the direct employer would need to be directly controlled by that business.

The only possible exception to this are in regards to:

• 'provision of place of work' and
• 'tools, material and equipment for work'

as these elements may be provided by other businesses from time to time where the nature of the activity is such that the person would be required by the sponsor/sponsor applicant to work in the premises or use the tools of other businesses in order to complete the activity. Physically working at the premises at an unrelated business is not by itself is not necessarily indicative of on-hire.

Example:

An accounting client firm (the sponsor applicant) has been contracted to perform an external audit of another unrelated company's accounts. As part of this service a Subclass 457 visa holder and possibly other employees of the accounting firm would be required to work on-site with the unrelated company for a short period. The accounting firm retains control over all of the staff member's actions and work tasks and could recall the staff member to continue their work in the accounting firm's own premises at any time. The accounting firm renders an invoice on the unrelated company for its auditing services. In this example, the work of the Subclass 457 visa holder would be considered part of a 'business service' of the sponsor applicant. It would not be considered 'the supply of the services of a sponsored visa holder' and therefore would remain within the scope of standard business sponsorship arrangements.

Services of a sponsored visa holder:
Where the sponsor/sponsor applicant shares, with another business, control of some or all of the aspects of a direct employer-employee relationship described in PAM3: Div1.4A - Identifying the direct employer, they would not be considered to be providing a 'business service'. They would be considered to be supplying 'the services of a sponsored visa holder'.

Example:

A client company has a short-term vacancy in its IT department and contacts an unrelated on-hire business (the sponsor) specialising in IT. The on-hire business places a subclass 457 visa holder in the other company‚''s business to fill their vacancy. Although the visa holder is an employee of the on-hire company and paid by them, the visa holder would work to the standard set out by the receiving company on duties assigned by that company. The on-hire firm renders an invoice on the unrelated company for the hours worked by the Subclass 457 visa holder in the company's business. In this example, the work of the Subclass 457 visa holder would not be considered a business service. It would be considered 'the supply of the services of a sponsored visa holder' and on this basis the on-hire company, would not be eligible to apply to become a standard business sponsor and could not nominate under standard business sponsorship provisions.

Mixed business:

Some businesses may provide 'business services' using some of their employees and also supply 'the services of other employees' (that is, they may fall into both categories in relation to different personnel they seek to sponsor). Where this is the case, such businesses should be advised that it is open to them to request access to a labour agreement in respect of the provision of services of a sponsored visa holder. The business may continue to use standard business sponsorship arrangements in those cases where they are supplying a 'business service' as distinguished above.

Example:

A large multinational Information and Communcition Technology (ICT) client company engages in a diverse range of ICT-related business in Australia. The business ranges from the provision of ICT services to other large companies by a large number of staff (including Subclass 457 visa holders) to the provision of individuals (also including Subclass 457 visa holders) with specialist skills as requested to work in client companies. At the former end of the scale the business is clearly providing a 'business service' rather than the 'services of Subclass 457 visa holders; while at the latter end of the scale the business is clearly providing the 'services of Subclass 457 visa holders'. The company can use the SBS program in relation to the Subclass 457 visa holders involved in the provision of 'business services' but must enter into a labour agreement in relation to Subclass 457 visa holders who are being on-hired (companies who wish to utilise the labour agreement to bring out both sets of overseas workers should contact Labour Agreement Section to discuss). And there will of course be other situations along this scale, however, the immigration policy on drawing the distinction between on-hire and other activities above generally reflects in determining the appropriate course in those instances.

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