A legislative instrument registered at the end of last week amends the labour market testing requirements for subclass 482 – Temporary Skill Shortage visa and subclass 494  – Skilled Employer Sponsored Regional (Provisional) visa nomination applications.

Labour market testing, commonly referred to simply LMT, is an aspect of nominating overseas workers to fill positions that cannot be filled by the local labour market. It involves advertising the position to see if a suitable local (Australian citizen or permanent resident) worker can be employed instead of sponsoring an overseas worker.

There are a couple of exemptions. This first is if an international trade obligation applies. With Australia entering into many free trade agreements over the years, the number of nationalities and situations that may invoke this exemption continues to grow. International trade obligations only apply to 482 nomination applications and not 494 nomination applications.

The second, while still deemed part of LMT, is when the position is deemed a select position or select occupation. While posting job ads is not required, a written statement from the sponsor must be provided stating reasons why a suitably qualified and experienced Australian citizen or Australian permanent resident, or temporary visa holder is not readily available to fill the position.

The debate over the need for LMT has ebbed and flowed over the years.

Unions generally consider it mandatory to avoid worker exploitation, however, this reasoning does not stack up when there is always a penalty to sponsoring (including the financial costs involved such as the Skilling Australia Fund Levy), and other safeguards such as the Annual Market Salary Rate requirement.

Business groups will say it is a waste of time and resources to go through the process if a suitable worker is found and a genuine position is available.

It seems that both sides are correct depending on the economic climate and particularly the unemployment rate. When the unemployment rate is low, such as it is currently, LMT is a drag on the efficiencies of a business. When the unemployment rate is high, such as was the case during the pandemic, LMT seems more than necessary to maximise the potential for local workers to not access welfare.

The pandemic was the reason why Workforce Australia, and its predecessor Jobactive, was included as a mandatory platform for LMT. In addition, there must be at least another two advertisements, on or in one or more of either:

• a recruitment website with national reach in Australia other than Workforce Australia,

• print media with national reach in Australia,

• radio with national reach in Australia, or

• if the approved sponsor is accredited, their website.

Most employers would simply post on other job websites given the ease to do this compared to advertising on legacy media platforms.

Satisfying the labour market testing requirements is extremely strict. Failing to meet the particulars, duration, not advertising in English or not lodging the nomination application within 4 months are grounds for refusal, and as LMT must be completed before lodging the nomination, a refusal can be disastrous for any corresponding visa application linked to it.

The instrument amends the LMT to effectively remove the need to advertise on the Workforce Australia website. It rolls back to the settings before the pandemic where only two different advertisements are required.

Anecdotally, Workforce Australia is a difficult platform to access as an employer because it is tied to a responsible officer’s digital identity. For larger organisations, the responsible person might be hard to locate or even identify.

There is also a new provision clarifying that overlapping advertisements are acceptable. It allows for a continuous and unbroken period of at least a four-week period across two or more overlapping advertisements where applications or expressions of interests for an advertised position may be received. It does not allow LMT over two or more consecutive (but not overlapping) or non-consecutive periods totalling a minimum of four weeks.

These amendments will apply to any application lodged before the change, which began on 9 December 2023.

While these changes are likely to be welcomed, the stronger response of removing the need to advertise at all, which some had expected, has not materialised.

Removing the need to advertise on Workforce Australia appears to be the only concession.