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PABC Talking Points for PAMM 2011 - ATTACHMENT D


Position Paper on 457-Visas

This paper addresses the practical issues resulting from the 2009 reforms to the 457 Visa Scheme.

IELTS Pass Mark

The English language proficiency requirements were introduced to the Subclass 457 visa program on 1 July 2007. They require applicants for Subclass 457 visas to demonstrate certain levels of English language proficiency before the visa may be granted.

At inception, applicants were required to demonstrate that they have English language proficiency that is equivalent to an International English Language Testing System (IELTS) average test score of at least 4.5 across the four test components. The IELTS is conducted over four test components of speaking, reading, writing and listening.

Effective 14 September 2009, applicants were required to achieve a pass mark of 5 in each of the four test components.

Despite a proficiency demonstrated in succeeding in most categories, Filipino applicants usually fail by 0.5 in the listening component, resulting from the pressure of the exam. The prevailing issue with the IELTS exam is the minimum requirement for each component.

Whilst we agree with the requirement for a minimum level of English language skills, a pass mark of 5 across each component has demonstrated it to be a stringent threshold. Not only is the IELTS exam cost inhibitive at the outset, but the minimum pass mark over all four components prevents an otherwise able employee from re-applying.

The 2008 integrity review recommended the IELTS pass mark of 4.5 remain.

It is our recommendation that an overall pass mark of 5 be maintained, however the minimum pass mark for each category should be reverted to 4.5.

A more flexible level should also be considered depending on the occupation. A welder for instance does not need the same level as an IT specialist.

Technical Assessment
An additional skills assessment requirement has been included to a 457 Visa application for applicants from nominated countries, of which the Philippines is one, applying for a 457 Visa for a particular industry. The applicable industries include most trades.

The skills assessment is facilitated by Australian-based organizations. The two-stage assessment scheme entails an examination of applicants’ training certificates and other evidence of skills and work experience, followed by a technical interview.

The skills assessment costs AUD1,200 plus associated costs of around AUD200 for courier, authentication of documents, etc. The assessment process takes 2-3 months.

It should be noted that most Filipino trade skills are gained through on-the-job experience rather than academic training. Thus a tradesperson may be highly skilled but doesn’t have certificates to prove it.

It is our recommendation that the skills assessment be reformed to recognize comparable skills examination recently conducted by local trade testing centers to avoid lengthy delays and prohibitive costs.

Inflexible and Inconsistent Application of Market Salary Rate Requirement

The addition for a 'Market Salary Rate' requirement for nomination applications has proven to be a considerable stumbling block for most employers.

The Market Salary Rate test requires, in a nutshell, that a 457 Visa applicant will not be offered salary rates and conditions below that of an equivalent Australian employee in the same industry and region. Conversely, a 457 Visa applicant cannot be offered an inflated salary above that of an equivalent Australian to meet the minimum threshold salary requirement.

Case Assessors within the Department of Immigration have inconsistently and inflexibly interpreted this requirement. Employers have been advised that all Australian workers would have to be paid the same rate as a 457 Visa applicant. This is not only impractical, but also conflicts with the flexible arrangements provided for by the Fair Work Act. In other cases, Case Assessors advise that even a difference of $0.50 per hour above or below the rate of an Australian worker is unacceptable.

There is nothing in the Act, Regulations, or Policy documents stipulating the number of equivalent Australian workers in a business to satisfy this requirement. The Market Salary Rate test merely requires that a business can demonstrate an Australian worker in the company is employed on the same conditions. Upon complaining to the Department of Immigration complaints line, employers have been able to get approval for their nomination applications, despite the refusal by the Case Assessor.


Another problem encountered with the 457 visa is that the spirit of the system correctly requires a fixed-term contract. However, in reality both parties can break it at will for no valid reasons. This can be devastating to the worker who has sacrificed to get the position and costly to the employer who has invested extensively in the recruitment process.

The increasingly complicated and inflexible system has necessitated even experienced employers to engage the services of migration agents which can result in considerable additional costs and delays.

Should the 457 Visa scheme continue to operate in this manner, employers will be reluctant to seek employees offshore to meet their requirements. This will affect not only the workers who will miss out on employment opportunities, but also affect employers’ ability to maintain and expand their business effectively and meet market demands.

In some cases this has resulted in companies closing down and putting Australian employees out of work.

In the increasingly demanding trades environment that Australia is experiencing, the 457 Visa scheme needs to be revisited and reformed to resemble its once-streamlined structure to accommodate the acute skills shortage projected for the near future.

It should also allow more flexibility in implementation and not adhere to the “one size fits all” philosophy.