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Since the 1970s, Australia has officially adopted a skilled immigration policy rather than a labor immigration policy. That is, the main permanent and temporary work visa categories have focused almost exclusively on selecting migrant workers qualified to work in high-skilled occupations, making it very difficult for lower skilled migrant workers to gain entry. Despite the pretense of this official skilled immigration policy regime, there is recent evidence that ‘side doors’ and ‘back doors’ to lower-skilled and unauthorized labor migration – traditionally features of countries that have been reluctant to accept migrant workers officially or unwilling to regulate their entry into lower-skilled segments of the labor market – have become features of Australia’s policy landscape. In this context, this article examines the reasons for the recent emergence of a de facto labor immigration policy in Australia. We utilize concepts from employment relations, migration studies and comparative politics scholarship and draw upon 59 elite interviews with policymakers and stakeholders to develop our findings. Our analysis identifies that the gradual opening of ‘side door’ visa schemes that fall outside of the formal scope of official skilled immigration policy, such as student and working holiday visas, and the growing number of ‘back door’ unauthorized migrants without any right to work, have allowed some employers in certain sectors to develop a reliance on large migrant workforces engaged to perform low-skilled, low-paid occupations. Inadequacies in Australia’s employment regulation enforcement regime have permitted employers using these sources of labor to flourish.
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Title
Back Door, Side Door or Front Door?
An Emerging De-Facto Low-Skilled Immigration Policy in Australia
Authors
Dr Chris F. Wright, The University of Sydney Business School, Australia,
chris.f.wright@sydney.edu.au
Dr Stephen Clibborn, The University of Sydney Business School, Australia,
stephen.clibborn@sydney.edu.au
Finalized version of manuscript for publication in Comparative Labor Law & Policy Journal,
volume 39, issue 1, 2017
2
ABSTRACT
Since the 1970s, Australia has officially adopted a skilled immigration policy rather than a
labor immigration policy. That is, the main permanent and temporary work visa categories
have focused almost exclusively on selecting migrant workers qualified to work in high-
skilled occupations, making it very difficult for lower skilled migrant workers to gain entry.
Despite the pretense of this official skilled immigration policy regime, there is recent
evidence that ‘side doors’ and ‘back doors’ to lower-skilled and unauthorized labor migration
– traditionally features of countries that have been reluctant to accept migrant workers
officially or unwilling to regulate their entry into lower-skilled segments of the labor market
– have become features of Australia’s policy landscape. In this context, this article examines
the reasons for the recent emergence of a de facto labor immigration policy in Australia. We
utilize concepts from employment relations, migration studies and comparative politics
scholarship and draw upon 59 elite interviews with policymakers and stakeholders to develop
our findings. Our analysis identifies that the gradual opening of ‘side door’ visa schemes that
fall outside of the formal scope of official skilled immigration policy, such as student and
working holiday visas, and the growing number of ‘back door’ unauthorized migrants
without any right to work, have allowed some employers in certain sectors to develop a
reliance on large migrant workforces engaged to perform low-skilled, low-paid occupations.
Inadequacies in Australia’s employment regulation enforcement regime have permitted
employers using these sources of labor to flourish.
3
I. INTRODUCTION
Official routes of immigration can be conceptualized as ‘small doors’ that permit entry
selectively to certain categories of migrants deemed ‘desirable’. These small doors are
situated within a much bigger ‘protective wall’ of immigration control erected to deny entry
to many other would-be migrants who fall outside of the selection criteria.1 Similar to many
developed nations, Australian immigration policy has maintained the pretense of channeling
entrants through the ‘front door’ of highly regulated mechanisms of selection and control.
While this has been most visible in relation to humanitarian and family migration,
governments have utilized ‘control signals’ by actively demonstrating their capacity to
prioritize migrants on ‘skilled’ visa categories who possess characteristics deemed to align
with ‘national interest’ economic imperatives. Since the mid-1990s, immigration selection
policies have been reformed with the intention of prioritizing applicants in these ‘wanted’
visa categories and making it more difficult for those would-be migrants that do not meet
these criteria.2 In this context, to borrow a phrase from Andrew Geddes,3 the ‘front doors’ of
Australian immigration selection have become larger, but the protective wall of immigration
control in which they are located has become more fortified.
This characterization of Australian immigration selection and control, which policymakers
have actively sought to promote,4 overlooks a paradox. Notwithstanding the focus on
1 Aristide R. Zolberg, The Next Waves: Migration Theory for a Changing World, 23 INT. MIGR. REV. 403
(1989).
2 Chris F. Wright, How do States Implement Liberal Immigration Policies? Control Signals and Skilled
Immigration Reform in Australia, 27 GOVERNANCE 397 (2014).
3 Andrew Geddes, THE POLITICS OF MIGRATION AND IMMIGRATION IN EUROPE (2003).
4 Laurie Berg, MIGRANT RIGHTS AT WORK: LAWS PRECARIOUSNESS AT THE INTERSECTION OF MIGRATION
AND LABOUR (2016); Peter Mares, NOT QUITE AUSTRALIAN: HOW TEMPORARY MIGRATION IS CHANGING THE
NATION (2016) Andrew Markus, James Jupp & Peter McDonald, AUSTRALIAS IMMIGRATION REVOLUTION
4
maintaining an official policy based on ‘skilled’ immigration entering through ‘front doors’,
governments have opened ‘side door’ schemes that fall outside of its formal scope, such as
student and working holiday visas, and permitted a growing number of ‘back door’
unauthorized migrants who overstay their visas or work in breach of their visa conditions.5
Loopholes in the regulation of temporary skilled visas have also led to side doors allowing
employers to recruit often-vulnerable migrant workers into lower-skilled forms of
employment.6
In the context of Australia’s official immigration policy predicated on prioritizing skilled
migrants channeled through a fortified regime of ‘front doors’, this article addresses the
following question: Why has a de-facto lower-skilled labor immigration policy emerged
through the permissive opening of ‘side doors’ and ‘back doors’?
Comparative scholarship suggests that the emergence of lower-skilled migration channels can
occur in several distinct ways. The first is through ‘front doors’ whereby lower-skilled labor
immigration is officially encouraged by reforms that ‘displace’ existing institutional
arrangements. The intent of these reforms may be pragmatic or ideological. Pragmatic
reforms may seek to regularize such inflows, for example through the creation and expansion
of sector-specific schemes and encouragement of migrants to satisfy demand lawfully in
(2009); Chris F. Wright, Why Do States Adopt Liberal Immigration Policies? The Policymaking Dynamics of
Skilled Visa Reform in Australia, 41 J. ETHN. MIGR. STUD. 306 (2015).
5 Stephen Clibborn, Why Undocumented Immigrant Workers should have Workplace Rights, 26 ECON.
LAB. RELAT. REV. 465 (2015); Joanna Howe & Alexander Reilly, Meeting Australia’s Labour Needs The
Case for a Low Skill Work Visa, 43 FED. LAW REV. 259 (2015); Alexander Reilly, Low-Cost Labour or
Cultural Exchange? Reforming the Working Holiday Visa Programme, 26 ECON. LAB. RELAT. REV. 474
(2015).
6 Iain Campbell & Joo-Cheong Tham, Labour Market Deregulation and Temporary Migrant Labour
Schemes: An Analysis of the 457 Visa Program, 25 AUST. J. LAB. L. 239 (2013); Joanna Howe, Is the Net Cast
Too Wide? An Assessment of Whether the Regulatory Design of the 457 Visa meets Australia’s Skill Needs, 41
FED. LAW REV. 443 (2013); Selvaraj Velayutham, Precarious Experiences of Indians in Australia on 457
Temporary Work Visas, 24 ECON. LAB. RELAT. REV. 340 (2013).
5
lower-skilled occupations in Canada and the United Kingdom.7 Alternatively, these policies
may be driven by an ideological view that employers should have the capacity to recruit
migrant workers to address labor shortages for any occupation regardless of the skill level to
improve the efficiency of the labor market, as with Sweden’s 2008 work permit reforms.8
The second way is through the opening of ‘side doors’, which is a feature of countries such as
Japan and Korea that have been reluctant to accept migrants officially to perform lower-
skilled work. In the case of Japan, governments have refused to open specific visas for
immigrants to address lower-skilled labor shortages and have steadfastly maintained that
highly skilled and professional immigrants on temporary visas are to be the only migrant
workers officially allowed. However, a number of side doors have been opened, such as
through the expansion of a ‘trainee program’ and the arguably deliberate failure of the
government to tighten immigration controls on those who enter Japan under student and
‘entertainer’ visa schemes and then shift to low-skilled jobs.9 As such, to utilize concepts
from comparative politics scholarship, lower skilled immigration is the result of ‘institutional
stasis’ or inertia in which certain policy options are essentially deemed unviable but
7 Judy Fudge and Joo-Cheong Tham, Dishing Up Migrant Workers for the Canadian Food Services Sector:
Labor Law and the Demand for Migrant Workers, COMP. LAB. L. & POL’Y J. (forthcoming); James Walsh,
From Nations of Immigrants to States of Transience: Temporary Migration in Canada and Australia, 29 INT.
SOCIOL. 584 (2014); Chris F. Wright, Policy Legacies, Visa Reform and the Resilience of Immigration Politics,
35 WEST EUR. POLIT. 726 (2012).
8 Gregg Bucken-Knapp, DEFENDING THE SWEDISH MODEL: SOCIAL DEMOCRATS, TRADE UNIONS AND
LABOR MIGRATION POLICY REFORM (2009); Organisation for Economic Cooperation and Development,
RECRUITING IMMIGRANT WORKERS: SWEDEN (2011); Charles Woolfson, Judy Fudge & Christer Thörnqvist,
Migrant Precarity and Future Challenges to Labour Standards in Sweden, 35 ECON. IND. DEMOCR. 695 (2014).
9 Erin Aeran Chung, Japan and South Korea, in CONTROLLING IMMIGRATION: A GLOBAL PERSPECTIVE 399
(James F. Hollifield, Phillip L. Martin & Pia M. Orrenius eds., 3rd ed 2014); Fang Lee Cooke & Ronald Brown,
THE REGULATION OF NON-STANDARD FORMS OF EMPLOYMENT IN CHINA, JAPAN AND THE REPUBLIC OF KOREA
(International Labour Organization, 2015); Amy Gurowitz, Mobilizing International Norms: Domestic Actors,
Immigrants, and the Japanese State, 51 WORLD POLIT. 413 (1999); Dietrich Thränhardt, Closed Doors, Back
Doors, Side Doors: Japans Non-Immigration Policy in Comparative Perspective, 1 J. COMP. POLICY ANAL.
203 (1999).
6
outcomes desired by influential stakeholders emerge de facto, rather than, as is the case with
front door arrangements, intended reform through institutional displacement.10
Finally, in countries such as the United States, ‘back doors’ have opened to unauthorized
immigrants willing to work in low-wage, low-skilled occupations particularly in agriculture
and horticulture. These migration outcomes have emerged as the protracted result of
problems left unaddressed for several decades, such as porous borders and weakly enforced
labor regulations, as well as ‘structurally embedded’ patterns of employer recruitment
generally sustained by migrant community networks.11 The opening of ‘back doors’ to lower
skilled immigration is therefore the long-term consequence of inactivity by regulators; in
other words it is the product of ‘institutional drift’, whereby certain policy outcomes are
unintended consequences from unregulated arrangements left unchecked.12
In Australia there is only one official lower skilled immigration scheme: the Pacific Seasonal
Worker Program, which permits horticulture employers to sponsor a very small number of
workers each year (4,772 in 2015-16).13 This lone exception aside, we argue that the recent
rapid growth of lower-skilled immigration in Australia is a manifestation primarily of ‘side
doors’ and to a lesser extent of ‘back doors’ that have been opened due to several factors. The
10 John Peters, JOBS WITH INEQUALITY: FINANCIALIZATION, POST-DEMOCRACY, AND LABOUR MARKET
DEREGULATION IN CANADA (forthcoming); Kathleen Thelen, VARIETIES OF LIBERALIZATION AND THE NEW
POLITICS OF SOCIAL SOLIDARITY (2014).
11 Alejandro I. Canales, Mexican Labour Migration to the United States in the Age of Globalisation, 29 J.
ETHN. MIGR. STUD. 741 (2003); Wayne A. Cornelius, The Structural Embeddedness of Demand for Mexican
Immigrant Labour: New Evidence from California, in CROSSINGS: MEXICAN IMMIGRATION IN
INTERDISCIPLINARY PERSPECTIVES 115 (Marcelo M. Suárez-Orozco ed. 1998); Philip L. Martin and Michael S.
Teitelbaum, The Mirage of Mexican Guest Workers, 80 FOREIGN AFFAIRS 117 (2001).
12 Jacob Hacker (2005) Policy Drift: The Hidden Politics of US Welfare State Retrenchment, in BEYOND
CONTINUITY: INSTITUTIONAL CHANGE IN ADVANCED POLITICAL ECONOMIES 40 (Wolfgang Streeck and
Kathleen Thelen eds., 2005); PETERS, supra note 10; Kathleen Thelen and Wolfgang Streeck, Introduction:
Institutional Change in Advanced Political Economies, in BEYOND CONTINUITY: INSTITUTIONAL CHANGE IN
ADVANCED POLITICAL ECONOMIES 1 (Wolfgang Streeck and Kathleen Thelen eds., 2005).
13 Department of Employment, Annual Report 201516 (Australian Government, September 2016) at 29.
7
regulation of visas primarily designed for non-work purposes has been loosened, which has
granted greater capacity for those granted international student and working holiday visas to
work. Additionally, the absence of an effective system of labor regulation enforcement and
the creation of systems of ‘institutionalized dependence’ have encouraged employers in some
industries to engage international students, working holidaymakers and temporary skilled
visa holders in exploitative arrangements that take advantage of their migration status, often
below established wage benchmarks. In short, we argue there has been a fundamental change
in the nature of policy relating to skilled and labor immigration in Australia since the 1990s.
Equally fundamental changes in the labor enforcement regime have been inadequate for
regulating the work of migrants and the practices of the employers and intermediaries that
recruit them and utilize their labor.
This article presents a ‘systematic process analysis’14 of policy change drawing upon 59
interviews conducted between January 2008 and December 2012 with policymakers,
lobbyists and key stakeholders, including government ministers, senior public servants, and
officials from business associations, trade unions and migrant community organizations
involved in key policy developments. The interviews focused on the factors driving changes
in Australian immigration policy between the 1990s and the early 2010s when the most
significant instances of policy change relating to the growth of de-facto lower skilled labor
immigration occurred. We also utilize a range of primary and secondary data and relevant
academic and policy literature relating to these policy developments as well as the
enforcement of regulations regarding the treatment of migrants in the workplace. The latter
dimension of the analysis focuses particularly on those on working holiday visas, temporary
14 Peter A. Hall, Systematic Process Analysis: When and how to use it, 7 EUR. POLIT. SCI. 304 (2008).
8
skilled visas, international students with permission to work, and non-residents without
authorization to work.
The next section of describes the operation of Australia’s de-facto labor immigration policy
alongside the official skilled immigration policy. To understand how the de-facto regime has
emerged, the article then explores the adoption of an official skilled immigration policy in the
1970s, examines how this policy was maintained effectively over the subsequent quarter-
century, and then analyzes the factors contributing to its erosion.
II. FROM ‘FRONT DOORS’ TO ‘BACK DOORS’ AND ‘SIDE DOORS’
The vulnerability of temporary migrant workers to underpayment and exploitation has
emerged as one of the biggest challenges for employment relations in many countries,15
including Australia. There have been several recent prominent cases relating to evasion of
wage standards and employment regulations in the low-wage sector particularly among
temporary migrant workers, involving companies such as 7-Eleven, Dominos, Myer and the
Baiada Group. These incidents follow an earlier spate of reports of workers on temporary
skilled visas being exploited in the mid to late 2000s, especially in the construction and
hospitality industries.16
The mistreatment of migrant workers in these cases stands at odds with prevailing scholarly
assessments of the success of Australian immigration and labor market policies, which
ensured that workers received the same wages and conditions regardless of whether they
15 Greg J. Bamber, Russell D. Lansbury, Nick Wailes & Chris F. Wright, INTERNATIONAL AND
COMPARATIVE EMPLOYMENT RELATIONS: NATIONAL REGULATION, GLOBAL CHANGES ch 14 (6th ed 2016).
16 BERG, supra note 4.
9
were migrant or non-migrant. For example, Watson, Buchanan, Campbell and Briggs claim
that, without overlooking the inherent racism of the immigration selection policies in place
for much of the twentieth century, “migrants who came to Australia to work shared in the
same underlying benefits as other wage earners when it came to wage rates, hours of work
and entitlements to sickness, holiday and long service leave… They did not face economic
marginalisation nor social exclusion”.17 According to Markus, Jupp and McDonald, until the
1990s immigration policy rested on the premise that “those admitted to Australia came as
permanent residents, enjoying the same rights and privileges and with the same obligations as
the Australian-born. There was a conscious rejection of the ‘guest worker’ programs which
developed in postwar Europe”.18
During the immediate postwar decades, many migrant workers experienced discrimination
and disadvantage in the labor market especially in terms of an inequality of opportunities for
skilled employment,19 thereby producing labor market segmentation.20 However, in terms of
wages and conditions, the presence of an effective system of labor market regulation and
enforcement “restricted the capacity of employers to use immigrants as a ‘super exploitable’
category of labour”.21
17 Ian Watson, John Buchanan, Iain Campbell & Chris Briggs, FRAGMENTED FUTURES: NEW CHALLENGES
IN WORKING LIFE (2003).
18 MARKUS ET AL., supra note 4, at 9.
19 Santina Bertone, Gerard Griffin & Roderick D. Iverson, Immigrant Workers and Australian Trade
Unions: Participation and Attitudes, 29 INT. MIGR. REV. 722 (1995); Jock Collins, MIGRANT HANDS IN A
DISTANT LAND: AUSTRALIAS POST-WAR IMMIGRATION (1988); Lucy Taksa & Dimitria Groutsis, Managing
Diverse Commodities? From Factory Fodder to Business Asset, 20 ECON. LAB. RELAT. REV. 77 (2010).
20 Constance Lever-Tracy & Michael Quinlan, A DIVIDED WORKING CLASS: ETHNIC SEGMENTATION AND
INDUSTRIAL CONFLICT IN AUSTRALIA (1988).
21 Michael Quinlan & Constance Lever-Tracy, From Labour Market Exclusion to Industrial Solidarity:
Australian Trade Union Responses to Asian Workers: 1830-1988, 14 CAMB. J. ECON. 159, at 161 (1990).
10
Temporary and employer-sponsored visas generate institutionalized uncertainty among
migrant workers and dependence on their employers for the purposes of maintaining their
rights of residence.22 From this perspective, Australia’s official promotion of permanent
settlement and the absence of temporary visas until the 1990s can be seen as one factor that
contributed to the relative degree of equality between migrant and non-migrant workers in
terms of the wages and conditions that they received.23 Another factor was the presence of an
effective labor enforcement regime spearheaded by trade unions with high membership
coverage and supported by a strong and inclusive system of collective employment rights.24
Recruitment of migrant workers was an attractive solution for employers seeking to address
labor shortages and therefore may have helped to alleviate upward wage pressure.25 However,
effective enforcement of universalist labor market regulations and an immigration policy that
allowed workers to exit from exploitative employment relationships without fear of reprisal
or loss of residence rights combined to prevent employers from gaining unfair labor cost
advantages on the basis of recruiting migrant workers, as was common in post-war Western
Europe and the United States.26
22 Bridget Anderson, Migration, Immigration Controls and the Fashioning of Precarious Workers, 24
WORK, EMPLOY. & SOC. 300 (2010); Judy Fudge, Precarious Migrant Status and Precarious Employment:
The Paradox of International Rights for Migrant Workers 34 COMP. LAB. L. & POL’Y J. 95 (2012); Chris F.
Wright, Dimitria Groutsis & Diane van den Broek, Employer-Sponsored Temporary Labour Migration Schemes
in Australia, Canada and Sweden: Enhancing Efficiency, Compromising Fairness? 43 J. ETHN. MIGR. STUD.
1854 (2017); Mimi Zou, The Legal Construction of Hyper-Dependence and Hyper-Precarity in Migrant Work
Relations, 31 INT. J. COMP. LAB. L. & IND. REL. 141 (2015).
23 LEVER-TRACY & QUINLAN, supra note 20.
24 Tess Hardy & John Howe, Partners in Enforcement? The New Balance between Government and Trade
Union Enforcement of Employment Standards in Australia, 23 AUST. J. LAB. L. 306.
25 LEVER-TRACY & QUINLAN, supra note 20.
26 Stephen Castles & Godula Kosack, IMMIGRANT WORKERS AND CLASS STRUCTURE IN WESTERN EUROPE
(1973); Gary P. Freeman, IMMIGRANT LABOUR AND RACIAL CONFLICT IN INDUSTRIAL SOCIETIES: THE FRENCH
AND BRITISH EXPERIENCE, 1945-1975 (1979); Michael J. Piore, BIRDS OF PASSAGE: MIGRANT LABOUR AND
INDUSTRIAL SOCIETIES (1979).
11
Table 1 shows the intakes of migrants to Australia through the main routes of entry between
1996-97 and 2015-16. Prior to the 1996 election of the Howard Coalition government there
was very little scope for temporary migration and intakes were therefore dominated by
permanent visa categories. However, from 1996-97 until 2012-13, we see large and
significant increases in intakes across all categories, aside from family and humanitarian
visas where intakes increased but by lesser degrees. Collectively the total intake almost
quadrupled from 214,768 to 853,019 during this period, before declining marginally to
796,989 in 2015-16. Of particular relevance are policy developments in relation to four visa
areas.
Table 1 Annual intakes by main visa category, Australia, 1996/97-2015/16 (selected years)
1996-97
2000-01
2004-05
2008-09
2012-13
2015-16
Temporary skilled visa
25,368
36,900
48,590
101,280
126,350
85,611
Working holiday visa
52,700
76,600
104,400
194,582
258,248
214,583
Student visa
68,611
146,565
175,825
319,632
259,278
310,845
Permanent skilled visa
19,697
44,730
77,878
114,777
128,973
128,550
Family visa
36,490
33,470
41,736
56,366
60,185
57,400
Humanitarian visa
11,902
13,733
13,078
13,373
19,985
17,555
Total
214,768
351,998
461,507
800,010
853,019
796,989
Source: Department of Immigration and Border Protection (various sources)
First, the ‘temporary skilled visa’ (originally known as the Temporary Work (Skilled)
Subclass 457 Visa), which allowed an employer to sponsor a skilled migrant worker for up to
four years, was introduced and expanded subsequently. The explicit purpose of temporary
skilled visas upon their introduction in 1996 was to facilitate greater speed and procedural
simplicity in arrangements governing longer-term temporary entry of professionals and
12
managers, especially among firms with international operations.27 Over time, particularly
following reforms in 2001 when employer obligations to advertise vacancies locally before
sponsoring an applicant on a temporary skilled visa were removed, the main purpose of the
visa evolved towards meeting the immediate skills needs of employers. Concessions were
also introduced that allowed employers in areas classified as ‘regional’ areas to engage
migrant workers below the statutory minimum wage threshold established for temporary
skilled visas, however these concessions were later removed.28 The Subclass 457 visa was
abolished in April 2017 but was immediately replaced by two other temporary skilled
employer-sponsored visa categories, known as the Temporary Skill Shortage program. Aside
from some minor regulatory adjustments these were very similar in their function and
operation to the scheme that they replaced.29
Second, there has been a large expansion of employer-nominated and non-sponsored
permanent skilled visas, which since the early 1970s have been the mainstay of Australia’s
skilled immigration policies. This expansion was largely been achieved through two policy
adjustments. First, concessions were granted to applicants with qualifications obtained from
Australian tertiary institutions or with work experience in Australia relating to skilled
occupations in short supply. Second, international students were allowed to apply for skilled
visas ‘on-shore’ immediately after completing their studies rather than being required to
return to their home countries first, as was previously the case.30 In addition to creating and
strengthening the pathway between international student and permanent skilled visas, a
27 Roach Review, Business Temporary Entry: Future Directions, Report by the Committee of Inquiry into
the Temporary Entry of Business People and Highly Skilled Specialists (Australian Government, 1995).
28 HOWE, supra note 6.
29 Department of Immigration and Border Protection, Abolition and Replacement of the 457 Visa
Government Reforms to Employer Sponsored Skilled Migration Visas (Media release, April 18, 2017).
30 Chris F. Wright, Immigration Policy and Market Institutions in Liberal Market Economies, 43 INDUS.
REL. J. 110 (2012).
13
similar pathway was created allowing employers to nominate workers on temporary skilled
visas for permanent residence more easily. While the April 2017 reforms to temporary skilled
visas removed some occupations eligible to quality for permanent residency,31 this pathway
to permanent residency has become an important feature of Australia’s immigration policy
landscape and is a significant driver behind the growth of temporary visas.32
Third, there have been significant reforms to the working holidaymaker (WHM) visa scheme,
consisting of the Working Holiday Subclass 417 visa and the Work and Holiday Subclass 462
visa.33 While classified as ‘visitors’ visas and formally established for the purposes of
encouraging cultural exchange, the scheme has evolved from its original intention of
allowing visa holders to undertake “incidental employment” to become the largest source of
labor in some parts of the horticultural industry.34 The changing nature and impact of the
scheme has been achieved in several ways. The number of countries that Australia has
reciprocal agreements with allowing foreign nationals to apply for a WHM visa has increased
from four in June 1995 (the United Kingdom, Ireland, Canada and Japan) to 41 in December
2016 (six of these agreements had been signed but were not yet in effect), thereby increasing
the number of people eligible for a visa substantially.35 Additionally, various policy changes
have removed working restrictions for applicants and loosened restrictions for employers in
regional industries seeking to engage visa holders. In the late 1990s, the intake quotas
31 Id.
32 Robert Gregory, The Two-Step Australian Immigration Policy and its Impact on Immigrant Employment
Outcomes, IZA Discussion Paper No 8061 (Institute for the Study of Labor, 2014); Lesleyanne Hawthorne, How
Valuable is “Two-Step Migration”? Labor Market Outcomes for International Student Migrants to Australia, 9
ASIAN PAC. MIGR. J. 5 (2010).
33 REILLY, supra note 5.
34 Joanna Howe, Alexander Reilly, Diane van den Broek & Chris F. Wright, Sustainable Solutions: The
Future of Labour Supply in the Australian Vegetable Industry (Horticulture Innovation Australia, 2017); Elsa
Underhill & Malcolm Rimmer, Layered Vulnerability: Temporary Migrants in Australian Horticulture, 58 J.
IND. RELAT. 608 (2016).
35 Department of Immigration and Border Protection, Working Holiday Maker Visa Programme Report
(2016).
14
pertaining to the WHM scheme were lifted and the maximum age of eligibility was increased
from 25 to 30 years.36 In 2005, WHM visa holders were permitted to apply onshore for a
permanent skilled visa for the first time, thus potentially making the scheme more attractive
to those wishing to stay beyond the term of their WHM visa. In addition, those who had
worked in agriculture in a regional area for at least three months became eligible for a second
12-month visa, which allowed them to work in other industries.37 These reforms were
extended beyond agriculture in July 2006, when WHM visa holders who had worked for
three months in any primary industry in a regional area could apply for a visa extension.
Moreover, the maximum term that visa holders could work for a single employer was
increased from three to six months.38
Fourth, there has been a tenfold increase in international student visas from around 29,000 in
1990 to over 300,000 in 2015-16. This growth reflects the increasing importance of
international tertiary education to the Australian economy, the export value of which rose
from AUD$1.2 billion in 1991-92 to AUD$19.7 billion in 2014–15,39 thus making
international education Australia’s largest export industry after resources. International
students have the right to work up to 40 hours in any two consecutive weeks during semester
and unlimited hours outside of semester. They contribute an important share of the workforce
36 Minister for Immigration and Multicultural Affairs, More Working Holiday Makers in 1996-97
(Ministerial press statement 35/96, July 16, 1996); Minister for Immigration and Multicultural Affairs,
Government Response to Working Holiday Makers Report (Ministerial press statement 127/99, September 2,
1999).
37 Minister for Immigration and Multicultural and Indigenous Affairs, Employers and Students to Gain from
Changes to Visas (Ministerial press statement 133/2005, October 31, 2005).
38 Minister for Immigration and Multicultural and Indigenous Affairs, Rural and Regional Industries to
Benefit from Visa Extension (Ministerial press statement 051/2006, May 3, 2006).
39 Department of Education, Science and Training, Submission to House of Representatives Standing
Committee of Economics, Finance and Public Administration Inquiry into the Current and Future Directions of
Australia’s Services Export Sector (Supplementary Submission No. 47, 2007); Department of Education and
Training & Deloitte Access Economics, The Value of International Education to Australia (Australian
Government, 2016); MARKUS ET AL., supra note 4, at 10.
15
in industries such as retail and hospitality.40 Policymakers have seen strengthening of the
pathway between student and work visas as an important component of improving Australia’s
comparative advantage in the highly competitive international education market.41
International student enrolments in tertiary institutions more than doubled in the six years
after this pathway was first established,42 though it is likely that other factors also contributed
to this trend.
III. UNDER-ENFORCED EMPLOYMENT STANDARDS FOR TEMPORARY
MIGRANTS
Among these four visa categories, there is virtually no sustained evidence relating to the
mistreatment of workers on permanent skilled visas.43 This could be because these visa
holders tend to be highly skilled which often grants workers relatively greater capacity to
negotiate higher wages and favorable terms of employment. Another critical factor likely
minimizing the scope for exploitation is that the visa conditions of permanent visa holders
grant them unlimited mobility within the Australian labor market. International migration
scholarship has identified these factors as important for enabling migrant workers to exit
from exploitative employment relationships freely.44
40 Chris F. Wright, Stephen Clibborn, Nicola Piper & Nicole Cini, Economic Migration and Australia in the
21st Century (Lowy Institute for International Policy, 2016).
41 Parliamentary Secretary to the Immigration Minister, A Better System for Processing Overseas Student
Visas (Media release, May 17, 2001); Interviews, Immigration Department officials #23, 40.
42 Bob Birrell & Bronwen Perry, Immigration Policy Change and the International Student Industry, 17
PEOPLE & PLACE 64, at 65-66.
43 WRIGHT ET AL., supra note 40.
44 See, e.g. ANDERSON, supra note 22; Harald Bauder, The International Mobility of Academics: A Labour
Market Perspective 53 INT. MIGR. 83 (2015); Catherine Dauvergne, THE NEW POLITICS OF IMMIGRATION AND
THE END OF SETTLER SOCIETIES (2016); Catherine Dauvergne & Sarah Marsden, Beyond Numbers Versus Rights:
Shifting the Parameters of Debate on Temporary Labour Migration, 15 J. INT. MIGR. INTEGR. 525 (2014);
ZOU, supra note 22.
16
By contrast, the conditions of temporary visa holders are characterized by institutionalized
uncertainty and dependence on employers in order to maintain or extend their residency in
Australia.45 This scenario makes temporary visa holders susceptible to mistreatment from
unscrupulous employers, a situation that is compounded by the ineffective enforcement of
wage and employment regulations.
The Fair Work Ombudsman (FWO), a government labor inspectorate created in 2009, built
on its predecessor, the Workplace Ombudsman, is empowered to inspect workplaces to
ensure that employers comply with their responsibilities and obligations and uphold workers’
rights. Following problems relating to the enforcement of temporary skilled visa
regulations,46 the FWO was empowered to fine employer sponsors in breach of their
obligations under the scheme up to AUD$50,001 in the case of organizations and
AUD$10,200 in the case of individuals, and to bar these employers from sponsoring workers
under the scheme.47 Despite these powers, the incidence of employer non-compliance with
temporary skilled visa regulations remains rather high. In 2007, 3% of employer sponsors
monitored were issued with sanctions and cancellations for non-compliance, compared to
11% in 2013. The number of employers monitored under the scheme deemed ‘satisfactory’
declined from 87% to 75% over this period. Instances of serious non-compliance resulting in
visa cancellations or sanctions were especially likely among firms with fewer than 10
employees and those sponsoring construction and food trades workers. While these figures
suggest growing employer non-compliance with temporary skilled visa regulations, the
45 WRIGHT ET AL., supra note 22.
46 Deegan Review, Visa Subclass 457 Integrity Review: Final Report, Department of Immigration and
Citizenship (Australian Government, 2008).
47 Department of Immigration and Border Protection, Booklet 9 Temporary Work (Skilled) (Subclass 457)
Visa (Australian Government, 2015), at 14.
17
Immigration Department48 claims that they are likely to be inflated by ‘risk-tiering’
monitoring practices concentrated primarily on sponsors considered to be ‘high risk’,49 and
may also reflect increased FWO resources dedicated to enforcement among migrant workers.
The FWO has also reported evidence of employer misuse of the temporary skilled visa and
mistreatment of workers on international student visas. In 2014-15, workplace dispute forms
lodged by overseas workers accounted for more than 10% of all FWO matters. Of these
dispute forms, 43% came from working holiday visa holders, 15% from temporary skilled
visa holders and 8% from international students.50
There is no reliable quantification of undocumented workers in Australia. The report of the
Howells review estimated the undocumented workforce, including those without a valid visa
and those working in breach the terms of an otherwise valid visa, to be greater than 50,000
and possibly in excess of 100,000.51 The Immigration Department estimated the number of
people overstaying their visa at 62,100 in 2014.52 However, these figures are most likely
conservative given the sheer number of temporary migrants without any work rights, those
with restricted work rights and the great increase in these numbers in recent years.53
48 To avoid confusion we use the term ‘Immigration Department’ to refer to the Australian Government
department tasked with administering immigration policy, the name of which has changed frequently in recent
years. Since the 1990s the official titles of this department have included the Department of Immigration, Local
Government and Ethnic Affairs, the Department of Immigration and Multicultural Affairs, the Department of
Immigration and Multicultural and Indigenous Affairs, the Department of Immigration and Citizenship, and the
Department of Immigration and Border Protection (the current title).
49 John Azarias, Jenny Lambert, Peter McDonald & Katie Malyon, Robust New Foundations: An
Independent Review into Integrity in the Subclass 457 Programme (Australian Government, 2014) at 85-87.
50 Fair Work Ombudsman, Annual Report 2014-2015 (Australian Government, 2015).
51 Stephen Howells, Report of the 2010: Review of the Migration Amendment (Employer Sanctions) Act
2007 (Australian Government, 2011).
52 Department of Immigration and Border Protection, Australia’s Migration Trends 20132014 (Australian
Government, 2014).
53 CLIBBORN, supra note 5.
18
Undocumented workers are particularly vulnerable to exploitation at work given their risk of
deportation should they be discovered by immigration authorities.
There is a widely held view among policymakers and employer associations that temporary
visa holders receive equal treatment and access to the same workplace protections as
Australian citizens and permanent residents.54 According to this view, reported instances of
exploitation have, at least until recently, been exaggerated.55 This perspective tends to be
underpinned by an assumption that employment and immigration regulations are effectively
enforced and that temporary migrant workers are aware of their rights and the means to assert
them. It is increasingly clear that such assumptions are misplaced and that the enforcement of
labor standards among the temporary migrant workforce is inadequate. Before discussing the
decisions that have created a de-facto low-skilled immigration policy, it is necessary to
explain the transformation of Australia’s labor regulation enforcement regime from a
universalist, union-administered system to a state-administered yet under-resourced one,
which is an important factor explaining why policy has led to opening of ‘side doors’ and
‘back doors’.
As Hardy and Howe explain, the Conciliation and Arbitration Act 1904 gave unions broad
rights to enter workplaces, which were often extended under the provisions contained in
many industrial awards, i.e. legal instruments that set minimum pay and conditions for
occupations in particular industries. Unions were able to use these rights and provisions, as
well as their legal capacity to take industrial action and secondary boycotts and to utilize
powers of the industrial tribunals to settle disputes, as mechanisms for pressuring firms to
54 Interviews, Australian Chamber of Commerce and Industry official #43; Immigration Department official
#56.
55 Anna Patty, Are the 457 Visa Reforms an Illusion Act? SYDNEY MORNING HERALD, April 22, 2017.
19
comply with award standards. Although unions were not officially sanctioned with
monitoring employer compliance with awards, their utilization of these broad industrial
rights, the high levels of membership coverage across the workforce, and the Commonwealth
government’s minimal devotion of resources to enforcement, meant that unions played a
significant de-facto role in enforcing award standards. This allowed unions to be key actors in
the regulation of labor standards across the Australian workforce.56
The introduction of ‘enterprise’ or workplace-level collective bargaining in the early 1990s
heralded a shift in the function of unions from regulators of labor standards, to
representatives and bargaining agents of union members in unionized workplaces. Enterprise
bargaining allowed strong unions to gain higher wages and better conditions for their
members than would have been allowed under the award system, but workers in parts of the
labor market where unions were weak had to rely exclusively on awards. Although awards
continue to provide important ‘safety net’ protections for vulnerable workers, they have
become less effective as a mechanism for unions to advance wages and conditions than
previously as unions have limited input into their variation. Industries with high
concentrations of award-reliant employees and migrant workers are often characterized by an
absence of unions. For example, in hospitality, a majority of employees rely solely on awards
for wage increases,57 yet despite awards providing nominal standards there are high rates of
wage theft among migrant workers in hospitality, especially restaurants.58 Weak coverage by
unions, whose ability to regulate labor standards has been significantly curtailed by a series
56 HARDY AND HOWE, supra note 24; see also Miles Goodwin & Glenda Maconachie, Minimum Labour
Standards Enforcement in Australia: Caught in the Crossfire? 22 ECON. LAB. RELAT. REV. 55 (2011).
57 Mark Bray & Elsa Underhill, Industry Differences in the Neoliberal Transformation of Australian
Industrial Relations, 40 IND. RELAT. J. 372 (2009).
58 Stephen Clibborn, Degrees of Exploitation: Why International Students in Australia are Underpaid, Paper
presented at the Association of Industrial Relations Academics of Australia and New Zealand Annual
Conference, Sydney, 2016.
20
of legal changes introduced since 1996,59 and barriers to enforcement for the FWO are likely
contributing factors. Particularly in industries characterized by large numbers of small
businesses such as hospitality, retail and construction, the enforcement challenges that unions
and the FWO face mean that employers have minimal likelihood of being held to account as a
result. For instance, a recent survey of temporary skilled visa holders found that less than 1%
of those employed in hospitality were union members and anecdotal evidence suggests very
low levels of union membership levels among international students in the industry.60
Although the resources allocated to the FWO have been increased in order to regulate labor
standards, it still employs only around 250 inspectors for Australia’s 11.1 million workers in
2.6 million workplaces and commences only 50 litigation cases each year.61 ‘Non-compliance
with minimum standards in Australia is significant’, even though, according to Hardy and
Howe, unions are more likely ‘to detect non-compliance more quickly than a state agency can
in relation to non-unionized workplaces’.62
IV. ACCOUNTING FOR DE-FACTO LABOUR IMMIGRATION POLICY CHANGE
The dramatic shifts in the systems for enforcing employment regulations coincided with
changes to visa regulations that are important for understanding the emergence of a de-facto
lower-skilled labor immigration policy through the permissive opening of ‘side doors’ and
59 Rae Cooper & Bradon Ellem, Cold Climate: Australian Unions, Policy and the State, 38 COMP. LAB. L.
& POL’Y J. 415 (2017); Anthony Forsyth & Andrew Stewart, Swimming against the Tide: New Challenges for
Unions under Australian Labor Law 38 COMP. LAB. L. & POL’Y J. 99 (2016); GOODWIN AND
MACONACHIE, supra note 56; HARDY AND HOWE, supra note 24.
60 Department of Immigration and Border Protection, Filling the Gaps: Findings from the 2012 Survey of
Subclass 457 Employers and Employees (Australian Government, 2014).
61 Australian Bureau of Statistics, Counts of Australian Businesses, Catalogue. No. 8165.0 (Australian
Government, 2014); Australian Bureau of Statistics, Australian Labour Market Statistics, Catalogue No. 6105.0
(Australian Government, 2014); Fair Work Ombudsman, 2015-16 Fair Work Ombudsman Annual Report
(Australian Government, 2015).
62 HARDY AND HOWE, supra note 24, at 34-35.
21
‘back doors’. The magnitude of these policy changes cannot be overstated, particularly the
shift towards temporary entry, which in the words of one senior official was “revolutionary”
given that temporary visas were “a non-event in this country through until the 1990s”.63
Commonwealth governments had consistently rejected temporary labor immigration
throughout the post-federation era since 1901.64 Employer exploitation of indentured guest
workers in the plantation industries around the turn of the twentieth century had ingrained a
deep and widespread policy preference for permanent over temporary immigration.65 It is
therefore important to account for the reasons behind the introduction and expansion of
temporary visas, particularly from the mid-1990s when the key policy changes enabling this
development were implemented.
A. The Underlying Assumptions of Temporary Labor Migration
In the context of the shift away from Australia’s protectionist economy in the 1980s and
1990s, immigration policy based exclusively on permanent migration became seen as
outmoded. Essentially, the shift towards temporary migration was the result of perceived
ineffectiveness of existing arrangements for addressing the supposed needs of the labor
market and for attracting ‘global talent’. In other words, there was a dominant perception that
existing immigration policy arrangements needed to be modernized to reflect the changing
preferences and behavior of labor market actors, especially employers.66
63 Interview, Immigration Department official #40.
64 Graeme Hugo, A New Paradigm of International Migration: Implications for Migration Policy and
Planning in Australia, Parliamentary Library Research Paper No. 10 2003-2004 (Australian Government, 2004)
at 17.
65 Nic Maclellan & Peter Mares, Remittances and Labour Mobility in the Pacific: A Working Paper on
Seasonal Work Programs in Australia for Pacific Islanders (Swinburne University of Technology, 2006) at 27-
29.
66 Chris F. Wright, Employer Organizations and Labour Immigration Policy in Australia and the United
Kingdom: The Power of Political Salience and Social Institutional Legacies, 55 BRIT. J. INDUS. REL. 347 (2017).
22
The introduction of a mainstream temporary skilled visa was a bipartisan project, since it was
recommended by an independent committee chaired by Neville Roach that the Keating Labor
government (1991-1996) commissioned and was later acted upon by the Howard Coalition
government (1996-2007). The Roach committee concluded that Australia’s growing reliance
on trade-exposed service industries meant that employers could no longer be expected to
source all of their required labor domestically, and that the permanent immigration schemes
were too cumbersome.67 According to Nick Bolkus, Immigration Minister during the Keating
Labor government, a temporary visa targeted specifically at executives and professionals was
necessary given the growing presence of multinational enterprises in Australia that relied
upon “the smooth movement of key personnel into and out of this country”.68 Bolkus’
successor Philip Ruddock, who was the Howard Coalition government’s Immigration
Minister from 1996 to 2003, claimed that the temporary skilled visa would help “to make
Australia a more internationally competitive nation”.69
Another important justification for the shift towards temporary visas more broadly related to
the notion that these schemes would enhance Australia’s comparative advantage in attracting
international talent. With other advanced economies in North America and Europe also
seeking to attract skilled workers, this posed a particular challenge to Australia given its
geographical isolation. The Howard government believed that the large number of
international destinations available to skilled workers made them less inclined to commit to
67 ROACH REVIEW, supra note 27, at 1-2
68 Id.
69 Minister for Immigration and Multicultural Affairs, Streamlined Temporary Business Entry Sponsorship
Starts (Ministerial press statement 43/96, August 1, 1996).
23
permanent residency.70 Ruddock used this reasoning in foreshadowing relaxation of
temporary skilled visa regulation in 2001 (discussed below), which he justified on the
grounds that – in the context of increased competition for skilled immigrants from other
states having an immigration program centered on permanent settlement hindered
Australia’s ability to attract applicants.71 Amanda Vanstone, the Howard government’s
Immigration Minister from 2003 to 2007, who presided over a subsequent expansion of
temporary visa schemes, also invoked this rationale:
“We’re in competition for skills, so you have to use different ways of trying to
attract people. And one way you can do that is to say: look, you don’t have to uproot
your family, sell your house and say, ‘goodbye, I’m never coming back’. That’s the
permanent choice and you can have that available to people, but the other thing
that isn’t offered by permanent migration, is a way of coming to suck it and see:
Bring your family under this visa and come try before you buy… You can look at a
whole range of job opportunities while you’ve got this job, and decide if you want to
stay and then you can apply for permanence. And then what will they be? A better
permanent migrant because they’ve already tried it out… So it’s a win-win”.72
However, such arguments overlooked two important considerations. First, the intentions of
people seeking to come to Australia had not changed as much as ministers and senior
officials claimed. According to a 2012 survey of temporary skilled visa holders, 72%
intended to apply for permanent residency once their current visa expired, while 6% planned
to prolong their stay by applying for another temporary skilled visa. By contrast, 6% planned
70 Interview, Immigration Department official #17
71 Philip Ruddock, The Coalition Government’s Position on Immigration and Population Policy, 7 PEOPLE
& PLACE 6, at 9-10.
72 Interview, Immigration Minister #55.
24
to return to their home country and 2% intended to move to another country.73 This suggests
that most temporary migrant workers in Australia wanted to settle rather than continue along
the path of international mobility. Second, these arguments imply that temporary migrants
have a high degree of agency within the Australian labor market, which overlooks the
challenges that institutionalized dependence imposes on many migrant workers (discussed
further below).
B. Temporary Skilled Visas
Following the introduction of the temporary skilled visa in 1996, its main objective soon
shifted from meeting the needs of multinational enterprises to meeting the needs of business
more broadly. In July 2001, the skills threshold of the visa was lowered to allow sponsorship
of para-professionals and skilled trades workers.74 A statutory minimum salary benchmark
was introduced to ensure that temporary skilled visa holders were paid above broadly-defined
wage norms, but all labor market testing requirements and training obligations for sponsoring
employers were removed. However, these skill and salary requirements did not apply to
employers in regional areas defined, for the purposes of this scheme, as anywhere outside of
the major metropolitan centers (specifically Sydney, Melbourne, Brisbane, Perth, the Gold
Coast, Newcastle and Wollongong). Regional employers were also allowed to engage
workers in lower-skilled occupations if they could not ‘reasonably’ fill a position from the
local labor force. A Regional Certifying Body would certify that the nominated salary was
73 DEPARTMENT OF IMMIGRATION AND BORDER PROTECTION, supra note 60.
74 Minister for Immigration and Multicultural Affairs, New Visa Process to Help Business, Overseas
Students and Skilled Migration from 1 July 2001 (Ministerial press statement 085a/2001, July 1, 2001).
25
appropriate and that there were no local workers who could easily do the job.75 In 2005, after
various scandals emerged of workers on regional temporary skilled visas being paid very low
salaries, regional employers were required to pay temporary skilled visa holders no less than
90% of the statutory salary minimum threshold. The result of the introduction of these
concessions was that the temporary skilled visa scheme ceased to be an exclusively ‘skilled’
avenue of labor immigration for a large section of the business community.
During this period there were reports of workers in Western Australia being employed under
the scheme by fast food franchises, cafes and taxi companies in unskilled jobs.76 In industries
such as agriculture, employer association officials claimed that employers would sponsor
temporary skilled visa holders by ‘shopping’ from the list of potential occupations that could
be nominated, rather than selecting one that reflected the nature of the skills required to
perform the job:
“In farms now, they’re not having that very fixed, defined, one role any more. In the
shearing shed, everyone is literally a cog that has traditionally done exactly the same
sorts of things. Now we’re finding people trying a bit of everything is becoming
more common, and that creates some compliance difficulties when you’re trying to
present a role as vastly or for the most part skilled. Which [occupational
classification] code do you pick? [Their role] seasonally or from day to day? … That
creates a real problem in terms of filling the paper out, literally”.77
75 Joint Standing Committee on Migration, Temporary Visas … Permanent Benefits: Ensuring the
Effectiveness, Fairness and Integrity of the Temporary Business Visa Program (Parliament of the
Commonwealth of Australia, 2007).
76 Interview, CCIWA official #4; Kim Macdonald, Skilled Migrants Hired in Fast Food Jobs, THE WEST
AUSTRALIAN, August 4, 2005, at 5.
77 Interview, National Farmers’ Federation (NFF) official #11.
26
There was also a spate of cases of temporary skilled visa holders being underpaid or
exploited, particularly in areas defined as regional where minimum skills and salary
thresholds were lower.78 Civil penalties for companies and individual employers caught
breaching their legal obligations were introduced largely in response to these controversies
surrounding the instances of worker exploitation, according to Kevin Andrews, the Howard
government’s Immigration Minister in 2007, because these cases were seen as contributing to
diminished public support for temporary skilled visas.79
Senior government officials and representatives of peak business associations such as the
Business Council of Australia (BCA) and the Australian Chamber of Commerce and Industry
(ACCI) claim that they played an important role in influencing the broadening of the
temporary skilled visa beyond the exclusive focus on the highly skilled.80 However, Nick
Bolkus, the Labor Immigration Minister who commissioned the Roach inquiry that
recommended the introduction of the temporary skilled visa, claimed: “we didn’t design it to
do that. The policy settings we put in place were definitely not intended” to allow entry to
workers with lower skill sets.81 The Australian Council of Trade Unions (ACTU) was
represented on the Roach inquiry and had initially supported the idea of a high-skilled
temporary visa but opposed the post-2001 changes to the temporary skilled visa scheme.
According to the then President of the ACTU:
78 See, e.g., Danielle Cronin, Overseas Workers Granted New Start, CANBERRA TIMES, March 11, 2006,
at 15; Matt Williams, Workers Locked out Over Contract Dispute, THE ADVERTISER, February 21, 2006, at
15.
79 Interview, Immigration Minister #34; Minister for Immigration and Citizenship, New Changes to Skilled
Temporary Visa Laws (Ministerial press statement ka07030/2007, April 26, 2007).
80 Interviews, BCA official #7; ACCI official #9; Immigration Department official #27.
81 Interview, Immigration Minister #6.
27
We told the Department of Immigration [in 2001] that if they move to regulate it to
employer sponsoring, three things would happen: one, you’d have exploitation writ
large, because of that direct, indentured nature of labor; secondly, you would have
an explosion of absolute shonky employment agencies going into countries offering
people all sorts of wonderful jobs at outrageous prices, and again that would add to
the exploitation; and three, that we’d have industrial unrest about it. And all of those
things are apt.82
Aside from the influence of business, there were three main reasons for the weakening of the
skills and salary thresholds for temporary skilled visas. First, the introduction of regional
concessions was driven by the government’s concern that existing arrangements did not
sufficiently accommodate regional recruitment difficulties, particularly in the context of
sustained demand in urban areas which made it harder for regional employers to attract and
retain workers.83 However, the Coalition parties that introduced these changes had a
concentration of electoral support in regional areas and many of the Howard government’s
broader policy initiatives were tailored to regional demands. For instance, a 2007 inquiry by
the Commonwealth Auditor-General found that a disproportionate amount of the funding
under the Regional Partnerships Program was allocated to Coalition-held electorates.84 In
other words, the regional concessions for temporary skilled visas were tailored to appease the
Coalition’s regional support base.85
82 Interview, ACTU official #33.
83 Interviews, Immigration Department official #23; NFF official #11.
84 Australian National Audit Office, Performance Audit of the Regional Partnerships Programme:
Department of Transport and Regional Services, Audit-Report No. 14 2007-08 (Australian Government, 2007).
85 Interviews, Immigration Department official #23; Department of Prime Minister and Cabinet (DPMC)
official #48.
28
Second, labor market testing, which was the mechanism by which temporary skilled visas
were originally allocated and helped to ensure some degree of compliance with skills
thresholds and wage norms, “was seen as absolutely useless in terms of public policy or
integrity”, in the words of one official. According to another, this arrangement was “a pretty
contentious thing anyway – no one ever failed a labor market test”.86 An additional rationale
for scrapping labor market testing was that workers who were eligible to be sponsored on a
temporary skilled visa were “very unlikely to be represented in the unemployed”, in the
words of one senior Immigration Department official. This was because to be eligible for the
visa, workers had to be sufficiently skilled, and higher-skilled workers, whether temporary
migrants or otherwise, were less likely to be unemployed. Labor market testing regulations
were thus changed on the assumption that the temporary skilled visas did not have a negative
impact on the employment prospects of local workers. However, these changes were made in
the context of a very buoyant labor market with strong demand for skilled workers.87 This
argument is less relevant now in the context of a slowing economy with higher
unemployment including among higher skilled workers. However, even in the context of low
unemployment during Australia’s mining boom of the mid-2000s, it failed to take account of
the institutionalized dependence experienced by migrant workers tied to a sponsoring
employer, especially lower skilled workers in regional areas with relatively weak labor
market power.
Third, an ideological view gained traction within the government and the Immigration
Department that “employers are the ones that know best the skills that their particular
86 Interviews, Immigration Department officials #23, 27.
87 Interview, Immigration Department official #27.
29
business requires”, in the words of former Immigration Minister Amanda Vanstone.88
According to a senior official, “the shift towards demand-driven visas is an acknowledgement
that [the] Immigration [Department] doesn’t often know what the needs of the labor market
are and that business knows this better. [The] Immigration [Department] is only looking
backwards in terms of its assessment of labor market needs”.89
The Labor government that came to office in 2007 had been critical of the operation of the
temporary skilled visa when in opposition. It made some important modifications to the
scheme to protect visa holders from exploitation, expanded the FWO’s capacity to monitor
and investigate possible non-compliance by sponsors, introduced harsher penalties for
employers found in breach of their obligations, and imposed stronger obligations for
sponsoring employers. However, until the Labor government reintroduced labor market
testing in 2013, the temporary skilled visa scheme continued to operate broadly as it had prior
to 2007. According to a senior government official, this was due to several factors.
Particularly in 2007 and 2008 prior to the global economic downturn, the Commonwealth
Treasury saw an expansive policy of temporary work visas including temporary skilled
visas as well as the contribution of international students and WHMs to increasing labor
supply – as important for dampening upward wage pressures that had intensified at the height
of the mining boom. Additionally, while there were indeed problems with the mistreatment of
temporary skilled visa holders particularly in regional areas, the government believed that the
scale of these problems was exaggerated:
88 Quoted in Elizabeth Coleman & Michelle Wiese Bockman, Migrants to Rescue on Skills, THE
AUSTRALIAN, April 15, 200 at 1.
89 Interview, Immigration Department official #56.
30
“457s [temporary skilled visas] account for around 100,000 workers out of a total
workforce of around 10 million, in other words around 1% of the overall workforce.
Only a very small percentage of this 1% were being exploited, and virtually all of
these were concentrated in a small category: trades workers without skills
assessment or English competency from high risk countries. Unions wanted to crack
down on the whole system, but we’ve told them to try to put these problems into
perspective”.90
C. Working Holidaymakers and International Students
While policymakers view the concerns raised about the operation of the temporary skilled
visa as exaggerated, there is wider acknowledgement of the problems with the working
holidaymaker visa scheme. As mentioned above, the WHM scheme forms a large component
of labor supply for regional-centered industries, particularly agriculture and horticulture. In
the words of one official, reforms to the WHM scheme have been designed to address the
following problem: “Driving [workers] towards a job which is really hard work and relatively
low paid: that’s hard. It’s hard to get policy to achieve that outcome”.91 However, other
officials claim that poor working conditions in these industries, particularly agriculture, were
part of the reason for these recruitment difficulties. This point is even acknowledged by an
industry representative, who says that agriculture “does stand out” for having more “bad
employers” including those that employ undocumented workers compared to other
industries.92 According to another government official:
90 Id.
91 Interview, Immigration Department official #27.
92 Interview, NFF official #11.
31
“The agricultural industry in the broader sense … are very big takers and contribute
naught. If you see some of the conditions these people have to work in – and the number
of complaints we’re now getting is increasing where people are claiming that they’re
being exploited by farmers, that they are forced to work extraordinarily long and tough
hours for minimum pay and quite often they’re then underpaid what they were originally
told, and furthermore, some of them aren’t paid.”93
Changes to the WHM scheme were perceived as especially necessary for addressing acute
recruitment difficulties during Australia’s mining boom of the mid-2000s.94 This was because
the high wages that resources sector employers were offering had the effect “of sucking
workers out of other parts of Australia”.95 While the increase in the number of reciprocal
WHM agreements was informed partly by foreign policy considerations, the decisions to
allow WHM visa holders to extend their stay if they worked for 88 days for a regional
employer was driven directly by industry pressure.96
The changes made that drove the expansion of international student visas were more
complex. While pressure from education industry lobbyists looking to increase student
enrolments was a key factor, these decisions were also motivated by state governments and
peak industry associations seeking to increase the permanent immigration intake and who
saw the creation of a student-skilled visa pathway as one way of achieving this.97
93 Interview, Immigration Department official #23.
94 Interview, NFF official #11.
95 Interview, Immigration Department official #17.
96 Interviews, Immigration Department official #23; Adviser to the Minister for Tourism #25.
97 Interviews, BCA official #54; Immigration Department official #40; Adviser to the Immigration Minister
#44.
32
In terms of the decision to grant international students the right to work during their studies,
two main factors appeared to stand out. First, according to one government official, this
experience was seen as benefitting their social and economic integration and improve their
English language skills, which were particularly important for those students that later
decided to apply for permanent skilled visas.98 Second, another official claimed that allowing
this provision helped Australia’s comparative advantage in the ‘global war for talent’: “With
our student program, in the competitive stakes, we allow 20 hours work per week for the
students; others don’t”.99
IV. DISCUSSION
There are several emerging themes underpinning policy changes that have facilitated the
growth of lower-skilled labor immigration in Australia. First, the relaxation of visa
restrictions was motivated partly by the economic cycle particularly during the mining boom
of the mid-2000s. When asked what drove these reforms, former Immigration Minister Kevin
Andrews said:
“The fundamental thing that changed was that we didn’t have enough workers, and
we moved from a period of high unemployment, where you were trying to find jobs
for workers, to a period of period of low unemployment, where you were trying [to
find] workers for jobs, and that’s the reality of the change from 1990 to 2000. Over
that decade, we swung totally the other way”.100
98 Interview, Immigration Department official #40.
99 Interview, Immigration Department official #23.
100 Interview, Immigration Minister #34.
33
However, there has not been a corresponding shift in visa regulations to take account of the
tightening of the labor market in the period since. The recent changes in economic conditions
might imply the need for stricter work visa regulations, which the incumbent Turnbull
Coalition government has acted upon to some extent through incremental modifications to
temporary skilled visas. Importantly, the economic downturn also signals the need for
stronger employment protections for workers whose already weak agency and bargaining
power has diminished further in the context of a surplus rather than a shortage of labor.
The liberal market assumptions that meeting employers’ short-term interests should be
prioritized, which is the second key theme underpinning expansive policy changes identified,
meant that any consideration of effective protections and enforcement for migrant workers
was effectively ignored. This was evident in the manner in which unions were excluded from
the policy process. According to a senior union official, “We had no influence. They were
hell bent on listening to business; no one else mattered”.101 A government official admitted
that “there was not a lot of consultation with unions” under the Howard government when
many of the key policy changes were implemented.102 This essentially reflects the dominance
of efficiency imperatives and the overlooking of equity imperatives in labor and skilled
immigration policymaking.
A third theme relates to business pressure. Although government ministers and agencies
autonomously pursuing objectives relating to labor market and fiscal policy influenced key
changes to temporary work visas,103 lobbying from peak and industry associations was an
important factor. This was seen, for instance, in the way that peak business associations
101 Interview, ACTU official #33.
102 Interview, Immigration Department official #56.
103 WRIGHT, supra note 4.
34
influenced the expansion of the temporary skilled visa and the creation of pathways between
student and work visas aimed at making Australia a more attractive destination for
international students. Business pressure was evident in the concessions granted to regional
employers for the temporary skilled visa and the WHM scheme, which some Immigration
Department officials claim was motivated by short-term self-interest on the part of these
employers and the regional electoral calculations of the Coalition parties. These regional
dimensions of policy change would seem to represent an example of what Gary Freeman
calls ‘client politics’, whereby policy deliberations often take place out of public view
through close liaisons between policy-makers and business lobbyists. Consequently policy
changes end up reflecting the preferences of the organized interests that stand to benefit the
most,104 in this case employers in low-wage industries.
V. CONCLUSION
The main avenues that have led to the growth of lower skilled labor immigration in Australia
can be conceptualized as ‘side doors’. While the working holiday scheme and international
student visas have increased the supply of migrant labor for low-paid, lower skilled work in
industries such as hospitality and agriculture, the stated principal purposes of these schemes
are cultural exchange and education, not labor immigration. Similarly, while the temporary
skilled visa is intended as a higher skilled visa, its use by certain employers to fill lower
skilled vacancies is the result of a failure of employment and immigration regulation to
enforce the rules of the visas, thus creating a ‘side door’. By contrast, the only ‘front door’
scheme that exists is the Pacific Seasonal Workers Program allowing a relatively very small
number of immigrants to work in a single sector, horticulture. ‘Back door’ forms of labor
104 Gary P. Freeman, Modes of Immigration Politics in Liberal Democratic States, 29 INT. MIGR. REV.
881 (1995).
35
immigration appear to be an important feature of certain labor markets, such as the reliance
on underpaid undocumented workers in parts of hospitality and horticulture, but the estimated
size of the undocumented workforce is invariably imprecise.
To return to our central research question, we can explain the emergence of a de-facto lower-
skilled labor immigration policy as the product of a combination of ‘drift’ and ‘stasis’, rather
than explicit ‘reform’ through ‘institutional displacement’.105 The Howard government,
which implemented the key policy changes examined, accepted that in the context of a
tightening labor market, “the immigration intake needed to be increased, as long as there was
a strong focus on skills”, according to a senior official in the Department of Prime Minister
and Cabinet.106 Due to sensitivities about a potential community backlash, peak business
associations were also careful to focus their advocacy on higher skilled schemes such as the
permanent skilled migration program and temporary skilled visas, rather than lower skilled
visas.107
With the option of an explicit and purposeful expansion of lower skilled immigration
effectively closed off owing to an institutional legacy of higher skilled immigration, the
industry associations representing employers that stood to benefit disproportionately sought
to lobby policymakers and vote-maximizing politicians to change policy at the margins. This
resulted in the introduction of concessions in schemes intended for other purposes, which
enabled a gradual increase in temporary migrants entering through these schemes being
enticed to work in lower-skilled occupations. From this perspective, the growth of de-facto
lower-skilled labor immigration is a consequence of ‘stasis’ or inertia. However, from
105 PETERS, supra note 10; THELEN, supra note 10; THELEN AND STREECK, supra note 12.
106 Interview, DPMC official #48.
107 Interviews, BCA official #54; ACCI officials #13, 43.
36
another perspective, the size of the lower-skilled migrant workforce is unlikely to have
increased so rapidly without the ‘drift’ that has occurred Australia’s labor regulations
enforcement regime, which has gone from relatively effective in ensuring equality between
new migrant workers, permanent workers and citizens to a relatively ineffective regime
within the space of two decades.
This institutional erosion has left a group of workers already at greater risk of mistreatment
less able to assert their rights, thus providing an incentive to unscrupulous employers.
Moreover, institutional drift has occurred through failure of policymakers accustomed to the
largely problem-free area of permanent immigration to anticipate the vulnerability to
mistreatment of a large temporary migrant workforce. If Australian governments are to
continue their experiment with temporary visas, a strengthening of immigration and
employment institutions is likely to be necessary in order to maintain public confidence in
their immigration policies.
Acknowledgements
We are grateful for the helpful feedback on earlier drafts of this article from Judy Fudge,
participants at the 2016 Comparative and International Perspectives on Australian Labour
Migration Workshop at the Melbourne Law School, and participants at the 2016 annual
conferences of the Association of Industrial Relations Academics of Australia and New
Zealand and the Australian Political Science Association.
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