Will Tom be going to Sydney?

Blog by Joan Cuss

A current question from our practice: 

Can a 457 sponsor transfer a 457 employee to a different branch without further legal ado, with the Department?

Background:  

One of Lattice’s clients, a biomedical company, recently enquired what their 457 sponsorships and/or restrictions are, to be able to transfer Tom (not his real name), a current 457 visa holder and mechanical engineer, from their Brisbane branch to their Sydney head-office. (Both branches are registered with ASIC under the same ABN.)

Approach in practice:

I knew there was/is nothing in Schedule 2 preventing our client from sending Tom to Sydney.  With the never-ending tarring and feathering of this subclass (now subject to closure in March 2018), I carefully checked the latest stacks in Policy/the PAMS for an answer there – but it remained unanswered. Neither my business partner, nor case law nor experienced colleagues, could provide any conclusive legal answer either.

I then proceeded to phone one of the Department’s managers in Brisbane’s 457 team. The question I put to her was as follows: since the 457 visa grant letter includes the “postcode of [the] proposed employment”, does the sponsor have to:

1. Notify the Department through a change of circumstances Form, after Tom starts working in Sydney, or
2. Re-apply and lodge a new nomination, attached to the Sydney head-office postcode, or
3. Nothing needs to be done in respect of the Department – and our client is able to transfer Tom to Sydney without further legal ado.

The answer from the 457 Departmental manager was: “…not sure Joan, but will check and get back to you”.  When the Department got back to me three days later, these were the Manager’s initial words (and I quote verbatim): “You have stumped the Department”. I responded with a “Wow, that’s a first for me”.  She said that after due discussion and research by Brisbane’s 457 team, they could not find the answer and therefore referred it to Canberra. Canberra came back to them and said that that nothing further needs to be done in respect of the Department – thus 3. above.  She said that she was very surprised (and so was I) when Canberra came back with this as the correct course of action (albeit no action).

Next steps:

Despite the good news to our client, the answer still sounds legally ‘out of sync’ with the 457 nomination regulations, for the following reason: before the Department can approve a 457 position, evidence has to be provided how the nominee’s proposed salary has been benchmarked, to ensure that he/she will be paid no less fairly than an Australian working in the same/similar position in the same region. It is also axiomatic that the average Greater Sydney salary (across all occupations) is around 10% higher than that for Greater Brisbane – see a statistical table from the ABS in this regard: http://www.abs.gov.au/ausstats/abs@.nsf/mf/5673.0.55.003

The unscrupulous 457 employer/sponsor could therefore hypothetically find an apparently legitimate way to undercut the wage of an intended 457 employee, by first hiring him/her in a branch based in a region with a lower wage rate, and thereafter simply transferring him/her to the branch with the higher wage rate. This hypothetical employer/sponsor would however be in breach of other sponsorship obligations (which are obiter to the subject-matter of this blog and discussed no further).

Please note that our client, did not contrive or stage Tom’s initial 457 employment into their Brisbane branch and they will not be in contravention of any sponsorship obligations, when they transfer Tom to Sydney without further ado.

Give us a call to see how we can help you:

Australia, Brisbane office: Tel: +61 7 3878 4252, Email: admin@latticecapital.com.au South Africa, Johannesburg office: Tel: +27 11 021 5760, Email: jacques.dutoit@latticecapital.com.au