When a Project Ends, What Happens?

When a project ends, what happens? What are the responsibilities of Employers? What are the responsibilities of the employee?

If a project is closed or if a position is made redundant, there are several issues that both the employer and employee need to take into consideration.

If the employer has sponsored employees (eg for a subclass 457 visa), there are legislated sponsorship obligations, such as specified time periods for notification of certain events, including notification of cessation of employment, of the subclass 457 visa holder to contend with. Here is a brief overview of the issues and actions to undertake.

The Employer Sponsor obligations

The Standard Business Sponsor obligations are available on the Department of Immigration and Citizenship (DIAC) website: https://www.immi.gov.au/skilled/skilled-workers/sbs/obligations-employer.htm – or see below.

One of these obligations Standard Business Sponsors (for 457 visas) is to notify the Department of Immigration within 10 working days of the cessation of employment of the subclass 457 visa holder’s employment. This includes where an employee visa holder is made redundant or their position (such as a fixed term contract position) ends, this would constitute a cessation of employment.

Once the notification of cessation of employment has been made to DIAC by the employer to the Sponsor Monitoring Team at DIAC they will record this against the sponsor and employee records. DIAC will then refer the Notification of Cessation to the Visa Cancellations team to process. There can be a delay of not less than 28 days, and up to 6 or more months before the actual visa cancellation process occurs. The Visa Cancellation Team will generally only liaise with the visa applicant, no the employer or their representative.

Another important obligation is the obligation to maintain records associated with the Business Sponsorship, Nomination and Visa Applications / Employment of sponsored workers for a period of two years after the last sponsored person ceases with the employer. This could have an impact on the maintainence of records for instance for a JV entity which is ceasing to exist following the completion of a project. Thought has to be given as to how and where the records will be maintained and who will be responsible for managing them during that period.

Finally, a reconciliation at cessation of employment of payments made to the employee and their entitlements should be undertaken and ensure that the market salary rate for that employee was paid for the duration of their visa, and that at least the guaranteed earnings were also paid. This type of reconciliation should occur regularly during the term of the visa holder’s employment. There is an obligation to meet the market salary rate for the entire term of the visa, not just what the rate was at time of application.

The Employee Subclass 457 Visa Holder

Where an employee subclass 457 visa holder’s position with the employer sponsor has concluded, terminated or been made redundant, it is advisable that the employee visa holder put their effort into gaining a new job as soon as possible if they wish to remain in Australia

The Department of Immigration will normally give the employee visa holder 28 days to find a new sponsor or depart Australia, before consideration is given to cancelling the visa.

The Department of Immigration case officers generally do not want to cancel visas where it is not necessary and it is helpful to provide the Department of Immigration with your progress in obtaining a new job. If the employee visa holder’s intention is to leave Australia please make the Department of Immigration aware of this intention.

If you plan to depart Australia, for instance you have received posting to another project overseas, and you wish to access your Superannuation payments, you need to complete an application to DIAC’s Super team in Hobart. Make sure you tick the box requesting for your visa to be cancelled on the form as the employer’s notification of cessation is not a visa cancellation. Only you as the visa holder can request your visa to be cancelled. Alternatively, send an email with your details to [email protected] and ask for your visa to be cancelled and they will do so. You can only access your Superannuation in certain circumstances, and only if you no longer hold a visa for Australia.

The New Employer Sponsor

If a sponsor wishes to employ someone who holds a 457 visa under a different sponsor,the new employer need only lodge and have approved a new nomination application in order to transfer the visa holder to their sponsorship. Once the nomination transfer is approved, the employee can commence work for the new sponsor.

The new employer needs to hold a valid business sponsorship in order to lodge a new nomination to sponsor the employee visa holder. The new nominated position will need to correspond with the visa holder’s skills and experience, meet the market rate salary and TSMIT and the terms and conditions of employment must meet the 10 Natiolanl employment standards (NES) set out by Fairwork Australia.

The main advantage is that a new subclass 457 visa application does not need to be. DIAC in Perth is currently processing subclass 457 nomination applications within 2 to 5 days which is below the standard processing time.

Obligations of the Standard Business Sponsor

Employer obligation

Explanation

Duration of obligation

Obligation to cooperate with inspectors

You must cooperate with inspectors appointed under the Migration Act 1958.

This obligation commences from the time a sponsor is approved.

This obligation ceases five years after the sponsorship ceases.

Obligation to ensure equivalent terms and conditions of employment

You must ensure that the terms and conditions of employment provided to a skilled worker are no less favourable than the terms and conditions the person provides, or would provide, to an Australian citizen or Australian permanent resident to perform work in an equivalent position in the person’s workplace at the same location.

If the nominated person holds a visa, this obligation commences from the time the nomination is approved.

If the nominated person does not hold a visa, this obligation commences from the time the visa granted.

This obligation ceases when the skilled worker ceases employment, or is granted a further substantive visa.

Obligation to pay travel costs to enable sponsored persons to leave Australia

The standard business sponsor must pay reasonable and necessary travel costs to enable the sponsored persons to leave Australia if the costs have been requested in writing by the sponsored persons, or the department and the costs have not already been paid by the sponsor in accordance with this obligation.

The costs will be considered reasonable and necessary provided they:

include travel from the skilled worker’s usual place of residence in Australia to the place of departure from Australia
include travel from Australia to the country (for which the person holds a passport) specified in the request to pay travel costs; and
are paid within 30 days of receiving the request; and are for economy class air travel or, where unavailable, a reasonable equivalent.

If the nominated person holds a visa, this obligation commences from the time the nomination is approved.

If the nominated person does not hold a visa, this obligation commences from the time the visa granted.

This obligation ceases when another nomination is approved, a further substantive visa is granted or when the visa holder has left Australia and no longer holds the Subclass 457 visa.

Obligation to pay costs incurred by the Commonwealth to locate and remove unlawful non-citizen

You must pay costs incurred by the Commonwealth in locating and removing the skilled worker or their family members from Australia, if the Minister has requested the payment by written notice. You are liable to pay the Commonwealth the difference between the actual costs incurred by the Commonwealth (up to a maximum of AUD10 000) less any amount already paid under the obligation to pay their travel costs to leave Australia.

In relation to a skilled worker, this obligation starts to apply on the day on which the skilled worker becomes an unlawful non-citizen; and ceases five years after the skilled worker leaves Australia.

In relation to the skilled worker’s family members, this obligation starts to apply on the day on which they become an unlawful non-citizen; and ceases five years after they leaves Australia.

Obligation to keep records

You must keep records of its compliance with the other obligations. All of the records must be reproducible and some must be capable of verification by an independent person. See Obligation to Keep Records.

This obligation commences from the time you become an approved sponsor.

This obligation ceases two years after the last sponsored person ceases with the sponsor.

Obligation to provide records and information to the Minister

You must provide records or information that goes to determining whether:

a sponsorship obligation is being, or has been, complied with; and
other circumstances, in which the Minister may take administrative action, exist or have existed
on request and in the manner and timeframe requested by the Minister.

This obligation commences from the time you become an approved sponsor.

This obligation ceases two years after the last sponsored person ceases with the sponsor.

Obligation to provide information to Immigration when certain events occur

You must provide certain information to the department when certain events occur. This information must be provided by registered post or electronic mail, to a specified address and within certain timeframes of the event occurring:

Appointment of new directors or partners

Cessation of employment of 457 visa holders

Changes to the legal structure including the closure of the business

Payment of return travel costs

Appointment of an administrator, declaration of bankruptcy or insolvency etc.

Change of address

This obligation commences from the time you become an approved sponsor.

This obligation ceases when the sponsorship ceases, and where the employer is no longer sponsoring a visa holder.

Obligation to ensure skilled worker does not work in an occupation other than an approved occupation

You must ensure that the skilled worker does not work in an occupation other than the occupation that is the subject of the most recent approved nomination for the person. If you want to employ a skilled worker in a different occupation, you must lodge a new nomination in respect of that occupation for the skilled worker.

You must also ensure that you do not engage the skilled worker’s services other than as an employee.

If the nominated person holds a visa, this obligation commences from the time the nomination is approved.

If the nominated person does not hold a visa, this obligation commences from the time the visa granted.

This obligation ceases when another nomination is approved, a further substantive visa is granted or when the visa holder has left Australia and no longer holds the Subclass 457 visa.

Obligation not to recover certain costs from a skilled worker or secondary sponsored person

You must not recover, or seek to recover, from the skilled worker or any of their family members, all or part of the costs (including migration agent costs):

that relate specifically to the recruitment of the skilled worker
associated with becoming or being a sponsor or former approved sponsor.

This obligation ceases when:

the approved sponsorship ceases
there are no sponsored persons in relation to the sponsor.

Cooperate with Government inspectors who have increased powers to audit and monitor business sponsors.

Ensure the terms and conditions of employment of a 457 visa holder are no less favourable than those provided to an Australian worker in the same role.

Pay travel costs to enable sponsored workers and their dependents to leave Australia if requested in writing by the Department of Immigration and Citizenship (DIAC) or the sponsored worker.

Pay costs incurred by the Australian Government to locate and remove unlawful non-citizens.

Maintain sponsorship-related information in a format that can be provided on request by the Government. Records must be kept for five years.

Providing information to DIAC within 10 days of certain events occurring, including:

Appointment of new directors or partners

Cessation of employment of 457 visa holders

Changes to the legal structure including the closure of the business

Payment of return travel costs

Appointment of an administrator, declaration of bankruptcy or insolvency etc.

Change of address

Ensure the sponsored worker does not work in an occupation other than an approved occupation.

Pay some costs associated with recruitment that could previously be recovered from sponsored workers. For example, it will no longer be possible for business sponsors to recover migration agent costs and costs associated with becoming an approved sponsor from the sponsored workers.