Labour Hire Firms Use Visa Loophole To Lure Staff

Labour hire firms use visa loophole to lure staff
Michael Bachelard
July 15, 2006

OVERSEAS workers are paying thousands of dollars to come to Australia as temporary skilled migrants, some lured by promises of permanent residency.

The push by businesses to import skilled labour to Australia is creating a booming industry of middlemen who will exploit vulnerable workers for profit.

An investigation by The Age has found that some labour hire firms and recruitment agencies charge skilled foreign workers up to $15,000 to bring them here under subclass 457 visas. If workers complain, they are threatened with deportation.

Australian law appears to be inadequate: the Immigration Department's only redress is to cancel sponsorship and bar future sponsorships. It has no power against offshore agents.

Businesses and the Federal Government are big supporters of temporary skilled migration because it eases chronic skill shortages and fills jobs that Australians are reluctant to do. The use of the 457 visa is booming: about 70,000 will be issued this year, up from 49,855 last year.

Employers are applying pressure to the Government to relax restrictions further to bring in semi-skilled or unskilled workers.

But Noelene Merrey, the owner of West Australian recruiting company Immigration Solutions Australia, said “about 10 per cent” of her fellow companies were doing the wrong thing, mostly at the “blue collar” end of the market.

“It's not a big percentage, but because you are dealing with human beings, with compelling stories and financial hardship, it's quite a concern,” she said.

Immigration Minister Amanda Vanstone has proposed a “flying squad” to move more quickly to investigate complaints. The department said it checked a quarter of business sponsors every 12 to 18 months.

But a former commercial migration lawyer, who did not want to be named, said the Department of Immigration fell over backwards to do the bidding of businesses when it came to 457 visas.

“When employers wanted to cancel a migrant's sponsorship, the most lame excuse would get them over the line,” the lawyer said. “The stories are astounding. When you were processing them, sometimes you'd get an approval before you even provided the department with any documents!

“In every other setting, DIMA is obstructive. In this setting we see incompetence, but facilitative incompetence.”

One Perth labour hire firm, KSN Engineering, has brought 60 Korean welders to Australia after demanding payment of $8000 each, on the promise that the employer could arrange permanent residency.

The workers paid their own way to Australia and all their own settlement costs (which the employer is supposed to pay).

They found themselves working up to 60 hours a week for a flat rate of $22 an hour after their employer creamed $4.10 an hour off their wages. Other skilled welders in Western Australia earn at least $30 an hour, plus overtime.

In another case, a Queensland-based former police officer turned recruiter, Terry Sweeney, has proposed charging Thai workers $10,000 to get jobs in Australia.

Mr Sweeney, whom The Age could not contact, recruited dozens of Ukrainian meatworkers to Teys Brothers abattoirs. The company has employed hundreds of workers on 457 visas, and became controversial after it locked out 20 unionised employees who refused to sign Australian Workplace Agreements.

In another case, a labour hire firm called World Workers has provided Chinese meatworkers for Midfield Meats, a Warrnambool abattoir. A model contract, obtained by The Age, demands 8 per cent of the gross salary of each worker as a “professional service fee”.

World Workers also promises other services to the company, including “locating and detaining a sponsored person (and) removing a sponsored person from Australia”. World Workers director Anh Oan declined to speak to The Age.

But the company's website promises “Adelaide's most willing workers fast. Seven days a week. We can even deliver workers direct to your door, via our own shuttle bus!”

The Age believes that World Workers is one of several labour hire firms that have paid Warrnambool TAFE to assess the skills of Chinese people in an express, three-week program in China.

TAFE spokeswoman Julie Kean said it had trained and assessed about 650 workers so far for an array of clients.

“We've found that we are engaged by one agent, then we are talking to someone else, and someone else and someone else, and it's hard to find where they are linked,” Ms Kean said.

In Melbourne, a new kiln for Austral Bricks is being built by French company Ceric, which has used workers from the Czech Republic employed by another company, Fornax. The workers' pay is sent straight to accounts in the Czech Republic.

Under immigration guidelines, offshore companies acting as sponsors must pass on technology or skills to the Australian workforce.

But construction union secretary Martin Kingham said no skills were being passed on. In fact, there were guards at the building site to keep him and Australian workers out.

A Ceric spokesman, Peter Rodriguez, said that it was not practical to train somebody on the job in the three to five months it would take to finish. “The immigration office has met with me, and I'm clear,” he said.

Senator Vanstone is a big backer of skilled migration. She described a recent skills expo in India as a “match-making exercise that would have made online dating agencies envious”.

Yet, while the Government is pushing skilled temporary migration, Treasurer Peter Costello was recently emphatic that unskilled guest-work, where people were “rounded up after a period of time and expelled” was undesirable.

“Australia is a migrant country,” he said. “We invite people to come to Australia who have skills, and to become Australians.”

Labor and the unions complain that the current skilled migration regime drives down wages and displaces Australians from jobs. The minimum wage under the 457 visa is $41,850, or the award wage, whichever is higher.

But, in many cases, the market rate for pay has outstripped the award. In the WA welding industry, the award rate is around $15 an hour. By combining cheaper migrants with AWAs under the WorkChoices law, employers can hold down wages.

Guests: a growing trend

■Number of temporary skilled migration visas issued:
2002-03: 37,859

2003-04: 40,124

2004-05: 49,855

2005-06: (DIMA estimates) 70,000

■The top six source countries for temporary skilled migrants in 2004-05 were: Britain, India, United States, Japan, South Africa, China.

■Their minimum pay in metropolitan areas was $41,850; in regional areas (including Adelaide) it was $37,665.

■Regional groups, including councils, or chambers of commerce approve companies as sponsors of visa holders in regional areas.

■Sponsors must give evidence that they are a genuine company, not a shelf company, and that they provide, or intend to provide, training.