Labour market testing for sc457 visas remains a thorn in the side of employers. It is generally required for the employment of foreign workers in trade, technical, engineering and nursing jobs as well as occupations where Australian workers were recently retrenched. Although the sc457 review recommended that LMT is abolished, the Coalition maintained the view that such a move was unlikely to pass the senate.

This government has however been chipping away at the LMT by providing exemptions to it for signatories to its free-trade agreements. It's become a bargaining chip of sorts.

The Republic of Korea (or South Korea) has now become the latest country to be added to the list of nationals who can work in Australia without the need to have their jobs screened by the labour market testing rules of the sc457 visa program.

The effect of the new legislative instrument IMMI 14/107 is that labour market testing will not be applied to Korean nationals/permanent residents or to employees of businesses in Korea transferring to an Australian branch of that business being nominated under the 457 programme.

More specifically, the instrument allows access for the following categories:

• intra-corporate transferees for up to two years for specialists and up to four years for an executive or a senior manager;
• independent executives for up to two years;
• contractual service suppliers for up to one year; and
• business visitors for up to 90 days.

Australia will also provide access for dependents and spouses of Koreans that have been granted entry, in accordance with the Agreement, for a period of longer than 12 months.

As at 31 August 2014, there were 2495 primary 457 visa holders and 2575 secondary (dependent) visa holders from Korea in Australia out of approximately 109,000 in total.

South Korea was added to the list of countries exempted from the LMT rule as a result of the ratification of the Korea-Australia Free Trade Agreement (KAFTA) recently by both countries parliaments. It is one of three landmark trade agreements concluded by the Abbott Government since taking office, with Japan and China FTAs completing the North-Asia trifecta. However, the Japan and China FTA still await ratification. Australia is also currently negotiating bilateral free trade agreements with India and Indonesia.

“KAFTA is expected to result in an annual boost to the economy of close to $650 million when fully implemented.  It’s also projected to create many thousands of jobs over the next decade, helping to underwrite our prosperity for years to come,” said trade minister Andrew Robb in a media release.

Mr Robb said KAFTA will increase export opportunities across a wide range of industries: from beef, wheat, sugar, dairy, wine, horticulture and seafood, to automotive suppliers, and the resources and energy industries.  It will also open up significant opportunities for service providers. 

In submissions to parliament various unions warned that the net effect of these agreements is that Australians may be by-passed by overseas companies doing business here and may have to settle for lower salaries because wages would be pegged to the generally lower rates the companies pay to their employees in their home countries.