When businesses in Australia want to recruit and sponsor foreign workers, Direct Sponsorship and Labor Agreement are two commonly mentioned directions. However, these two forms have different conditions, scope of application and implementation methods. Which direction to choose depends on the industry, the vacancy, the shortage of human resources and the ability to meet the requirements of the business and employees.
What is Direct Sponsorship?
Direct Sponsorship can be simply understood as businesses using current skills Visa to sponsor a foreign worker for a specific position. Where appropriate, businesses can undertake the sponsorship and nomination process for workers under Skilled Worker Visa programs, such as the Skills in Demand Visa (subclass 482) or related Visa streams.
It is worth noting that the position and employee must meet the requirements of the respective Visa program.
What is Labor Agreement?
Labor Agreement is an agreement between the Australian Government and businesses, allowing businesses to recruit foreign workers in cases where the standard conditions of the Visa program do not fully suit the business’s human resource needs.
Labor Agreement is often used in industries or situations with specific recruitment needs.
Some Labor Agreements may allow for the application of specific conditions related to:
- Occupation being recruited.
- Number of foreign workers.
- Skill and experience requirements.
- Salary.
- English required.
- Conditions related to permanent residence route.
However,not all Labor Agreements have the same conditions. Requirements depend on the type of agreement and its content as approved by the Australian Government.
Comparison
| Criteria | Direct Sponsorship | Labor Agreement |
|---|---|---|
| Nature | Guarantee under the current Visa program | Enterprises operating under a separate agreement with the Government |
| Subjects | Workers who meet standard Visa conditions | Workers in cases that meet the conditions of the Labor Agreement |
| Occupation | Must be on the list/industry covered by Visa | Depends on specific Labor Agreement |
| Visa conditions | Mainly according to standard regulations | There may be some conditions adjusted according to the agreement |
| English | As required by Visa | May be different depending on Labor Agreement |
| Experience/skills | As required by Visa | There may be separate requirements |
| PR route | Depends on Visa and conditions at the time of application | There may be a route PR if the agreement allows |
| Process for the business | Usually more direct | There are additional steps involved in the Labor Agreement |
| Suitable | The business has a position that meets the normal Visa conditions | The business has specific recruitment needs or has difficulty meeting the standard conditions |
Which direction should the business choose?
It should not be assumed that Labor Agreement is always better than Direct Sponsorship, or vice versa.
First, businesses need to determine:
- What is the position being recruited?
- Is that occupation included in the appropriate Visa program?
- Does the worker meet the skills, experience and English language requirements?
- Do the salary and employment conditions meet current regulations?
- Is the enterprise covered by a specific Labor Agreement or has the ability to establish a Labor Agreement?
- If the goal is PR, does the current program provide a suitable roadmap?
Important note
Australian immigration policy can be adjusted from time to time. Therefore, just because a profession or position was eligible in the past does not mean that it still meets the conditions now. In addition, the Labor Agreement is not a “shortcut” applicable to all businesses. Businesses must still meet relevant requirements and receive regulatory approval.
Direct Sponsorship is suitable when the position is open and the employee can meet the standard requirements of the Visa program. Meanwhile, Labor Agreement may be suitable for businesses with specific recruitment needs and are applicable under an approved agreement.
If a business is considering recruiting Vietnamese workers to Australia, determining the right Visa, right occupation and right sponsorship mechanism from the beginning can help limit the preparation of documents in an inappropriate direction.
