457 Employer Sponsorship Update - December 2015

webster By Mark Webster
Wednesday, 23 December 2015

Offences Introduced for Charging Visa Applicants for Employer Sponsorship

The Migration Amendment (Charging for a Migration Outcome) Act 2015 has been passed and came into effect from 14 December 2015.

This legislation makes it illegal for a benefit to be given by a visa applicant to another person in return for a "sponsorship-related event". Effectively, this means that if a visa applicant pays an employer to sponsor them, the following can result:

  • Refusal of a visa application - applicants must now declare that they have not paid for sponsorship, and this could result in 4020 refusal and a 3 year ban.
  • Cancellation of the visa applicant's visa - even if this did not require employer sponsorship
  • Significant fines to the employer - up to $324,000 for a corporation
  • Jail sentence of up to 2 years for the visa applicant, as well as a fine of up to $64,800 for individuals
  • Fines for company officers and directors who allow payment for sponsorship to occur due to recklessness or negligence, or if they know about it

The above offences apply to 457 visas, but also apply to other visa types, including:

  • ENS Subclass 186
  • RSMS Subclass 187
  • Temporary Work (Long Stay Activity) Subclass 401
  • Training and Research Subclass 402 (Research stream)
  • Entertainment Subclass 420
  • Superyacht Crew Subclass 488

There are both criminal offences (which require proving the person's state of mind) as well as civil offences which do not require proof that the person acted knowingly.

Benefits which are prohibited include:

  • Payments or valuable consideration
  • Deductions - for example from a person's salary
  • Real or Personal Property
  • An advantage, service or a gift
  • Payment of reasonable fees to a migration advisor is exempt from the above provisions

Sponsorship related events which are prohibited include:

  • Applying for approval as a sponsor, renewing this, or not withdrawing an application
  • Applying for nomination
  • Employing or engaging a person to work or perform an activity, or not terminating a person

The new offences make it clear that people paying an employer to sponsor them for a visa are taking a huge risk as the consequences are severe.

Self Sponsorship for 457 Visas Disallowed

Changes have been made to the policy document for 457 nominations which means that self-sponsorship is now very difficult. The changes are in relation to the "genuine position" requirement for the nomination. As a result, the nomination would be refused on the basis that the position has been created just to facilitate a visa application.

Immigration has set out the following "risk factors" which could indicate the position is not genuine

  • Visa applicant is a director or owner of the sponsoring business
  • Visa applicant is a relative or personal associate of an officer of the sponsoring business

Immigration will wish to see an ASIC historical extract with the application - this would give information on the company owners and directors, and so assist in establishing whether the visa applicant is associated with a company officer. Sponsors must also declare who the company officers and shareholders are in the application for sponsorship approval.

The policy document specifically mentions that the application will be scrutinised if an overseas business is being used to "self-sponsor" a business owner to establish a branch in Australia. The stated reason is to prevent the 457 program from being used to circumvent the Business Innovation and Investment Subclass 188 program.

One of the other risk factors mentioned is where the applicant is currently in Australia on a Working Holiday subclass 417 visa. This suggests that Working Holiday Makers may find it much more difficult to obtain a 457 visa.

The "self-sponsorship" ban is certainly ill-advised and will lead to fewer businesses being started in Australia by temporary residents. It is also somewhat contrary to the intention of the National Innovation and Science Agenda which seeks to promote start up businesses in Australia.

Lee Case Overturned Clarifying Appeal Rights for 457 Refusals

As a result of the 2014 Lee case (Minister for Immigration and Border Protection v Lee [2014] FCCA 2881), the AAT has had no jurisdiction to review 457 visa refusals unless there was an approved nomination at the date the appeal was lodged.

This was a significant barrier to appealing refused 457s, particularly where the reason for refusal of the 457 was an issue with the nomination.

The Lee case has been overturned by the Full Federal court in Ahmad v Minister for Immigration and Border Protection [2015] FCAFC 182. As a result, it is now possible to lodge an appeal for a 457 refusal where at the date of the appeal:

  • There is an approved nomination; or
  • A nomination application is still pending; or
  • There is a refused nomination, but the nomination has also been appealed to the MRT

However, it appears that it would not be possible to appeal a 457 visa refusal if:
  • A nomination has been refused, but not appealed to the MRT; or
  • A nomination has previously been approved, but has now expired

The decision in Ahmad's case greatly clarifies the situation in relation to 457 refusals and results in fairer outcomes for applicants.

If you have received a 457 refusal between December 2014 and December 2015, it is possible that you may have an opportunity to have your case reviewed by the AAT.

If you would like assistance with any employer sponsorship matter, please book a consultation with one of our immigration advisors.


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