Labour Agreement

A Labour Agreement is a formal arrangement between the Australian Government and an approved Australian employer that allows the business to sponsor skilled overseas workers where the standard skilled migration programs may not adequately meet its workforce needs.

Labour Agreements can be particularly relevant for Australian businesses experiencing genuine and ongoing skills shortages, including situations where a required occupation is not available through the standard skilled migration framework. Depending on the type and terms of the agreement, employers may be able to sponsor overseas workers through the Skills in Demand visa (subclass 482), Employer Nomination Scheme visa (subclass 186) and Skilled Employer Sponsored Regional visa (subclass 494).

What Is a Labour Agreement?

A Labour Agreement is not a visa. It establishes the specific terms and conditions under which an eligible employer may sponsor overseas workers for approved occupations.

The agreement can set out matters such as:

• Approved occupations
• Number or circumstances of workers who may be sponsored
• Salary and employment arrangements
• Skills and experience requirements
• English language requirements
• Age requirements
• Work experience requirements
• Available migration concessions
• Applicable visa pathways
• Conditions for temporary and permanent sponsorship

The terms available depend on the relevant Labour Agreement and Australian migration legislation.

When May a Labour Agreement Be Appropriate?

A Labour Agreement may be considered when an employer has a genuine need for skilled workers and the workforce requirement cannot be appropriately addressed through standard employer-sponsored migration programs.

Businesses may need to demonstrate:

• A genuine and ongoing skills shortage
• Difficulty recruiting suitable Australian workers
• Genuine recruitment efforts within Australia
• A genuine position and business need
• Appropriate salary and employment conditions
• Financial and operational capacity
• Compliance with relevant Australian workplace and migration requirements

A strong and well-supported business case is particularly important where a company-specific Labour Agreement is being considered.

Types of Labour Agreements

Australian employers may have access to different Labour Agreement arrangements depending on their industry, business circumstances, location and workforce requirements.

Company-Specific Labour Agreements may be considered where an employer has a specific and demonstrated skills shortage that cannot be addressed through the standard skilled migration program or another available agreement.

Industry Labour Agreements provide arrangements for particular industries experiencing recognised workforce shortages. The occupations, requirements and concessions depend on the applicable industry agreement.

Designated Area Migration Agreements (DAMA) operate in specific regional areas and can provide access to additional occupations and agreed migration concessions. Employers generally need endorsement from the relevant Designated Area Representative before proceeding with an individual DAMA Labour Agreement.

Project Labour Agreements may be available for eligible major projects with specific workforce requirements.

Visa Pathways

Where permitted by the relevant agreement, Labour Agreements may support employer-sponsored visa pathways such as:

Skills in Demand Visa – Subclass 482

The Skills in Demand visa is a temporary employer-sponsored visa. A Labour Agreement can provide access to approved occupations and conditions that may differ from the standard SID pathways.

Employer Nomination Scheme – Subclass 186

Certain Labour Agreements can provide an employer-sponsored pathway to permanent residence through subclass 186, subject to the terms of the agreement and the worker meeting the applicable visa requirements.

Skilled Employer Sponsored Regional Visa – Subclass 494

Where permitted, employers may use a Labour Agreement to sponsor eligible skilled workers through the subclass 494 regional employer-sponsored pathway.

Labour Agreement Concessions

An important feature of some Labour Agreements is the possibility of agreed concessions to standard migration requirements.

Depending on the applicable agreement, concessions may be available in areas such as:

• English language requirements
• Age requirements
• Salary arrangements
• Work experience requirements
• Other specified eligibility criteria

Concessions are not automatically available to every employer or worker. They must be specifically provided for under the applicable Labour Agreement and must comply with Australian migration requirements.

Labour Market Testing

Where required, employers may need to demonstrate that they have made genuine efforts to recruit suitably qualified and experienced Australian workers before sponsoring an overseas worker.

This can involve appropriate advertising and evidence of recruitment activities. Certain exemptions or alternative arrangements may apply depending on the circumstances.

Salary and Employment Requirements

Employers must provide sponsored workers with appropriate remuneration and employment conditions in accordance with the applicable migration requirements, Labour Agreement and Australian workplace laws.

The assessment may consider the:

• Annual Market Salary Rate
• Applicable income thresholds
• Salary specified in the Labour Agreement
• Employment conditions
• Superannuation
• Australian workplace entitlements

Employers must not use sponsorship arrangements to underpay or exploit overseas workers.

Labour Agreement Application Process

The process will depend on the type of Labour Agreement being requested, but generally involves:

1. Business Assessment
Review the business, workforce structure, financial position and proposed employment requirements.

2. Skills Shortage Assessment
Identify and document the genuine shortage and explain why Australian workers cannot reasonably meet the requirement.

3. Occupation Assessment
Determine the proposed occupations, duties, skills and relevant visa pathways.

4. Business Case Preparation
Prepare supporting evidence regarding the business, recruitment efforts, workforce requirements and proposed Labour Agreement terms.

5. Government Submission
Submit the Labour Agreement request through the relevant Department of Home Affairs process.

6. Government Assessment
The Department assesses the request and may seek additional information or clarification.

7. Agreement Approval
If approved, the Labour Agreement establishes the terms under which the employer can sponsor overseas workers.

8. Sponsorship and Nomination
The employer then completes the applicable sponsorship and nomination requirements.

9. Visa Application
The nominated worker submits the relevant visa application and must independently satisfy the visa requirements.

Employer Responsibilities

Employers using Labour Agreements must comply with their sponsorship, nomination and employment obligations.

This can include:

• Paying the required salary and employment entitlements
• Providing the nominated position and conditions
• Maintaining appropriate employment records
• Complying with Australian workplace laws
• Notifying the Department of relevant changes
• Cooperating with government compliance activities
• Meeting applicable sponsorship requirements
• Ensuring overseas workers are not exploited

Non-compliance with sponsorship obligations can result in serious consequences for an employer.

Labour Agreement and Permanent Residency

A Labour Agreement may provide a pathway to permanent residency, depending on the approved agreement, occupation, visa pathway and the worker's individual circumstances.

Where a permanent pathway is available, the worker must still meet the relevant requirements for the permanent visa. Approval of a Labour Agreement does not guarantee permanent residency or visa approval.

Why Choose The Visa?

Navigating a Labour Agreement can involve detailed business information, workforce evidence, occupation analysis and migration requirements.

The Visa can assist Australian employers with:

• Labour Agreement eligibility assessment
• Business and workforce assessment
• Skills shortage assessment
• Occupation and visa pathway analysis
• Recruitment evidence
• Business case preparation
• Labour Agreement documentation
• Sponsorship and nomination guidance
• Employer compliance guidance
• Temporary and permanent employer-sponsored pathways

Our goal is to help employers understand their options and prepare a structured approach to sponsoring skilled overseas workers.

Discuss Your Labour Agreement Options

If your business is experiencing a genuine skills shortage and standard employer-sponsored visa options do not adequately address your workforce requirements, a Labour Agreement Australia pathway may be worth considering.