Federal Court decision upholds removal of visa restrictions for foreign workers on offshore projects

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22 September 2014 | By Michael Barnes (Associate)

The Federal Court of Australia’s decision in Maritime Union of Australia v Assistant Minister for Immigration and Border Protection [2014] FCA 993 (15 September 2014) is important for employers in the offshore oil and gas industry. 

The effect of the decision is that non-citizens working on offshore projects fall outside the operation of the Migration Act 1958 (Cth) (Migration Act) and, as a result, do not need visas to take part in such activity.

Background

As we identified in a previous Corrs In Brief, the inconsistencies created by the Migration Act’s application to the offshore resources industry have been a contentious issue for some time.  Since 1982, employers have employed non-citizens, who do not hold visas, on certain vessels in Australia’s exclusive economic zone (EEZ).  This practice continued unhindered until 2013 because the ‘migration zone’, as defined by section 5 of the Migration Act, did not extend to vessels that were not attached to the continental shelf or a resource installation.

The Federal Court’s decision in Allseas Construction SA v Minister for Immigration and Citizenship [2012] FCA 529 (Allseas) highlighted this issue, with Justice McKerracher finding that non-citizens employed on two offshore pipe-laying vessels were not within the migration zone and, therefore, were not required to hold visas.

The former Labor Government responded to the Allseas decision by introducing a Bill for the Migration Amendment (Offshore Resources Activity) Act 2013 (Cth) (Amending Act).  The Amending Act received royal assent on 29 June 2013 and commenced operation on 29 June 2014.

The Amending Act extended the migration zone to include the concept of ‘offshore resources activity’, and inserted new requirements that non-citizens involved in such activity were not allowed to work without a permanent visa or a visa prescribed for that purpose.  Importantly, those provisions were accompanied by a Ministerial power to make exceptions to, or include new matters in, the definition of ‘offshore resources activity’.

The Coalition Government elected to office in September 2013 then sought to repeal the Amending Act because ‘it will increase the regulatory burden on the resources industry and will have significant impacts for businesses and investors’.[1]

In anticipation of its repeal bill being defeated in the Senate, the Government sought to achieve the same outcome by way of a legislative instrument. On 29 May 2014, the Governor-General made the Migration Amendment (Offshore Resources Activity) Regulation 2014 (Cth) (Regulation) to overcome the Amending Act (avoiding the consequence that non-citizens in offshore activities would require a permanent visa).  However, the Senate disallowed the Regulation on 16 July 2014 (with the Palmer United Party and two minor party senators voting with Labor and the Greens in support of disallowance).

The Assistant Minister for Immigration and Border Protection, Senator Michaelia Cash, swiftly acted to reverse the disallowance by making a determination under section 9A(6) of the Migration Act (Determination).  The effect of the Determination was to except the whole of the defined content of ‘offshore resource activity’ in section 9A(5)(a) and (b) of the Migration Act.

It was this Determination that the Maritime Union of Australia and the Australian Maritime Officers’ Union sought to overturn in their Federal Court challenge.

Decision on the validity of the Determination

Justice Buchanan dismissed the applicants’ challenge to the validity of the Determination, largely in view of the fact that the impugned provisions were definitional, and did not impose a fetter or limit on the exceptions that a Minister could make.

As His Honour remarked (at para [65] of the decision):

... the full potential of the statutory scheme [in the Migration Act] remains unaffected by the Determination, even if the definitional content of s 9A has been altered.  Section 9A contemplates that its definitional content might be altered by the Minister, by contraction or expansion, at the Minister’s discretion.  The statutory scheme has not been destroyed even though the migration zone has, in one respect, been contracted.

Justice Buchanan also rejected the unions’ argument that the Determination breached section 48 of the Legislative Instruments Act 2003 (Cth), which renders ineffective any legislative instrument “that is the same in substance” as an instrument that has been disallowed within the previous six months.  His Honour found that there were a number of differences between the Regulation and the Determination, so that section 48 did not apply in this instance.

Implications for employers

The decision in MUA v Assistant Minister for Immigration and Border Protection is a positive outcome for employers in the offshore oil and gas industry.

The decision essentially nullifies the effect of the Amending Act, meaning that employers in the offshore oil and gas industry performing work in the EEZ (such as pipe-laying and drilling) will not need to take steps to ensure their employees have a permanent visa (or other visa prescribed by the regulations for the purposes of s 41(2B) of the Migration Act).

A further consequence of the decision is that the relevant employees will not be covered by the Fair Work Act 2009 (Cth), and therefore do not have to be afforded terms and conditions of employment which apply under that legislation (such as those provided for in the National Employment Standards, modern awards or enterprise agreements).

It is important for employers to note, however, that the Determination does not ‘amend’ the Migration Act (see para [63] of the decision); and could be negatived – for instance, following a change of government. More clarity in this area would be achieved if Parliament were to pass the Migration Amendment (Offshore Resources Activity) Repeal Bill 2014.


  [1] Explanatory Memorandum to the Migration Amendment (Offshore Resources Activity) Repeal Bill 2014, introduced into Parliament on 27 March 2014.


The content of this publication is for reference purposes only. It is current at the date of publication. This content does not constitute legal advice and should not be relied upon as such. Legal advice about your specific circumstances should always be obtained before taking any action based on this publication.


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