Compliance and Integrity Issues


Cancellation circumstances – act quickly

There are a number of grounds prescribed under s 116(1)(g) of the Migration Act which crystallise the power to cancel a subclass 457 visa, including the following under Reg 2.43(l)(l) :

[This is the small letter ‘l’ which comes after ‘k’ and before ‘m’]

(l)  in the case of the holder of a Subclass 457 (Temporary Work (Skilled)) visa who is a primary sponsored person in relation to a person who is, or was, a standard business sponsor or party to a labour agreement (the sponsor) — that:

  • ….

(ii)  the sponsor has given false or misleading information to Immigration or the Tribunal; or

(iii)  the sponsor has failed to satisfy a sponsorship obligation; or

(iv)  the sponsor has been cancelled or barred under section 140M of the Act; or

(v)  the labour agreement has been terminated, has been suspended or has ceased;


Subclass 457 visa holders are often not conscious of the fact that they may sink with the sponsoring employer. Of particular lethal force is where the sponsor’s sponsorship status has been cancelled or that the employer is barred from being a sponsor. At that moment in time a subclass 457 visa holder is vulnerable to cancellation.

The subclass 457 visaholder here is to some extent hampered by condition 8107 which prohibits the visa holder from working for any other employer.

Thus if a subclass 457 visa holder gets wind of pending disciplinary action against a sponsoring employer, the subclass 457 visa holder should urgently consider finding a new sponsor. Once an employer’s sponsorship status is cancelled the employee should immediately look for and hopefully find another sponsoring employer, this may involve a new application for sponsorship and a nomination.

If a subclass 457 visa holder receives a notice of intention to cancel then it may be prudent to rush through a new application for a subclass 457 visa, a sponsorship application and a nomination application.  This could be used as a submission not to cancel the subclass 457 visa on discretionary grounds.

Throughout this process though until either a new nomination is approved the employee will shackled by condition 8107 preventing him working for any other employer. The writer has not yet tried this, but it may be possible to apply for a visitor visa asking for a one week duration of that visa. During that one week, a subclass 457 visa, and new nomination and sponsorship applications can be lodged. The visitor visa grant brings the ‘infected’ subclass 457 visa to an end and the bridging visa granted after that time would not be shackled by 8107!

In all of the above, one notes that the political climate has changed about subclass 457 visas, not only are less visas being granted but there is much more aggression on subclass 457 visa cancellation.

Out of job time reduced to 60 days

From 18 November 2016, the time a new subclass 457 visa holder can spend unemployed reduces to 60 days from 90 days – Here is what Condition 8701(3)(b) will say from 19 November :

if the holder ceases empyment — the period during which the holder ceases employment must not exceed 60 consecutive days

This is done under the Migration Legislation Amendment (2016 Measures No. 4) Regulation 2016 dated 27 October 2016 coming into effect on 19 November 2016. But it only applies to visas granted on or after 19 November 2016 – see Item 5701

5701  Operation of Schedule 1

                   The amendments of these Regulations made by Schedule 1 to the Migration Legislation Amendment (2016 Measures No. 4) Regulation 2016 apply to a visa granted on or after 19 November 2016.

So now a migration adviser will need to check when a person was granted a subclass 457 visa to determine if the unemployed period is 60 days or 90 days.

Of course there is no mandatory cancellation in the subclass 457 regime it is always discretionary and employers of course have no power to ‘cancel’ a visa all they can do is report a separation from an employee.

However even if an employee is unemployed for more than 60 days and his or her visa is cancelled then the strategy is to attempt to go out and find another employer and have that employer apply to be approved as a sponsor and to apply for approval of the occupation’s nomination. A good example of this strategy is the AAT case of Francisco 1609897 (Migration) [2016] AATA 4548 (21 October 2016)

The employee “resigned from [his employer] because he was asked to do lots of unpaid overtime and undertake duties which were inconsistent with those of being a Motor Mechanic, such as driving trucks.” He was employed there for 8 months and he was unemployed for 8 months when his visa was cancelled. He found a new employer but it took until 21 September 2016 for the nomination to be approved. On 21 October 2016 the tribunal overturned the cancellation. So here is the exact timeline on this case :

23 February 2016 Voluntarily ceases employment

27 June 2016 Subclass 457 visa cancelled

21 September 2016 Nomination from new employer approved

21 October 2016 AAT overturns cancellation

Th employee had started with the new employer for a few weeks but ceased when he received the Notice of Intention to Cancel the visa. He was on a Bridging Visa E after cancellation with no permission to work.

Nevertheless the fact the employee had found a new employer with an approved nomination meant the AAT overturned the cancellation.

It is sometimes wrongly thought that condition 8101 must be imposed when a person applies for a bridging visa E after visa cancellation. Of course the first thing to do is to immediately apply for review to the AAT against the visa cancellation. Then the person is eligible for a BVE under  050.212(4)(b) which states :
(b)  the applicant has applied for merits review of a decision to cancel a visa

Under paragraph 050.617, 8101, no work, may be imposed but is not mandatory. In fact the regulation contains no presumption that a person should have 8101 imposed. Many delegate just impose 8101 as a matter of course without realising the imposition of 8101 is purely discretionary.

In the above case of Francisco the applicant had 4 school age children and a spouse to support in the Philippines.  On is case he was being exploited by his former employer. These are grounds not to apply 8101.

An important strategic point in these cases is getting the client permission to work while the merit review process is underway. In Francisco the applicant worked illegally for a few weeks but was unemployed for about 6 months.

Obviously speed is essential, the former must holder must act very quickly to find another suitable employer.


Cash payments to employees

Reg 2.82(3) requires employers of subclass 457 visa holders to keep records :

(3)…….(c) a record of the tasks performed by the primary sponsored person in relation to work undertaken in relation to the nominated occupation or activity; and

(d)  a record of the location or locations at which the tasks mentioned in paragraph (c) were performed; and

(e)  if the obligation mentioned in regulation 2.79 applies to the person:

(i)  a record of the money paid to the primary sponsored person; and

(ii)  a record of the money applied or dealt with in any way on the primary sponsored person’s behalf or as the primary sponsored person directed; and

(iii)  a record of the non-monetary benefits provided to the primary sponsored person, including the agreed value and the time at which, or the period over which, those benefits were provided; and

(iv)  if there is an equivalent worker or workers in the person’s workplace — a record of the terms and conditions that apply, or did apply, to an equivalent worker or workers, including the period over which the terms and conditions applied; 


Paying an employee in cash creates a doubt in the minds of the officer carrying out monitoring. In practice monitoring officers often just don’t believe that that the wages that had to be paid were paid.

Under Reg 2.89, the failure to meet a sponsorship obligation then triggers the power of the Minister to cancel a sponsorship and/or bar an employer from being a sponsor under s 140M of the Migration Act.

The writer has seen cases where cash payments to employees were not believed and sponsorship cancellation ensued. Best practice to avoid this, is for an employer to pay and employee via a bank account.

The Fair Work Ombudsman works hand in glove with Immigration and also looks at issues like the employer paying the employee via a bank account but then the employee ‘gifts’ money back to the employer. Such an arrangement will be regarded as a sham and would mean the employer has not paid the Temporary Skilled Migration Income Threshold (TSMIT)

There is also a link up with the Australian Tax Office which will pick up whether the employee is being the paid the correct salary by way of group certificates and employer tax returns.