Labour market testing to be waived in some cases under ChAFTA

IMPACT – MEDIUM

What is the change? The Australian Government has issued a regulation stating that under the China-Australia Free Trade Agreement, or ChAFTA, labour market testing will be waived for certain executives, specialists and service suppliers coming to Australia from China.

What does the change mean? Labour market testing will be waived for: executives, senior managers and managers coming to Australia as inter-corporate transferees; specialists coming to Australia as intra-corporate transferees; independent executives; and contractual service suppliers.

• Implementation time frame: Ongoing.
• Visas/permits affected:Subclass 457 visas.
• Who is affected: Employers and Chinese business executives, specialists and service suppliers covered by ChAFTA.
• Impact on processing times: The change should save significant time for Australian companies recruiting affected business executives, specialists and service suppliers because employers will not have to go through the steps of demonstrating that Australian nationals are unavailable for the job in question.
• Business impact: ChAFTA’s labour market testing provisions are part of the trade deal’s attempts to increase trade and lift barriers to entry in the two countries.
• Next steps:The labour market testing provisions will take effect immediately after the China-Australia Free Trade Agreement enters into force. ChAFTA takes effect 30 days after Australia and China complete their respective domestic ratification processes.

Background: Australian and Chinese officials signed the landmark trade agreement in June. The deal was subject to subsequent discussion about whether additional labour market testing protections were needed for Australian workers, either in ChAFTA or Australian law. Earlier this month, officials made a number of legislative amendments to clarify and reinforce visa requirements, including new labour market testing guarantees in the Subclass 457 visa programme.

In a 23 November regulation, however, the Australian Government made it clear that it was required to honour ChAFTA’s obligations on labour market testing. Peter Dutton, the Minister for Immigration and Border Protection, said that for the categories of people covered, “the imposition of labour market testing would be inconsistent with international trade obligations of Australia arising under the China-Australia Free Trade Agreement.”

BAL Analysis: The regulation is welcome news for Australian employers and Chinese executives, specialists and service suppliers covered by ChAFTA. It also advances the trade agreement’s broader goal of lifting barriers to trade and entry between Australia and China.

This alert has been provided by BAL Australia. For additional information, please contact australia@bal.com.

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