Knowledge is strength

It is the perfect storm for overseas candidates looking to move to Australia. An environment of low local unemployment rates, positive business growth and the acute skills shortage means that there simply is not enough talent in Australia. Organisations are once again casting their nets overseas for talent. What areas do businesses need to be aware of to ensure movement of overseas workers is smooth and trouble-free? Perhaps more importantly, are Australia's constant policy and legislative changes conducive to attracting overseas talent?

Setting the scene

On the launch of KPMG's Skilled Migration Survey in September 2010, Karen Waller, head of KPMG's Migration practice, said 85% of respondents had felt no impact from the GFC when it came to skilled migration and more than half of the respondents were suffering from a skills shortage, with Queensland and South Australia the hardest hit States.

"Queensland and South Australia are suffering a skill shortage because they have been less inclined to engage in the Federal Government's 457 visa scheme. In contrast, companies in Western Australia also feel a squeeze on headcount but are using skilled migration much more aggressively," Waller said.

The survey indicated that employers are trying to meet their workforce needs by using the 457 visa program as it allows employers to recruit foreign workers in approved occupations for up to four years. More than half of KPMG's survey respondents expected to hire additional workers under this scheme in the current financial year.

"The 457 visa offers businesses flexibility in meeting temporary skill shortages. Up to half the people entering Australia under a 457 visa have subsequently been granted permanent residency. For both employers and workers, 457 visas offer the advantages of a try before you buy system," Waller added.

Ron Kessels, special counsel, Fragomen, says his firm is regularly speaking with employers who have not previously considered sponsoring talent from overseas but who now see this as the only way to find people they need. For example, he says, a growing problem for many employers in the construction sector comes from the fact that the resources boom is drawing labour from all over Australia, leaving many small and medium employers looking for tradespeople. He expects to see the same in the IT sector if the NBN, or some alternative, gets off the ground.

"Given that home grown talent produced by the higher education is not meeting the skills shortfalls, particularly in the short to medium term, the real challenge for many employers - particularly small and medium size businesses - is not so much the willingness to hire from overseas but how they can access that talent pool," Kessels says.

Internal business repercussions

With the realisation of the importance of overseas workers in the Australian talent mix, there is also growing awareness of the issues that accompany this shift. Immigration issues can affect businesses in a number of ways; the politics of immigration and the use foreign labour can lead to mistrust and disharmony in the workplace and breaches of immigration rules can lead to serious penalties including fines and the denial of access of foreign workers. Whilst most HR professionals understand the rules and the politics, their challenge is to raise awareness in their organisations about the importance of these matters to the organisation as a whole (and to the individuals directly affected) and to ensure that there are robust policies in place to avoid trouble.

Room for improvement

If knowledge is strength, HR professionals need to be aware of the larger issues at play. It's undeniable that Australia is a popular destination for ex-pats, but how do we rank on a global scale in terms of best practice for global mobility?

The Centre for International Employment and Migration (CENTIEM) is an initiative of Fragomen Australia. CENTIEM brings together experts in the field to produce research, commentary and educational tools designed to inform individuals and organisations interested in global mobility.

CENTIEM's spokesperson Kessels believes that Australia's 457 visa system is up there with the best; it is demand driven, allows for sponsorship of a wide range of occupations and provides residence and work rights for dependent family members. Kessels feels that where the system let's employers down is lack of flexibility when it comes to intra-company transfers or short-term assignments. This leads to problems when employers are forced to re-invent their internal HR and payroll requirements in order to meet Australian visa rules. Indeed, one of CENTIEM's key projects for 2011 will be to lobby for changes to the short-term work visa system to accommodate the needs of global corporations with internationally mobile workforces.

In relation to Australia's permanent migration system, Kessels says Australia is still struggling to formulate an effective system to ensure we get the people we need. "Recent changes to the points test for the General Skilled Migration program were designed to 'decouple' Australia's migration system from the education sector and to ensure that migrants help to fill the skills shortages that Australia faces," he says. "The changes certainly 'decouple' the GSM program from the vocational education sector and will mean the death of many cooking and hairdressing colleges throughout Australia, but the new program does not adequately address skills shortages in key areas such as the construction trades and nothing in the semi-skilled or unskilled area."

Kessels adds that this is consistent with the increased emphasis by the government on the use of the employer demand driven programs such as 457 and ENS to supply the labour market with tradespeople and to fill short-term skills shortages. For Australian businesses needing labour, this will mean more recruitment from overseas with little supply being pumped directly into the labour market through the general migration program. Whilst employer sponsored programs can be used to top up areas of skills shortage, how businesses will access lesser skilled workers is a big issue and a looming hot political debate.

Business implications

On a more practical level, a combination of vague laws and flexible policy results in a situation where business cannot know with certainty how the migration rules will be applied in any given circumstance. It raises the question: Is the government doing enough to work with employers on these issues?

Waller noted that nearly two thirds of the surveyed businesses surveyed in KPMG's survey believed the government could better leverage its skilled migration program to support population growth and the exodus of Baby Boomers from the workforce.

"The challenge for government is to ensure there is independent and rigorous discussion about what role skilled migration plays in Australia to help businesses grow," she said.

Kessels agrees, and feels there should be more consultation with corporate Australia about the impact of migration rules on their businesses. He notes that one of CENTIEM's key objectives is to facilitate this by engaging with government on immigration issues relevant to business.

"In our experience, a lack of consultation about business needs and how proposed changes may work in practice has led to migration law and policy that creates real issues for many employers of overseas workers. One example is in relation to temporary business visas such as the 456 visa and Electronic Travel Authorities. These visas are granted with a condition that the visa holder must not engage in work that might otherwise be done by an Australian citizen or permanent resident. Although this seems clear and would allow for short-term employment of an overseas worker in many situations, the Department's policy provides a much stricter interpretation that effectively prohibits employment of more than six weeks duration and even then only in very limited circumstances and where the position is not ongoing. The inconsistency between the law and the policy leads to a large degree of uncertainty about how these visas can and should be used. There are many other examples," he says.

Who's responsible?

According to KPMG's survey, 55% of respondents felt that keeping up-to-date on changes to immigration law posed the greatest concern for their business. With constant changes to legislation and even government direction on migration issues, where does the responsibility lie within an organisation for keeping on top of the situation?

Kessels believes this will vary from organisation to organisation, but ultimately there are serious risks that could affect the business in a financial and reputational way and the level of responsibility for ultimate decision-making should reflect this.

"Organisations need to take migration compliance seriously and decide where responsibility should lie for decisions that could result in a financial penalty on the company, suspension of the company's sponsorship rights or an adverse media story," he says. "Different levels of responsibility may be needed for different decisions."

At the highest level, Kessels says senior management should be aware that the organisation is involved in the employment or sponsorship of overseas workers, and understand the associated compliance obligations and risks of managing all their overseas workers. They should ensure adequate planning, policies and procedures are in place that would establish that the corporation takes reasonable precautions and exercises due diligence to avoid conduct that would amount to a breach of migration law. This would include ensuring that managers are aware of the laws and their individual responsibilities in relation to these obligations, and that there is a professional undertaking and culture of compliance and disclosure amongst management teams.

HR teams need to ensure that the general migration laws and sponsorship obligations are being strictly complied with. This is likely to require the education and training of managers and supervisors with responsibility over temporary visa holders so that will report to HR any matters that may affect the organisation's obligations. It would also be prudent to involve in-house counsel or an external expert to ensure policies and procedures are compliant and robust.

"HR teams regularly tell us their main challenge in relation to migration compliance is ensuring that their line managers and others with responsibility over the day to day management of sponsored employees fully comprehend the importance of migration compliance to the organisation and understand the highly disruptive impact of exposing the business to these risks," Kessels says. "Project managers and line managers have their own deadlines and delivery pressures which mean they are less likely to be concerned about migration rules, which they often see as an annoying hurdle and something to get around rather than as legally binding obligations that can cause severe business interruption."

The costs of non-compliance

KPMG's survey revealed that only 10% of respondents are preparing for a review of their foreign recruitment programs by the Department of Immigration and Citizenship (DIAC) in the coming 12 months.

"This small figure reflects that businesses aren't concerned about being monitored by DIAC, however, they should be ensuring that their processes and 457-visa obligations, like paying the correct salary levels, are up to date," Waller noted.

Many organisations may not be aware that it is a criminal offence for an employer to knowingly or recklessly allow a temporary visa holder to work in breach of a work condition on their visa. This could include:

    * allowing a student visa holder to work for more than 20 hours a week when their course is in session

    * requiring a 457 visa holder to carry out work in a lower position than the one they were sponsored for

    * employing a Working Holiday visa holder for more than six months where they have not been granted permission to do so or on-hiring a 457 visa holder to an unassociated business when your organisation does not have an approved labour agreement in place

Whilst prosecutions are uncommon, Kessels says the penalty for such any such offence can be as severe as imprisonment of up to two years or a fine of up to $66,000 for a corporation. Higher penalties can apply if the person is being exploited.

There are also serious penalties for breaching the sponsorship obligations that are imposed on employers employing sponsored workers. If an organisation fails to comply with any sponsorship obligation this can result in financial penalties of up to $33,000 for each breach, possible cancellation or suspension of the organisation's right to sponsor overseas workers, and even cancellation of the visas of the existing visa holders. Kessels adds that these administrative penalties (suspension, for example) are more common than financial penalties but are considered by most sponsors to be more serious because they mean that the organisation will not be able to sponsor new staff or even renew existing visas which can be disastrous if the business depends to any extent on overseas employees.

Add to the mix reputational damage for those organisations that breach immigration laws and Kessels believes there is more than enough motivation for companies to take extra steps to ensure that immigration compliance "is part and parcel of their usual business practices".

Dotting the i's, crossing the t's

What policies and procedures should employers have in place to ensure compliance and raise awareness? Here is CENTIEM's list:

    * A recruitment policy that outlines whether permanent residence be supported and at what stage and in which circumstances, whether Living Away From Home Allowance (AFHA) will be offered and when it will be withdrawn and whether dependents will be allowed to be included in an application for 457 and in what circumstances.

    * A procedure for checking that a person has appropriate work permission before hiring a new starter or renewing an existing contract - even through a recruiter, arranging for an intra-company transfer or short assignment or engaging the person as an independent contractor.

    * A policy for the appropriate use of Business Visitor visas (eg Business ETA, Business e-Visa or Business Short Stay subclass 456 visas) including: the circumstances in which these Business Visitor visas may be used; who may use them; and who within the business can approve the use of Business Visitor visas. Appropriate systems also need to be in place for monitoring and tracking the use of these visas.

    * A clear escalation policy to deal with issues of corporate liability and risk in relation to migration matters.

    * Policies and procedures to ensure compliance with any sponsorship obligations including: market rate compliance; recording and reporting to government as required, particularly in relation to sponsored employees who have ceased employment; and the payment of return travel costs.