The Facts on the China Free Trade Agreement Temporary Work Visas

23rd September 2015

The free trade agreement between Australia and China (ChAFTA) is the largest trade agreement Australia has negotiated. However, it is mired in controversy over the arrangements for temporary entry of Chinese workers into Australia. In this update I explain the provisions of the ChAFTA that deal with movement of workers between each country and consider the opportunities for Australian employers.

Chapter 10. Movement of Natural Persons

Article 10.4 of the chapter entitled ‘Movement of Natural Persons’ sets out the terrms of agrement for permitting Chinese and Australians to work in each country. It provides in paragraph 3:

‘In respect of the specific commitments on temporary entry in this Chapter, unless otherwise specified in Annex 10-A, neither Party shall:

(a) impose or maintain any limitation on the number of visas to be granted to natural persons of the other party, or

(b) require market labour testing, economic needs testing or other procedures of similar effect as a condition for temporary entry.’

Paragraph 5 states: ‘… temporary entry granted in accordance with this Chapter does not replace the requirements needed to carry out a profession or activity according to the applicable laws and regulations in force in the territory of the Party authorising the temporary entry.’

Temporary Entrant Categories

These provisions apply to various categories of temporary entrants listed under Annex 10-A, of the ChAFTA including:

  • Business visitors looking for investment opportunities and the like in each country

  • Intra-corporate transferees such as executive and senior management, specialists and divisional managers
    independent executives of a Chinese enterprise who is establishing a branch or subsidiary in Australia

  • Contractual service suppliers including Chinese who have trade, technical, or professional skills and work experience who have been assessed as having the necessary qualifications, skills and work experience accepted as meeting Australia’s standards for their nominated occupation.

  • Installers and servicers of machinery and equipment where such installation and servicing by the supplier is a condition of the purchase. An installer or servicer must abide by Australian workplace standards and conditions and cannot perform services which are not related to the installation or servicing activity of the contract.

  • 1,800 Chinese chefs, Wushu martial arts coaches, Mandarin language tutors, and traditional Chinese medicine practitioners.

With the exception of business visitors (who continue to be paid by their Chinese based enterprise) all temporary visa’s may be issued for a maximum of 4 years.

Any Chinese person who has been granted the right of entry and temporary stay for a period of longer than 12 months and who has a spouse or dependant, Australia shall, upon application, grant the accompanying spouse or dependant the right of entry and temporary stay, movement and work for an equal period to that of the natural person.

Effect on 457 Temporary Visa Applications

The removal of labour market testing under ChAFTA would mean that there would not be a requirement for an employer to prove a skills shortage in the Australian labour market or difficulty recruiting Australian workers in relation to Chinese 457 visa applicants. Nor is there a cap on the number of temporary entrants.

However, Article 10.4 of ChAFTA does preserve the requirement that temporary visa applicants ‘follow prescribed application procedures for the relevant immigration formality’ and ‘meet all relevant eligibility requirements for such temporary entry’. As such, all other requirements for standard 457 visa applications would apply, including the following:

  • Sponsorship obligation to demonstrate ongoing commitment to training Australian workers
  • Sponsors must show that they will provide 457 visa nominees with no less favourable terms and conditions than those of an equivalent Australian worker.
  • The market salary rate of 457 visa nominees must be greater than an annually indexed temporary skilled migration income threshold (TSMIT), to ensure that they will earn enough money to be self reliant in Australia.
  • 457 visa applications are assessed by the Department of Immigration to ensure applicants meet necessary occupational qualifications and English language proficiency.

Opportunities for Australian Employers

If the ChAFTA is approved by the Australian Parliament then Australian employers will be able to sponsor Chinese workers under 457 temporary work visas more easily due to the relaxation of the market testing requirements. However, as anyone who has sponsored an person to work temporarily in Australia woud testify, the requirements and the costs to do so are still substantial disincentives, particularly where there are qualified Australians to perform the work.

Therefore the controvesy is really a storm in teacup for most Australians. The real politics centres on the side deals negotiated between the countries that would allow further relaxation of the rules for major infrastructure projects. These Memorandum of Understandings between Australia and China are designed to facilitate large investment by China in Australia. The CFMEU currently has enormous influence on the success of such infrastructure projects as it controls the workforce. It is paranoid that the ChAFTA and memoranda of understanding will weaken its control of the workforce and therefore its capacity to control conditions of employment.

I reckon the CFMEU should be more worried about the army of Wushu martial arts coaches that will be allowed into the country. They might train enough workers to challenge the bikies, gangsters and other thugs that currently control the building industry.

If you would like further information on employing persons from overseas please give me a call. Subscribers to Employee Relations Online can download the latest fact sheet from the Benchmarking ER Toolbox section.