Labour Market Testing – more exemptions from international treaties

Relief from labour market testing (LMT) arising out of Australia’s international trade treaties are either very helpful and clear or on the other hand a quagmire.

A new agreement the Regional Comprehensive Economic Partnership Agreement (RCEP) comes into force on 1 January 2022. The RCEP is a new international trade agreement and is made between the Association of Southeast Asian Nations (ASEAN includes Brunei Darussalam, Cambodia, Indonesia, Lao People’s Democratic Republic, Malaysia, Myanmar, the Philippines, Singapore, Thailand, and Viet Nam) and ASEAN’s free trade agreement partners including Australia, China, Japan, New Zealand and the Republic of Korea.

Because of treaties already in force, citizens of China (excluding HK), Japan, Mexico, Thailand or Vietnam plus citizens AND permanent residents of Canada, Chile, Korea, New Zealand or Singapore are exempt from labour market testing for the subclass 482 visa.

What is sometimes ignored is that ‘permanent residents’ of those latter countries also gain the LMT exemption.  

Also presently exempt is a current employee of a company that is;

·       an associated entity of the sponsor; and

·       that associated entity is located in Canada, Chile, China, Japan, Korea, New Zealand or any ASEAN nation (Brunei, Myanmar, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam);

It would also seem that such employees would not need to be citizens of the relevant ‘party’ country but would have to employed by the relevant employer.

The term associated entity is very broad and the Australian based company merely needs to be a company with some cross ownership links to the previous employer in the relevant country of origin.

The RECP is a further step in relief on LMT, as it now opens up relief from LMT in some circumstances to employees of companies in Japan doing business with Australia and who are specialists or have trade or professional skills.

The RECP extends to skilled employees of companies based in the party states who have been working for that employer for 2 years.

It also adds the follows to the exemptions:

Persons who are: (i) employees of an enterprise of another Party that has concluded a contract for the supply of a service within Australia and that does not have a commercial presence within Australia; or (ii) engaged by an enterprise lawfully and actively operating in Australia in order to supply a service under a contract within Australia.

These are baby steps but all worth carefully watching to see what advantages can be squeezed out of these treaties.

Whatever relief that can be gained out of these treaties depends on the application of s140GBA of the Migration Act, which as relevant, states:

(1)(c)…it would not be inconsistent with any international trade obligation of Australia determined under subsection (2) to require the person to satisfy the labour market testing condition in this section, in relation to the nominated position.

(2)  For the purposes of paragraph (1)(c), the Minister may, by  legislative instrument, determine (as an international trade obligation of Australia) an obligation of Australia under international law that relates to international trade, including such an obligation that arises under any agreement between Australia and another country, or other countries.

 So merely the fact that Australia has entered into a trade treaty with a country does not mean that all citizens of that country are exempt from LMT.

For example the Free Trade Agreement between Australia and Hong Kong, China, (A‑HKFTA), has quite limited relief on LMT. It is limited to skilled persons employed by the HK employer for not less than two years immediately preceding the date of the visa application.

Here are the URL’s for the RCEP and the relevant annexure :

https://www.dfat.gov.au/trade/agreements/not-yet-in-force/rcep/rcep-text

https://www.dfat.gov.au/sites/default/files/rcep-annex-iv-schedule-of-australia.pdf

Service sellers, senior or specialist executives and executives coming out to set up a business for a company based in a party state are exempt from LMT.

There have been some problems with dual citizens but in my view a dual citizen is entitled to the benefit of wherever citizenship provides the LMT exemption benefit. In relation to the China and HK SAR situation, a person who is separately a citizen of the PRC and who also has an HK SAR identity document still have the benefit of being a citizen of China.

The new legislative instrument (Migration (International trade obligations relating to labour market testing) Determination (LIN 21/075) 2021) was promulgated on 28 October 2021 setting out the list of treaties relevant for s140GBA. Here is the list of the treaties entered into by Australia and which apply to s140GBA as set out in that legislative instrument:

(a)   Agreement Establishing the ASEAN-Australia-New Zealand Free Trade Area (AANZFTA);

(b)   Australia-Chile Free Trade Agreement (ACl-FTA);

(c)   China-Australia Free Trade Agreement (ChAFTA);

(d)   Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP);

(e)   Free Trade Agreement between Australia and Hong Kong, China (A‑HKFTA);

(f)    General Agreement on Trade in Services at Annex 1B to the Marrakesh Agreement Establishing the World Trade Organization (GATS);

(g)   Indonesia-Australia Comprehensive Economic Partnership Agreement (IA‑CEPA);

(h)   Japan-Australia Economic Partnership Agreement (JAEPA);

(i)    Korea-Australia Free Trade Agreement (KAFTA);

(j)    Malaysia-Australia Free Trade Agreement (MAFTA);

(k)   Pacific Agreement on Closer Economic Relations Plus (PACER Plus);

(l)    Peru-Australia Free Trade Agreement (PAFTA);

(m)  Protocol on Trade in Services to the Australia-New Zealand Closer Economic Relations Trade Agreement (ANZCERTA);

(n)   Regional Comprehensive Economic Partnership Agreement (RCEP);

(o)   Singapore-Australia Free Trade Agreement (SAFTA);

(p)   Thailand-Australia Free Trade Agreement (TAFTA).

As is often the case, the object of the relief from LMT arising out of these treaties is laudable, it is the implementation which is sometimes cumbersome and difficult to manoeuvre.

The PAM also records this exemption to LMT:

·       the nominee is a citizen of a Word Trade Organisation (WTO) member country and is being nominated by an employer for whom the nominee has worked in Australia on a continuous, full-time basis for two years immediately before the nomination is lodged.

·       This means that LMT would not be required for a new nomination lodged by the same sponsor or an associated entity of that sponsor provided:

·       the visa applicant/holder will be staying in the same nominated position; and

·       either

·       the new sponsor is still an associated entity of the original sponsor or

·       the employer has stayed the same (that is, even if one company has ceased to exist).

·       LMT might not be required if the person is nominated for a different position with the business but has a specialised knowledge at an advanced level of a proprietary nature of the company's operations. Officers should refer such cases to the policy owner for further guidance if unsure.

This means that LMT is not required for a renewing subclass 482 visa!