Policy Change – 457 program not intended for “Self-Sponsorship” – Is it a lawful policy?

There have been many discussion about the recent policy change made by the Department of Immigration and Border Protection concerning the assessment of applications in the 457 program. One of the significant change that has caught many people’s attention and concern is the issue of the so-called ending of “self-sponsor” under the 457 program.

On 21 November 2015, the Department added the following policy statement to the 457 visa Procedural Advice Manual 3 (“PAM3”):

The intent of the 457 program is to enable Australian businesses to temporarily fill short term skill shortages with overseas workers when they cannot find a suitably qualified or experienced Australian citizen or permanent resident to fill the position. The program is not intended to be used for non-citizens to establish a business in Australia and self-sponsor themselves; there are other visa pathways available for such purposes.

Many have interpreted this policy statement as you cannot use a business which you have established to sponsor yourself for a position in that business. This view is also reflected in a statement made in the Migration Institute of Australia’s MIA Notice 11 dated 23 February 2016, it states “[t]he use of the 457 program to self sponsor has effectively been closed…”

On the face of the policy, the interpretation of many and the statement made by MIA appears to be correct. However, in our opinion, it is necessary to consider this policy statement more closely having regards to the relevant legislative requirement to which this policy seeks to provide guidance to decision-makers.

Under the Australian legal system, policy is not the law. While it has been well-settled that decision-makers making administrative decisions should generally apply policy, it is however not a blanket approach for all cases and circumstances. Policy is not to be applied if it is unlawful or “there are cogent reasons to the contrary” (Re Drake and Minister for Immigration and Ethnics Affairs (No 2) (1979) 2 ALD 634). Policy will be said to be unlawful when it seeks to fetter the discretion of a decision-maker or where it is inconsistent with the law. Policy is not allowed to substitute a law in circumstances where Parliament has decided to give discretion.

So is this new policy concerning so-called “self sponsor” lawful?

To answer this question, it is necessary to consider the legislative provision this policy seeks to guide decision-makers.

The legislative provision is r.2.72(10)(f) in the Migration Regulations 1994, which states:

(f) the position associated with the nominated occupation is genuine

We say that the proper determination of whether the position associated with the nominated occupation is genuine involves consideration of factors concerning the business operation and whether the nominated occupation is necessary for the operation of the business. This includes giving regard to the scale of the business, scope of activities, operating environment, immediate and future directions, and current staffing structure. In other words, it is a question of whether the nominated occupation is necessary for the business ongoing operation and any goal or objective it seeks to achieve.

The fact that a nominee for position is the shareholder, partner or associate of the business, in our view, is not conclusive evidence that the position associated with the nominated occupation is not genuine. It may call for further scrutiny but the policy should not be applied as a blanket approach to conclude all nomination in such circumstances to be non-genuine.

Moreover, r.2.72(10)(f) do not involve an assessment of whether the position associated with the nominated occupation is only for a temporarily fulfilment of short term skill shortages. This issue is addressed by the very fact that a subclass 457 Temporary Work (Skilled) visa is granted for a maximum of 4 years. As to whether a skill is in shortage is determined by the Consolidated Skilled Occupations List (CSOL).

Further, where is the notion of “separate legal entity” in this policy? To the extent of an incorporated corporation, a corporation is a separate legal entity to its owners, managers, operates, employees and agents (s.1.5.1 of the Corporations Act 2001). How can it be legally correct to categorise a 457 nomination by a corporation nominating an employee whom is also an owner to be “self-sponsor”?

Accordingly, we are of the view that there is a real likelihood that this new policy will be found to be unlawful by the Administrative Appeals Tribunal (AAT) or a Court if challenged on the basis that it inconsistent and seeks to fetter the discretion allowed by law. Thus, so-called “self-sponsor” don’t be turned away by this flawed policy.



David Gu | Solicitor Director | Accredited Specialist in Immigration Law


25 February 2016


This article is for information only. It should not be construed as providing migration or legal advice and should not be relied upon as such advice. You must always seek specific migration or legal advice for your particular circumstances from a registered migration agent or a lawyer authorised to provide advice in your jurisdiction.


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