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AUSTRALIA: Caution When Dismissing Sponsored Employees

Sponsors should be cautious when considering dismissal of 457 visa holders. As with their Australian counterparts, 457 visa holders have access to employment remedies under the Fair Work Act. Even where a sponsored employee's employment is terminated under an employment agreement, the dismissal may still be held to be harsh, unjust, or unreasonable. Under Australian immigration law, when a sponsored employee's employment is terminated, he or she has just 28 days to regularize visa status or leave Australia.

If sponsors fail to comply with relevant workplace law, Fair Work Australia may order one of two sanctions: compensation or reinstatement. This could also affect the sponsor's continued ability to sponsor expatriates.

When determining whether a dismissal is harsh, unjust, or unreasonable, Fair Work Australia takes into account, among other factors, whether:

  • there was a valid reason for the dismissal;
  • the person was notified of the reason;
  • the person was given an opportunity to respond to any reason related to his or her capacity or conduct; and
  • the person received a warning about unsatisfactory performance before the dismissal.

In Webster v Mercury Colleges Pty. Ltd., Fair Work Australia held that termination of a sponsored teacher was unfair because of the serious financial consequences to the teacher and the social dislocation that was inevitable as a result of his summary dismissal.

In Richard Patemella v Electroboard Solutions Pty. Ltd., the tribunal held that the dismissal was harsh because the employee was not given any warning that his employment was at risk, limiting his opportunity to mitigate his job loss and, as a result, his ability to remain in Australia.

The Fair Work Act requires employees in Australia, including sponsored visa holders, to lodge an unfair dismissal claim with Fair Work Australia within 14 days of their dismissal unless the tribunal is satisfied that there are exceptional circumstances for the delay. The recent decision in Usman Ali v Industries Services Training Pty. Ltd. held that the potentially severe impact on a 457 visa holder of losing his job constituted exceptional circumstances justifying a one-day delay in lodging an unfair dismissal claim.

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