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China-australia Free Trade Agreement Will Bring In New Obligations For Employers

By Alan J. McDonald


McDonald Murholme’s Managing Director Alan McDonald discusses the impact of the China-Australia Free Trade Agreement on employees and employers with HC Online. The article raises concerns that limited compliance agreements could lead to exploitation of foreign workers – as well as Australian residents unnecessarily “losing out”. See below article for further details.

China-Australia Free Trade Agreement will bring in new obligations for employers – HC Online

The China-Australia Free Trade Agreement (FTA) gives Australian companies greater access to the Chinese market, while allowing more Chinese workers to work in Australia on temporary skilled migration visas.

On Wednesday, Abbott described the deal as “history making” and said that it would “change our region for the better”.

However, concern has been aroused over the agreement’s power to grant Chinese migrants the ability to work in Australia for four years or longer if they qualify as “contractual service suppliers”.

These suppliers are defined by the agreement as a Chinese person “who has trade, technical or professional skills and experience and who is assessed as having the necessary qualifications, skills and work experience accepted as meeting Australia’s standards”.

The individual could be employed by either a local firm or a Chinese company that has a service contract in Australia.

Under the agreement, up to 1,800 people will be able to enter Australia from China each year to take jobs as Chinese chefs, Wushu martial arts coaches, Mandarin language tutors or Chinese medicine practitioners.

Chinese machinery installers and equipment servicers will also be eligible to work in the country for up to three months, and companies from China involved in infrastructure projects worth at least $150 million will have the ability to bring in Chinese workers.

Projects that fall into this category will have to be approved by the Australian Government and fill certain criteria, while the workers will be required to meet English language standards, be appropriately qualified to complete the work and receive sponsorship from the Immigration Department.

HC spoke to Alan McDonald, managing director of law firm McDonald Murholme, about the risks and obligations that could be imposed by the FTA.

“The agreement will benefit a limited class of employers,” McDonald told HC. “It’s not going to have widespread benefit.”

He explained that the FTA will be beneficial to employers who have the energy and interest in accessing the Chinese labour market, but “not many companies will have the scope to do that”.

McDonald advised that employers should put protection in place to acknowledge compliance with Australian law.

“I’m advocating that specific clauses of the agreement be applied in a transparent way by publication of information about the import of foreign workers,” McDonald said.
“This can be done through the Fair Work Tribunal, which has the resources to publish certain information. No later than six months after a worker’s date of entry, each party should publish explanatory information in relevant forms and documents.”

These should include a record that both parties have signed, which says they will comply with Australian law.

“The intention is for people to be able to look at this and see that they’ve declared they will comply with Australian law,” McDonald added. “It only needs to be a one page document – there is no need for unnecessary red tape.”

Publishing these documents on the Fair Work Tribunal’s website – or elsewhere – will provide employers with a simple auditing process that can be utilized for future reference.

“I fear if it’s not done, we will have repeats of past problems where people are working unlawfully without people knowing they’re here – let alone whether they’re complying with Australian law,” McDonald  continued. “Unfortunately, I don’t see this process being complied with unless someone prompts the authorities to encourage it.”

He also speculated some concern that limited compliance agreements could lead to exploitation of foreign workers – as well as Australian residents unnecessarily “losing out”.

“Temporary employment is defined when a person enters Australia to work ‘without the intent to establish permanent residence’,” McDonald told HC. “If a person is here for four years [as the FTA could allow], they may well decide to become a permanent resident, and they could do so.”

“Over time, this could lead to a rise in the number of permanent migration into Australia, meaning that the labour market could expand. If a large Chinese business is established here, then a large influx of foreign workers could occur – in some sectors there is no limit on the number of temporary employees.”

Unions and industry groups have also argued that the FTA will put jobs at risk.

The Australian Council of Trade Unions (ACTU) said that the agreement threatens local employment.

In a statement, ACTU president Ged Kearney said that the agreement will need strong regulations to ensure that local jobs are protected.

“The Abbott Government needs to come clean on the impact the China Free Trade Agreement will have on unemployment and local jobs,” the statement said.

According to Lance McCullum, national policy officer for the Electrical Trades Union, the agreement could also expose foreign workers to manipulation.

“We’ve got concerns for those [Chinese] workers that their conditions could be exploited by unscrupulous employers,” he said.

Innes Willox, chief executive of the Australian Industry Group, agreed that local firms could lose out because of increased competition, but referred to the FTA as “both a threat and an opportunity”.

He added that there were concerns that Chinese goods or services may not match Australian standards.

Reference: ‘China-Australia Free Trade Agreement will bring in new obligations for employers’, HC Online, 23rd June 2015