According to recent figures released by the Department of Immigration, there has been a massive increase in the number of warnings issued and penalties levied on employees for breaching the controversial 457 visa programme.

The number of formal warnings issued to employers for breaching aspects of the scheme jumped from 99 in 2005/6 to 1353 in 2007/8.

Only 3 employers were sanctioned for violating the terms of the programme in the 2005/6 period, but the number has risen to 192 in 2007/8.

Labour market analyst, Bob Kinnaird, attributed the sharp increase in the number of abuses to the recent efforts by the Department of Immigration to clamp down on non-compliance. As a result, these numbers may not indicate a rise in abuse, but rather an increase in the government’s ability to detect abuses that had long been taking place.

Unions, who see it as a means for companies to bring in cheap labour and undercut local wages, have long loathed the scheme and the latest figures appear to support union claims that the scheme has been (and continues to be) widely exploited.

Union leaders such as John Sutton, national secretary of the Construction, Forestry, Mining and Energy Union, are convinced that without major changes to the structure of programme, it will continue to be open to abuse and exploitation.

“There are several ways in which breaches can occur,” explained Bruce Mills, Joint CEO of 3W Consulting Contracting & Recruitment Pty Ltd. “Failure to pay the minimum salary level; failure to comply with workplace legislation and failure to pay superannuation or medical costs are among the most common transgressions.”

“But under recent legislation, companies found guilty of committing such offences risk penalties of up to $33,000 and sanctions which could include a ban on future sponsorship nominations, or the cancellation of existing sponsorships,” he added.

“A recent review of the programme by federal industrial relations commissioner Barbara Deegan saw several changes to the 457 Programme, which included stricter control and increased monitoring of companies with 457 sponsorships,” said Mills. “These changes have also contributed to the rise in the number of recorded cases of abuse.”

The programme has played a vital role in assisting Australian businesses to recruit workers during the global skills shortage and has seen a 24% increase in applicants with the number of primary applicants for 457 visas increasing from 46,680 in 2006/7 to 58,050 in 2007/8. A total of 110,570 temporary working visas were issued to workers and their dependents in 2007/8 — an increase of 27% on the previous period.

The number of people entering the country on 457 visas in the high-risk group (which comprises mainly tradespeople) has risen dramatically over the past three years and the majority of these people have been drawn from low-wage countries including China, and India.

“These factors have undeniably had a compounding effect on the exploitation figures we are seeing today,” said Mills.

In order to safeguard against non-compliance and its consequences, Mr Mills suggested that employers and 457 visa holders and applicant ensure that they always deal only with reputable organisations who have the knowledge and expertise to properly arrange 457 placements.