Labour Agreements

A Labour Agreement is a formal arrangement between Australian businesses and the Department of Home Affairs, established to address critical skill shortages that cannot be filled by the local workforce. When a business demonstrates the need for specialised skills not available within the Australian labour market, a Labour Agreement provides a tailored solution, enabling the employer to sponsor skilled international workers. Once the agreement is approved, it allows for the issuance of specific visas, such as the subclass 482, 494, or 186 visas, to bring in overseas workers who meet the business’s specialised needs.

What is a Labour Agreement?

A labour agreement is a formal, contractual arrangement between an employer and the Department of Home Affairs (DOHA) that allows businesses to sponsor skilled overseas workers. These agreements are designed for specific circumstances, typically allowing employers to fill positions through visa subclasses 482, 494, and 186. The flexibility of a labour agreement provides businesses with the opportunity to address skills shortages where standard visa programs are unavailable, while also protecting job opportunities for Australian citizens.

Labour agreements are generally approved in limited or exceptional circumstances. It is important to note that even if an employer meets the minimum requirements, the Department of Home Affairs is not obligated to approve a labour agreement.

Types of Labour Agreements Available

There are five primary types of labour agreements available, each designed for different business needs:

1. Company-Specific Labour Agreements (CSLA)

• A CSLA is negotiated directly between the Australian government and a specific business. It is tailored to meet the unique needs of the company, particularly when the required occupation is not listed on the skilled occupation list or involves a combination of duties across multiple ANZSCO occupations.
• Businesses may apply for a CSLA if they experience a genuine labour shortage that is not already covered by an industry agreement, designated area migration agreement (DAMA), or project agreement.
• To be eligible for a CSLA, a compelling business case must be presented, demonstrating that:
  • The business is lawfully operating in Australia for at least 12 months and is financially viable.
  • The company requires a specific skillset that cannot be sourced locally or has an occupation with evidence of a labour market shortage.
  • The roles being filled are skilled positions (typically ANZSCO skills 1-4).
  • The proposed overseas workers meet English language requirements and have the necessary qualifications and experience.
  • The business has a plan to train and employ Australians in the future, reducing the need for ongoing labour agreements.
  • The overseas workers will not exceed one-third of the total workforce.
  • The business has consulted with relevant industry bodies or unions about the agreement.

2. Industry Labour Agreements (ILA)

• ILAs cater to specific industries that face widespread and ongoing labour shortages. Unlike CSLAs, the terms of ILAs are fixed and non-negotiable.
• The Department of Home Affairs may consider establishing an ILA when multiple businesses within a single industry report sustained labour shortages and engage in extensive industry-wide consultations.
• ILAs are available for the following industries:
  • Dairy
  • Fishing
  • Meat processing
  • Minister of religion
  • On-hire labour services
  • Pork
  • Fine dining restaurants
  • Advertising
• Businesses applying for an ILA must meet industry-specific requirements, which are available on the Department’s website.

3. Designated Area Migration Agreements (DAMA)

• DAMAs are designed to address regional skill shortages. These agreements are negotiated between the Australian government, a regional authority, and local employers. DAMAs are particularly useful for businesses located in regional areas needing to fill specific skill gaps that cannot be addressed through standard visa pathways.
• DAMAs are structured as a two-tier system:
  1. Head Agreement: A five-year contract between the Australian government and a specific region.
  2. Individual Labour Agreement: Between the employer and the government, based on the terms of the Head Agreement.
• To request a DAMA, businesses must provide:

• • A letter of endorsement from the relevant state or territory.
  • Endorsement from a Designated Area Representative (DAR).
  • Documentation demonstrating the need for concessions (e.g., skill level, English proficiency).
  • Evidence of industry consultations and supporting documentation.

4. Global Talent Scheme Agreements (GTES)

• GTES agreements allow businesses to sponsor overseas workers for niche, highly specialised roles that cannot be filled locally. These agreements are typically for high-tech or STEM fields and are available under two streams:
  • Established Business Stream: Accredited sponsors can hire up to 20 highly-skilled workers annually. The minimum salary threshold for these positions is AUD 148,700.
  • Start-Up Stream: Start-ups operating in tech-based or STEM industries may sponsor up to five workers per year, with a minimum salary threshold of AUD 80,000. Start-ups must obtain endorsement from the Start-up Advisory Panel.
• To be eligible, businesses must demonstrate that they cannot source the required skills through existing visa programs and must show how the agreement benefits Australian workers.

5. Project Agreements (PA)

• Project agreements are suitable for large-scale construction or infrastructure projects that face significant labour or skill shortages. These agreements allow companies to sponsor workers for positions essential to project completion.
• A two-tier framework is used for project agreements, similar to DAMAs. First, a Head Agreement is established, and then individual labour agreements are negotiated.

Requirements for Requesting a Labour Agreement

The specific requirements for each type of labour agreement vary, but the following principles apply universally:

• Genuine Labour Market Need: The employer must demonstrate that there is a critical need for overseas workers to fill positions that cannot be filled by Australian workers. Recruitment efforts and market testing may be required.
• No Standard Visa Options Available: Labour agreements are only granted when existing skilled visa programs are unsuitable.
• Alignment with National Interests: The labour agreement must support Australia’s economic and social interests without undermining opportunities for the local workforce.
• No Adverse Information: The requesting business must have a clean compliance record with no adverse information regarding employment practices or immigration violations.

Legal advice is strongly recommended to ensure the application meets all relevant criteria.

How to Request a Labour Agreement

Once an employer is confident they meet the eligibility criteria, they can request a labour agreement through the following steps:

1. Submit an Online Request: The employer must lodge a labour agreement request through ImmiAccount, accompanied by all supporting documents required to demonstrate eligibility.
2. Supporting Documentation: The employer must provide evidence that addresses the criteria for the specific labour agreement they are applying for, such as proof of a labour shortage, recruitment efforts, and industry consultations.
3. Processing Time: The Department of Home Affairs typically reviews labour agreement requests within six months. Employers must respond to any additional requests for information within 7–14 days, depending on the nature of the request. Incomplete applications may be returned without assessment.
4. Agreement Execution: Once approved, the employer must sign and return the labour agreement within four weeks. The agreement is valid for five years, during which time the employer must comply with all sponsorship obligations.

Key Takeaways

Labour agreements provide employers with a flexible, tailored solution to sponsor skilled overseas workers when standard visa programs are unsuitable. The five available types of labour agreements—Company-Specific, Industry, DAMA, Global Talent Scheme, and Project Agreements—each address unique labour market needs and involve specific requirements. Employers can apply for a labour agreement via ImmiAccount, with careful attention to the criteria and supporting documentation.

If you need expert guidance on the labour agreement process, our experienced immigration lawyers are available to assist. Through our LegalVision membership, you can access unlimited legal advice and document drafting support.