Unfair dismissal for 457 visa sponsors

unfair dismissal for 457 visa sponsors

Employers must comply with fair work laws when employing local and foreign employees in Australia – including providing the minimum terms and conditions of employment as prescribed by the Fair Work Act, the applicable modern award (if any) or enterprise agreement.

Employees on temporary visas (such as work visas, working holiday or student visas) can make a claim for unfair dismissal and have their case heard by the Fair Work Commission (FWC). A claim for unfair dismissal can arise where an employer fails to provide procedural fairness to a foreign employee.

In a recent case, Singh v Dairy Kosher Catering¹, an employee was sponsored by the employer on a subclass 457 visa and worked as a cook from 11 March 2014. In March 2016, the employee was advised by the employer that the business had been sold, and that the new owners would not continue to sponsor him and his employment was terminated. The employee lodged an unfair dismissal application.

The FWC Commissioner held that:

  1. the employee had access to the unfair dismissal jurisdiction just like a local employee;
  2. the termination of employment was “harsh, unjust or unreasonable” because there was not a valid reason for the termination of employment and the Employee was not notified of the reason for the termination nor was he given an opportunity to respond.
  3. the withdrawal of sponsorship when the employee was one week away from eligibility for permanent residence (and would need to find another sponsor or face deportation) made the termination of employment “particularly harsh”.

The employer was ordered to pay the employee the statutory maximum compensation (26 weeks pay) of $27,500.00.

Key learnings

This case demonstrates that Australian employers must comply with Australia’s industrial legislation when employing foreign employees.  The Fair Work Commission will take into account the impact of the termination on the employee holding a 457 Visa in dismissal cases .  Employers should consider the impact of a company sale or restructure on an employee’s visa status and ensure employees are afforded procedure fairness in such instances.

Under Australian immigration laws, if an employee on a 457 visa changes employer due to sale of business or otherwise, the new employer must:

  • hold a valid Standard Business Sponsorship; or
  • be eligible and willing to apply for a valid Standard Business Sponsorship.

Once the new employer has a valid Standard Business Sponsorship, they will need to lodge a 457 nomination transfer application to sponsor the 457 visa holder. After the 457 nomination transfer application is approved, then the 457 visa holder can begin employment with the new employer.

It is also important to note that in case of 457 visa transfer, the 2 year qualifying period to transition from temporary to permanent residency status starts over again.

Related article: Why is immigration compliance important for business?


Reference: GS v Dairy Kosher Catering Pty Ltd T/A Milk n Honey [2016] FWC 5284

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