Introducing Lavan’s Migration Practice | Case Law Update

Lavan is pleased to announce the establishment of its Migration practice with the recruitment of senior migration practitioner Amanda Valenti.  

Amanda practices exclusively in migration law and has experience in providing practical advice and assistance to help businesses and individuals from a range of backgrounds to navigate Australia’s immigration framework, particularly related to visas and migration issues.  Amanda can provide assistance with business sponsorship, obtaining a range of Australian visas including permanent and temporary visas, citizenship, complex migration matters and representation at the Administrative Appeals Tribunal.

Please see below Amanda’s migration law update and our employment case law update below.

Migration Law Update: changes impacting employer sponsored visas

On 1 July 2024 several migration law changes came into effect. Below is a summary of the changes impacting employers who employ visa holders.

1. Increase in Temporary Skilled Migration Income Threshold (TSMIT) 

The TSMIT is the minimum salary threshold an employee can pay a sponsored visa holder. TSMIT applies to the following visa programs:

• Temporary Skills Shortage (Subclass 482);
• Skilled Employer Sponsored Regional (Provisional) (Subclass 494); and
• Employer Nominated Scheme (Subclass 186).

The purpose of the TSMIT is to ensure that skilled migrants are fairly remunerated and can meet the cost of living in Australia.

On 1 July 2024, the TSMIT increased from $70,000.00 to $73,150.00. This reflects a 4.5% increase in line with the Average Weekly Ordinary Times Earning figure of November 2023.

From 1 July 2024, employers seeking to sponsor/nominate a skilled migrant must ensure that the proposed salary meets TSMIT or the annual market salary rate, whichever is higher.

The increased TSMIT does not impact approved nominations before 1 July 2024.

This change is consistent with the Commonwealth Government’s commitment to increase TSMIT annually to reflect prevailing conditions. Accordingly, we can expect to see another increase in 2025. 

2. Infringement notices in relation to strengthening employer compliance

The Australian Government has implemented measures to strengthen employer compliance in tackling worker exploitation of temporary migrant workers in Australia and misuse of the visa system.

The measures are mainly targeted at employers of non-sponsored temporary visa holders such as student visa holders, temporary graduate visa holders and working holiday visa holders. However, existing measures currently in place for employer-sponsors have also been strengthened.

As part of these measures, effective from 1 July 2024:

• the scope in which infringement notices can be issued for work-related breaches has broadened;
• different penalties for first time and subsequent work-related breaches have been removed; and
• the amount an individual or company can be fined for work-related and employer-sponsored related breaches has increased.

Individuals can now be fined up to $15,024 and companies can be fined up to $75,120 for work-related breaches.

The changes to the infringement notices serve as a tool to deter non-compliance, efficiently manage non-compliance and provide an alternative to civil proceedings, therefore decreasing the administrative burden in the courts.

Infringement notices form one part of the broader compliance framework. Other tools available in responding to non-compliance include criminal offences, civil penalties provisions, enforceable undertakings and compliance notices.

Future measures to be implemented towards combating worker exploitation include:

• development of a public register of approved sponsors;
• review and reform of the approved sponsor application process; and
• improving post arrival monitoring and compliance through coordination with the tax system.

If you employ a visa holder, it is essential that your business has checks in place to ensure that the visa holder’s visa is valid and that they have work rights/are permitted to work.  If you sponsor visa holders it is vital that you are familiar with your sponsorship obligations and implement processes to ensure compliance with them. If you require advice about your obligations, we can assist.

3.  Commencement of the Western Australia Designated Area Migration Agreement

A Designated Area Migration Agreement (DAMA) is an agreement between the Commonwealth Government and a State or Territory Government.  There are two levels of agreements involved with the DAMA process.  The first is the main deed of agreement which covers a defined regional area, for a period of 5 years, made between the Commonwealth Government and State or Territory Government or regional authority. The second level involves individual labour agreements with employers from the defined region which operate under the main deed of agreement. An employer must first apply for endorsement to the Designated Regional Authority and then apply for a labour agreement via the Department of Home Affairs.

Generally, DAMAs are utilised to provide access to overseas workers that do not fit within the standard visa programs. For example, a DAMA can offer occupations that are not otherwise available, as well as work experience, age and English concessions.

The purpose of a DAMA is to respond to the unique economic and labour conditions of a region. However, the process has often been criticised due to its lengthy processing times.

In response to the skill shortages in Western Australia, the Western Australian Government negotiated the establishment of a Western Australia Designated Area Migration Agreement (WA DAMA) with the Commonwealth Government.  The WA DAMA came into effect on 1 July 2024.

The WA DAMA offers a list of occupations and concessions covering both Perth metropolitan and regional Western Australia.  The endorsement process is managed by WA Department of Training and Workforce Development via Migration Services.  The WA DAMA supports the following employer-sponsored visas:

• Temporary Skills Shortage (Subclass 482) visa;
• Skilled Employer Sponsored Regional (Provisional) (Subclass 494) visa; and
• Employer Nominated Scheme (Subclass 186) visa.

The WA DAMA operates in addition to the existing four regional DAMAs currently in place across Western Australia (The Goldfields, Kimberly, Pilbara and South West Western Australia).

If you are struggling to fill positions within your business and are considering employing a skilled migrant, contact us to see how we can assist.

Employment Law Update: franchisor held liable for underpayments faces $1.44 million in penalties:

Fair Work Ombudsman v 85 Degrees Coffee Australia Pty Ltd [2024] FCA 576

Background

85 Degrees Coffee Australia Pty Ltd (Respondent) is a responsible franchisor entity for eight franchisees who operate within the café business across New South Wales.

In 2014 (prior to enacting its franchise business model), the Respondent, as an employer, committed underpayment and record keeping contraventions which prompted the provision of enforceable undertakings to the Fair Work Ombudsman (FWO) in 2015. 

Between 2016 and 2017, the Respondent (as an employer) faced proceedings commenced by the FWO for a separate series of contraventions, which resulted in a total civil penalty of $475,200. 

In early 2019, the FWO commenced an audit which uncovered a series of breaches in relation to underpayments (including towards vulnerable workers on temporary visas) and record keeping which are the subject of this case. 

Decision:

With reference to the Respondent’s admissions, Justice Bromwich determined that one or more of the franchisee entities committed contraventions by:

• failing to make and keep for seven years, the employee records required by the Fair Work Act 2009 (FWA);
• failing to provide payslips to a number of its employees;
• making and keeping records that it knew was false or misleading;
• failing to pay a number of employees the minimum rate specified within the applicable award;
• failing to pay a number of employees casual loading, penalty rates and overtime rates;
• failing to pay a number of employees a laundry allowance to which they were entitled;
• failing to pay an employee their untaken annual leave upon termination; and
• failing to pay an employee on a weekly or fortnightly basis as required by the applicable award.

Through section 558B(1) of the FWA, liability may be imposed on a responsible franchisor for the contraventions of its franchisees, where the franchisor knew, or could reasonably be expected to have known that the contraventions would occur by its franchisee, or contraventions of the same or similar character were likely to occur.

Noting the Respondent’s prior non-compliance, the Respondent’s control and familiarity with franchisee conduct and the Respondent’s “systematic failure” to ensure compliance within its franchise network, Justice Bromwich held that the Respondent contravened section 558B(1) of the FWA. 

Justice Bromwich found that “substantial civil penalties” against the Respondent were appropriate, particularly given the need to deter conduct of this kind.  With this, the Court imposed $1.44 million in penalties against the Respondent.  This is the third highest penalty secured by the FWO.

Lavan's comments:

This is the first time the FWO has used the ‘responsible franchisor entity’ provisions to hold a franchisor to account for the conduct of its franchisees.  The case highlights that franchisors who know or could reasonably be expected to have known that a contravention by a franchisee would occur, face serious consequences.  Lavan recommends that any systematic failure to ensure compliance with the FWA or contractual benefits, resulting in underpayments, should be treated with caution.  Appropriate advice may need to be obtained on conducting an investigation and self-reporting obligations.  If you require advice about your obligations, we can assist.