Let’s talk about economics!

According to a Crunchbase News tally, more than 73,000 workers in the U.S. tech sector have been laid off in mass job cuts so far in 2022.  This number is set to grow even further as technology stocks plummet and businesses look to regroup amid concerns around profitability and longevity.

Whilst this has yet to hit our shores, it would be remiss of our economy not to pay attention and set some contingency plans.

What happens when a business lays off staff?

From an immigration perspective, all employers must adhere to their obligations as a Business Sponsor, this includes:

  • Notifying the Department in writing if a sponsored worker’s employment has ceased (within 28 days of cessation date),
  • Paying reasonable return travel costs of a sponsored worker or any of their family members (only if the costs have been requested in writing by the sponsored worker).

The latter obligation is only triggered when the employee makes the request in writing to the employer and extends to economy class air travel (or equivalent) only.  The travel costs must be paid within 30 days of receiving the request.  The business must keep records of the request and travel costs payment as part of their sponsorship obligations as well.

The employer will also need to declare any redundancies of Australian citizen/permanent resident employees in the same occupation that occurred within the last 4 months prior to any future 482 visa applicants, or occurred within the last 12 months prior to any future 186 visa applications.  Additional genuine need information will need to be provided to mitigate any risks.

For example, if an Australian employee in the occupation of Developer Programmer is made redundant and the business seeks to lodge an application for a subclass 482 visa for another employee in the same occupation, the employer will need to provide supporting evidence explaining the genuineness of the role (e.g. employee who was made redundant did not have transferrable skills, different business unit, etc).

Moreover, under the National Employment Standards (NES), all employers must also ensure that they comply with obligations under the Fair Work Act.

What happens to sponsored foreign workers?

If the (former) sponsored employee is a primary subclass 482 visa holder, then they have a 60-day grace period from the date of cessation to:

  • Make arrangements to depart Australia;
  • Apply for an alternative visa; or
  • Find an alternative sponsor and transfer the visa to the new sponsor.

Please note that although these subclass 482 visa holders are no longer employed, they must continue to comply with their visa conditions during their stay in Australia, this includes restrictions to work for another employer under the visa transfer has been granted, work in a different position or occupation, and working for as an independent contractor, working for themselves, etc.

It is important to note that any breaches to their visa conditions may subject their visa to being cancelled.

For non-sponsored (former) employees (such as Student Visa holders, Working Holiday Visa Makers, and Subclass 485 visa holders) there are no specific immigration related obligations for termination of employment, however, the individual must ensure they continue to comply with their relevant visa conditions during their stay period in Australia.

For permanent visa holders such as the subclass 186 (permanent residency) visa, employers would have made a legal declaration that:

  • They will provide full-time employment for the sponsored employee for at least two years; and
  • They have the ability to fund full-time employment for the sponsored employee for at least 2 years.

Although these are generally not enforced by the Department, it is important to be aware of these legal declarations and ensure that records of these layoffs are well kept.

Additionally, employers will also need to declare any redundancies of Australian citizen/permanent resident employees in the same occupation that occurred within the last 4 months prior to any future 482 visa applicants, or occurred within the last 12 months prior to any future 186 visa applications.

Final thoughts

As employers and employees (alike) navigate the challenges in business, it is vital that all parties are afforded the requisite information and advice from which to make informed decisions.

We are moving!

Gilton Valeo Lawyers has decided to take the plunge and join the co-working space at WeWork 5 Martin Place.

Whilst all other contact details remain the same, our Sydney legal team will be based at WeWork 5 Martin Place from 1 January 2023.


Gilton Valeo can answer your questions about Australia’s immigration system

As experts in Australian immigration, Gilton Valeo can guide you in identifying the best immigration pathways to bring people over to start your Australian office, provide you with strategic consulting along the way, and connect you with our partners to make sure everything goes smoothly.

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