Fast Food, 457 visas and Labour Agreements

Last week the Federal Government announced it is cracking down on the number of 457 skilled worker visas handed out to McDonald’s and other fast-food chains.  Media reported that there was a “short cut” 457 visa process for the industry after Julia Gillard’s Labor Government approved the Fast Food Industry Labour Agreement in 2012.

Consequently, the Immigration Minister Peter Dutton announced a decision to cancel the Fast Food Industry Labour Agreement, under which 500 skilled worker visas have been approved for fast-food outlets over the past four years. Nearly 300 of those were at McDonald’s, almost 100 at KFC and more than 70 at Hungry Jacks.

“Australian workers, particularly young Australians, must be given priority,” Mr Dutton said.

“Fast-track arrangements for the fast-food industry put in place by Bill Shorten and Chris Bowen in 2012 are not consistent with putting Australian workers first.”

Here we dispel fact from fiction on this topic of sponsoring overseas workers in fast-food restaurants and labour agreements.

What is a Labour Agreement?

A Labour Agreement is a special agreement negotiated between an employer and the Commonwealth which allows a business to sponsor temporary skilled overseas workers outside of the normal 457 visa program.

There are four types of labour agreements:

  • Company-specific labour agreements
  • Industry-specific labour agreements
  • Designated area migration agreements (DAMAs)
  • Project agreements.

All of these Labour Agreements are negotiated by an employer and the Commonwealth via the Department of Immigration, in consultation with key industry stakeholders from the relevant industry sector such as trade unions and peak industry bodies.

Unlike a normal sponsorship arrangement, a labour agreement is costly and complex to establish and to administer. An industry-specific agreement, such as the Fast Food Industry Labour Agreement, will ONLY be considered by the Department if it has received a number of similar submissions from an industry AND there is clear evidence of ongoing labour shortages within that industry.

Industry labour agreements are currently available for the following industries:

  • Dairy
  • Fishing
  • Meat
  • Minister of religion
  • On-Hire
  • Pork
  • Restaurant (fine dining)
  • Snow sports

For example, the Dairy Industry Labour Agreement enables farmers to recruit Senior Dairy Cattle Farm Workers with a suitable qualification or 5 years’ skilled experience. Senior Dairy Cattle Farmers are not listed on the Consolidated Skilled Occupation List for 457 sponsorship.

The Fast Food Industry Labour Agreement

This was the only pathway for fast food restaurants to recruit overseas workers as managers and people who would be involved in the running of the business via a temporary 457 visa.

Under this agreement, employers may nominate the following occupations:

Retail Manager (Skill level 2 – ANZSCO 142111). A Retail Manager is responsible for the overall management of the outlet and must have a Diploma qualification and at least 3 years’ relevant experience; or more than 5 years’ relevant experience in a fast food environment.

Retail Supervisor (Skill level 4 – ANZSCO 621511). A Retail Supervisor is responsible for coordinating and supervising the activities of retail sales workers and must have a Certificate IV or higher qualification and 3 years’ relevant experience, or at least 4 years relevant experience in a fast food environment.

These occupations are not on the Consolidated Skilled Occupations List for 457 sponsorship.

Retail Managers can be nominated under the Regional Sponsored Migration program, for businesses located in regional, remote or low population growth areas of Australia. Retailer Supervisors are not eligible for any other sponsored visa.

When negotiating an Industry Labour Agreement, the Department can require certain conditions to protect the interests of Australian workers. For example, under the Fast Food Agreement, the minimum salary must be greater than $53,900 for a retail supervisor and $59,200 (10% more than the retail supervisor) for a retail manager. The terms and conditions of employment can be no less favourable than those provided to an Australian worker in the same role at the same location.

Also, 457 visa holders sponsored under a Labour Agreement are generally not eligible for permanent residence through the Temporary Resident Transition Stream, and is not a long term substitute for the 457 visa program.

Opportunities for Australians first

One of the stated objectives of the Labour Agreement is to “reduce future reliance on temporary overseas workers by building capacity in the Australian labour market over time”. Australian workers are expected to be provided with first opportunity through the provision of training and employment opportunities.

Employers seeking a Labour Agreement must provide evidence of training Australians and efforts to recruit local workers annually to the Department of Immigration. Also, they must show that the overseas workers are qualified and experienced (in many cases they are more skilled than their local counterparts), and can transfer their skills to less experienced Australian colleagues.

It is also a requirement that overseas workers represent a minor proportion of the employer’s workforce—this proportion should decrease over the life of the agreement, otherwise the Department may not agree to renew the Labour Agreement.

Analysis

The removal of the industry agreement for fast food companies will not put a stop to sponsorship of overseas workers in the fast food industry. Employers can still seek a company-specific labour agreement or designated area migration agreement.

Labour Agreements are a genuine facility for sponsoring overseas workers outside of the 457 visa program to fill demonstrated skills shortages in the labour market.

In 2014-15, Labour Agreements represented 2.9% of temporary subclass 457 visa grants and 2.2 per cent of permanent Employer Sponsored visa grants. Whilst Labour Agreements are not widely used or understood, they are certainly not a “secret mechanism” for recruiting unskilled labour. They play an important role by helping industry to overcome constraints that result from a shortage of workers in a particular location or industry sector.

According to the DIBP Annual Report 2014/15, there were 213 labour agreements were in place (and a further 29 under negotiation):

Labour Agreement Type Number in place in 2015
Company Specific Labour Agreement

e.g. on-hire agreements, semi-skilled labour agreements

65
Industry-Specific

e.g. Fine Dining Restaurant Industry, based on industry template

146
Project Agreements 0
Designated Area Migration Agreements

e.g. Northern Territory DAMA

12

Labour Agreement statistics were not reported by the Department for 2015/16.

Furthermore, it is worth noting that the fast food industry workforce is comprised of approximately 175 000 employees, according to 2011 census data. The 500 457 visa holders sponsored by McDonalds, KFC and Hungry Jacks under Fast Food Industry Labour Agreements represents a mere 0.003% of the total number of employees working in fast food services.

Labour agreements are considered on a case-by-case basis. Unlike standard business sponsorship, there is no application process for a Labour Agreement.  Employers seeking a Labour Agreement are required to submit a strong, evidence-based business case to the Department of Immigration to access overseas skilled workers outside of the standard immigration programmes. If the Department agrees that there is a justifiable business case, then the Agreement is negotiated. This process takes 3 – 6 months.

Each year of the Labour Agreement, the maximum number of workers that can be sponsored is reviewed annually and an employer’s submission must be supported by concrete, relevant and current evidence.

More information

If you want more information about these industry labour agreements, please contact us on info@themigrationagency.com.au

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