GUNN, Mr Richard, Migration Law Committee, International Law Section, Law Council of Australia

MALYON, Ms Katie, Vice-Chair, Migration Law Committee, Law Council of Australia

O'DONOGHUE, Mrs Anne, Law Council of Australia

[11:56]

CHAIR: I now welcome representatives from the Law Council of Australia. Do any of you have anything to say about the capacity in which you appear today?

Mrs O'Donoghue : I am the Treasurer of the International Law Section, and I am a practising immigration lawyer.

CHAIR: Thank you, Mrs O'Donoghue.

Ms Malyon : I am also a registered migration agent and was an executive director with Ernst & Young.

CHAIR: Thank you, Ms Malyon. The Law Council of Australia has lodged submission 29 with the committee. Are there any amendments or alterations you would like to make to the submission?

Mrs O'Donoghue : There was one clarification in Katie's paper, if I can just pick it up now. It was a referral to legislation when it should have been policy—is that correct?

Ms Malyon : Correct. That is on page 8. The footnote referred to in paragraph 21, footnote 10, should have been a reference to an extract from policy. We will need to forward that to you.

CHAIR: I am just finding that. I am sorry; could you repeat that?

Ms Malyon : Page 8, paragraph 21 makes a reference to footnote 10. The citation there of a legislative instrument is incorrect. It should be a reference to an extract from policy, and we will need to refer you to that particular extract.

CHAIR: You can follow up and do that?

Ms Malyon : We will provide you with those details. I apologise for that error.

CHAIR: I now invite you to make a short opening statement, at the conclusion of which I will invite members of the committee to ask questions.

Mrs O'Donoghue : The Law Council certainly supports the need for 457 visa holders to assist Australia with skills shortages and assist business. We certainly do not in any way countenance bad work practices or people being exploited in any way in their workplace. The 457 visa system has been working as an uncapped, demand driven 457 program, and the Law Council believes it is working well in the interest of meeting temporary skills shortages. We do believe that there is a need to address certain potential vulnerability of some 457 holders, and we also believe that there is a potential for conflict of interest in some 457 situations. We have outlined that in the paper.

We also wish to state that we believe that DIAC, with the resources that are made available to them at the moment, are doing a reasonable job. There is a lot of pressure on DIAC at the moment, but we believe that, given the resources, they are doing a reasonable job in these circumstances.

Senator HUMPHRIES: Thank you for that submission and the extra evidence you have given this morning. You make a number of comments about the way in which 457 visas are working at the moment across Australia. Obviously the Law Council represents immigration lawyers but also, I presume, many clients come to your members to get advice, principally from the point of view of employers, about problems arising from the 457 system—if they were, for example, being prosecuted for breach of a 457 visa and there is the condition that they would come to one of your members to get advice on defending themselves. Can you give us some indication of the extent of involvement by your members from the point of view of acting for employers and how you are dealing with issues arising out of 457 visas within the operation of the system?

Mrs O'Donoghue : There are various situations with 457 visas. A law firm may be acting purely for the employer in the situation of sponsorship and nominations and visa capacity. One of our members could also be acting for a visa applicant who wishes to get a second opinion, a little bit concerned about using the representative that is tied with the particular corporation. Then you may have a situation where a company may come to you, where they have a problem, where they may have had a warning or there may be some breach, and of course you can have a situation where a visa applicant has had the employment terminated and they are in the situation of a 28-day period to either find another sponsor or depart. Katie may like to elaborate on that.

Ms Malyon : It is important to note that roughly one third of registered migration agents are lawyers. The work that comes across an immigration lawyer's desk for the large part is the same as might come across a registered migration agent's desk. We would typically act for both employer and employee, in sponsorship, nomination for the employer or a 457 application by the prospective employee. There might be issues arising during the course of the sponsorship that might give rise to notifications to the department of immigration in relation to change of directors or sponsored employees leaving. We would work with the employer to assist with those notifications. Lawyers may also assist in court proceedings, but there have not been too many of those, in terms of sanctions being challenged. It is very much the case that we would have a practice that very much reflects what other registered migration agents practice, although we do bring our special legal training and skills to those cases.

Senator HUMPHRIES: I am glad you have been able to indicate that your members act for both employers and potential or actual employees I want to get your take on the argument that has been put to the committee that people who find that they are being exploited by an employer under a 457 visa arrangement are reluctant to seek advice or make a complaint because of the sanctions that are available, effectively of being deported by virtue of complaining about the way they are being treated under a 457 visa. Typically, if one of your members were approached by an employee on a 457 visa who made such a complaint, what kind of advice would you give them about their position with respect to making a complaint? Would you say to them, 'Don't complain, because you'll only end up being deported,' or would you say, 'Yes, let's deal with this,' and proceed to have that complaint dealt with?

Mrs O'Donoghue : Who do you want to ask?

Senator HUMPHRIES: Whoever wants to answer.

Ms Malyon : I have been in that situation, so perhaps I can share personal experience. Generally, it is an employment law issue and we are not employment lawyers. So we would refer someone to an employment lawyer or, if there are impecunious circumstances, directly to the Fair Work Ombudsman. One thing the Law Council would like to say is that the Fair Work Ombudsman has two functions: educative and compliance. It really has taken its educative role very seriously in this regard. It has multilingual speakers; there are about 22 different national languages. Publications are extensive. It is usually just a case of simply referring people. I have on occasions accompanied people to the Fair Work Ombudsman's office.

Senator HUMPHRIES: But when people come to you and say: 'I want to make a complaint,' and you say, 'Yes, let's go see the Fair Work Ombudsman or another employment specialist lawyer,' or whatever, are you as an immigration lawyer giving advice simultaneously about the likelihood of them being deported because of their complaint about the operation of the system?

Ms Malyon : No. When I say no, you are looking at the scenario that is presented now. It may or may not ground an issue that might present for the Fair Work Ombudsman. As I say, my expertise lies in immigration law, not employment law. If there are grounds for the employer to be sanctioned, you would canvas: 'Then your visa may be at risk, in which case let's sit down and explore your options and your partner's options to remain in Australia on another basis.' During the GFC, we ended up hoarse on some occasions, because employers were aware that they needed to downsize and 457 visa holders were included in the downsizing. Employers, as part of their separation, their termination of 457 visa holders, would willingly assist them in trying to remain in Australia if they could and they would engage services, typically of an immigration lawyer, a registered migration agent, to review someone's options—there are five main pathways to temporary and five main pathways to permanent—for how they could remain in Australia.

Senator HUMPHRIES: Sure. So it is not true to say that a person who complains about their treatment under a 457 visa automatically and inevitably faces deportation?

Ms Malyon : Not at all.

Mrs O'Donoghue : I feel that is an extreme situation. Speaking personally, in my practice one tries to assist the visa applicant to find options, refer out if you need independent employment law advice but try to solve the problem. I remember getting on the phone to a potential employer and turning it around. This is what lawyers do. Lawyers in the current system have to be registered as a migration agent and are duly regulated. Inherently, this is what a lawyer does in trying to solve a problem for a particular applicant. There is, as we state in the paper, quite a big problem in relation to the conflict of interest when you have representatives for the employer and then you have a visa applicant. If something turns sour in the relationship, then their visa is at risk. That of course is when they would often come to a lawyer for a second opinion and that is what we give and we try to assist the people in those circumstances. I had an instance yesterday in my office of a very similar situation. This is the unsung work that lawyers do that no-one knows about.

Senator HUMPHRIES: Sure.

Mr Gunn : Senator, it is probably also important not to overstate the inevitability of deportation. It is not a situation where, whether or not it is due to a power imbalance in the relationship, ceasing the employment does not automatically equal deportation. If the person is the holder of a 457 visa, there is an opportunity for them to find a new employer as well. That employer would also need to be a sponsor, but they can switch employment. That is also an option that is open to them. It is not a case of: you've lost your job, get on a plane.

Senator HUMPHRIES: Based on the advice that your members are giving to employers and employees about the operation of the 457 visa system, would your section of the Law Council or your members have been surprised to hear the claim that there were 10,000 cases of breaches of the 457 system or would the feedback they give to you would be something like, 'Yes, that is an indication of the workload that we are getting across our desks.'?

Mrs O'Donoghue : I believe they feel that it is an exaggeration of the situation. We are not saying that there are not some examples of that and we are not saying that our members are not trying to assist people in these circumstances, but I believe that is an exaggeration. I would like to see some independent data on this information and I am sure that the Law Council would be happy to address a written submission with access to independent data.

Senator HUMPHRIES: I think that we would all like to see that. You say that the Law Council's view is that it is a challenge for an employer to take on a 457 visa holder. You called it the 'last resort', and further, you say:

The regulatory requirements involved for such a business to undertake the steps to become a sponsor are overwhelming for some and act as a deterrent. This means that they continue to struggle to fill vacant roles.

And with respect to the idea of prescriptive market testing as a way of weeding out unnecessary use of the 457 system, you also say that many of your members were 'practising in the 1990s when labour market testing was compulsory' and it was your experience that 'those requirements were poorly managed, largely ineffective and honoured more in form than substance'. Would you say that that was the danger of going back to a strict labour market testing regime again?

Mrs O'Donoghue : I am sure Katie and I practised when labour market testing was done and it was almost like an artificial process that was gone through. Yes, the advertisement was placed in the paper and all the steps were taken, but at the end of the day a large percentage of the successful applicants were the people that you wanted to sponsor and I do not believe that labour market testing is the solution to the problem in these circumstances. Would you like to contribute—

Mr Gunn : I would agree with that. Ultimately, for most migration agents and migration lawyers where you have small to medium businesses that come to you for advice, if they had been able to find a local person to fill the position they are trying to fill, they would have done so. Once you explain the documentary requirements for becoming a business sponsor and for doing a nomination—perhaps implementing formal training for the business that has not been implemented previously—it does turn a lot of employers off. They need to provide copies of their financial documentation for the business, for instance, and it can act as a disincentive to some businesses to actually go through the process. Notwithstanding that they have got a person who is on a temporary visa—and they like them, they want to employ them, they are good for the job and have got the skills to do the job—in many cases, particularly in signing up to sponsorship obligations when they are signing themselves up to legally binding obligations, many employers are not willing to do it. I guess those businesses then go without those skilled workers.

Senator HUMPHRIES: What about the argument that the sanctions available under the legislation are not strong enough to discourage people from exploiting 457 visa holders? Do you feel that the sanctions should be increased to act as a barrier to people exploiting such workers?

Mrs O'Donoghue : From my point of view, I have seen a situation with a very large corporation losing the ability to sponsor for six months for what would have been a bookkeeping oversight and poor advice. Fortunately it was able to get reinstated, but the number of people that that employer would have employed Australia wide with Australian citizens was major and, at that stage, they were working in a particular area where they did need to bring in skilled labour. So those consequences were quite horrific for them.

So, in some respects, I believe that the sanctions are strong enough in these circumstances. On the other hand, you must also protect exploited workers. There are two types of sanctions for different types of situations. Workers are being exploited in a most horrific way and then an employer, where there is a minor oversight, gets a sanction or gets a warning and moves on from there.

Ms Malyon : If I take you to page 11 of our submission, you can see there that we have over 20,000 approved sponsors, yet less than roughly 2,000 have been monitored. So it is really become very much an issue of the resources that are available to the department of immigration to do what they need to do, what they have the power to do. If you are not commencing monitoring, how on earth are you going to discover breaches unless they are brought to your attention through the employee, family members or people in the community, if it is an ethnic community that might give rise to that? I think those figures are really telling. When I say we are doing monitoring, I mean a form is sent out asking: are you doing the right thing? How many site visits are conducted? Less than a thousand. On those figures, the breaches just are not going to be identified. So we are very encouraged to see that the Fair Work Ombudsman is going to have a new role in this monitoring regime, and I think the department of immigration has done a really splendid job with the resources that it has had to date.

Senator HUMPHRIES: I note, though, that, even with 20,000 sponsors and 2,000 monitoring exercises, there was only one prosecution last year and none the year before, which suggests that, even with that cross-section taken, there is not a widespread problem with people actively seeking to thwart the system or exploit people.

Mr Gunn : The council do not think there are abuses by Australian employers, flagrantly exploiting overseas workers. Most employers who come to you are looking to do the right thing. Yes, there is a legislative framework that they have to work within; so, if they are prepared to actually go ahead and sponsor the person, they will work within that. I think that on the sponsor-monitoring side of things, from the department's point of view, they try to be educative rather than punitive, at least at first—unless they are actually seeing flagrant disregard for the system. I think a few years ago there were the Chinese welders living 10 to a house and being paid a pittance. Obviously, those people should be prosecuted to the full extent of the law. But, on the whole, most employers cannot find a local person to fill a position and they are trying to do the right thing and work within the system that is there.

Senator HUMPHRIES: Thank you.

CHAIR: I might ask a few questions. I started off thinking that an employer would advertise internationally to fill these positions, but my impression, from looking at a table earlier in relation to the status of 457 visa holders and their previous visa status, that there are actually a significant proportion who are already in Australia—backpackers on the different visa that allows them to—

Mr Gunn : Or students.

CHAIR: or students. So it strikes me that, in fact, quite often—and I imagine this is the case with your clients—they will come to you with someone in mind who is already in Australia. Is that the case?

Mr Gunn : Absolutely.

CHAIR: What proportion would that be true of? In a sense, I would then be putting the question: isn't it arguably sometimes not so much about not being able to fill the position and address unmet need but more about wanting to fill the position with someone where there is already an established relationship and respect for their work?

Mr Gunn : Probably the majority of cases that most migration agents and lawyers would see—not necessarily the vast majority; it depends very much on the industry—would be temporary residents in Australia, either student visa holders or backpackers. It is difficult to speak to the process that the employer has gone through in order to find that particular person and go through that process. To turn it around, generally speaking it is administratively difficult as a small to medium-sized business to go through the 457 visa process. It costs you money. It involves paperwork that you would not otherwise be doing. You are signing yourself up to legal obligations. The constant refrain that we hear is: 'I can't find an Australian; do not want to work hard enough et cetera.' Again, I cannot speak to the effort that employers have put in in specific cases of trying to find a local person, but if they had been able to, it is easier to employ someone locally than to go through the process of employing an overseas person.

CHAIR: In dealing with a client, you do not necessarily ask them about the effort that they have previously put in. My understanding was that there needs to be an attestation that they have not been able to fill that position by someone who is a permanent resident or an Australian citizen. Wouldn't that be part of the process that you would engage in advising them—asking them about what they have previously—

Ms Malyon : The attestation as part of the sponsorship application process is that they have demonstrated or made a commitment to employ local staff. The second step in getting a 457 visa holder here is getting a nomination approved. There isn't a question on the form which says: have you tried to fill this position locally? There are other local employees in the business and the disincentives that we have referred to in terms of the extra obligations at the end of this 457 visa holder are: you are going to have to repatriate the person back overseas even if they were living in Acton when you employed them. You have got to repatriate them back home overseas. For many people, certainly in the ACT, if you have children attending school here, there are very significant education expenses—three times what people have to pay, for example, in New South Wales. It costs $12,000 to send your child to school here in the ACT, and about $4,500 in New South Wales, per child per year. It does not happen in all other states. There are significant disincentives for employers to recruit 457 visa holders.

CHAIR: Mr Gunn, you have correctly said it would be exaggerating to suggest that if someone were to complain about workplace practices or occupational health and safety, they would immediately be deported. I do not think anyone is suggesting that. We have been looking at the vulnerability of some 457 visa holders and indeed you revert to that in your submission quite clearly. You said there are 28 days for someone to find an alternative sponsor, but we have already heard evidence from different submissions that in fact that is not an adequate amount of time. The Deakin review recommended 90 days. Does the Law Council have a view on what would be an appropriate period of time?

Mr Gunn : As Mr Parcell from the MIA was saying, practically the clock does not start ticking on day one and finishes on day 28. From my experience, the immigration department is quite sympathetic. Generally speaking, they are dealing with visa holders because they understand that within that relationship, obviously, there is an imbalance of power. Because of the visa condition that they have on the 457 visa that they only work for their sponsor, in order to keep working they have to find a new sponsor. As to what is an adequate amount of time—in the way that it practically works, it ends up being closer to 60, potentially 90, days in terms of the length of time that the person is able to stay. They are not able to work for anyone else during that period.

CHAIR: Is there any merit in regularising that informality so that there is some certainty? Presumably, if someone comes and sees you, you can give them that advice that possibly there may be discretion and that might not happen. If someone understands they have 28 days to find another employer, regularise their visa in some other way or get out—

Mr Gunn : I would not say it is unregularised. At the end of those 28 days, then the notice to consider cancellation would come, and that is more of a defined time period—so you must respond within, I think, 14 days, and then potentially the visa could be cancelled. It might be that that initial 28-day period gets extended. I am not sure. I think it needs to work with some flexibility from the department's point of view. As Katie was saying before, people have kids in school and, if there is the possibility that they might have to return home because they cannot find another sponsor, then people have their lives settled and there are a lot of things that they need to do if all of a sudden they have that taken away from them.

Mrs O'Donoghue : From my point of view, I found the department quite sympathetic. You could have a situation where someone is working for a company and it goes into liquidation. I have seen situations of anything up to three months where they are actively looking for new employment. I have only found the department very reasonable in the circumstances. Yes, I think there is probably merit in making a period which would give parties some degree of certainty, but I still think we need some level of flexibility.

Ms Malyon : I think to have the certainty for 90 days would be commendable. It is something I would certainly recommend the committee endorse.

CHAIR: I have other questions, but I will pass at this stage to Senator Xenophon.

Senator XENOPHON: Mrs O'Donoghue, your submission—

Mrs O'Donoghue : I have to clarify that it was Katie's submission, but I am happy to—

Senator XENOPHON: I am sorry; I will put it to any of you. The Law Council says that there is some room for improvement but that the recent politicisation of the visa program has been unhelpful. You do not think it is good to air public concerns about the visa program?

Mrs O'Donoghue : Not specific, but I do think there is an issue in relation to conflict of interest, which we would be happy to put further to the committee, in a situation where you have got an employee and you have got the sponsor in these circumstances. Certainly I think in conflict of interest there is some work that could be done.

Ms Malyon : In terms of responding specifically to that question, it is always welcome to have government policy reviewed, and it should be done in a timely way, with invitations extended to relevant stakeholders. What we do not want, in the context of the need for a globally mobile workforce, in the context of having just issued an Asian white paper, when we are looking to engage more closely with our Asian neighbours, is this unhelpful politicisation of what is essentially a temporary work solution for employers who cannot fill positions locally. We are not talking medium term or long term; we are talking short term. We have had traditionally a very close alignment between the unemployment rate in Australia and the use of 457 visas, so, when the unemployment rate has been below 5.2 per cent, we have had to have increased access to foreign workers to fill those short-term skills needs.

Senator XENOPHON: Chair, I am aware that time is short but, just further to that, the TWU in their submission make the point that there has been a steady rise in applications for 457 visas but that, for instance, the ANZ series of job ads—that benchmark which covers newspapers and internet job vacancies—showed a 15 per cent decline in the year to October 2012. In a similar period, there was a significant increase of about 20 per cent in 457 visa applications. Isn't there an issue there that there seems to be some disconnect between job vacancies in the domestic market and an increase in 457 applications?

Ms Malyon : If you are alluding to the difference between the unemployment rate and our number of 457 visas at the moment, there are a number of structural reasons within the immigration program that can explain that. For example, when did we start getting the number here? I am looking at the submission that the department of immigration prepared for your committee, on page 3. They started to diverge in January 2010. What happened then? In February 2010, we had the change in the permanent residence onshore GSM program. So all those people who had undertaken study in Australia on the basis that they thought they were going to be able to get permanent residence—and we have already dealt with that; we fixed that problem up—then became eligible largely to apply for graduate visas, 485 visas. So they are now making up a significant component of that group.

Also, with changes to the permanent residence program which came into effect on 12 July last year, we have people who were able to proceed to permanent residence after being with their employer for one year if they had been in Australia for two but who now have to remain for two years. So that group is stuck in this 457 visa cohort.

We also have really protracted processing times at the department of immigration at the moment—again, a resourcing issue. It was the case about 12 months ago with migration agent certified documentation that if an application went in and we certified it as 'fully documented, decision ready', it could be approved within a matter of weeks. Our reputation was on the line: three strikes and you were out. Now it is taking six to 10 months for these applications, and I heard of someone yesterday where it was 12 months. That person, if they had permanent residence granted, would not be in that group. So how do you reduce the 457 visa cohort? You look at some structural changes to the program itself, allowing a 485 visa holder perhaps. Their visas are only granted for 18 months. If they had been allowed to stay for two years they could transition to permanent residence.

Senator XENOPHON: I do not want to cut you off but I have two or three more questions to ask you. I found what you were saying then to be very valuable and helpful so, in addition to the very comprehensive submission you have provided, I would invite you to provide some further elaboration on that, should you wish to do so.

Paragraph 35 of your submission refers to the concerns I have cited about flight attendants being on the CSOL. Is the Law Council essentially saying that there is an issue there? It does seem strange that flight attendants should be on the CSOL. Are you saying there is a need to separate 457 visas from the employer nominated permanent residence visa occupation list? I did not quite follow what you were saying.

Ms Malyon : The consolidated sponsored occupations list covers a number of visas: 457s and employer nominated permanent residence. Our argument is that that should be one single list. It also covers a bunch of other visas: state sponsored—and, of course, states are very aware of which locality, which region, where specific skills have surfaced as in need of being addressed. But it also covers the occupational trainee visa, where flight attendants can come in if they have had more than a year's experience overseas. They can come to Australia because 'flight attendant' is on the consolidated sponsored occupation list, attend training here for some weeks—six weeks or whatever—

Senator XENOPHON: Two to six.

Ms Malyon : and then be sent home. The consolidated sponsored occupations list is a combined list.

Senator XENOPHON: There is scope to remove that confusion?

Ms Malyon : Yes.

Senator XENOPHON: Reference is made at paragraph 63 to the Federal Circuit Court decision in Alcantara & Anor v Buildpower Pty Ltd where the court found that merely because an employee has a 457 visa it is not sufficient to categorise them as vulnerable. Instances have been put to me where there has been a lot of vulnerability, where there is the fear that they can be chucked out after 28 days. I want to take you to paragraph 66 of your submission where it says:

Clearly, the issue of vulnerable foreign workers needs to be tackled on two fronts: first, education and, second, serious consequences for abuse of foreign workers.

Do you consider that there are adequate penalties in place now, in terms of monetary penalties, if an employer is abusing a 457 visa holder? I have spoken to 457 visa holders who are terrified of speaking out for fear of upsetting their employer and who do feel vulnerable. Is it a question of having, for that minority who are not doing the right thing, some stronger penalties in place than what we have now?

Ms Malyon : There are consequences both in immigration law and in employment law. The increased role of the Fair Work Ombudsman should encourage affected employees, like those you mentioned, to actually report those matters to the body which has regulatory authority to—

Senator XENOPHON: But Ms Malyon, this goes to the questions Senator Wright was asking. Do you think there is a bit of a disconnect between employment law and migration law, given that there seems to be, amongst some 457 holders, a minority of employers who may not be doing the right thing—rogue employers? There does seem to be a disconnect between the two; there is not an adequate meshing between employment and migration law in the case of 457 visa holders that are vulnerable.

Ms Malyon : One in four people in the workforce have a visa, including the 457s. So, many employment scenarios in Australia involve a visa. For 457 visa holders: yes, the time frame. That is why I would encourage the committee to consider a longer time frame—by when do they need to leave? Perhaps increase the 28 days. We have also suggested an alternative visa to allow them an opportunity to pursue their employment work rights. But you have two different portfolios here that, even amongst themselves, have not been sharing information, from what I can gather. There has been limited information-sharing—even, as you mentioned earlier, statistics regarding injured 457 visa holder employees injured. All the state government bodies—WorkCover in New South Wales—should be sharing that kind of information. To me it is just so obvious.

Mrs O'Donoghue : Taking Katie's point, there is no reason the department could not consider creating a new type of bridging visa for people in these circumstances so they could be protected whilst they are trying to sort out legal advice or, alternatively, seeking, other employment. I think this has been a problem that has existed for quite some time and that has not been addressed. As I said, I think it is a resourcing issue with the department. But what we have to bear in mind with this is that globally we have something like 800,000 Australians working around the world every year, and we are party to certain international trade agreements. We do not want the rest of the world to think we are so restrictive in relation to people coming to work in Australia when we expect our Australians to be able to work overseas. I think the total number of our workforce is something like 11 million, and we have just under a million of that working overseas. Organisations like the International Bar Association, which the Law Council is very much affiliated with through its global institute, are looking at these global issues, because the workforce around the world is moving rapidly. We have to protect the vulnerable, but at the same time we need to keep Australia in a competitive situation whereby it can be flexible with bringing workers from overseas.

Mr Gunn : I think the laws that are there are not insubstantial; it is just that they are not exercised.

Senator XENOPHON: Is a maximum penalty of $33,000 for a corporation an adequate disincentive for a company that flagrantly breaches the rules?

Mr Gunn : They are not all multinationals, though.

Senator XENOPHON: Right, but some are, and the maximum penalty is $33,000. Is that enough?

Mr Gunn : Arguably not.

Mrs O'Donoghue : The ultimate penalty in a situation like this for a major corporation is that if they lost their ability to sponsor for six months that is costing them a lot more than $33,000. I acted for a company, and it was a minor issue, and what they lost for six months was substantial—the loss of the ability to sponsor in these circumstances can be a very big deterrent.

Mr Gunn : If you have 200 or 300 people on 457s and you rely on that workforce in order to do your business and then you have a bar or a lifetime ban on sponsoring anyone else then that is absolutely substantial.

Senator FURNER: Mrs Donoghue, in response to questions from Senator Humphries, I think it was, in relation to sanctions, you referred to a person making incorrect bookkeeping. Did that person incur a sanction?

Mrs O'Donoghue : It was a major corporation in their surfeit account staff. It was a small amount. It was certainly fixed up very quickly, but they incurred a substantial penalty in those circumstances whereas there was no exploitation or anything like that.

Senator FURNER: Are you at liberty to give a name?

Mrs O'Donoghue : No, I am not at liberty to disclose that.

Senator FURNER: It would be interesting to find out the facts.

Mrs O'Donoghue : It was not a major issue and I would say that in every other capacity they were a model employer. I have come across situations where people are not model employers where clients would come and they would explain their circumstances, and there is fear out there in these circumstances of losing their jobs. This is where a lawyer tries to assist and negotiate with the department to get as much time as you can in these circumstances so that they can find alternative employment. A company going into liquidation, for example, is a good example if someone is on a 457 visa.

Senator FURNER: I accept the fact that we should not stereotype every employer as being a bad employer because one has stood out as doing the wrong thing. In my experience I have come across employers in a previous career where they had two sets of books. You go in and inspect the records and one set of books was different from the correct set. There are always circumstances like that but I am not indicating—

Mrs O'Donoghue : I have had 20 years of experience and I have never come across anyone with two sets of books. I am not saying it does not happen—

Senator FURNER: I have in my experience and it was as a result of engagement of police to recover the correct books. I was fortunate enough to get those. I want to take you to your table 21 on page 11 of your submission. Thank you for bringing that to our attention from DIAC's annual report. But you do exclude the 2009-10 table out of that from the annual report, which clearly demonstrates a history over the three-year period. In particular you make the relevant point of the increase of infringement notices by up to 600 per cent. In 2009-10 it did not apply. The last annual report was nine and it jumped to 49. Those infringement notices and the increase of 600 per cent, do they apply to circumstances like you identified with the bookkeeping?

Mrs O'Donoghue : I can only speak of my personal experience. Katie would have experience. But the infringement notices that I have seen have been of a relatively minor nature. I had another situation for another corporation where one particular staff member interstate was going through some mental issues and the corporation were very assisting. The bottom line was that the notification of the cessation of employment was late in being sent to the department. They have got a very specific time period in which you must notify the department. That triggered a breach situation. So a breach is a breach and a breach can refer to a pattern of conduct, but there are more minor things where you can have a breach and then it is covered by these statistics. What has been your experience, Katie?

Ms Malyon : For the most part I have indicated there are at the bottom of that paragraph 38 what have been the main issues for the department in leading through to infringement notices. Thy include the following. Failing to produce records and documents when requested by DIAC, where a DIAC inspector on-site is asking you for certain records, it might be pay slips, it might be evidence of training, and failing to produce that. Maybe you do not have it. Failing to notify when certain events occur. This is typically when sponsored employees leave your employment. Many times it will be a case pertaining of their moving on to a new employer but maybe they have gone underground and become unlawful. Maybe they have left and gone back overseas. Someone needs to know. There is also failing to keep records as required under the sponsorship obligations—which covers employment law, workplace law, occupational health and safety records; a full suite of records that you would expect any employer to have that will enable both the Department of Immigration and Citizenship and the Fair Work Ombudsman to go in and do their necessary investigation—and failing to ensure that the person sponsored will work in the most recently approved nominated occupation. Those are the breaches that have led to the infringement notices.

Senator FURNER: The table in the annual report provides for referrals as well, although not listed in your submission. I am just wondering if you are able to comment on this, because it appears that referrals went from 65 in 2009 to 61 in 2010 down to 18 in 2011-12. Have you any comment on the reduction in that number at all?

Ms Malyon : I am very aware of that. I think one of the themes that come through the paper prepared by the Law Council is the fact for much more referral across state, territory and Commonwealth agencies that are involved in anything to do with people here on visas, not just 457 visas. First of all, we had last year an initiative to share much more information with the Australian Taxation Office. That was clarified about a month or so ago. It is going to encompass all temporary residents holding 400 visas. It is a resourcing issue at the other end, I would have thought, if you are referring them off.

Senator FURNER: I will ask the department this afternoon about that. Lastly, there have been suggestions by some of the submitters about increasing the period for advertisements from currently a 28-day period up to as much as three months. Do you have any comment on that, or are you satisfied that the period as it currently exists is adequate?

Mr Gunn : It does not currently exist.

Mrs O'Donoghue : It does not currently exist.

Mr Gunn : Previously, that is what it used to be. It is not in place at the moment. That is what I think is being advocated by some people: the reintroduction of the market testing. We say that we do not think it is valuable to reintroduce—

Mrs O'Donoghue : I think I said earlier on that I was one of the practitioners that was practising at the time when labour market testing was in place. It appeared to me that it was an artificial process that was gone through at the time. If you are going to have a process, do not make it artificial. There are ways and means of addressing this. The Law Council in the submission does not support the reintroduction of labour market testing. I think this ties in to the fact also that we have 800,000 Australians working overseas and certain obligations with labour and trade agreements, and we have to bear that in mind. I think there are other ways of addressing the problem, rather than reintroducing labour market testing.

Senator FURNER: Thank you.

CHAIR: Thank you very much, Law Council, for coming along and giving evidence today.

Mrs O'Donoghue : Thank you.

Proceedings suspended from 12:48 to 13:30