The former Labor government's new policy on the
temporary entry of key business personnel involves unprecedented
levels of deregulation. From July 1996, individual firms will
have greatly increased rights to employ foreign nationals in Australia.
Provisions for monitoring the effects of this policy are inadequate.
The employment rights of Australians will depend on employers'
willingness to behave as good corporate citizens.
In September 1995, the then Minister for Immigration and Ethnic Affairs, Senator Bolkus, announced that the Australian Government was introducing major reforms to temporary-entry policy, based on acceptance of the key recommendations of the Roach Report, entitled Business Temporary Entry - Future Directions.1
The Report was prepared by a Committee chaired by Mr Neville Roach, Managing Director of Fujitsu Australia.2 Though business representatives dominated the Committee, one of its members was Alan Matheson, International Officer of the Australian Council of Trade Unions (ACTU). The Committee said its proposals amount to a 'wide ranging and substantial shift in policy direction and process'. Effectively, they amount to 'considerable self regulation' by businesses recruiting foreign nationals for periods of up to four years as 'key business personnel'.
At present, the temporary movements covered by the Report involve about 200,000 short-term business visitors to Australia each year and some 13,000 longer-term visas issued under the Temporary Residence (TR) visa subclasses 411-414 considered by the Roach Committee. These TR subclasses include executives, specialists, educational and medical practitioners. In 1995, the number of persons in Australia in these TR visa classes at any time was around 12,500. The largest category, and the one focussed on in this paper is specialists (8,339 visas issued in 1993-94). 'Specialist' covers highly skilled persons such as computing professionals and engineers, as well as (currently) some tradespersons and sales workers (see Table 1).
Table 1: Occupations of Specialist Temporary Residents, July 1993 (%) | |
Occupation | Specialists (%)a |
Managers & administrators Professionals paraprofessionals Tradespersons Clerks Salespersons & personal services workers Plant & machine operators Labourers Not stated | 9 52 7 7 2 6 1 1 15 |
Total Percentage Number | 100 6,595 |
a Percentages have been rounded. Source: Bureau of Immigration, Multicultural & Population Research, The Role of Skilled Temporary Residents in the Australian Labour Market, 1995 | |
The new policy, which will come into force in July 1996, will
increase the number of foreign nationals working in Australia
as key business personnel. The Roach Report recommended a range
of measures to publicise and promote the new arrangements, but
provides no estimates of likely take up.
According to the Minister for Immigration at the time (Senator Bolkus), 'the business personnel entering Australia under these arrangements will have skills not readily available in Australia, and there will be safeguards in the system to ensure that the employment rights of Australians will be protected'.3
This article provides a summary of the new policy and its rationale;
outlines the major issues that it raises; and concludes with some
suggestions on how the policy should be implemented.
SUMMARY OF THE NEW POLICY
Proponents of the new policy argue that it is needed if Australia is to take full advantage of the potential benefits of internationalisation and globalisation. The old policies and procedures, according to the Roach Report, were unresponsive to business needs, impeded Australia's integration into the global economy and undermined the ability of individual businesses to compete effectively both domestically and abroad. The new approach is intended to support the Government's initiatives in this area.4
Under the new arrangements the most important features from an employment-rights, training and labour-market perspective, involve long-term entry. They are:
Thus, there is no mandatory labour-market testing for any job lasting less than 12 months, and none for up to four-year jobs if the employer successfully defines the work as a 'key activity'.
Furthermore, where the work is a key activity and the employer
has PQS status, foreign nationals are not required to demonstrate
that they possess the skills required to perform the key activity.
Even for a standard
sponsorship, assessment of the foreign national's skills to perform
the key activity is discretionary only.
THE DEFINITION OF A KEY ACTIVITY
The notion of a key activity is central to the new policy. If the employer can establish that a particular work role is a key activity, then that decision automatically entitles the employer to recruit a nominated foreign national to do the work without offering the work to Australians.
The Roach Report has two slightly different definitions of a key activity. One is that 'a key activity is an activity which is essential to the overall operations of the employer and which requires specialised knowledge either in terms of professional/specialist skills or proprietorial knowledge' (emphasis added).5 Another is that a key activity is 'an activity which would have a significant impact on the overall success of the employer's business and which requires specialised skills or proprietorial knowledge'(emphasis added).6
Considering the important practical and legal consequences of the definition that it is surprising there are two definitions. According to advice from the Department of Immigration and Ethnic Affairs (DIEA), the decision on whether or not a work role is designated a key activity would be made by a DIEA official (the 'decision maker'); and it would be up to the decision maker's discretion whether to consult any other Department, such as the Department of Employment, Education and Training (DEET), in making that decision.
The Report states that key activities are those which would be undertaken by Executives, Managers, Specialists and Trainees as defined in the Report.7 It is noted that Managers include 'junior managers who are needed to liaise with overseas companies in areas important to the business'; Specialists include those who 'have in depth knowledge of the culture of the organisation or are able to assist the business to integrate its Australian operations with those elsewhere in the world' and Trainees are 'full time employees (either executives, managers, or specialists) joining established companies in Australia on exchange, or for training, staff development or career development purposes'.
Specifically excluded from the definition of a key activity are what the Report terms 'labour market sensitive occupations such as those involving minimal skills and experience (such as tour guides and duty free shop assistants) and occupations in the skilled trades, and professions such as nursing or teaching.'8
However, even where work involves 'non-key' activity, the new
policy gives employers substantial rights to recruit foreign nationals.
For example, the business is not required to offer this work to
Australians unless the position is for more than 12 months.
THE CORE ISSUE: ACHIEVING THE RIGHT BALANCE
The new policy raises many important questions. But the core issue is whether the policy really does achieve the right balance between meeting the needs of business for less costly and minimal regulation on the one hand and the protection of Australians' employment rights on the other. Senator Bolkus and the Roach Committee argued that it did achieve the proper balance. They were strongly supported by the Department of Industry, Science and Technology (DIST) which, in its submission to the Committee, proposed virtually a regulation-free zone that would have provided no protection for the employment rights of Australians:
There should be a single criterion for assessment of temporary business resident entry into Australia for Australian or foreign companies: the business already invests in or wishes to establish or expand in Australia.9
However the Roach Committee was aware that some respondents dissented. It commented in its Final report that:
A small number of respondents have concerns that the proposed framework, as outlined in the Discussion Paper, could undermine the training commitments of employers, and lead to a loss of job opportunities for Australians. There is a perception by some respondents that the framework means 'an open door' policy for overseas recruitment.10
This 'small number' included DEET, the Queensland Government,
and the Queensland Branch of the ACTU.
THE POLICY INFORMATION BASE
The DEET submission shows that the department was concerned, among other things, about the poor quality of the information and the research base on which the new policy was based. According to DEET, 'little is known about temporary entry and its (labour market) impact under current arrangements'; this was in part because 'the current data collection and maintenance arrangements for temporary entrants fall well short of an acceptable minimum'.11 The submission also complained about a tendency in the earlier Roach Discussion Paper to 'downplay the incidence of unacceptable behaviour or practice and argue that controls are excessive'.
The DEET submission gave as an example the issue of extensions of stay for temporary visas.
While the Discussion Paper claims extensions to temporary visas are rarely refused, it provides no data to support this claim. DEET's national data base indicates that for the six months ending 31 December 1994, DEET did not support an estimated 20 per cent of requests for extensions of stay (normally for labour market testing reasons). The extent to which DEET's advice was accepted by DIEA is unknown (this it itself a cause for concern).12
A key part of the new policy is a 'rigorous monitoring system'. As the Roach Report states, their recommendations form a two-part deregulation package in which temporary entry of key business people is to 'be administered with a "light touch" up front and be backed up by rigorous monitoring'.13
But since we have very little data on the effects of the existing
temporary entry programs on the employment rights of Australians,
there must be questions about the capacity of policy makers and
administrators to make appropriate responses under the new 'light
touch' arrangements.
SPECIFIC SAFEGUARDS TO PROTECT EMPLOYMENT RIGHTS
According
to Senator Bolkus, 'there will be safeguards in the system to
ensure that the employment rights of Australians are protected'.14
From the former Minister's statement and the Roach Report itself,
it appears these safeguards comprise: the monitoring system; annual
reports by employers; random audits; and sanctions including fines
'on those not complying with their sponsoring or monitoring obligations'.
The specific safeguards listed, particularly the new monitoring system, will be welcomed. But there must be concerns about how effective these 'safeguards' will be in practice. For example, all protective measures listed take effect only after the event of recruitment of foreign nationals. Also, the appeals process gives rights of appeal against adverse decisions to the sponsoring employer or business and to the foreign national nominated to a position, but no rights of appeal to Australians who may consider themselves qualified for that same work activity. Indeed, the question of how Australians will become aware of such opportunities is not addressed in the Report.
The Roach Report does not indicate that, in the USA, similar concerns led Congress in 1990 to require temporary employment sponsors to file their sponsorship application (including terms of employment) with the Department of Labor (DOL). According to a recent analysis of the legislation, such forms are now publicly available and thus make it possible for domestic workers or their representatives to monitor the process and to protest to the DOL if they wish.15
As well, it is not clear that the sponsorship obligations of the employer highlighted by the Minister offer much protection for Australians' employment rights. These obligations involve signing a sponsorship undertaking, after satisfying the good standing test, and the benefit to Australia test.
Table 2: Computer professionala arrivalsb in the Specialist visa class, Australia, 1991-92 to 1994-95 | ||||
Visa categoryc | ||||
| Short term
Long term | 2,218
679 | 2,699
680 | 481
1 | 22
0 |
| Total | 2,897 | 3,379 | 482 | 17 |
| a ASCO 2707
b Arrivals data may overstate the actual number of persons involved in these movements, since the figures may include multiple arrivals by the same person. DIEA undertook to provide data on the actual number of visas issued, but at the time of writing, these data had not been received. c Short term here is 12 months or less, initially; long-term is over 12 months, initially. Data on visa extensions are not available, but according to the Roach Discussion Paper (December 1994) requests for extensions of stay are 'rarely refused'. Source: Centre for Population and Urban Studies, Monash University, 1996 | ||||
But the benefit to Australia test has been drawn up so that an employer can qualify as a sponsor of foreign labour without any commitment to create or even maintain employment for Australians. The employer must show that the sponsorship will result either in a contribution to Australian trade or economic 'competitiveness', or that it will improve Australian business links with international markets or create or maintain employment for Australians.16 The sponsorship undertaking covers 11 specific points. The following two which deal with employment and training appear to offer minimal real protection. The employer has only to:
The stage where the protection of the employment rights of Australians
is most needed is at the front end of the process. It is here
that administrative decisions are made about, for example, whether
or not particular work roles constitute a key activity which requires
a specified individual and may therefore be withheld from competition
by Australians altogether. It is not clear how protection of local
workers will be provided by DIEA officers operating in consultation
with sponsoring firms.
CASE STUDY: COMPUTER PROFESSIONALS
In the international movement of 'Specialist' personnel, it is the computer professional area that has aroused most concern both internationally and in Australia.
In Australia, Computer Professionals constitute the
largest single occupational category under the Specialist TR visa
class and also one of the most rapid growth areas in this class.
Between 1991-92 and 1994-95, the number of arrivals recorded as
Computer Professionals in the Specialist TR class increased from
2,900 to 3,380, or 17 per cent in three years (Table 2).
To put these numbers in some perspective, the number of graduates in Computer Science recorded in the Graduate Destination Survey from Australian universities in 1994 was just under 2,100 (though this understates the total number of 1994 graduates in this field). Of the 1994-95 arrivals classified as 'computer professionals', nearly 60 per cent (1950) were from North America and the UK.
According to some DEET sources, there is concern about a significant number of these 'Specialists', on the grounds that:
In fact, DEET has run such courses under its National Skills Shortage Program with some success. For example, according to an October 1995 joint Media Release18 from DEET and the Australian Computer Society (ACS), industry has reacted very positively and has been quick to engage graduates from such a course in Relational Database Management.
In January 1996, the Australian media reported19 concerns about how some Informational Technology (IT) firms are behaving under current regulations, and how they would act under the more liberal regulations applying from July 1996. The Victorian representative of the Australian Computer Society (ACS) and also a partner in the international chartered accounting and training company Ernst and Young indicated that greater self regulation will lead more firms to import more foreign IT specialists, especially at the high skill end.
The worry is that this would not just deny job opportunities to Australian computer professionals but also result in an erosion of the standard of Australian IT skills, leaving Australians to work in the lower skill areas. This is because there is a lack of provision for technology, knowledge and skills transfer in the new temporary business entry regulations. The ACS feels this deficiency could be an issue particularly with the large international IT consulting firms for whom the international movement of personnel is a relatively low cost item.
Another concern surfaced in other discussions with the IT industry. This involved the effects of the trend to outsourcing of IT functions by many large organisations, combined with self regulation under the Roach initiatives. Industry representatives felt that this might be a dangerous combination, as outsourcing lowered the incentive on business to provide upgrading training to computer professionals. When outsourcing was combined with greater incentives to recruit offshore under the Roach reforms, then Australian computer professionals might be further disadvantaged.
In the USA, similar worries have surfaced concerning the computer industry, especially in the software sector, the area where imported temporary professionals are most highly concentrated. But whereas in Australia, the trend is to greater deregulation of temporary skilled migration, in the USA there are more signs of movement in the opposite direction. Currently in the US, there is a public debate over a Federal Bill drafted by Senator Simpson which would seriously limit the ability of firms to recruit skilled and professional workers offshore.
According to a member of the Board of Advisors
of the American Engineering Association, this Bill was prompted
in part when, 'job contractors began to bring in computer programmers
from Third World countries at wages significantly less than those
paid in the US to replace US workers or force them to take significant
pay cuts'.20 The Simpson Bill is largely being opposed by much
(but not all) of the US computer industry. The US debate on this
issue is not referred to in the Roach Report.
Contrary to the statements by the former Minister for Immigration and the Roach Report itself, it is doubtful that the new policy has struck the right balance between two objectives: meeting the legitimate needs of business for the removal of unnecessary and costly regulations, and the public responsibility to protect the employment rights of Australian citizens and permanent residents.
The new policy in fact reduces the employment rights of Australians because it gives less protection to these rights than the the nominal policy it is replacing. The full scope of what has actually been happening in practice under the current policy is not at all clear. This is a serious concern in itself. But it is evident that the new policy will remove from Australians the right to compete for an increasing number of jobs in Australia.
Based on the analysis in this article, several changes are needed to the policy on key business personnel announced by the Minister in August 1995 and due to take effect from July 1996.
First, the Australian Government needs to send two clear signals about its expectations both to the business community and to the Federal officials responsible for administering the policy. It needs to confirm that, while it is serious about making the regulators more 'business friendly', it is also equally serious about protecting the employment rights of Australians. Unless that signal is communicated clearly and forcefully through the corporate culture of all Federal Departments and agencies involved in administering the new policy, junior officers representing the public interest will be at a disadvantage in dealing with businesses, many of which will be large, sophisticated international enterprises.
The Australian Government also needs to describe and publicise in practical terms the kind of corporate behaviour that meets minimum acceptable standards of good corporate citizenship in this area; and, more importantly, the behaviour which meets 'best practice' standards. This must surely include working in partnership with government to address training needs, such as through the National Skills Shortage program.
The success of the policy which the Australian Government has adopted depends on two conditions: businesses should act as good corporate citizens, and public officials should act as guardians of the employment rights of Australians. But these conditions are largely outside public scrutiny. There would be more confidence in this policy if there was more objective evidence that employers were behaving as good corporate citizens under the existing policy of (at least notional) regulation and that the employment rights of Australians were being protected adequately by public officials now. The Roach Report has not provided this evidence to the Government, apparently because no one so far has taken the question seriously.
In at least one area that this writer is familiar with - the tourism industry - it is very doubtful if the employment rights of Australians have been adequately protected under current policies. Since 1992, it has been known by Government, business and unions that there were at least 2,000 - 2,500 positions for Japanese-speaking tour guides and tour co-ordinators in Australia; and that only around 15 per cent of these, at most, were filled by Australian citizens or permanent residents in 1992. Yet in early 1996 (nearly four years later), no Federal Government agency involved in temporary residence policy had been even monitoring the extent to which Japanese- speaking Australians have moved into these positions; and various attempts to negotiate national agreements with major tourism companies (on employing and training more Australians) had not been concluded. This failure is all the more startling considering Federal Government initiatives involving millions of dollars to promote Japanese language learning, as part of a program to capture the benefits of closer Asia /Australia relations for Australians.
The Government's commitment to a rigorous monitoring
system, including independent research, should therefore improve
the information on temporary business personnel. This is necessary
for more informed community debate and decision making. Such a
monitoring system should also include more accurate and up-to-date
information on developments in other countries' policies on temporary
migration for employment purposes. This would also show, for example,
whether Australia is alone in granting unrestricted work rights
to spouses and teenage dependants of temporary business personnel.
Assessing the total costs and benefits to Australia of the policy
means that all its potential impacts, including those on total
employment and training opportunities, should be considered.
References
1 Media Release, 6 September 1995
2 Business Temporary Entry - Future Directions, (Roach report), Report by the Committee of Inquiry into the Temporary Entry of Business Beople and Hightly Skilled Specialists, Department of Immigration and Ethnic Affairs, Canberra, August 1995. The Committee also released a Discussion Paper, which was critically reviewed by Martin Bell in 'Temporary overseas workers - deregulating the market', People and Place, vol. 3, no. 1, 1995
3 Media Release, 6 September 1995
4 Roach, ibid., p. 66
5 ibid., p. 31
6 ibid., p. 6
7 ibid., p. 31
8 ibid., p. 31
9 Department of Industry, Science and Technology, Submission to the Inquiry into the Temporary Entry of Key Business Personnel and Highly Skilled Specialists, Canberra February 1995, p. 11
10 Roach, op. cit., p. 67
11 Submission to the Committee of Inquiry into the Temporary Entry of Business People and Highly Skilled Specialists, DEET, April 1995, p. 9
12 ibid., p. 8
13 Roach, op. cit., p. 41
14 Media Release, 6 September 1995
15 D. North, Soothing the Establishment, the Impact of Foreignborn Scientists and Engineers on America, University Press of America, New York, 1995, pp. 114116
16 Roach Report, op. cit., p. 30
17 ibid., p. 28
18 DEET/ACS Media Release, October 1995 'Building Career-Resilient IT Professionals'
19 The Australian, 8 January 1996 (Computers Section)
20 Immigration Review, No 24, Winter 1996, page 7
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