New migration laws introduce more liability for directors

Company directors are being warned to stay vigilant when it comes to the employment of staff following amendments to the Migration Act 1958.

As a result of these amendments, there will soon be non-fault civil penalty provisions in addition to the existing "criminal offence" regime and a defence to criminal offences and civil penalty provisions, says Holding Redlich partner Paul Hardman.

He says the Migration Amendment (Reform of Employer Sanctions) Act 2013 also introduces an extension of liability to the directors and executive officers of businesses in certain circumstances.

The Migration Act 1958 contains a number of provisions prohibiting employers from allowing "unlawful non-citizens" (foreign citizens who do not hold a valid visa to be in Australia) and "lawful non-citizens" (foreign citizens who hold a valid visa to be in Australia) to work in Australia either without permission or in breach of work related conditions on their visa. Employers are liable for fines of up to $102,000 for ordinary breaches and $255,000 for aggravated breaches of the relevant provisions of the Act. Under the existing provisions, an employer could only be found guilty if the prosecution could prove that an employer knew that a person did not have the appropriate right to work in Australia and allowed him or her to work despite that knowledge.

"This element has proven difficult to establish and is considered by the Government to be ineffective as a deterrent against preventing persons without valid work rights from working in Australia," says Hardman. The "physical" elements of the existing offences, allowing an unlawful or lawful non-citizen to work, will not be materially altered by the amendments. Rather, civil penalty provisions will be introduced into the regime to allow prosecutors to enforce breaches of the Act even if the "fault" element cannot be established.

"Ultimately, this means that employers could face penalties where they employ a person who, unknown to them, does not have a valid right to engage in work (or that type of work) in Australia," notes Hardman.

Employers are liable for fines up to $76,500 for breaching the civil penalty provisions.

The amendment creates a specific defence to the criminal offences and the civil penalty provisions where employers can evidence that they have taken reasonable steps at reasonable times to verify that a worker is not an unlawful non-citizen or a lawful non-citizen in breach of their visa conditions.

However, the amendments also mean executive officers will be personally liable for contraventions of the criminal offence and civil penalty provisions by the company of which they are a director where the executive officer knew that, or was negligent to whether, the contraventions would occur; was in a position to influence the conduct of the employer in relation to the contravention; and failed to take reasonable steps to prevent work-related contraventions.

So what can directors do?

In light of the new non-fault civil remedy provisions, and the extension of liability to executive officers, Hardman says directors should ensure their companies have taken steps to comply with the new penalty regime by:
  • Preparing or refining employee screening procedures or implementing mandatory reviews of all new (and existing) employees' work rights.
  • Reviewing contractual obligations with third party labour referrers and/or hire companies to clarify the responsibility of checking work rights of proposed employees.
  • Registering for access to Department of Immigration and Citizenship's (DIAC) Visa Entitlement Verification Online (VEVO) system.

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