As part of the Federal Budget 2011-2012, the Government has announced the introduction of Enterprise Migration Agreements (EMAs).
What are EMAs?
An EMA is a special type of labour agreement, custom-designed and specific to the resources sector.
A labour agreement is a legal contract between the Australian Government (the Department of Immigration and Citizenship (DIAC)) and an employer which allows the employer to bring in skilled overseas workers to Australia on either a temporary or permanent visa.
EMAs are applicable only to the resources sector to ensure that skills shortages do not create constraints on major projects, and that economic and employment benefits for Australia are realised. Through EMAs, major resource projects will be able to access overseas labour for genuine skill shortages that cannot be filled from the Australian labour market.
Why is the Government introducing EMAs?
The introduction of EMAs was recommended by the National Resources Sector Employment Taskforce (Taskforce), in their July 2010 report, 'Resourcing the Future'.
The Taskforce's report outlined that resource sector employment was forecast to grow 5 per cent a year for the next five years. Jobs are being created by 75 advanced resources projects worth a combined $110 billion and another 286 less-advanced projects worth $250 billion.
With the Gorgon Liquefied National Gas (LNG) Project underway it is likely to create up to 3,500 direct jobs during peak construction and up to 6,500 indirect jobs. This is just one of a number of new or expansion projects in the pipeline.
Who can get an EMA? How will they work?
EMAs will be available to 'mega resource projects' with capital expenditure of more than $2 billion dollars and a peak workforce of more than 1500 workers.
An EMA will be negotiated between the project owner or EPCM contractor and DIAC. Once negotiated the EMA will be a project-wide labour agreement and will act as an umbrella arrangement for the project. This means that several employers involved in a project will be able to benefit from one single EMA, rather than each sub-contractor having to individually negotiate their own EMA. This allows project owners or EPCM contractors to plan their workforce needs from the beginning and there will be a straightforward process for sub-contractors to sign up to an individual EMA. For sub-contracting employers this also ensures that responsibility for sponsorship obligations rests with the direct employer of the overseas worker.
The terms set out in the EMA will include occupations, qualifications, English language skills, wages and conditions of overseas workers on the project.
To be approved for an EMA, project owners will be required to demonstrate how the project will significantly contribute towards addressing future skills needs in the resource sector. As part of this, the project owner will need to:
- implement comprehensive training plans;
set measureable targets to demonstrate the continued up-skilling of Australian workers to meet future shortages; and
demonstrate effective and ongoing local recruitment efforts.
For sub-contractors, standard training benchmarks associated with the 457 program will need to be met to sign up to an individual EMA. These include:
- contributing 2% of payroll to a relevant industry training fund; or
- spending 1% of payroll on training for their Australian employees.
Occupations that are not eligible for standard migration programs can be sponsored under an EMA, provided the project can justify that the genuine need for the overseas skilled worker cannot be met within the Australian labour market. This is particularly relevant to the construction phase of projects. Additionally, there will be no cap on the number of people that can be sponsored under an EMA.
DIAC will work with project owners to determine eligibility and interest in negotiating EMAs. DIAC aims to negotiate EMAs in a three month time frame, from the time the project owner submits and completes the request for an EMA. Labour agreements and visa applications associated with an EMA will be subject to expedited processing.
DIAC will be able to suspend or cancel an EMA (and associated agreements) if there is widespread abuse or contractual sanctions.
What if a resource project isn't a mega project?
Existing migration arrangements will be available to projects that are not 'mega resource projects'. This includes five-day processing for decision-ready 457 visa applications.
As part of the Budget announcement, the Government has committed $10 million in additional funding to 457 programs, which aims to halve processing times down to around ten days. A new 457 visa processing centre will be opened in Brisbane to support this initiative by streamlining processing times and procedures.
Will overseas workers be exploited?
Overseas workers sponsored under an EMA will hold a 457 visa and will be subject to the Worker Protection Act 2009 (Cth). Direct employers will need to comply with sponsorship obligations, including paying Australian market salary rates.
There will be much preparatory work to be done by project owners or their EPCM contractors in preparation for negotiating an EMA with DIAC.
The proponents of 'mega projects' due to commence construction within the next 12 months should seriously consider their workforce needs to ensure that they are ready to apply for an EMA in the very near term.