The real implications of the removal of 457

27 April, 2017 by
Danielle Bowling

The recent decision by the Prime Minister to axe the 457 visa and replace it with the TSS visa is already having a negative effect on the hospitality industry. As with any legislative change, the devil is in the detail. This change has many unforeseen impacts that I believe will aggravate small and big businesses alike.

As I believe most people are aware of the basic changes to the visa program, I’ll take this opportunity to look at the unforeseen impacts.

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Whilst there undoubtedly will be wide ranging implications for the industry, the main issue I see is one of a restriction of supply to an industry already starving for skills. The three points below are the ones that the industry should focus on gaining concessions for, either through an industry wide labour agreement or lobbying members of parliament to bring about  change before the legislation is enacted.

1. Removal of Permanent Residency (PR) Pathway
Firstly, the removal of ANY pathway to Permanent Residency for all but chefs. The typical applicant for a restaurant or hotel manager we see in our business has arrived on a Working Holiday visa and their employer has recognised their skills and invited them to stay in the business. They see this as an opportunity to investigate living in Australia with the potential, if they like it, to settle here as active, productive, tax paying members of the community.

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They are in positions of management and regularly induct and train young Australian citizens into the inner workings of the hospitality industry. Their value to our community and industry cannot be in dispute.

When you create a defined end to a person’s career development, the natural reaction for them is to seek another opportunity. Certainly there will be those who happily accept the two year visa. It’s the bright, highly skilled people with options who won’t. They will see that there is no future for them in Australia and find other opportunities further afield or in their own country.

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australia-permanent-visa-passport-with-world-map.jpgImage: PAX Migration Australia

It is important to note that PR is not citizenship. There are many ways to protect the country against welfare claims and family re-union issues (which seem to be the concerns a lot of Australians voice) without cutting off the main applicants’ ability to settle in Australia on a more permanent basis.

This visa is now essentially a Guest Worker visa that you see commonly used in the Middle East, and often exploited. In those countries it targets low skilled workers on low salaries.  It is not a visa you use to entice a highly skilled general manager to a hotel, or a Michelin star restaurant manager who would strategically grow your business and employ more Australians.

2. Specification of Occupations  – Occupational Caveats
Commonly known as the Consolidated Skilled Occupation List, the new list has placed caveats on a number of roles. You can read the list here. 

It is yet to be seen but the biggest issue I predict is the introduction of the words ‘Limited Service’. I believe the Department’s policy will be that any business that is ‘order and pay at the counter’ will be deemed Limited Service. It is important to note this is different wording to what was previously termed as Fast Food or Fast Service. I believe they have done this after losing a case in the AAT against Grill’d Restaurants where the tribunal member conceded that the face or Australian restaurants is changing and table service is not necessary to be still classed as a restaurant.

If this is the case, then most hotel bistros and any business not offering full table service will be excluded from sponsoring restaurant managers, cooks and chefs. This is a massive issue and unfortunately is not being properly addressed by industry associations at this point in time.

hotel.jpgImage: Careers NZ

A further issue to the caveats applies to hotel managers.

the specification excludes positions that predominately involve  responsibility for managing hotel or motel staff.  The specification does not exclude positions that predominately involve responsibility for organising and controlling the operations of a hotel or motel that may have limited duties requiring management of hotel or motel staff but is not the main function of the position.

It is foreseeable the duty managers may struggle with Genuine Position requirements as it is fair to say that a large chunk of their day is supervision of staff.

This could see a move to where each individual venue, hotel or restaurant is only permitted one hotel manager or restaurant manager regardless of size or spread of hours. This would be a disaster for most of our clients who have multiple duty managers to cope with seven day a week trading, a long spread of hours and multiple outlets in the one venue.

3. Hospitality graduates unable to apply for a 457
Under the new framework, an applicant for a 457 will need two years’ full time experience. We envisage that this will be post qualification experience. This will put an end to sponsoring chefs or managers who may have worked for a business the whole time they were studying part time if they have only completed a Vocational course in Australia.

This has a further implication in that these students will likely not come here to study in the first place if the pathway to a 457 visa is unclear. We have already had discussions with several offshore education consultants who have had multiple requests to withdraw enrollments.

Undoubtedly there will be some refinement to the changes as many of the legislative amendments have yet to be written. It is incumbent on the industry to ensure there views are heard. If these changes are allowed to pass through, the only guarantee for the industry is that staffing issues will be worse than they are now, and they are already terrible.

Justin Browne is managing director at registered migration consultancy, edupi.