Employer Nomination Scheme (ENS) visa (Subclass 186) – watch the expenditure on training!
Temporary Work (Skilled) visa (subclass 457) holders who are looking to gain permanent residency in Australia can apply for the Employer Nomination Scheme (ENS) visa (subclass 186) via the Temporary Residence Transition (TRT) stream.
457 visas happen in 3 stages:
- Standard Business Sponsorship: Business is approved to be a sponsor for a period of anywhere between 1 to 5 years
- Nomination: Sponsoring business identifies position and nominee for position
- Visa applicant: Applicant is approved to work in the nominated position with for a period of up to 4 years
The ENS visa under the TRT stream is for sponsor businesses who wish to offer a permanent position to 457 visa holder. The ENS visa application can only be lodged after the 457 holder has completed 2 years in their nominated position. It happens in 2 stages; nomination by the sponsor and visa application.
There are many requirements to fulfil to be granted an ENS 186 visa, too many for our brief articles to cover. Instead we will write a series of articles focusing on the most common problems encountered.
Has the nominator has met the training requirement?
It is Department of Immigration and Border Protection (DIBP) regulation that businesses nominating a visa applicant for an ENS 186 visa under the TRT stream (for 457 visa holders) must have met Training benchmark A or Training benchmark B. See Reg 5.19(3)(f)(i) under the Department of Immigration and Border Protection (DIBP) regulations.
Training benchmark A: recent expenditure to the equivalent of at least 2% of the payroll of the business, in payments allocated to an industry training fund that operates in the same industry as the business
Training benchmark B: recent expenditure to the equivalent of at least 1% of the payroll of the business, in the provision of training to employees of the business who are Australian citizens or Australian permanent residents.
Not having fulfilled the training expenditure requirement would have to rate as the number one reason as to why a nominating business faces the possible refusal to sponsor an individual for permanent residence, despite being successful sponsors for the Temporary Work (Skilled) visa (subclass 457).
How many years of evidence do you need to show?
From 1 July 2013, all standard business sponsors are required to demonstrate that they have fulfilled either Training Benchmark A or Training Benchmark B in each year of their SBS approval that a 457 visa holder was also approved to be sponsored. Each year is counted from the date the sponsorship approval was granted not from the date the 457 holder is approved.
An SBS approval does not necessarily mean that a 457 visa (applicant) was approved. The period of validity on an SBS approval also does not necessarily mean that a 457 visa holder is approved to work with their sponsor for the same period of time.
Therefore, the business is only required to demonstrate meeting Training Benchmark A or B only for each year (from the date of SBS approval) that they sponsor at least one 457 visa holder. It is not necessarily for the full period the SBS is valid. If a 457 holder is successfully nominated by a sponsor but the business’s SBS approval has ceased by the time the application for the ENS application for that 457 holder is to be lodged, the business will only need to show evidence of training expenditure for each year in which they held both SBS approval and sponsored any 457 visa holder.
The DIBP provides examples in the Procedural Advice Manual (PAM);
- An Australian business is approved as a standard business sponsor for 3 years on 24 May 2013. On 5 July 2013, a UC-457 visa was approved for 2 years for their nominated employee. The standard business sponsor must therefore satisfy either Training Benchmark A or B for the periods of 24 May 2013 to 23 May 2014, 24 May 2014 to 23 May 2015 and 24 May 2015 to 23 May 2016 (that is, each year of their standard business sponsorship in which they were approved to sponsor a UC-457 visa holder) .
- An Australian business is approved as a standard business sponsor for 3 years on 24 May 2013. On 5 July 2013, a UC-457 visa was approved for their nominated employee for a period of 12 months. For the period of 24 May 2013 to 23 May 2014 and 24 May 2014 to 23 May 2015 the approved standard business sponsor must demonstrate expenditure against Training Benchmark A or B. If the approved standard business sponsor is not approved to sponsor any more UC-457 visa holders for the remainder of their standard business sponsorship they are not required to meet the training benchmarks for the final year 24 May 2015 to 23 May 2016.
If the sponsoring business is unable to demonstrate meet the training expenditure requirement for each year that it holds both SBS approval and is sponsoring one or more 457 holder, it may struggle to achieve a positive ENS visa application result.
There is yet hope as a clause in the law exists which allows a case officer to exercise discretion and can, under certain circumstances, find it “reasonable to disregard” a nominators requirement to demonstrate its expenditure on training in full in each relevant year of their most recently approved standard business sponsorship. Each case is considered on its merits and there exists no exact boundaries to what may be acceptable.
A couple of examples are given in the Procedures Advice Manual (PAM):
- If the business has in total over the relevant years spent the required amount on training but in one year fell short of its requirement. That is an aggregate figure of expenditure may be acceptable .
- The nominator can demonstrate a combination of both Training Benchmark A and B in a required year. For example; an amount equal to 1.5% of payroll was placed in an industry training fund and an amount equal to 0.5% of payroll spent on internal training to make up 2% of payroll spent on training
The DIBP states that “only when an application is submitted to the department for consideration will policy be in a position to provide a firm determination as to whether or not it is reasonable to disregard an applicant’s claims.”
If all fails, the business could opt to apply for the ENS visa under the Direct Entry stream, which has slightly different training requirement conditions to satisfy:
Training benchmark A: recent expenditure equal to at least 2% of the payroll of the business in payments allocated to an industry training fund that operates in the same industry as the businessand a commitment to maintain that level of expenditure for the term of approval as a sponsor
Training benchmark B: recent expenditure equal to at least 1% of the payroll of the business, in the provision of training to employees of the business. The expenditure must be expenditure that can count towards the benchmark
Remember, the nomination stage of a ENS application via the TRT stream can only be submitted after the 2 year requirement of the visa holder has been met. If the applicant has a long term visa (more than 2 years) and the business has doubts in meeting the training requirement required via the TRT stream (or other requirements), it would be advisable to first lodge the application for nomination approval without submitting the application for the visa applicant. This would ensure that the visa applicant does not lose their expensive PR application fees if the nomination application is refused. The visa applicant has 6 months to lodge their application after the nomination has been granted.
ENS 186 visas would have to rate as one of the most complicated visas to apply for, particularly under the TRT stream. However due to the large and growing number of 457 visa holders, this visa’s popularity is on the rise.