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What happens if you need to make a 457 visa holder redundant?

Ai Group regularly fields enquiries from members who have employed overseas workers on 457 visas but subsequently experience unforeseen shortfalls in business activity. So what are the implications of redundancy in the case of 457 visa holders?

Firstly, if the position is required elsewhere in a sponsor’s company structure, a 457 visa holder can work in an associated entity of the sponsor, as defined under section 50AAA of the Corporations Act, if the sponsoring business was a lawfully operating business in Australia at the time they were approved as a standard business sponsor. Under this arrangement, the sponsor retains ultimate responsibility for the 457 visa holder and the sponsorship obligations, even if they are working for an associated entity of the business. It is important to note that the 457 visa holder cannot be on-hired by the sponsor or associated entity to any other non-associated business.

If redeployment is not an option, in relation to redundancy and also termination, the 457 visa holder should be treated in the same way that Australian citizens or permanent residents are under Australian workplace laws, specifically the Fair Work Act 2009, including the National Employment Standards (NES). Sponsors are not required by the department to help the 457 visa holder find alternative employment, although they can, of course, do so. The Fair Work Ombudsman has two factsheets on their website about the rights of foreign workers.

There are sponsor obligations related to informing the Department of Immigration and Border Protection within 10 working days if the 457 visa holder’s employment ends, or is expected to end (the sponsor must tell the department if the end date changes). The same notification requirements apply if the visa holder decides to change his/her place of employment, or if he/she is terminated.

There is also an obligation for the sponsor to pay the return travel costs for the sponsored 457 visa holder and sponsored family members to their country of intended travel, if they are going to leave Australia. The visa holder must ask the sponsor in writing to pay the costs, or the department can make a written request on their behalf. Travel costs must be paid within 30 days of receiving the request. The sponsor must also notify the department within 10 working days of paying this travel.

Sponsors should meet their sponsor obligations to ensure that they do not expose themselves to risk of sanctions. More information about these obligations, the addressees for where to send notifications (as it changes depending on the location of the sponsor’s head office), and details on when the obligations start and end, can be found on the 457 page of the department’s website under the Sponsors tab, the heading Sponsor obligations and the subheading ‘Where to send a notice of an event or change’

What does this mean for the 457 visa holder?

If the 457 visa holder stops working for a sponsor, he/she must do one of the following within 90 days:

  • find another employer to sponsor them (the employer will need to be or become an approved sponsor and will need to have nomination approved);
  • apply for a different visa; and
  • make arrangements to leave Australia.

The 457 visa holder is responsible for looking after their own welfare arrangements during this time and for finding alternative employment.

More information about the 457 visa program can be found on the department’s website

by Graham Turner

Graham TurnerGraham Turner is the former Editor of Ai Group’s Industry magazine, which ceased publication in 2014. He now edits (and moderates) this Blog, together with Ai Group’s weekly Email newsletter.

Published - 25/08/14

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