The European Union’s Trade Related Technical Assistance for the Republic of the Philippines
A Cross Country Study of Labour Market Tests and Similar Regulatory Measures: Implications for Labor Market Test Policy in the Philippines
EUROPEAN UNION TRADE RELATED TECHNICAL DEPARTMENT OF LABOR ASSISTANCE PROJECT 2 AND EMPLOYMENT
THIS PUBLICATION IS FUNDED BY THE EUROPEAN UNION
A Cross Country Study of Labour Market Tests and Similar Regulatory Measures: Implications for Labour Market Test Policy in the Philippines
The European Union
“The European Union is made up of 27 states who have decided to gradually link together their know-how, resources and destinies. Together, during a period of enlargement of 50 years, they have built a zone of stability, democracy and sustainable development whilst maintaining cultural diversity, tolerance and individual freedoms.
The European Union is committed to sharing its achievements and its values with countries and peoples beyond its borders”.
Disclaimer: This publication has been produced with the assistance from the European Union-Trade Related Technical Assistance Project 2. The contents of this publication are the sole responsibility of Charles W. Stahl (Short term expert on labor market test) and can in no way be taken to reflect the views of the European Union.
9 8 7 6 5 4 3 2 1 0 Manila, Philippines April 2011 Electronic copy of this publication is also downloadable at www.eu-trtaphils.org
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The Philippines and the EU have successfully concluded negotiations for a comprehensive Partnership and Cooperation Agreement, reflecting the wide scope of our relationship and setting the framework of our cooperation, which also covers trade and migration issues.
In this wider context I note with appreciation the completion of the study of Dr. Stahl on Labour Market Tests undertaken for the Department of Labour and Employment through the EU-Philippines Trade Related Technical Assistance Programme 2 (2008-2012).
I welcome the DOLE interest in learning from international best practice in its pursuit of choosing its own strategy and approach on Labour Market Tests, in line with its plan of economic integration and best fit for the interest of the country.
Ambassador Guy Ledoux
Head of Delegation
Delegation of the European Union to the Philippines
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MESSAGE
Every country has its own set of domestic regulations, and the Philippines is not an exception. In recognition of our right as a nation to preserve our country‟s sovereignty, we have set our own national policies in pursuit of national welfare and interest.
The Labor Market Test provided under Article 40 of the Labor Code of the Philippines is a classic example of a regulatory measure that protects the interest of the country. We acknowledge, however, that such measure poses limitations on labor market access and the freer movement in trade of services. Although ASEAN members have agreed to address this issue within a set timeframe, the same cannot be realized without further deliberation on matters concerning LMT liberalization.
It is, indeed, necessary to elevate the discussion on this matter to higher plane as this will subject countries to greater pressures if they are not well prepared in fulfilling their commitments. In the case of the Philippines, even if it has already agreed to include certain industries in the services sector under the General Agreement on Trade in Services (GATS), said commitments are still subject to limitations on market access and national treatment, most especially for the professional services. Therefore, there is a need to revisit and evaluate the relevance of the LMT as a requirement in allowing the entry of foreign nationals who intend to find gainful employment in the country.
As we brace the foundations of our national policy on LMT vis-à-vis with the objectives of the trade agreement, we have sought the assistance of the European Union‟s regional cooperation through their Trade Related Technical Assistance Project 2 under the Rapid Response Facility. This partnership has provided select officials and staff of the Department of Labor and Employment (DOLE) with enlightenment, through innovative training opportunity, on the technical issues and challenges associated with the movement of natural persons.
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The pages of this mission report is a collective matrix of research findings of an expert, including analysis of experiences, practices and useful insights that are vital and will aid us in crafting policies that are more responsive and realistic, thus, meeting the demands of a healthy labor market.
It is noteworthy to acknowledge the assistance of the European Union (EU), in coordination with the National Economic and Development Authority (NEDA), without which, this project would not be possible. The DOLE need not face more labor market pressures and challenges since it has already led us to a more serious evaluation and possible adoption of reforms that will help us become more globally competitive and prepared.
Let us work together for a more conducive and well-performing labor environment.
ROSALINDA DIMAPILIS-BALDOZ Secretary
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FOREWORD
The contents of this mission report are not just information, but a compilation of valuable literatures and practices on labor mobility that paved the way to the sighting of innovative solution for one of the major issues confronting the labor market today. More than just a report, it is a product of an objective evaluation and study of international practices and policies on labor market tests to be able to come up with our own for the government‟s consideration.
Advantages of these ventures, particularly for developing countries like the Philippines, facilitates borderless flow of information and knowledge through a “global village” concept, ensuring economy measures against wastages of resources like financial, material, and most importantly the human resources. Beyond philanthropic philosophy, the optimum use of the resources is implemented in the notion of “complement through partnership”, thus, welcoming the economic benefits of cooperation minus duplication of costs.
We would like to thank the European Communities (EC), through the National Economic and Development Authority (NEDA) as the coordinating agency, in their commitment to assist the government on its thrust for deeper integration into international trade system. Our expression of great appreciation for Dr. Charles Stahl‟s devotion in this undertaking, for all the effort, and for sharing his valuable time and expertise into bringing this endeavor to fruition.
Likewise, our thanks go to the Trade Related Technical Assistance Project 2 team members and partners who are instrumental to the project‟s success. Your contributions are felt and highly recognized.
Cooperation with foreign partners can lead to an agreeable environment resulting from each other‟s consciousness and understanding of one‟s economic, social, political, and environmental, issues confronting them. Economic prosperity and international harmony are attainable when members of international community lend a hand and initiate cooperation.
DANILO P. CRUZ Undersecretary
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BUREAU OF LOCAL EMPLOYMENT Technical Secretariat
Director Maria Criselda R. Sy
Jose S. Sandoval Geraldine B. Labayani Kenneth D. Liza Estelita B. Enriquez Noel R. Campita Florencia F. Abordo Juliana P. Jiloca
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TABLE OF CONTENTS
List of Tables ...... iv Acronyms...... iv Executive Summary...... v
Background ...... 1
1.1 Background to the Study ...... 1 1.2 Summary of Scope of Work & Expected Outputs ...... 1
2. Skilled Labour Mobility and ENTs/LMTs ...... 1
2.1 Background ...... 1 2.2 Economic Needs Tests and Labour Market Tests: A Review of the Literature ...... 3
3. Labour Market Tests and Similar Regulations Pertaining to Foreign Worker Immigration: A Cross Country Comparison and Analysis ...... 9
3.1 The Philippines Labour Market Test ...... 9
3.2 Australia ...... 10
3.2.1 Employer Nomination Scheme (ENS) ...... 10 3.2.2 The Regional Sponsored Migration Scheme ...... 10 3.2.3 Temporary Business (Long Stay) - Subclass 457 ...... 11 3.2.4 Labour Agreements ...... 13
3.3 New Zealand ...... 14
3.3.1 Skilled Migrant Category ...... 14 3.3.2 Talent (Accredited Employer) Work to Residence Category ...... 14 3.3.3 Talent (Long Term Skill Shortage) Work to Residence Category ...... 15 3.3.4 Essential Skills Work Category (Temporary) ...... 16
3.4 Canada ...... 19
3.4.1 Permanent Skilled Migration ...... 19 3.4.2 Temporary Foreign Worker Program ...... 20
3.5 Ireland ...... 22
3.5.1 Green Card Permits ...... 23 3.5.2 Work Permits ...... 24 3.5.3 Intra-company Transfer Scheme ...... 25 3.4.4 Work Permits for Spouses and Dependants of Employment Permit Holders .25
3.6 The UK ...... 26
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3.6.1 Tier 1 ...... 27 53.6.2 Tier 2 ...... 27 3.6.3 Tier 5 ...... 29
3.7 Austria ...... 30
3.8 Belgium ...... 31
3.9 Denmark ...... 32
3.10 France ...... 34
3.11 Germany ...... 35
3.12 Netherlands ...... 36
3.13 Sweden ...... 37
3.14 Malaysia ...... 38
3.14.1 Types of Expatriate Posts...... 38 3.14.2 Professional Worker Visit Pass ...... 41 3.14.3 Temporary Employment Visit Pass for Low Skilled Foreign Worker ...... 41
3.15 Singapore ...... 42
3.15.1 Employment Pass P1 ...... 43 3.15.2 Employment Pass P2 ...... 43 3.15.3 Employment Pass Q1 ...... 44 3.15.4 Employment Pass S ...... 44 3.15.5 Personalized Employment Pass (PEP) ...... 44 3.15.6 Employment Pass Eligibility Certificate (EPEC) ...... 45 3.16.7 Work permits in Singapore (WP) ...... 45
4. Analytical Framework ...... 46
5. Study Findings ...... 58
5.1 Specific Country Lessons ...... 58 5.2 General Lessons ...... 59
6. Policy Considerations for the Regulation of Foreign Worker inflow into the Philippines ...... 60
Sources ...... 63
Appendix 1: Comparative immigration and employment regulations in relation to skilled human resources in 8 AMS, 2010 ...... 65
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List of Tables
Table 1: Analytical Framework – Summary of Visa/Work Permit Conditions by Country ...... 47
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Acronyms
AFAS ASEAN Framework Agreement of Services
AMS ASEAN Member States
DEEWR Department of Education, Employment & Workplace Relations
DOLE Department of Labor & Employment
EEA European Economic Area
ENS Employer nomination scheme
ENSOL Employer nomination scheme occupation list
ENT Economic needs test
EURES European job mobility portal
GATS General Agreement on Trade in Services
ILO International Labor Office
ISCO International Standard Classification of Occupations
ISSL Intermediate skill shortage list
LMO Labour Market Opinion
LMT Labour market test
LTSSL Long term skill shortage list
MNP Movement of natural persons
MSL Minimum salary level
OECD Organisation for Economic Cooperation and Development
SOL Skill occupation list
UNCTAD United Nations Trade and Development Organisation
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EXECUTIVE SUMMARY
Background
In order to gain insights into how labour market tests or similar measures are used to control access of skilled workers to domestic labour markets, and determine how those findings might inform labour market test policy in the RP, the study was commissioned by the Trade Related Technical Assistance Project 2 at the request of the Department of Labor and Employment.
The aim of project is to identify a cross-section of countries and their labour market tests, or similar regulations for controlling the inflow of foreign workers, for benchmarking and/or possible adoption by the RP. The countries reviewed for the study were Australia, New Zealand, Canada, Ireland, UK and other EU countries, as well as the AMS of Malaysia and Singapore.
Skilled Labour Mobility and ENTs/LMTs
Section 2 presents a brief overview of the literature concerning the global and regional movement of skilled labour. The phenomenal growth in trade, investment and economic growth within the region has exposed structural shortages in the supplies of skilled human resources. This has driven growth in the movement of skilled workers across international boundaries within the region. Within the ASEAN region, under AFAS the AMS have made considerable progress toward extending the width and depth of their commitments toward the liberalisation of trade in services beyond those scheduled under GATS. However, one of the areas of least progress is under Mode 4, and in no small measure because of the application of LMTs and other regulatory measures aimed a controlling the inflow of foreign workers.
Also discussed in Section 2 are ENTs and LMTs, and a review is undertaken of the sparse literature that is more specifically focused on ENTs and LMTs. ENTs are scheduled with respect to nearly all GATS modes of supply of services, i.e. consumption abroad (mode 2), commercial presence (mode 3) and presence of natural persons (mode 4). In the context of mode 4 movement of natural persons, the use of the term ENT is largely interchangeable with the term LMT.
The lack of a precise definition by GATS of ENTs seems to have contributed to a lack of clear criteria with regard to their application, a lack of transparency on their implementation or operation, and scheduling inconsistencies. These factors serve to undermine the three fundamental objectives that service agreements should provide to their members, viz. transparency, predictability and market access opportunities.
In the context of mode 4, three of studies see a possible solution to the problems posed by ENTs/LMTs in the form of moving to a positive list of sectors and/or occupations within those sectors to which ENTs/LMTs would not apply, and which, of course, would be mutually agreed upon by member states.
Labour Market Tests: Cross Country Comparison and Analysis
Section 3 commences with a review of the Philippines labour market test to allow its comparison with what is being done elsewhere. The Philippine labour market test is captured in its GATS/AFAS horizontal limitations on the movement of natural persons, applying to all
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sectors. It reads: Non-resident aliens may be admitted to the Philippines for the supply of a service after a determination of the non-availability of a person in the Philippines who is competent, able and willing, at the time of application, to perform the services for which the alien is desired.
This is followed by a review across 14 countries of their regulations pertaining to the inflow of foreign labour.
Analytical Framework
Table 1 is the focus of Section 4. It provides an analytical framework for a comparative analysis of visa/work permit conditions across a selected group of the countries reviewed. The framework allows for comparison of visa types; duration; employer sponsorship requirements; employer binding; skill/qualifications requirements; work entitlements; LMT or similar regulatory controls; whether the visa/work permit can lead to permanent residency; and any additional relevant information.
Study Findings
Section 5 reports the findings of the study in the form of specific country findings and general findings.
The specific country findings derive from the subset of countries that was included in the Analytical Framework.
For Australia, the finding most important to the study‟s focus was that in 2001 the requirement that vacant positions must be advertised under the temporary skilled migration program was removed. Instead, it was decided that the integrity of the temporary migration program could be better served by putting more resources into the compilation and maintenance of a skill shortages list; ensuring that foreign workers are paid “market” rates of pay; and no longer requiring foreign workers to be bound to the employer who initially sponsored them.
Compared to the other developed countries reviewed, Canada has the most regulated regime for the employment of foreign workers on a temporary basis. Each application requires a „Labour Market Opinion‟ from Human Resources and Skills Development Canada. This LMO evaluates the efforts made by the prospective employer to recruit locals or train existing employees to fill the vacant position; determines whether the working conditions and pay offered is comparable to that which a Canadian would expect to receive; and, among other considerations, whether the job is filling a labour shortage occupation.
New Zealand has largely moved away from the classic LMT that requires employers to make a genuine attempt to fill a vacancy from the resident labour force. New Zealand relies instead on a detailed “Long Term Skill Shortage List” and minimum annual salaries. Recruitment of lower skilled workers and those not on their “Intermediate Skill Shortage List” does require a LMT.
Ireland is the only country of those reviewed that uses a Negative List approach. That is, work permits will not be granted for occupations on the Ineligible List. Moreover, a LMT is required for all work permit applications.
In the UK, companies wishing to recruit foreign workers on a temporary basis must undergo a LMT unless the job is on the shortage occupation list (SOL). Employers are required to
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use an Occupation Codes of Practice list to identify the Standard Occupational Code for the job they wish to fill. Each SOC is linked to another page that provides information on the occupations skill level, salary, whether it is on the skill shortage list, and how to meet the resident LMT if the occupation is not on the SOL.
Denmark‟s Positive List Work Permit Scheme also revolves around a list of occupations that are in short supply. Foreign workers from outside the European Economic Area/Switzerland are eligible for work and residence if they have a job offer in one of these occupations from a Danish employer. The foreign worker must have a written job offer that states his/her expected salary and employment conditions. Salary and employment conditions must meet Danish standards.
As of December 2008, LMTs are no longer required in Sweden nor is the occupation required to be on the skill shortage list. However, employers must send any job offer to a foreign worker to the relevant trade union for approval of salary and working conditions. This represents a major liberalisation of their labour market test policy, but union scrutiny does provide some degree of protection for foreign workers.
There were several general lessons learned from the cross country survey and analysis.
There is considerable cross-country variation in approaches to the management of the inflow of foreign workers. Importantly, methods of regulation of labour market entry have become more complex and go beyond the LMT procedure of requiring an employer to genuinely search for a worker from the resident labour market. Increasingly, countries are relying on two measures to regulate labour inflow, viz. compilation and ongoing maintenance of a detailed list of skill shortages by occupation (Positive List), and ensuring that employers pay the market rate of pay as opposed a minimum salary level (MSL), as well as providing other work entitlements comparable to a resident worker in the same occupation.
The use of a Positive List approach that is being increasingly employed as a regulatory measure is seen as a method of ensuring that the recruitment of foreign workers will make a positive contribution to the economy by relieving labour shortages in specific occupations. Another important advantage of the use of a Positive List is that it sends labour market signals to educational and training institutions, and their clients, that specific occupations are in short supply and hence easy to find employment in if the right credentials are obtained.
A final general lesson learned is that a country‟s international obligations under GATS/AFAS with regard to not using LMTs or other methods of regulating the inflow of skilled labour only apply to certain categories of service suppliers. A country‟s labour market tests and similar measures apply to a broader range of sectors and occupations than the GAT/AFAS service sectors.
Policy Considerations and Recommendations
The introduction of LMTs and other methods for regulating the inflow of foreign workers is not inconsistent with the Philippines commitments under AFAS/GATS.
Since the free flow of skilled labour is unlikely to be achieved under AFAS by 2015, the objective in the interim should be to clarify the use of ENTs such as LMTs and similar measures by advancing clear and detailed criteria for their application. With respect to mode 4 MNP as service providers, the AMS should attempt to construct a common list of natural persons supplying services within the region. Agreement on such a common list would result
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in clear criteria for LMTs and similar measures that apply to specific categories of natural persons affected.
The need for AFAS to move to a positive list of occupations open to free mobility underscores the need for the Philippines to develop a positive list, both to regulate the flow of foreign workers and send labour market signals to education and training institutions and employers. The development of this list can be based on current efforts already underway in this area by DOLE. DOLE‟s current methodology of identifying skill shortages can be improved by drawing on some of methodologies used by some of the countries surveyed.
DOLE may want to consider other measures revealed in the cross-country survey in developing its foreign worker entry requirements. For example, they may want to consider that foreign workers receive comparable wage and working conditions. They may also want to consider the extent to which foreign workers should be bound to their sponsoring employer.
In terms of developing a LMT and similar regulatory measures for controlling foreign worker inflow, in addition to developing a skill shortage (positive) list, DOLE should consider ensuring that wages and working conditions are at least equivalent to what a domestic worker would receive in the same occupation in the same sector. This ensures that employers will make an effort to recruit or perhaps train locals to fill vacant positions rather than resorting to foreign labour recruitment because it is easier. When developing its foreign worker entry requirements, DOLE may also want to consider the extent to which foreign workers should be bound to their sponsoring employer. This provides the foreign workers with a least minimal scope for extricating themselves from an exploitive situation, or one in which actual work entitlements were less than promised.
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1. Background
1.1 Background to the Study
One of the principal objectives of GATS/AFAS is to achieve a greater degree of mobility of skilled labour amongst member countries. Indeed, the facilitated entry of skilled labour engaged in the trade of goods, services and investment is a key element of the AEC Blueprint. However, there considerable variation in the degree of commitment amongst GATS/AFAS members to the liberalization measures necessary to achieve a greater degree of skilled labour mobility.
As noted by Iredale et al (2010), key limitations to liberalization of skilled labour flows include, amongst others, definitions regarding categories of labour; criteria for the issuance of visas and work permits; the use of quotas; limited periods of stay; requirements to transfer technology by training local counterparts; and economic needs tests, including labour market tests.
In order to gain insights into how labour market tests or similar measures are used to control access of skilled workers to domestic labour markets, and determine how those findings might inform labour market test policy in the RP, this study was commissioned by the Trade Related Technical Assistance Project 2 at the request of the Department of Labor and Employment.
1.2 Summary of Scope of Work & Expected Outputs
The principal task of the project is to identify a cross-section of countries and their labour market test policies, or similar management policies, for benchmarking and/or possible adoption by the RP. The countries decided on at the briefing meeting were Australia, New Zealand, Canada, Ireland, UK and other EU countries, as well as the AMS of Malaysia and Singapore.
The project should also review the findings of the USAID study on Economic Needs Tests in Services Schedules of the ASEAN Member States, and others insofar as they are available. These findings and those from the country studies above will be used to conduct an analysis of the Philippine labour market test vis-a-vis the labour market test and similar measures of other countries.
2. Skilled Labour Mobility and ENTs/LMTs
2.1 Background
Economies today are being transformed via globalisation, economic integration and a shift to knowledge-intensive activities. An important aspect of this global knowledge-based economy is that it is underpinned by an international skilled and professional labour force that crosses national borders, increasingly on a temporary basis (Gera et al 2004). Business is becoming
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ever more international in its outlook and activities and the exports of products, technology transfers and R&D investment across operations worldwide require the movements of key skilled personnel (Price Waterhouse Coopers 2006).
The reality is that global labour markets now exist in many occupations and a person‟s skills are their greatest tradable asset. This is due in no small measure by some countries seeing skilled movement as a means of filling skilled labour shortages to ensure that economic growth is not held back in the short term or to meet social needs.1 For others, it has come to be used as a means to improve the stock of „brains‟ generally or to train locals. Thus, the Philippines has become a major port of call for countries looking for well-trained nursing staff, while Malaysian nurses and doctors find lucrative employment opportunities in Singapore and the Gulf States.
There are two broad categories of skilled movement and their prevalence depends on the policy framework of each country: permanent settlement policies and policies designed to enable short-term movement. The former are country-controlled and skilled human resources are eager to move to fill a particular niche or to simply participate in, and benefit from, the country‟s economic development. The latter partly rely on the internal labour markets of multinational corporations, recruitment agencies or government policies. Skilled labour partly follows international investment flows, and „reflect the internationalisation of firms in the ongoing process of globalisation of the world economy‟ (OECD SOPEMI 1995). Garnier (1996) identifies another three short-term categories as well: individual service providers and specialists on specific assignments, short term or business visitors, and diplomatic and international personnel. Garnier also discusses the challenge governments confront in determining how much access they will grant international service providers to their domestic market when this involves the movement of physical persons. Even in relation to temporary movement, the arguments for easier access come up against those that argue against liberalisation.
The AMS have imposed a variety of restrictions on foreign skilled workers such as limits on duration of stay, labour market and/or economic needs tests, skills transfer and pre- employment conditions, qualifications recognition requirements, or have tied foreign skilled labour to commercial presence (Wongboonsin 2008). In general, countries provide mechanisms to select or attract the people that their industries and employers require. At the same time, they have introduced mechanisms to exclude those skilled people who are trained in occupations in which they have an oversupply or a perceived oversupply. Often the oversupply may not be real but fears about a possible oversupply may be generated among professionals in the host country who are anxious about protecting their incomes and status.
The restrictions imposed by the AMS on foreign skilled labour are imbedded in horizontal and sector specific commitments have ensured that service providers moving under Mode 4 are principally skilled and professional workers who are largely intra-corporate transferees.2 The movement of low-skilled service workers is virtually non-existent while the movement of skilled service providers other than intra-corporate transferees is circumscribed by political,
1 Stahl (2001) examines the impacts of structural changes on the labour markets of APEC member economies and explores the implications of these changes for international labour mobility within the region. 2 This was the intention of GATS since WTO negotiators at the time had reservations over broader coverage.
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regulatory and enforcement concerns that, to reiterate, are manifest in impediments that include stringent visa requirements, quotas, the application of economic needs/labour market tests, limits on recognition of professional qualifications and licensing requirements (Jansen & Piermartini 2004; Mamdouh 2004). In other words, the movement of natural persons is constrained by limitations on market access and national treatment.
In general, progress on Mode 4 labour mobility is constrained by the fact that governments are reluctant to make permanent commitments when employment demand varies with economic cycles. In addition, governments prefer bilateral labour agreements untied to trade policy as they provide greater flexibility to adjust programs to changing demographic trends and labour market needs. MFN based liberalisation of labour mobility would undermine this flexibility (World Bank 2004).
2.2 Economic Needs Tests and Labour Market Tests: A Review of the Literature
There is a surprisingly limited about of literature on ENTs and LMTs. What has been written largely emanates from those organisations concerned with trade in services. Below, we review several of the seminal studies and a study of ENTs in AFAS scheduled commitments funded by USAID. These studies discuss the application of ENTs across a range of sectors and modes of supply.
ENTs are scheduled with respect to nearly all GATS modes of supply of services, i.e. consumption abroad (mode 2), commercial presence (mode 3) and presence of natural persons (mode 4). However, our principal interest is in ENTs as they apply to mode 4. As we will see, in the context of mode 4 movement of natural persons, the use of the term ENT is largely interchangeable with the term LMT.
At the outset, it merits noting that use of LMTs and similar measures in the context of domestic labour market regulation is broader than their application in the context of GATS/AFAS scheduled commitments. This is because for domestic purposes, LMTs can apply to a much broader range of occupations that those pertinent to the provision of services. That is to say, a country‟s international obligations with regard to not using LMTs or other methods of regulating the inflow of skilled labour only apply to certain categories of service suppliers.
The lack of a precise definition of ENTs and LMTs in the GATS/AFAS context is well understood. It does cause some confusion. This definitional problem would appear to apply as well to LMTs used for domestic labour market entry regulation. Some countries interpret a LMT to be nothing more that than an employer being able to show that they have made a genuine attempt to recruit a local for an advertised job before being allowed to fill the position with a foreign worker. In some countries that have developed a positive list of skill shortages, if an occupation is on that list then it is claimed that a LMT is not necessary. But this begs the question is not a positive list a statement of an “economic need” thus making the list an ENT. It appears that other countries recognise this and have a broader definition of an LMT that includes such checks as advertising, salary levels, occupation, skills recognition, and economic impact, for example.
For our purposes, we will skirt around these definitional problems and talk in terms of LMTs and other measures for regulating foreign worker entry, where an LMT is defined in the
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classic sense of an employer being required undertake various measures to make a genuine attempt to fill a position locally.
Let us now turn to a brief overview of some of the more important discussions of ENTs and LMTs, with particular focus on their findings regarding ENTs/LMTs applying to mode 4 movement of natural persons as service providers.
UNCTAD (1999), Lists of economic needs tests in the GATS schedules of specific commitments, UNCTAD/ITCD/TSB/.
This study provides an overview of the main concerns with the use of ENTs and reviews their extent in horizontal commitments and sector specific commitments. Relevant to this study, it was found that a number of professional and business services, in general, had a relatively high incidence of the application of ENTs. The view is expressed in the study that it is unlikely that ENTs are going to be abandoned anytime soon, particularly in countries‟ horizontal commitments. However, the authors suggest that the possible elimination of ENTs might be pursued on the basis of service sectors and/or categories of persons. What they have in mind here is countries might be able to agree on certain services sectors where the movement of the natural persons would be excluded from the general application of the ENTs. The idea is that horizontal commitments on mode 4 could be supplemented by the list of service sectors where the ENTs would not be applied to the movement of natural persons supplying services in that particular sector.
The authors recognise that a sector approach might be too broad in some cases since the commitment would apply to all natural persons of all professions supplying services in that sector. To address this possible concern, they posit that an occupation based list might be compiled with ENTs not applying to those occupations on the list. This is getting close to the Positive List approach used by a number of countries in their regulation of foreign worker inflows.
They argue that this ENT exemption list could be based on the ILOs International Standard Classification of Occupations (ISCO), which has established an internationally adopted classification of nine major groups: (1) managers; (2) professionals; (3) technicians and associate professionals; (4) clerks; (5) service and sales workers; (6) skilled agricultural, forest and fishery workers; (7) craft and related trades workers; (8) plant and machine operators, and assemblers; (9) elementary occupations. These groups are further subdivided into sub-major, minor and unit group titles.
Their position is that this classification could be used for establishing a list of relevant occupations for the international trade in services as UN CPC has been used to establish a list of service sectors. The ENT exemption list could include professions (or “trades”) as they are defined in the ISCO, implying that ENTs would not be applicable to the market access of the natural persons in these categories in any of the service sectors.
If that is still too difficult for member countries, an alternative could be to make the ENT exemption list both occupation and sector specific, indicating that the ENTs would not apply to specific occupations in specific sectors.
As can be discerned from the above review of this study, the authors have advanced some interesting suggestions for overcoming ENT barriers to mode 4 mobility. A motivating factor for their suggestions for change is the reality that not much progress will be made on the elimination of ENTs if is left up to individual countries to liberalise their commitments.
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Morris, Rosemary (2001), “The Scheduling of Economic Needs Tests in the GATS: An Overview”, Trade in Services: Negotiating Issues and Approaches, OECD, Paris, pp. 27-47.
This study was part of a broader effort by the OECD to look into various issues relating to progressing the liberalisation of trade in services. Focusing on mode 4 issues, the author begins by defining mode 4 services suppliers as natural persons seeking non-permanent entry to the host country, rather than permanent access to its employment market. Member countries are free to determine the length of the temporary stay for which they make commitments.
As is mentioned by the few studies that there are on ENTs, there is a lack of precise definition of the term. However, Morris says that an ENT can generally be characterised as a provision in national regulations, legislation or administrative guidelines that imposes a test that has the effect of restricting entry of service suppliers on the basis of an assessment of “needs” in the domestic market.
The author points out that ENTs are applied in various ways to respond to a range of policy objectives. In the context of mode 4, it is often for the protection of the local work force in certain sectors, the encouragement of foreign workers in strategically important areas or the avoidance of potential social and demographic imbalances.
The criteria indicated for mode 4 ENTs appear to be based on the assessment of an economic need that corresponds to the availability of local suppliers in a given sector at a given time. As such, they seem to be applied on a case-by-case basis and may be highly unpredictable.
As a possible solution to the barriers imposed by ENTs, Morris appears to be on the same page as the study reviewed directly above. She also posits that an agreed occupations list, such as the ISCO, could bring some precision to the application of mode 4 ENTs. This approach would have the advantage of enhancing transparency and permitting easy comparison among members and better assessment of the impact of ENTs, but only if members were to agree on the same classification of occupations.
Morris reiterates what we learned above, viz. that liberalisation negotiations could be based on sectors or categories of persons to which ENTs would not apply. Countries would agree on certain sectors and/or types of personnel that would be excluded from any horizontal listing of an ENT. Alternatively, the reduction of ENTs could be approached on an occupational basis, using the ISCO. Members would need to agree on the list of occupations most relevant to services provision. In this case, an exemption from the ENT list would include the occupations to which ENTs would not apply for persons supplying services in the sectors for which commitments are made. A third approach would be a combination of the two with an exemptions list that would include exemptions for specific occupations in selected sectors.
Clearly, Morris‟ proposals mirror those advanced by UNCTAD several years earlier.
WTO (2005), “Communication from Canada: Mode 4 Commitments and Economic Needs Tests”, Council for Trade in Services, TN/S/W/46, S/CSC/W/47.
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The stated purpose of this communication was to promote discussion of ENTs with respect to mode 4 and to encourage Members exchange information on ENTs or LMTs applicable to their mode 4 commitments. However, their principal concern appears to be the problems arising from a lack of clear criteria with regard to the application of ENTs/LMTs, and a lack of transparency on the implementation or operation of specific ENTs. They are concerned that while ENTs/LMTs listed often relate to the availability of domestic workers or other factors, there is often no reference to specific domestic legislation or administrative requirements and procedures. In their view, this lack of transparency has led to concerns that certain unspecified ENTs or LMTs are being carried out in an arbitrary or discretionary manner. Their concern is shared by Hong Kong (China) which was communicated in a WTO paper to which access is restricted but whose finding were briefly reviewed by USAID (2009) – a study that will be reviewed below.
With a slight shift of direction, the authors also distilled the various elements that appear with some commonality across Member countries in relation to their LMTs. They found that despite differences in specific terminology and factors, the LMTs of various Members are composed of several common elements for which they provide a list.
Skills. Does the foreign worker being sponsored to come into a country meet minimum skill thresholds there? Salary. Would the foreign worker's salary be at or above a certain level stipulated for the prospective job? Economic Impact. What effect would the foreign worker have on the domestic economy? Job Classification. Is the prospective job recognized in the national occupation classification system? Labour dispute. Would the foreign worker adversely affect an ongoing labour dispute? Advertisement & Recruitment. Before offering the job to a foreign worker, has the sponsoring employer advertised the job adequately or considered domestic candidates sufficiently?
Returning to issue of transparency and predictability of ENTs/LMts in mode 4 commitments, the authors posit that things can be improved if Members could be more explicit about: a) the criteria and operation on which ENTs/LMTs are based; b) the relationship between their mode 4 commitments and their general immigration laws, regulations and administrative procedures; and c) the requirements and procedures for work permits or visas for work.
Nathan Associates (2009), Economic Needs Tests in Services Schedules of ASEAN Member States: Analysis and Recommendations, USAID.
This study commences with the usual definitional issues pertaining to ENTs in GATS. The authors advance a practical definition: ENTs can be used to restrict the movement of services or service providers. Following the WTO line, they point out that ENTs arise only in the context of market access and not national treatment because they are quantitative in nature and “do not relate to the quality of the service supplied or the ability of the supplier to supply the service (i.e. technical standards or qualifications of the supplier).”3 They go on to remind us that ENTs should not be confused with regulatory measures such as qualifications requirements, technical standards and licensing requirements that are disciplined under GATS Article VI:4. While this may be the official GATS position, it does not appear to conform with the reality of the construction of LMTs at the country level, which often include
3 Quoted from Guidelines for the scheduling of specific commitments under the GATS (S/L/92).
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requirements that foreign workers must meet various skill requirements or that professionals be locally licensed.
The study reviews those studies, some of which are noted above, that are concerned about the lack of clarity with which ENTs are described, and the scheduling inconsistencies and lack of transparency as to their operations.
The study continues with an enumeration of ENTs in AFAS horizontal and sector schedules, followed by a breakdown of ENTs by sector and mode of supply. They find that the sectors most affected by ENTs are Communications services and Healthcare services, while two ENTs are present in five sectors, namely Business services, Distribution services, Education services, Tourism and travel, and Transport services.
In relation to ENTs by modes of supply, the review shows that most of the 22 ENTs in the AFAS schedules of specific commitments are concentrated in mode 3. Only 4 ENTs are associated with mode 4 in the schedules of specific commitments, while only one is associated with mode 1. In the case of horizontal commitments, all of the ENT entries are associated with mode 4.
The authors remind the reader that the three fundamental objectives that service agreements should provide to their members, viz. transparency, predictability and market access opportunities, are undermined by recourse to ENTs that are not clearly defined, with no criteria as to how they are to be applied, without criteria for assessment, and with the possibility of different interpretations for each market access request. Such ENTs reduce the value of services commitments in the affected sectors and modes of supply.
The authors argue that with respect to mode 4, the presence of ENTs, or LMTs or labour certification tests, can constitute a major trade barrier to services trade, and especially in relation to MNP as service suppliers in the ASEAN region. The authors posit that there are several steps that would improve the AFAS schedules with regard to the application of ENTs:
Agree on a definition of an ENT Specify criteria for all ENT entries included in a revision of AFAS schedules Discuss compilation of a common list of natural persons supplying services Specify procedures to ensure transparency Provide for legal recourse
As can be seen from the above dot points, the authors have also entertained the notion of a list of natural persons supplying services. More specifically, they argue that the mode 4 movement of service providers might be promoted by specifying the number of people that may be permitted to enter the national labour market of a Member state under each type of supplier category per annum for temporary work. This is consistent with their view that all of the ENTs, as far as possible, should be converted into numerical quotas that can be at first expanded (liberalised), before ultimately being eliminated altogether.
Summary
The studies reviewed above review the extent of the use of ENTs in the horizontal and sector specific commitments of GATS members, and in one case AFAS members. It was found that the use of ENTs is widespread and affects all modes of supply, but particularly modes 3 and 4. The lack of a precise definition by GATS of ENTs seems to have contributed
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to a lack of clear criteria with regard to their application, a lack of transparency on their implementation or operation, and scheduling inconsistencies. These factors serve to undermine the three fundamental objectives that service agreements should provide to their members, viz. transparency, predictability and market access opportunities.
In the context of mode 4, MNP as service providers, three of studies see a possible solution to the problems posed by ENTs/LMTs in the form of moving to a positive list of sectors and/or occupations within those sectors to which ENTs/LMTs would not apply, and which, of course, would be mutually agreed upon by member states. It was agreed in the studies that using a sector/sub-sector approach could be problematic in that any one sector/sub-sector might contain a large number of occupations. On the other hand, specifying an occupation would imply that a wide range of sectors/sub-sectors might be affected. If this actually were to pose a problem in the context of negotiations, it was suggested in the studies that the list could be both sector and occupation based.
From the point of view of blending member country commitments with domestic labour market tests, it would seem that the sensible way to proceed would be on an occupational basis whereby each member country puts forward a list of those occupations it finds to be in short supply within its service sectors. Out of these lists would emerge a common list of occupations for which all member countries could agreed to remove any LMTs. In the spirit of moving the liberalisation process forward, occupations that are not on every member‟s list, but on most, might also be included in the common list.
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3. Labour Market Tests and Similar Regulations Pertaining to Foreign Worker Immigration: A Cross Country Comparison and Analysis
3.1 The Philippines Labour Market Test
Before moving on to a cross-country comparison and analysis of labour market test and similar regulatory measure pertaining to foreign worker inflow, let us see what the Philippines has done in terms of a labour market test.
The Philippine labour market test is captured in its horizontal limitations on the movement of natural persons, applying to all sectors:
Entry and Temporary Stay of Natural Persons Supplying Services
Non-resident aliens may be admitted to the Philippines for the supply of a service after a determination of the non-availability of a person in the Philippines who is competent, able and willing, at the time of application, to perform the services for which the alien is desired.
This derives from Article 40 of the Labor Code of the Philippines. According to Tabladillo (2009), the primary legal basis of the Philippine labour market test is the Philippine Constitution, wherein it is provided that “the State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods, and adopt measures that help make them competitive.” This preference for Filipino labor is further substantiated by the provision promoting sustained development of national talents and limiting the practice of all professions in the Philippines to Filipino citizens, save in cases prescribed by law. Tablaillo (2009) goes on to point out that this rule on practice of profession, however, is not absolute as the PRC Modernization Act of 2000 provides for exceptions by allowing foreign professionals to work in the Philippines pursuant to foreign reciprocity provisions.
In terms of the operationalisation of the LMT, there are several steps involved (DOLE 1997, pp. 8-9).
1. The requesting employer is required to advertise the vacancy being sought by the foreign national for a period of two consecutive weeks at least in three newspapers of general circulation; 2. The Regional Offices of DOLE will check its files of active applicants to see if there is someone who matches the foreign national‟s qualifications, and is able and willing to perform the services for which the foreign national is being sought; 3. The Regional Offices of DOLE are also required to check with various professional associations and groups to see if one of their members has the same qualifications as the foreign national and who is willing to undertake the job being offered to the foreign national; 4. If no Filipino can be found, the foreign national‟s application for a permit is evaluated and if everything is in order an AEP is issued which is valid for one year. If the position/occupation is covered by the understudy program then the foreign national is required to train two Filipino understudies.
Let us now compare the Philippines labour market entry regulations with those of other countries across the world.
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3.2 AUSTRALIA
Australia encourages the immigration of skilled workers to work and live permanently in Australia. The General Skilled Migration program is designed to encourage those with appropriate skills, education and training, but who are not sponsored by an employer, to apply for permanent residence and work. Applicants must be over 18 and under 45 years of age and speak good English. They must also have recent skilled work experience or a recently earned and eligible Australian qualification as well as qualifications for an occupation listed on Australia's Skilled Occupation List (SOL).4
3.2.1 Employer Nomination Scheme (ENS)
The Employer Nomination Scheme (ENS) allows Australian employers to sponsor workers from overseas, or who are currently in Australia, to fill skilled full-time vacancies in their business. Persons who qualify for entry under ENS have a right of permanent residence. It is viewed as being less flexible that the General Skilled Migration program insofar as independent migrants under the GSM program can pick and choose their jobs.
The objectives of the ENS are to:
allow Australian employers to satisfy genuine skills shortages by recruiting skilled workers; enhance Australia‟s ability to compete globally; maintain training opportunities for existing employees; ensure the integrity of the skilled migration program; and generally ensure there is a net benefit to Australia.
The ENS has 2 stages:
Stage 1 – Employer lodges an employer nomination Stage 2 – Nominee (visa applicant) lodges a visa application. ENS employer nominations and visa applications are processed within Centres of Excellence located in Perth, Melbourne and Sydney. There is no labour market test under the ENS. However, the occupations that the sponsoring employer wishes to fill must be a highly skilled occupation that is on the Employer Nomination Scheme Occupation List (ENSOL). See http://www.immi.gov.au/skilled/_pdf/ensol.pdf
3.2.2 The Regional Sponsored Migration Scheme
The RSMS is much the same as the ENS except that it is aimed at regional areas. The scheme allows Australian employers in regional and low population growth areas of Australia to sponsor workers for permanent residence in order to fill skilled vacancies in their business. The objectives of the RSMS are to encourage migration to areas outside the major metropolitan centres and enhance Australia‟s ability to compete globally by satisfying genuine skill shortages in regional and low population growth areas of Australia. Generally, employers applying under this scheme would be apply to fill positions with persons of lesser skills compared with employers in urban areas applying under the ENS. An eligible position must meet the following requirements.
is located in a regional area cannot be filled by an Australian employee
4 This is actually a skilled occupation shortage list.
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is a genuine full-time vacancy is available for at least 2 consecutive years requires a person with qualifications equivalent to at least Australian diploma level (unless exceptional circumstances apply).
3.2.3 Temporary Business (Long Stay) - Subclass 457
This is the most commonly used program for employers to sponsor overseas workers to work in Australia on a temporary basis. The visa is designed for employers who would like to employ overseas workers to fill nominated skilled positions in Australia. The duration of the visa can vary between one day and four years. Successful applicants can bring any eligible secondary applicants with them to Australia. These secondary applicants are eligible to work and study.
The occupations for which the employer wants to sponsor a migrant must appear on the Employer Nomination Scheme Occupation List (ENSOL).
Employers will have to register as a sponsor to recruit overseas workers for the occupations they nominate, and assist their prospective employees in the visa application process. Employers are also required to cooperate with department's monitoring requirements.
From 14 September 2009, all sponsors of Subclass 457 visa holders (457 sponsors) are obliged to ensure equivalent terms and conditions of employment which means that they pay market salary rates to their overseas workers.5
The introduction of market salary rates is part of a wider package of reforms to the Subclass 457 visa program designed to ensure that it continues to provide industry with needed skills, while not undermining local training and employment opportunities or exploiting overseas workers. This package of reforms addresses many of the integrity issues associated with the Subclass 457 visa program highlighted by the business-led External Reference Group, the Subclass 457 Integrity Review.6
The Integrity Review also addressed the ongoing concern that the tying of 457 visa holders to a specific employer increases the risk of exploitation. In response it was ruled that from 14 September 2009, 457 visa holders who wish to change employer or position (within the validity of their current visa) will not be required to apply for a new Subclass 457 visa.
Employers with a business that operates in Australia must meet benchmarks relating to the training of Australian citizens and permanent residents. The development of training benchmarks is currently underway to clarify the existing requirement on employers to demonstrate a commitment to training local labour.
An employer with a business that has no formal operating base or representation in Australia may apply to bring employees to Australia to either establish a business operation in Australia or fulfil obligations for a contract or other business activity in Australia.
5 From 1 July 2010, the Temporary Skilled Migration Income Threshold (TSMIT) was indexed by 5 per cent, in line with the Australia-wide increase in average weekly earnings. This increases the TSMIT from $45 220 to $47 480. http://www.immi.gov.au/skilled/temporary-skilled-migration-threshold.htm
6 See: http://www.immi.gov.au/skilled/457-integrity-review.htm
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From 27 June 2009, there has been a requirement for sponsors under subclass 457 visa program to attest that they have a strong record of, or a demonstrated commitment to employing local labour and non-discriminatory employment practices.
From 14 September 2009, all primary Subclass 457 visa applicants who are sponsored by an employer must demonstrate that they have English language proficiency that is equivalent to an International English Language Testing System (IELTS) test score of at least 5 in each of the four test components of speaking, reading, writing and listening. Prior to 14 September 2009, applicants required an average test score of at least 5 across the four test components.
Where the nominated occupation requires a higher level of English (equivalent to IELTS test score of more than 5 in each of the four test components) because it forms part of that occupation‟s registration, licensing or membership requirement, the visa applicant must have at least the standard of English language proficiency required for the grant of that registration, licence or membership.
Skills assessment
Australia requires visa applicants to have the skills required for their nominated positions. Where necessary for safety or to prevent fraud, Australia will undertake more extensive skills assessments to confirm skills claimed by applicants. Australia requires formal skills assessments of some trade occupations. This arrangement commenced on 1 July 2009 and will be extended as capacities are increased.
Employer Obligations
Sponsors must cooperate with inspectors who are appointed under the Migration Act 1958 (the „Act‟) and are exercising powers under that Act. The role of the inspector is to determine whether a sponsorship obligation is being, or has been, complied with, and whether other circumstances exist or have existed in which administrative action may be taken against the sponsor.
The sponsor must ensure that the terms and conditions of employment provided to a primary sponsored person are no less favourable than the terms and conditions the person provides, or would provide, to an Australian citizen or Australian permanent resident to perform work in an equivalent position in the person's workplace at the same location.
The sponsor must pay reasonable and necessary travel costs to enable the sponsored persons to leave Australia if the costs have been requested in writing by the sponsored persons, or the department and the costs have not already been paid by the sponsor in accordance with this obligation.
Sponsors must keep records of their compliance with the other sponsorship obligations. All records must be kept in a reproducible format and in a manner that is capable of being verified by an independent person.
If requested to do so, sponsors must provide certain records or information to the department in the manner and timeframe requested by the department.
Sponsors must provide details of certain events to the department should they occur. This information must be provided by registered post or electronic mail, to a specified address
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and within a specified period of time. Examples of events include, but are not limited to: a change of the sponsor‟s address or contact details; the cessation, or expected cessation, of a primary sponsored person‟s employment with the sponsor and a change to the work duties carried out by the primary sponsored person.
Labour Market Testing
From it inception, one of the aims of the 457 program was to ensure that Australian workers were not disadvantaged as a result of labour importation. To assist in achieving this objective, LMT for non-key activities was one of the methods of ensuring that employers has made an effort to hire local labour before being allowed to import skills from abroad. There were two principal exercises that employers had to undertake before being granted approval to import skilled labour:
advertise the vacant positions properly and in the right places over a sufficient period of time (four to six weeks) ensure that no suitably qualified Australians were overlooked in the selection process or had recently had their employment in these positions terminated.
However, the system was unwieldy and difficult to operate effectively. It was removed in 2001 when Minimum Salary Levels were introduced. The system has been tightened up further in 2010 with the adoption of a number of the recommendation of the 457 integrity review (Deegan et al. 2009). In particular, employers now need to pay “market rates” as opposed to minimum rates. Also, more effort is being put into to ensuring that the occupational shortage list is both accurate and up to date.7
3.2.4 Labour Agreements
Labour Agreements are formal arrangements to recruit a number of overseas skilled workers. Both temporary and permanent visas can be granted under the agreement. Agreements are generally effective for two to three years. If workers are issued with a temporary visa then it is valid for up to four years. Of course, a permanent visa is just that. Under both visas, applicants can bring to Australia any dependants who then have the right to work or study.
Situations where an employer may consider choosing a Labour Agreement as opposed to accessing a 457 visa include: occupations that are not on the list of approved occupations for the 457 visa, for the permanent Employer Nomination Scheme (ENS) or for the Regional Sponsored Migration Scheme, and yet a genuine skills shortage exists or occupations are not covered under ANZSCO where a business recruits labour for the supply to an unrelated business and/or the hiring of labour to unrelated businesses (on-hire companies) meat companies - migration regulations were amended on 15 October 2007 to exclude this group from the 457 program.
The reality is that Labour Agreements have been used to recruit lower-skilled workers and trades people to fill positions for which it is difficult to attract Australians, particularly positions in regional areas.
7 For a discussion of the methodology used for identifying skill shortages that is used to underpin the various skill shortage lists see: http://www.deewr.gov.au/Employment/LMI/SkillShortages/Pages/MethodologyPaper.aspx
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Labour agreements are the only segment of the Subclass 457 visa program that requires prospective employers to demonstrate evidence of shortages in required occupations.
3.3 NEW ZEALAND
There are a number of options for those seeking work in New Zealand.
Skilled migrant category Talent (Accredited Employer) Work to Residence Category Talent (Long Term Skill Shortage) Work to Residence Category Essential Skills Work Category (Temporary)
There are other minor categories that are not particularly relevant to the issue we wish to address.
3.3.1 Skilled Migrant Category
The application and selection process for the Skilled Migrant Category works on a points system. Points are earned on the basis of a migrant‟s qualifications, work experience, age, close family in New Zealand, and job (or job offer) in New Zealand. For example, an offer of skilled employment in New Zealand is worth 50 points. Six years relevant work experience earns 20 points, a recognised tertiary or trade qualification 50 points. Bonus points can be earned if the applicant‟s offer of employment, work experience or qualification is in an area or industry which has been identified, by the Department of Labour, as having a skills shortage or growth potential.
A score of 100 points or more is required to begin the four-stage Skilled Migrant Category application process. Those with 140 points or more will be selected automatically from the pool of applicants.
People who are accepted under the Skilled Migrant Category will usually be granted residence and can stay and work in New Zealand permanently. Highly qualified migrants do not necessarily need a job offer to score the requisite points.
3.3.2 Talent (Accredited Employer) Work to Residence Category
The stated purpose of the Talent (Accredited Employers) Work Policy is to facilitate New Zealand employers‟ access to global skills and knowledge by making it easier to recruit talented workers from overseas where such skills are not available in New Zealand. The aim is to recruit employees that have high skills levels, particularly in knowledge-based industries and other areas that it is believed would contribute to New Zealand‟s economy. The program is used by employers who regularly need to employ skilled workers from overseas for permanent positions or positions that are for at least two years.
Prospective employees applying under this program must meet any occupational registration requirements in their industry, are aged 55 years or under, will be paid a salary of at least NZ$55,000, and have a job offer of at least 30 hours a week for two years or more.8
8 The form that employers must complete to accompany a prospective employee‟s work permit/visa application can be viewed at: http://glossary.immigration.govt.nz/NR/rdonlyres/BC2C4F49-C3CE- 4940-969C-B5E257AB25CF/0/1113.pdf 14
For employers to become an Accredited Employer they need to apply to the Department of Labour and show that their business is in a sound financial position, has a high standard of human resources policies and processes, is committed to employing and training New Zealanders, and that they comply with immigration and employment law. Employers are accredited for twelve months at a time. Once they are accredited and have found a foreign worker, they need to make a job offer that complies with the conditions noted above.
Prospective migrants, with an appropriate job offer, can apply under this category if the position/occupation applied for is on the Long Term Skill Shortage List (LTSSL) and the candidate has the work experience and qualifications listed specifically for that position. A work permit will be granted for the length of the employment contract, up to a maximum of three years.
Although the permit is a temporary option, people who come to New Zealand on this type of visa can apply for residency through the Work to Residence programme after working in New Zealand for two years. Once in New Zealand they cannot work for another employer or in another location without applying for a variation to their permit conditions, in essence going through another application process. Once they have been granted residence, they may work for any employer. A person who has skills listed on the Immediate Skill Shortage List (ISSL) is able to apply for a temporary work visa or permit if they have a relevant job offer and the work experience and qualifications listed for that position.
If the occupation is not on one of the skill shortage lists or is not considered skilled according to immigration policy, the employer making the job offer needs to be able to demonstrate that he cannot find suitably skilled or qualified New Zealand workers or New Zealand workers who could be trained to do the work. The Department of Labour will undertake a labour market test to confirm this.
An employer has the option of going through the labour market test before seeking a candidate if they successfully apply for an Approval in Principle.9 This Approval means that the employer is pre-approved to hire people in the positions specified within the time specified, typically six to twelve months. An employer can apply for Approval in Principle to hire many people and this is valid until the number of positions specified in the application are filled, or until the expiry date.
Below, we will discuss further the LTSSL, the ISSL, and the labour market test.
3.3.3 Talent (Long Term Skill Shortage) Work to Residence Category
A Talent (LTSSL) work visa or permit requires the candidate to have a job offer in an occupation on the Long Term Skill Shortage List for which they are suitably skilled and qualified. The job must be for at least two years, full time and paying a salary of at least NZ$45,000 (based on a 40-hour week). For those occupations where professional registration is a requirement to practice, the applicant must meet those requirements.
This program is used by employers who do not regularly hire skilled foreign workers. Unlike Accredited Employers, employers using this program cannot make a job offer to a person unless they are explicitly on the LTSSL.
9 See: http://glossary.immigration.govt.nz/NR/rdonlyres/84F9BE8F-7C2C-4FFA-9F81- 86E796377549/0/1112.pdf
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3.3.4 Essential Skills Work Category (Temporary)
Employers who are unable to find suitable workers in New Zealand and have roles that do not meet Skilled Migrant or Talent work permit criteria may be able to assist an employee to get an Essential Skills work visa/permit. An employer must be able to demonstrate that they cannot find suitably skilled or qualified New Zealand workers, or New Zealand workers who could be readily trained to do the work. The Department of Labour will undertake a labour market test to confirm this. The LMT involves seeking advice from industry representatives and the appropriate New Zealand government agencies to determine current skill shortages. Also relevant is evidence of the employer‟s “genuine” attempt to find New Zealand workers, such as advertising and the use of a recruiting company.
An employer meets the labour market test by proving that there are no suitable employees in New Zealand and that they have made genuine attempts to attract and recruit New Zealand workers for the positions at the current market salary. This could include evidence of advertisements placed, responses received, industry statistics on vacancies, training in place to address shortages. The Department may also consult with the Department of Work and Income or industry organisations to ensure that the labour market test is met.
Employers can undertake the labour market test before they seek a candidate if they apply for Approval in Principle. This means the employer is pre-approved to hire people in the positions specified within the time specified, typically six to twelve months. Employers using this category can apply for Approval in Principle to hire a number of people and this is valid until they have filled the number of positions specified in their application, or until the expiry date.
Essential Skills in Demand Lists
The Long Term Skill Shortage List (LTSSL) identifies those occupations where there is an absolute (sustained and ongoing) shortage of skilled workers both globally and throughout New Zealand. People who gain employment in one of these areas may be granted a work permit under the LTSSL Work to Residence Policy. Candidates for residence under the Skilled Migrant Category who have an offer of employment, work experience or qualifications in an area of absolute skill shortage identified on the LTSSL will gain bonus points towards their application for residence. The LTSSL is used in relation to both temporary work policy and residence policy.
The Immediate Skill Shortage List (ISSL) is for occupations that have an immediate shortage of skilled workers in New Zealand. It is designed to facilitate the approval of temporary work visa and permit applications. If an applicant produces an offer of employment in an occupation that is included on the current ISSL, visa and immigration officers will accept that no suitably qualified New Zealand citizens or residents are available. The ISSL is only used in relation to temporary work policy. For migrants coming to work in New Zealand based on meeting the ISSL requirements, there is no direct link to residence.
The Essential Skills in Demand Lists are not designed to cater for lower skilled labour shortages, seasonal labour shortages or recruitment and retention problems arising because the industry cannot, or does not, meet the terms and conditions necessary to recruit sufficient numbers of suitably qualified workers from within the New Zealand workforce.
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Employers wanting to recruit from overseas can do so regardless of whether the occupation is on the lists, provided they meet Essential Skills Work Policy requirements. One of the key requirements is to show evidence that genuine attempts have been made to recruit New Zealanders to the role before trying to recruit a temporary migrant.
The lists are reviewed twice a year by the Department to ensure they meet the needs of the changing labour market. During the review, submissions are sought from industry groups about both the nature and extent of skill shortages in their area. Submissions can ask for an occupation to be added or removed from the ISSL or LTSSL, or ask for changes to be made to the qualifications and experience levels. To keep the lists responsive to the changing labour market, the Department also periodically reviews the status of occupations already on the lists.
After the submission phase, a data analysis and consultation phase brings together analysis of labour market, employment and immigration data with information from employers, collective employee and industry bodies, as well as relevant government agencies such as the Ministry of Social Development (MSD) and the New Zealand Qualifications Authority (NZQA). (More details on the data analysis are provided below).
Where there is demonstrated evidence that there is an immediate skill shortage, the Department will generally recommend that the occupation be added to the ISSL. Where there is a demonstrated absolute (sustained and ongoing) long term skill shortage both globally and throughout New Zealand, the Department will generally recommend that the occupation is added to the LTSSL. There may be cases where the Department does not consider that the lists are the most appropriate response to the shortage, and may recommend an alternative solution.
As part of each review, labour market information is analysed to gain an understanding of the occupation which has been submitted for inclusion on the lists or selected by the Department to be reviewed. Labour market data information sources include:
Historical Department of Labour Employment Estimates (DEE)
Previous five years DEE Previous one year DEE Current DEE Five year annual average growth DEE current growth
Employment Growth Forecasts
Future five years Future ten years
Retirement Demands
Previous five years Future five years
Changes in online job vacancies
Annual change Quarterly change
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Number of ads
Other information sources include:
Immigration data (e.g. number of work permits) from the Department's administrative records Information on the number of people available to work in occupations which is provided by the Ministry of Social Development
The LTSSL can be viewed at: http://www.immigration.govt.nz/NR/rdonlyres/063ECB35-F5D5-44D8-8325- 7041A727A9D5/0/1093.pdf
The ISSL can be viewed at: http://www.immigration.govt.nz/NR/rdonlyres/0A835F49-D204-4283-B609- C5AC60E9974B/0/ISSL.pdf
Labour Market Test
Visa and immigration officers will conduct a labour market test to determine whether there are any New Zealand citizens or residents available to do the work offered to a non-New Zealand citizen or resident worker. When conducting a labour market test a visa or immigration officer must be satisfied that the employer has made a genuine attempt to attract and recruit suitable workers in New Zealand and that suitable workers are not available in New Zealand.
Matters a visa or immigration officer may take into account when determining whether or not a labour market test is satisfied include but are not limited to:
the employer's case for an approval in principle, or in support of an individual worker's application evidence of a genuine attempt on the part of the employer to recruit New Zealand workers by way of advertising and/or use of other appropriate avenues of recruitment likely to attract New Zealand workers advice from the service delivery arm of the Ministry of Social Development, Work and Income New Zealand of the unavailability of New Zealand citizens or residents suitably qualified by training and experience to do the work offered labour market advice from the particular industry.
In any particular case the visa or immigration officer may decide to: determine the labour market test is satisfied by one or more of the above, or determine that the labour market test is not satisfied by one or more of the above, or make other inquiries.
Approval cannot be given for a non-New Zealand citizen or resident worker to do the work: if the employer has advertised the work in such a way that no New Zealand citizen or resident will or is likely to apply e.g. making foreign language skills a requirement when it is not necessary for the performance of the work; or
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if there are suitable New Zealand workers in the market for work of a certain type (the employer would then be expected to meet the New Zealand market in relation to the terms and conditions of employment); or if an employer is only able to prove that there are no New Zealand workers willing to do the work on the terms and conditions proposed by the employer, but does not show that those terms and conditions meet the New Zealand market for the work in question.
3.4 CANADA
Like other developed countries, Canada is experiencing skilled labour shortages due to (i) a shift in the structure of production toward those industries requiring more highly skilled workers, and (ii) a slowing of the labour force growth due to low fertility rates and an ageing population. As a consequence, Canada encourages both permanent and temporary migration of skilled workers.
3.4.1 Permanent Skilled Migration
Skilled workers are selected as permanent residents based on their education, work experience, knowledge of English and/or French, and other criteria that have been shown to help them become economically established in Canada. Skilled worker wishing to apply for permanent migration must:
pass a language proficiency test have a valid offer of arranged employment, OR within the last 10 years have one year of continuous full-time paid work experience in at least one of the 29 eligible skilled occupations (Skill Type 0: managerial occupations; Skill Type A: professional occupations; or Skill Type B: technical occupations and skilled trades).
Prospective migrants who clear the above hurdle will then be assessed according to:
educational attainment abilities in English and/or French, Canada‟s two official languages work experience age whether they have arranged employment in Canada, and their adaptability.
As can be seen from the above, having an offer of permanent employment from a Canadian employer in one of the 29 designated (shortage) occupations improves an applicant‟s chance of having their skilled worker application approved. An applicant also has to meet all required Canadian licensing or regulatory standards associated with the job
As of June 2010, a cap has been placed on the number of independent skilled migrants applying for admission under one of the 29 eligible occupations. That cap is 20,000 annually, and no more than 1,000 per occupation. However, these limits do not apply to applications with an offer of arranged employment.
3.4.2 Temporary Foreign Worker Program
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Of more direct interest in relation to our concerns is Canada‟s Temporary Foreign Worker program. Every year, over 150,000 foreign workers enter Canada to work temporarily.
To employ a foreign worker an employer must first submit a Foreign Worker Application in order to obtain a Labour Market Opinion (LMO) from the Service Canada Centre in the employer‟s geographic area. This is Canada‟s labour market test. Before granting a LMO, Human Resources and Skills Development Canada (HRSDC) considers whether:
the job offer is genuine the wages and working conditions being offered to the foreign worker(s) are comparable to those currently offered to Canadians working in the occupation the employer has made reasonable efforts to hire or train Canadians for the job the foreign worker is filling a labour shortage occupation the employment of the foreign worker will directly create new job opportunities or help Canadians retain their jobs the foreign worker will transfer new knowledge and skills to Canadians the hiring of the foreign worker will not affect a labour dispute or the employment of any Canadian worker involved in such a dispute.
TFWP officers assess both straightforward, measurable criteria such as wages and working conditions and harder-to-measure benefits such as skills transfer and job retention for Canadians. For example, if an employer can demonstrate that a foreign worker with a particular skill set is integral to the business and that hiring him or her will result in the transfer of skills to the Canadian staff or create jobs, then choosing that individual over a qualified Canadian or permanent resident may be acceptable.10
Employers wishing to hire foreign workers in an occupation that requires prolonged and/or extensive recruitment can apply for approval in principle before recruiting foreign workers. Some employers revert to this process if a large number of workers are being recruited and/or the recruitment process is complex. This is similar to the New Zealand situation where an employer can identify the positions he will need to fill within the year and then request a labour market test be carried out prior to filling the positions.
Assuming an employer gets a LMO, they will need to send a copy to the foreign worker who will need to submit it along with his/her application for a work permit. Work permits are issued by Citizenship and Immigration Canada (CIC). There is no guarantee that a positive LMO will result in the issuing of a work permit as CIC has its own criteria that have to be met before issuing a work permit.
Minimum Advertising Requirements
The LMO process requires that the employer has attempted to fill the position with a Canadian citizen or permanent resident. This involves minimum advertising requirements. All occupations based on the National Occupational Classification (NOC) system, skills levels 0, A, B, C and D are subject to the same minimum advertisement requirements. Employers must provide proof of advertisement and the results of their efforts to recruit Canadians or
10 For further details on the LMO see: WTO (2005), Communication from Canada: Mode 4 Commitments and Economic Needs Tests, http://www.international.gc.ca/trade-agreements- accords-commerciaux/assets/pdfs/SCSCW47.pdf 20
permanent residents. This proof includes copies of advertisements, number of Canadian applicants and why they were rejected.
For NOC 0, A and B occupations, an employer will have been deemed to have conducted the minimum advertising efforts required if:
the recruitment activities are conducted in a manner consistent with the practice within the occupation (e.g., advertise on recognized Internet job sites, in journals, newsletters or national newspapers or by consulting unions or professional associations); or advertise on the national Job Bank (or the equivalent in Newfoundland and Labrador, Saskatchewan or the Northwest Territories) for a minimum of fourteen (14) calendar days, during the three (3) months prior to applying for a LMO
For NOC C and D occupations (including seasonal agricultural workers), an employer will have been deemed to have conducted the minimum advertising efforts required if:
they advertise on the national Job Bank (or the equivalent in Newfoundland and Labrador, Saskatchewan, Quebec or the Northwest Territories) for a minimum of 14 calendar days during the three (3) months prior to applying for an LMO; and conduct recruitment activities consistent with the practice in the occupation. Advertisement must be for a minimum of 14 days, choosing one or more of the following options: o advertise in weekly or periodic newspapers, journals, newsletters, national/regional newspapers, ethnic newspapers/newsletters or free local newspapers; o advertise in the community, e.g., posting ads for two to three weeks in local stores, community resource centres, churches, or local regional employment centres; o advertise on Internet sites e.g., posting during 14 calendar days/two weeks on recognized Internet job sites (union, community resource centres or ethnic sites).
The advertisement must include:
the company operating name; job duties (for each position, if advertising for more than one vacancy); wage range (i.e. an accurate range of wages being offered to Canadians and permanent residents). The wage range must always include the prevailing wage for the position – see “wage rate”; the location of work (local area, city, or town); and the nature of the position (i.e. project based, or permanent position).
Wage Rate
The following applies to all NOC B, C and D advertising conducted in support of applications for a LMO:
The wage range identified in the advertisement must represent an accurate range of wages being offered to Canadians and permanent residents, working in the same occupation and geographical area. The wage range must always include the prevailing wage for the position.
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The prevailing wage is identified as the average hourly wage for the requested occupation in the specified geographical area. For a unionized position, the wage rate must be consistent with the wage rate established under the collective bargaining agreement. All benefits provided to Canadian workers or permanent residents must be extended to temporary foreign workers.
In order to address unique circumstances, HRSDC/Service Canada maintains the discretion to set the prevailing wage rate that an employer must offer, whether or not the position is covered by a collective agreement.
Exempted Persons
People in the following categories need a work permit but do not need a LMO from HRSDC. Workers covered under international agreements Professionals, traders, investors and business people coming to Canada to work under certain international agreements Entrepreneurs and intra-company transferees Some types of entrepreneurs, workers transferring within a company, and other types of workers who will provide significant benefit to Canadians or permanent residents by working in Canada Participants in exchange programs People whose employment in Canada will provide similar employment to Canadians abroad, such as participants in youth exchange programs, teacher exchange programs or other reciprocal programs Co-op students Foreign students who are studying in Canada and who need to do co-op work placements as part of their program of study Spouses Spouses and common-law partners of certain foreign workers and of certain foreign students who are currently studying or working under the Post-Graduation Work Permit Program Academics and students Certain academics and students Religious workers People doing charitable or religious work Others Certain people who need to support themselves while they are in Canada for other reasons such as the refugee determination process.
3.5 IRELAND
In general, non-EEA nationals must have a permit to work in Ireland. EEA and Swiss nationals do not need an employment permit, except for Bulgarian and Romanian nationals who must have an employment permit for a continuous period of 12 months. After that they do not need an employment permit to work in Ireland. Since 1 February 2007 there are a number of changes in relation to the application and granting of employment permits. Currently, there are 4 types of employment permits: Green Card permits, work permits, spousal/dependant work permits and intra-company transfer permits.
3.5.1 Green Card Permits
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The Green Card permit is an employment permit for most occupations with annual salaries of over €60,000 or certain occupations where there are skill shortages. In April 2009 this list of occupations was revised. The Green Card permit replaces the working visa and work authorisation which have been discontinued.
The main features of the Green Card scheme are:
The Green Card permit is available for most occupations with annual salaries of €60,000 or more It is also available for a restricted list of occupations with annual salaries of €30,000 to €59,999 in the following sectors of employment: information and communications technology, healthcare, industry, financial services and research There is no requirement for a labour market test The Green Card permit is issued for 2 years and a renewal permit is not required as it is intended to lead to the granting of long-term residence Holders of a Green Card permit can have their spouses and families join them immediately Either the employer or the employee can apply for the employment permit, based on an offer of employment The permit is granted to the employee and includes a statement of the employee's rights and entitlements A copy of the permit is sent to the employer The employer is prohibited from deducting recruitment expenses from the employee's pay or retaining the employee's personal documents
Employees working on employment permits are protected by employment legislation in exactly the same way as other employees.
Green Card applicants must have a job offer from a company or employer who is registered with the Revenue Commissioners, trading in Ireland and registered with the Companies Registration Office. The applicant must be directly employed and paid by their employer in Ireland. Job offers from recruitment agencies and other intermediaries are not acceptable under the scheme. The job offer must be for 2 years or more.
Labour Market Test
A labour market test is not required, that is the employer does not need to advertise the job with FÁS/EURES or in newspapers. However, an employment permit will not be granted to companies if the granting of the permit would mean that more than 50% of the employees would be non-EEA nationals.
Eligible occupations
There are 2 categories of eligible occupations:
(1) For jobs with annual salaries of €60,000 or more the Green Card permit is available for all occupations.
(2) For jobs with annual salaries of €30,000 – €59,999 Green Card applications may be made for the following occupations.
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Economic Sector Occupation Job Titles Computer systems managers, Computer analysts, Information Technology ICT professional Computer programmers, Computer testers Registered nurses, Medical practitioners, Specialist Health Healthcare nurses, Pharmacists/Pharmacologists, Dental professionals practitioners Dieticians, Occupational therapists, Orthoptists, Medical scientists, ECG technicians, Neurophysiological measurement technicians, Health associate Healthcare Cardiac catheterisation technicians, Vascular professionals technicians, Respiratory technicians, GI function technicians, Audiologists, Biochemists, Medical radiographers Electrical, Software, Chemical, Design and Professional development, Planning and quality control, Network, Industry engineers and Validation, Product development, Process and technologists Equality Researchers and Researchers, Chemists, Natural scientists, Biological Education/Healthcare/Industry natural scientists scientists, Physicists, Material scientists Business and Chartered and certified accountants, Actuaries, financial Management consultants, Business analysts, Risk Financial professionals and professionals, Compliance specialists, Risk associate specialists, Tax experts, Legal experts professionals
3.5.2 Work Permits
Main Features:
Work permits are available for occupations with an annual salary of €30,000 or more. Work permits for jobs with an annual salary below €30,000 will only be considered in exceptional cases Work permits will not be considered for occupations listed as ineligible for work permits (see below) The work permit is granted for 2 years initially, and then for a further 3 years. After 5 years a permit may no longer be needed A labour market needs test is required with all work permit applications Either the employer or employee can apply for the employment permit, based on an offer of employment It will be granted to the employee and will include a statement of the employee's rights and entitlements The employer is prohibited from deducting recruitment expenses from the employee's pay or retaining the employee's personal documents
First time permit holders are expected to stay with their new employer for 12 months. Thereafter, they may move to a new employer provided that a new application for a work permit has been made for a similar job or to another eligible employment sector. A labour market test is not necessary.
Occupations Ineligible for Work Permits
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Clerical and administrative staff General operatives and labourers Operator and production staff Retail sales staff, sales representatives and supervisory or specialist sales staff Drivers - from 1 June 2009 this includes HGV drivers Nursery/crèche workers, child minders/nannies Hotel, tourism and catering staff except chefs The following craft workers and apprentice/trainee craft workers: bookbinders, bricklayers, cabinet makers, carpenters/joiners, carton makers, fitters - construction plant, electricians, instrumentation craftspeople, fitters, tilers - floor/wall, mechanics - heavy vehicles, instrumentation craftspersons, metal fabricators, mechanics - motor, originators, painters and decorators, plumbers, printers, engineers - refrigeration, sheet metal workers, tool makers, vehicle body repairers, machinists - wood, plasterers and welders Domestic workers including carers in the home and childminders (for work permit applications received on or after 1 June 2009) Work riders -horseracing - (for work permit applications received on or after 1 June 2009)
Labour Market Test
A vacancy, in respect of which an application for a work permit is being made, must be advertised with the FÁS/EURES employment network for at least 8 weeks and additionally in local and national newspapers for six days. This is to ensure that the vacancy has been advertised in the local and wider EEA labour market and that in the first instance a national of the EEA or Norway, Iceland, Liechtenstein and Switzerland, or in the second instance a national of Bulgaria or Romania, cannot be found to fill the vacancy. Evidence that this has been done must be included with the application. Applications should not be submitted unless the Labour Market Needs Test has been completed.
3.5.3 Intra-company Transfer Scheme
Since 1 February 2007 a new intra-company transfer scheme has been introduced. This scheme allows senior management, key personnel and trainees who are foreign nationals working in an overseas branch of a multi-national company to transfer to the Irish branch. The employee must be earning at least €40,000 a year and have been working for the company for a minimum of 12 months. An intra-company transfer permit may be granted for a maximum of 2 years initially and may be extended to a maximum of 5 years.
Normally the number of intra-company transferees should not exceed 5% of the total Irish workforce in a firm, although in exceptional circumstances such as small firms or start-up companies a higher percentage may be permitted on a strictly temporary basis with an absolute limit of 50% of non-EEA staff.
3.4.4 Work Permits for Spouses and Dependants of Employment Permit Holders
There is a scheme of work permits for spouses and dependants of certain employment permit holders. A spouse or dependant must be legally resident and have a work permit in order to work in Ireland. To be eligible for a spousal/dependant work permit the spouse must be married to the employment permit holder and the dependant must be a family member aged under 18 – see „Who can apply‟ in the Rules section below.
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For Green Card or Work Permit holders who applied for a work permit for the first time on or after 1 June 2009, their spouse and dependants must apply for work permits in their own right. Applying for a work permit in their own right means:
A labour market test will be required when applying for a work permit for a spouse or dependant. This means the vacancy must be advertised with FÁS/EURES for 8 weeks and in national media for 6 days Fees are payable when applying for or renewing a work permit for a spouse or dependant Applications for work permits for spouses or dependants will not be considered for occupations listed as ineligible for work permits
These changes do not apply to the spouses and dependants of those who have already been granted a work permit or who apply for a work permit before 1 June 2009.
Sources: http://www.citizensinformation.ie/categories/employment/migrant-workers/employment- permits/green_card_permits http://www.deti.ie/labour/workpermits/whoneedsapermit.htm
3.6 The UK
The UK has a points-based system (PBS) for managing migration for those wishing to enter the UK for work or study. The PBS only covers migrants from outside the European Economic Area (EEA) and Switzerland. With the exception of persons from Bulgaria and Romania, EEA or Swiss national are free to reside and work in the UK.
Under the PBS, migrants must pass a points assessment before they can get permission to enter or remain in the UK. Each of the system's five tiers has different points requirements. The number of points the migrant needs and the way the points are awarded will depend on the tier level. Points are awarded to reflect the migrant's ability, experience and age and, when appropriate, the level of need in the migrant's chosen industry.
The points based system consists of five tiers. These are:
Tier 1 - for highly skilled workers, such as scientists and entrepreneurs Tier 2 - for skilled workers with a job offer, such as teachers and nurses Tier 3 - for low-skilled workers filling specific temporary labour shortages, such as construction workers for a particular project Tier 4 - for students Tier 5 - for temporary workers, such as musicians coming to play in a concert, and participants in the youth mobility scheme.
Tiers 1, 2, 4 and 5 are now open. Tier 3 is currently suspended.
3.6.1 Tier 1
Tier 1 has several levels sub-tiers, namely General, Investor, Entreprenuer and Post Study Work (foreign graduates of UK universities).
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The Tier 1 (General) category allows highly skilled people to come to the UK to look for work or self-employment opportunities. Tier 1 persons do not need a job offer if they are applying as a highly skilled worker. Applicants are awarded points based on their qualifications, previous earnings, UK experience, age, English language skills and maintenance (funds).
Qualified persons already in the UK can apply for or extend their Tier 1 (General) status or switch from another points based tier to Tier 1 if they qualify.
On 19 July 2010, the UK government introduced a limit on the number of initial applications from outside the UK that can be granted under Tier 1 (General) until 31 March 2011. The limit is 600 Tier 1 (General) visas issued every calendar month. If the limit is not reached in any given calendar month, the unused capacity will be carried forward to the following month.
The Tier 1 (Entrepreneur) category is for those investing in the United Kingdom by setting up or taking over, and being actively involved in the running of, one or more businesses in the United Kingdom.
The Tier 1 (Investor) category is designed to allow high net worth individuals make a substantial financial investment in the UK. A job offer is not required to apply under the investor category. Points awarded are based on the ability to invest at least £1,000,000 in the UK.
The Tier 1 (Post-study work) category aims to retain the most able international graduates who have studied in the UK. The category provides a bridge to highly skilled or skilled work. It is expected that former students will switch into another tier of the points-based system as soon as practical.
3.6.2 Tier 2
Tier 2 offers an entry route into the UK for skilled workers who are citizens of countries outside of the EEA. In all cases people applying for entry under this scheme must be in possession of a job offer and fulfil other requirements as detailed for the different categories. The initial work permit is good for three years with the possibility of extension. After a continuous period of residency in the UK for five years, the applicant will be eligible to apply for settlement as a permanent resident.
Migrants in any tier except Tier 1 must be sponsored before they can apply to enter the UK for employment. The sponsoring employer must apply for a sponsor license, which requires meeting specific criteria. The licensed employer can then issue a certificate of sponsorship after certain conditions have been met.
Tier 2 has four categories:
General: for people coming to the UK with a job offer to fill a gap that cannot be filled by a settled worker which may or may not be on the Shortage Occupation List (see Appendix 1). Intra-Company Transfers: for employees of multi-national companies who are being transferred by an overseas employer to a skilled job in a UK-based branch of the organisation Sports People: for elite sportspeople and coaches whose employment will make a significant contribution to the development of their sport at the highest level.
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Ministers of Religion: for those people coming to fill a vacancy as a Minister of Religion, Missionary or Member of a Religious Order.
To qualify for inclusion under the General and Intra-Company Transfer categories of Tier 2, a job must require a skill level of the Scottish/National Vocational Qualification level 3 or above as indicated in the codes of practice relevant to the sector and to the job. (See Appendix 2 for S/NVQ levels). Moreover, all migrants must be paid the appropriate salary rate to ensure that the resident labour market is not undercut.
The employer sponsoring the migrant must ensure that the migrant will score a total of 70 points. Points are awarded on the according to various criteria, viz.
the shortage occupation list the job meets the resident labour market test the migrant is switching from a post-study worker category qualifications/education salary pre-employment maintenance English language skills
If a job is on the shortage occupation list, it means there are not enough resident workers to fill the available jobs in that particular sector. Migrants who come to the United Kingdom to fill a skilled job in Tier 2 on the shortage occupation list will receive enough points without proving their prospective earnings or qualifications. http://www.ukba.homeoffice.gov.uk/sitecontent/documents/workingintheuk/shortageoccupati onlist.pdf
Resident Labour Market Test
If an employer wants to recruit a migrant from outside the settled workforce for a skilled job that is not on the list of shortage occupations they must complete a resident labour market test and can show that no suitably qualified settled worker can fill the job or if the migrant is already employed by the firm in the same job and currently has permission to stay in the UK.
All vacancies must be advertised to settled workers for 28 calendar days. An employer can choose to do this in one of two ways:
advertise the vacancy for a single continuous period, with a minimum closing date of 28 calendar days from the date the advertisement first appeared; or advertise the vacancy in two stages, where each stage lasts no less than 7 calendar days and both stages added together total a minimum of 28 calendar days. For example, the employer can initially advertise the vacancy for 14 calendar days. If a suitable settled worker is identified then he/she can be appointed straight away. However, if no suitable settled worker is identified, a migrant worker who has applied still cannot be appointed at this stage. Rather, the employer must advertise the vacancy for a further 14 days, making 28 calendar days in total. If no suitable settled workers are identified during either the first or second stage, the resident labour market test has been completed and the employer can appoint a Tier 2 migrant.
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When an employer issues a certificate of sponsorship on the sponsorship management system under Tier 2 (General), they must confirm that:
they have completed a resident labour market test as set out in the relevant code of practice and cannot fill the post with a settled worker; or the test does not apply to the job (see below).
Methods of Advertising Jobs
With few exceptions, all jobs must be advertised in Jobcentre Plus and at least one other listed method. Employers advertising jobs are required to provide details of the job title, tasks and salary. They are assisted in this by access to Occupation Codes of Practice. This site allows the employer to search through the Standard Occupation Code description and associated Related Job Titles. Each SOC code or code description is linked to another page that provides more information on the skill level, appropriate salary, shortage occupation details (i.e. which of the many sub-occupations under the 4-digit code are open to migrants) and how to meet the resident labour market test if the occupation is not on the shortage list. See, for example, http://www.ukba.homeoffice.gov.uk/sitecontent/documents/employersandsponsors/pointsbas edsystem/sectionccodeofpractice.pdf
This is system appears to be very user friendly from the employers viewpoint. It provides the employer with information on appropriate occupation category for a particular job and its associated tasks, what the average rate of pay is for that occupation, and whether the occupation is on the shortage list. If it is not on the shortage list it explains how to meet the resident labour market test.
3.6.3 Tier 5
The maximum length of stay in the UK for a migrant in the Tier 5 (Temporary worker) category will depend on the sub-category for which they apply. Migrants applying under this tier must have both a sponsor and a valid Certificate of Sponsorship before applying. There are five categories under Tier 5 (Temporary Worker):
Creative and sporting - for people coming to the United Kingdom to work or perform as sportspeople, entertainers or creative artists for up to 12 months. Charity worker - for people coming to the United Kingdom to do voluntary, unpaid work for a charity. Religious worker – for people coming to the United Kingdom to work as religious workers. Duties may include preaching, pastoral and non-pastoral work.
Source: http://www.ukba.homeoffice.gov.uk/workingintheuk/tier2/general/
OTHER EU COUNTRIES
As is the case with the UK and Ireland, the other countries of the EU exempt all citizens of the EEA and Switzerland from the need to obtain permits for work and residence in their
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countries. Below, we outline the type of policies and procedures that apply to foreign workers outside of the EEA and Switzerland.
3.7 AUSTRIA
Due to transition regulations employees of the new Member States which joined the European Union (Estonia, Latvia, Lithuania, Poland, the Czech Republic, Slovakia, Hungary, Slovenia, Bulgaria and Romania) are subject to the Foreigners' Employment Act concerning the admission to the national labour markets during a so-called “transition period” for a maximum of seven years. In order to take up an employment a permit issued by the national labour markets authority is required.
In Austria the employment of foreign nationals is lawful only if an appropriate permit has been obtained from the labour market authorities. Employment permits are granted to individual foreigners following application by the prospective employer. Employment permits entitle their holders to take up legal gainful employment at a clearly defined workplace in Austria.
The purpose of the work permit system is to protect the domestic labour market: the principle being that available jobs must in preference be filled by Austrian citizens, and only if no suitable resident applicant is available to fill a given vacancy may a permit be issued to or in respect of a foreign national.
Quotas have been fixed for the employment of foreign nationals applying to specified geographical or occupational areas. Authorization for employing a foreign worker within the relevant quota is granted without applying the above domestic labour market test, provided that the other preconditions laid down by law are satisfied. The important factors in this respect are that the overall national quota of foreign workers is not thereby exceeded and that the individuals concerned possess legal resident status in accordance with the relevant regulations imposed by the immigration authorities. The fact that the issue of a residence permit is routinely subject to the domestic labour market test, and that the overall national quota is usually already filled, leaves little margin for the grant of first-time employment permits.11 Once a permit has been granted, however, its extension is correspondingly easier. This reflects a central principle of Austria's policy on immigration in recent years, which places difficulties in the way of the first-time hiring of foreign nationals, since an increase in the inflow of immigrants could cause undue stresses on the general population and the domestic labour market, but eases the integration into Austrian society of foreign workers who have been legally employed in the country for some length of time and during that time have conducted themselves properly (integration in preference to immigration). The resultant system therefore includes the following types of permit: a) The first-time hiring of a foreign national requires a restricted employment permit. This is valid for a maximum period of a year, relates to a specific job and must be applied for by the potential employer. It may be granted only if the above-mentioned preconditions are met. b) If the foreign national concerned is shown to have been legally employed in Austria for at least 12 months during the preceding 14 months, he or she is granted, on personal application, a temporary work permit. This is valid for up to 2 years and confers entitlement
11 As of January 1, 2003 employment permits are only granted to integrated foreigners already in possession of a certificate of residence. 30
to engage in any chosen employment in the in which he or she has previously been employed. Such situations may, however, also be covered by an application from the employer for an extension of the restricted employment permit. c) If the employee concerned is shown to have been legally employed in Austria for at least 5 years during the preceding 8 years, he or she is granted, on personal application, an unrestricted work permit. This is valid for a period of 5 years, extendible if the applicant is shown each time to have been legally employed in Austria for at least 21/2 years during the preceding 5 years, and confers entitlement to engage in any kind of chosen employment anywhere on Austrian territory. To that extent, such a worker is equated in law with an Austrian national. Concessions regarding application for an unrestricted work permit are also provided for young second-generation foreign nationals (children of foreign workers) and relatives of Austrian citizens. d) For postings of foreign employees to Austria, on the other hand, a posted-worker permit is required if the employee concerned is to be used for not more than 4 months for work projects lasting not more than 6 months. In such cases, the domestic labour market test may be waived in certain circumstances. Where foreign nationals who are not EEA citizens but employees of a firm located in an EEA member country are posted to Austria, a permit referred to as a European posted-worker certificate is issued, on application from the employer, the employee or the principal in Austria commissioning the services concerned, if the employee being posted has, inter alia, concluded a contract of employment of unspecified duration with the employer posting him or her to Austria. For such certificates, which are issued for an extendible period of 6 months, the domestic labour market test is waived.
Sources: http://www.eurofound.europa.eu/emire/AUSTRIA/ANCHOR-AUSL-AUML-NDERBESCH- AUML-FTIGUNG-AT.htm http://www.wien.gv.at/english/living-working/working.html
3.8 BELGIUM
Non-EU nationals must have a work permit, usually applied for by their potential employer, in order to be legally entitled to work in the country. Belgium generally requires a work permit or evidence that the foreign worker‟s employer has applied for one on their behalf before they can apply for a residence permit or long-stay visa.
The employer, not the individual, files the work permit application, and before a permit is granted, the employer must prove that no Belgian or European Union citizen is able to do the job. Applications relating to artists, au pairs, specialized technicians and trainees require slightly different processing.
There are two possible ways for the candidate to be employed with a work permit:
1. As the direct employee of a Belgian company. 2. As the employee of a foreign company that is providing services to a Belgian company. This foreign company may not be a recruitment agency and must produce a service contract as part of the application. Where this occurs, the application needs to be made in conjunction with a Belgian accountant who must administer the payrolling of the candidate to ensure that all tax and social security is duly paid.
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Those who wish to be self-employed in Belgium must apply for a Professional Card. The application process can take up to a year, and the permit must be renewed annually.
There are three types of work permit in Belgium:
The C permit is valid for only one year, allowing the holder to work for multiple employers. This is usually issued to migrant agricultural or domestic workers. C permits generally aren't renewable. The B permit is valid for one employer and runs for one year, after which it can be renewed (by the same employer, usually for the same job or job classification). If the foreign worker changes employers, the new employer must apply for a new B permit. It some cases the foreign worker may have to return to his/her home country and re- apply for a residence visa before commencing the new job. If the B permit has been renewed four or more times, i.e. the foreign worker has lived and worked in Belgium for five years on the same permit, s/he can receive an unlimited A permit. The A permit allows a foreigner to work for any employer in Belgium for an unlimited period of time. These permits are issued only to the following categories of applicant: the spouse of an A permit holder, the non-EU spouse of a Belgian national, the non- EU spouse of an EU national legally resident in Belgium, and any foreigner with five years' uninterrupted (legal) residency in Belgium.
Source: http://www.bruxelles.irisnet.be/en/citoyens/home/travailler/travailler_comme_ressortissant_et ranger/permis_de_travail.shtml
3.9 DENMARK
Foreign workers can come to Denmark either with or without a specific job offer. If they have a concrete job offer, they can obtain a work and residence permit if they meet one of the following three conditions:
The job which is offered is included on the so-called Positive List. The salary being paid is minimum of DKK 375,000 (approximately USD 80,000) p.a. The worker has been offered a job for which he/she specially qualified.
In certain cases, foreign workers filling professional positions may be required to first obtain Danish authorisation. For example, if they are employed as a nurse or doctor.
There are three schemes under which foreign workers can gain permission to live and work in Denmark. These are the Green Card Scheme, Pay Limit Scheme, and the Positive List Work Permit Scheme which is tied to the Positive List of shortage occupations.
3.9.1 Green Card Scheme
Under this scheme, foreign workers with or without a concrete job offer can to come to Denmark to seek work. They are granted a residence permit solely on the basis of their qualifications. The residence permit is granted following an individual evaluation based on a point system. The points are awarded according to four criteria: Educational level, language
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skills, work experience and age. Bonus points are granted if migrants come from an acknowledged university, and if they have trained/qualified within one of the fields/professions included in the Positive List of Shortage Occupations (see Appendix 4).
The residence and work permit is valid for three years and assumes the foreign worker can support himself throughout the entire period of his/her stay. The residence permit entitles the migrant to both seek and accept work.
3.9.2 Danish Pay Limit Scheme
If a foreign worker has a highly paid job offer in Denmark, s/he may be eligible to quickly obtain a work and residence permit. Unlike the Danish Green Card scheme or the Positive List Work Permit scheme (below), there are no specific requirements pertaining to the applicant's occupation, education, or experience.
To qualify for a work and residence permit in Denmark under the Pay Limit scheme, applicants must be offered a job by a Danish employer for no less than DKK 375,000 (USD 80,000) a year.
There are also cases where Danish authorization is needed, for instance, those taking employment in Denmark in occupations such as a medical doctor. See Appendix 4, Danish Positive List of Shortage Occupations, which indicates those occupations requiring Danish accreditation.
Work and residence permits are granted for a maximum of three years under the Pay Limit scheme, with the possibility of extension of up to four years.
3.9.3 Positive List Work Permit Scheme
As noted above, the Positive List is a list of occupations that are in short supply. Foreign workers from outside the European Union and the European Economic Area/Switzerland are eligible for work and residence permits under the Positive List scheme if they have a job offer in one of these occupations from a Danish employer. Restricting non-EEA/Swiss foreign workers to these occupations precludes the need for a labour market test since no potentially contentious occupations are open to them.
As is the case under the other schemes discussed above, if the occupation requires Danish authorization (such as practicing medicine), then the foreign worker must obtain this authorization before a work and residence permit will be granted. In addition, the foreign worker must have a written job offer that states his/her expected salary and employment conditions. Salary and employment conditions must meet Danish standards. Work and residence permits can be obtained for up to three years under the Positive List scheme with the possibility of extension of up to four years.
The Positive List is broken into a number of fields of work:
Academic Work (includes project management, engineering occupations, lawyers, doctors, and other professional occupations) Construction Hotel, Restaurant, Kitchen, Canteen IT and Telecommunication
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Management Educational, Social and Religious Occupations Sales, Purchases and Marketing Health, Healthcare and Personal Care Freight Forwarding, Postal Services, Storage and Engine Operation Education and tuition
Family Members
If a foreign worker has been granted a work and residence permit under the Positive List then his/her spouse or partner is also eligible for residence permit, as are any children under the age of 18 who live with foreign worker. The foreign worker‟s spouse or partner is eligible to work for the entire period that his/her residence permit is valid.
Source: http://www.nyidanmark.dk/en-us/coming_to_dk/work/work.htm
3.10 FRANCE
A work permit for France is considered one of the more difficult to obtain for non-EU nationals. They are generally reserved for highly skilled/professional workers. There are three principal factors that are considered, in order of importance, that determine whether or not a foreign worker can obtain a work permit:
1. Salary level 2. Education 3. The statute of "cadre" and a CDI contract (i.e, full-time employment)
There is no obligation for the employer to advertise the position if the candidate earns more than 3600 EUROS per month. A salary level less than this requires a labour market test in the form of an advertisement for the position posted with the ANPE (Agence Nationale pour l'Emploi) for three weeks before the work permit application can be submitted.
Education is very important as the French authorities consider highly-educated candidates more able to integrate into French society, which is a consideration in the work permit application, as well as the ability to speak French.
The status of "cadre" is also important. The closest translation of the term means that one is a effectively in a managerial position, or a high-level professional. This is a prerequisite for the application to be considered.
The higher the DDTEFP (Direction Départementale du Travail, de L'emploi et de la Formation Professionnelle) considers these above three elements to be, the more general the work permit they will issue.
Sources: http://www.justlanded.com/english/France/France-Guide/Jobs/Work-permits http://www.expatica.com/fr/essentials_moving_to/essentials/a-guide-to-work-permits-in- france-12891_10426.html?ppager=0
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3.11 GERMANY
Starting in 2005, Germany is making a greater attempt to encourage highly skilled workers to move to Germany. While low skilled workers still find it difficult to gain permission to work in Germany, highly skilled workers have found it easier to gain permanent residency. The new rules provide for highly qualified persons to be granted permanent residence and permission to work from the outset, rather than five-year work permits as was previously the case. They must have a concrete job offer and get permission from the German Employment Agency. The new law also makes an attempt to reduce bureaucracy.
As a general rule non-EU nationals need a residence title (visa or residence permit) to take up employment in Germany. By law the residence title has to give information whether and to which extent access to the labour market is granted. This information replaces the former work permit. Before entering Germany to work prospective migrants must apply for a visa. (Only nationals of Australia, Canada, Israel, Japan, New Zealand, South Korea and the United States may apply for the necessary residence title after arrival in Germany.)
To qualify as for a German work permit, the basic requirements for the employee and the German company are as follows:
The potential employee has to be employed on equal terms as a German employee. German or other European nationals are not available to fill the position. Usually the employee must have a university degree or comparable qualification. For some positions there are special requirements. The German company must be registered at the Labour Authorities in Germany and apply for a Corporate Registration Number.
Categories for the recruitment of third-country nationals
Highly qualified persons – do not need consent of the Federal Employment Office (FEO) Executives, Managers - do not need consent of FEO Short-term deployments - up to 3 months within 1 year – consent of FEO generally not needed IT-specialists – quota of approximately 2,500 per year Academics - up to 3 years, no labour market test Executive staff and specialists - depends on the case Intra-company transfer - up to 3 years, no labour market test Self-employment – must invest a minimum of 1 million euros and generate 10 local jobs
It is clear that Germany is only interested in high skilled migrants from non-EEA countries. Germany is able to access rather abundant supplies of lower skilled labour and trades type occupations from within the EEA countries, particularly from the newly joined Eastern European countries.
Source: http://www.bund.de/EN/Working-In-Germany/Work-Permit/Work-Permit_node.html
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3.12 NETHERLANDS
To qualify for a Netherlands work permit, the candidate should be a professional and have the skill set and qualifications necessary to fill a position that has already been unsuccessfully advertised in the Netherlands, or which is subject to recognised shortages. There is a legal requirement that the candidate is between 18 and 45 years of age, although it is unlikely that a candidate under the age of 23 would have the relevant experience or skills necessary to fill a professional position.
In the case of a non-Netherlands company supplying services to a Netherlands based client, the candidate should usually have been employed the company outside the Netherlands for at least six months.
People coming from outside the EEA, as well as persons from Bulgaria and Romania, remain subject to the strict labour market test. In many cases, this test entails a bureaucratic process to prove that no job seeker is available within the EEA.
The candidate must be paid more than the agreed minimum wage for the type of work being performed, which is generally at least 3-4,000 EURO per month in the case of IT professionals. Companies who fail to comply with this legislation are unlikely to be granted work permits for a further five years.
Candidates who are nationals of the following countries are exempted from the requirement to obtain a Netherlands residence visa (MVV), but should obtain a residence permit (VTV) if remaining in the Netherlands for longer than six months.
All EU countries Norway Iceland Liechtenstein Switzerland Japan New Zealand Australia Canada United States
For nationals of all other countries, the candidate should apply for a residence permit (MVV) at the Royal Netherlands Embassy in their normal country of residence before a work permit application is made. Once the work permit is approved, the MVV is granted by the Embassy within a period of a few days to several months, in the cases of certain countries.
NB: A Netherlands work permit is employer-specific. That is, it is not possible to change companies unless the new company obtains another work permit in their name.
Source: http://www.oecd.org/document/51/0,3343,en_2649_34605_39997811_1_1_1_1,00.html
3.13 SWEDEN
More liberal Swedish labour migration laws came into force in December 2008, making it much easier to move to Sweden for work. Non-EU citizens simply need to apply for a job via the European job mobility portal (EURES), receive a written job offer from a Swedish
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employer and send in an application for a work and residence permit to the Swedish Migration Board. Assuming the requirements are met, migrants will be given a permit for the duration of employment, lasting up to two years at a time. A number of professions are regulated and require authorization or certification.
If the foreign worker decides to change employers during the first two years, s/he will have to apply for a new permit. This can be done from within Sweden. As long as the foreign worker is employed, his/her permit can be extended several times, and after four years, permanent residency can be granted.
The process of obtaining a work permit requires employer sponsorship. The employer must prepare an offer of employment. With regard to the offer of employment, the terms of employment must be equal to or better than those provided under a Swedish collective agreement or that are customary for the occupation or sector, and the relevant trade union has been given the opportunity to express an opinion on the terms of employment. The relevant union must verify that the wages, insurance cover and other terms of employment must at least be equivalent to a Swedish collective agreement or what is customary for the occupation or the sector.
Before December 2008, it was the responsibility of employers to advertise the job in Sweden and the EU if the proposed position involved a new recruit. This required advertising the job with the Public Employment Service for a period of ten days. This also provides access to EURES (The European Job Mobility Portal). The Public Employment Service also offered a job matching services to determine if suitable workers were available within the EU/EEA and Switzerland. This type of labour market test is no longer required.
Once approved, the offer of employment must be sent to the employee, who must attach it to his or her application for a work permit.
If the employment is temporary, the employee will get a residence and work permit that only covers the relevant period. The maximum validity period for the employee's permit is two years. He/she can then apply for an extension. After 48 months, the employee will be eligible for a permanent residence permit.
A work permit is always restricted to a specific occupation. For this reason, the employee must apply for a new work permit if s/he is offered new employment in another occupation, while the employer must prepare a new offer of employment.
Sources: http://www.migrationsverket.se/info/179_en.html http://www.sweden.se/eng/Home/Work/Labor-market/Work-permit-legislation/ http://www.swedenabroad.com/Page____22422.aspx
3.14 MALAYSIA
Foreign nationals intending to work in Malaysia must generally obtain one of three work visas: employment pass, temporary employment visit pass, or professional visit pass.
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An employment pass applies to investors, skilled workers, professionals, and senior management in companies. The minimum employment period required is two years.
A temporary employment visit pass is for unskilled and semi-skilled workers in the manufacturing, construction, and service fields. Foreign nationals under this category may typically work for up to three years, with extensions available on a year-to-year basis.
A professional visit pass is generally appropriate for technical experts, including experts in machinery installation, and technical trainees. Professional visit passes are typically issued on a short-term basis.
Where there is a shortage of trained Malaysians, companies are allowed to bring in expatriate personnel i.e. „key post‟ or „time post‟. Key posts are posts that are permanently filled by foreigners whereby time post are position filled on specified time.
3.14.1 Types of Expatriate Posts
Key Posts
These are high level managerial posts in foreign-owned private companies and firms operating in Malaysia. Key posts are posts essential for companies to safeguard their interest and investments. The expatriates are responsible in determining the company‟s policies in achieving its goal and objectives.
Time Posts i. Executive Post
These are intermediate level of managerial and professional posts. The post requires professional qualifications, practical experience, skills and expertise related to the respective jobs. The expatriate are responsible in implementing the company‟s policies and
supervision of staff.
ii. Non-Executive Post These are posts for the performance of technical jobs that require specific technical or
practical skills and experience.
There are two stages in the employment of expatriates: i. Application for an expatriate post sent to relevant authorised bodies determined by the nature of the business. ii. Upon approval of the expatriate posts by the approving bodies, the company must submit an application to the Immigration Department for endorsement of the employment pass.
The guidelines on the employment of expatriate personnel are as follows: a) Manufacturing companies with foreign paid-up capital of US$2 million and above: • Automatic approval is given for up to 10 expatriate posts, including five key posts. • Expatriates can be employed for up to a maximum of 10 years for executive posts, and five years for non-executive posts
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b) Manufacturing companies with foreign paid-up capital of more than US$200,000 but less than US$2 million: Automatic approval is given for up to five expatriate posts, including at least one key • post. • Expatriates can be employed for up to a maximum 10 years for executive posts, and five years for non-executive posts c) Manufacturing companies with foreign paid-up capital of less than US$200,000 will be considered for both key posts and time posts based on current guidelines. They are: • Key posts can be considered where the foreign paid-up capital is at least RM500,000. This amount, however, is only a guideline and the number of key posts allowed depends on the merits of each case. • Time posts can be considered for up to 10 years for executive posts that require professional qualifications and practical experience, and five years for non-executive posts that require technical skills and experience. For these posts, Malaysians must be trained to eventually take over the posts. • The number of key posts and time posts allowed depends on the merits of each case. d) For Malaysian-owned manufacturing companies, approval for the employment of expatriates for technical posts, including R & D posts, will be given as requested.
An expatriate employed in the manufacturing sector, excluding ICT related activities, should be at least 27 years old. For ICT related activities, an expatriate personnel employed should be at least 21 years old.
An expatriate personnel who is transferred from one post to another within the same company will be required to obtain a new employment pass. His original employment pass will be amended to reflect the change in post. A new expatriate personnel replacing another must also obtain a fresh employment pass.
All employment passes are valid for the period approved for the post. However, for key post holders, employment passes will be issued up to five-years and renewable. Holders of employment passes will be issued with multiple entry visas valid for the duration of the employment pass.
Foreign professionals must meet professional standards of the relevant organisation. There are a limited number of foreign specialists/experts allowed per institution. In wholesale & retail trade, foreign managers/executives must been employed by the company outside Malaysia for a minimum of three years. Some professions require 180 days of residency before they can register and practice.
There are 6 authorized bodies / agencies to approve the Expatriate application based on the "core business" of the company. These agencies are:
No Agency Position/Field 1. Malaysian Industrial Expatriate post in private sectors of the following Development fields: Authority (MIDA) 1. Manufacturing (new or existing company which is involved in expansion plan) 2. Manufacturing Related Services·Regional
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Office ·Operation Headquarters, Overseas Mission, International Procurement Centre and etc. 3. Hotel & Tourism Industry 4. Research and Development Sectors
2. Multimedia Expatriate Post and Skilled foreign worker in Development Information Technology based companies which Corporation have been granted "Multimedia Super Corridor" (MSC) status ( MDeC ) 3. Public Service 1. Doctor and nurse in government hospitals or Department (PSD) clinics 2. Lecturer and Tutor in Government Institute of Higher Education (IPTA) 3. Contract Post in public services 4. Recruitment process (job offer by Public Service Commission (SPA) or related government agencies
4. Central Bank of Employment in following sectors: Malaysia (BNM) 1. Banking 2. Finance 3. Insurance
5. Securities Employment in Security and Share market. Commission (SC) 6. Expatriate Employment in private and public sectors other than Committee (EC) MIDA, MDeC, PSD, BNM and SC's jurisdiction.
The EC is under supervision of Ministry of Home Affairs and Employment Pass Division of the Immigration Department Malaysia which acts as a Secretariat. The Expatriate Committee consists of following :
No Members Position 1. Ministry of Home Affairs Chairman (SG/DSG) Ministry of International Trade and 2. Member Consumer(MITI) 3. Ministry of Domestic Trade and Consumer Affairs Member 4. Ministry of Education Malaysia Member 5. Ministry of Human Resources Member 6. Construction Industry Development Board (CIDB) Member 7. MARA Member 8. Immigration Department Malaysia Secretariat
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3.14.2 Professional Worker Visit Pass
A Professional Worker Visit Pass is issued to a foreigner who holds acceptable professional qualifications or specialist skills and enters Malaysia to take up professional work for short term period not exceeding twelve (12) months. Applicant must be outside Malaysia at the time of application. There are four categories: 1) Expert/Volunteer; 2) Artist; 3) Mubaligh (Muslim); 4) Missionary/worker of other religions.
3.14.3 Temporary Employment Visit Pass for Low Skilled Foreign Worker
In Malaysia, foreign workers can be employed in the manufacturing, construction, plantation, agricultural, services and domestic help sector.
Services sector consists of eleven sub sectors: restaurant, cleaning services, cargo handling, launderette, golf caddy, barber, wholesale/retail, textile, metal/scraps/recycle activities, welfare homes and hotel/resort islands.
Only nationals from the specified countries below are allowed to work in the selected sectors:
Approved Sectors Nationals of:
All sectors Indonesia Cambodia manufacturing Nepal plantation Myanmar agriculture Laos construction Vietnam services sector Philippines (male only) Pakistan Sri Lanka Thailand Turkmenistan Uzbekistan Kazakhstan
Services (cooks, wholesale/retail, barber, India metal/scraps/ recycle, textile) Construction (fixing of high voltage cable only) Agriculture Plantation
Approval is based on the merits of each case and subject to conditions that will be determined from time to time. Applications to employ foreign workers will only be considered when efforts to find qualified local citizens and permanent residents have failed.
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All applications for foreign workers should be submitted to the One Stop Centre, Ministry of Home Affairs except for applications for foreign domestic helpers which should be submitted to Malaysia‟s Immigration Department.
Sources: http://www.mida.gov.my/en_v2/index.php?page=employment-of-expatriate-personnel http://www.jobsdb.com.my/MY/EN/V6HTML/Employer/files/ExpatriatePersonnelGuide.pdf http://www.mida.gov.my/en_v2/index.php?page=immigration-procedures www.moha.gov.my
3.15 SINGAPORE
Foreigners with acceptable degrees, professional qualifications or specialist skills who are seeking professional, managerial, administrative, executive or managerial jobs must acquire an Employment Pass (EP). This will be either a P pass or an S pass. There are two levels of P pass. A P1 pass is issued if basic monthly salary exceeds S$7,000, a P2 passed is issued if salary is more than S$3,500 up to S$7,000. An S pass is issued if salary is at least S$1,800 up to S$3,500.
All nationals of ASEAN Member States, with the exception of Myanmar nationals, are not subject to visa requirements and hence do not need entry visas for short-term stay.
Foreigners coming for short durations do not require a work pass. This includes the provision of specialised skills (e.g. commissioning or audits of new plant and equipment, or the installation, dismantling, transfer, repair or maintenance of any equipment, process or machine), performances, exhibitions, tour facilitation, etc. These activities broadly correspond to services provided by contractual service suppliers (CSS), business visitors (BV) and independent professionals (IP). Foreigners can perform these activities for the duration of their short term visit passes subject to a maximum of 60 days. However, they are required to notify Ministry of Manpower (MOM) after they have arrived in Singapore and obtain a Short Term Visit Pass issued by the ICA (Immigration and Checkpoints Authority).
There are no numerical restrictions, no economic needs or labour market tests and no sectoral restrictions imposed under the EP framework, with two exceptions. The number of new foreign doctors registered each year may be limited depending on the total supply of doctors. An intra-corporate transferee must have had prior employment with a foreign subsidiary of not less than one year immediately preceding the date of their application for admission.
Although Singapore liberal position on labour immigration is admirable, it needs to be realized that professionals from less developed countries, including Singapore‟s ASEAN neighbors, find it a challenge to have their professional credentials recognized in Singapore. It is not unusual for Filipino dentists working in Singapore to be relegated to serving as dental assistants, and qualified Filipino nurses having to work as nurse aids.
In order to work in Singapore, foreign nationals must apply for a work visa. Known as “employment Passes”, there are various types of work visas adapted to each situation:
Employment Passes P1, P2 and Q1 - designed for qualified foreign workers, executives and managers.
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3.15.1 Employment Pass P1
The employment pass P1 is a work visa designed for executives, managers and highly skilled foreign workers. In the framework of employment pass P1, applicants must earn a fixed monthly salary of more than SGD $7,000 in Singapore. Employment pass P1 is generally valid for 1 or 2 years and is renewable.
Two months before visa expires, the employer in Singapore receives a renewal notification. A new employment pass application must then be filed by the employer to the “Work Pass Division”. Note that renewal is not automatic and remains at the discretion of the Ministry of Manpower in Singapore.
Application procedure for pass P1 can be initiated by the “sponsor”, i.e. the company that wants to hire a foreign worker in Singapore. Applicants may be required to provide complementary documents themselves.
Dependants of P1 pass holders have to apply for a “Dependant Pass”. The dependant pass is a residence visa only; it is strictly forbidden to undertake any paid activity on a dependant pass. However, dependant pass holders are allowed to work in Singapore provided that they hold a specific work permit: the Letter of consent. Companies that want to hire dependant pass holders must submit a “Letter of Consent” (LOC) application to the Ministry of Manpower.
Unmarried partners of P1 pass holders must apply for a Long Term Social Visit Pass.
3.15.2 Employment Pass P2
Employment pass P2 is very similar to employment pass P1. The only real difference lies in the level of remuneration: only applicants earning a fixed monthly salary ranging between SGD $3,500 and SGD $7,000 in Singapore can apply for an employment pass P2.
Employment pass P2 applicants must have recognized professional qualifications assessed by the Ministry of Manpower in Singapore.
Family entry and settlement in the framework of employment pass P2 is exactly the same as in the framework of employment pass P1.
3.15.3 Employment Pass Q1
Employment pass Q1 is very similar to employment pass P2. Only applicants earning a fixed monthly salary of more than SGD $2,500 can apply for employment pass Q1.
Employment pass Q1 allows family entry and settlement for married couples (and children), but does not allow family entry and settlement for unmarried partners (and children).
3.15.4 Employment Pass S - designed for mid-level skilled workers
Employment Pass S is a work visa designed for mid-level skilled workers holding specific qualifications in demand in Singapore.12 Only applicants earning a fixed monthly salary of
12 Singapore‟s Strategic and Skills-in-Demand List can be viewed at: http://www.mom.gov.sg/foreign- manpower/working-in-singapore/finding-a-job/Pages/skills-in-demand.aspx
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more than SGD $1,800 in Singapore can apply for employment pass S. Family entry and settlement for married couples (and children) is allowed if the fixed monthly salary of the S pass holder is of more than SGD $2,500 ONLY.
Applicants to employment pass S are assessed on the following criteria: expected wage in Singapore; nature of the position; study level; professional qualifications.
Quotas of S pass holders apply in Singapore and companies should not exceed 25% of S pass holders in their staffs.
3.15.5 Personalized Employment Pass (PEP)
The Personalized Employment Pass (PEP) is an open work visa. Contrary to the other types of employment passes, the PEP is not tied to a specific employer. Personalized employment passes are granted on the strength of an EP holder's individual merits. A PEP holder is able to remain in Singapore for up to six months in between jobs to evaluate new employment opportunities.
PEP applicants are assessed on the following criteria:
Foreign professional whose last drawn fixed monthly salary overseas was at least of SGD $7,000; Former P1 Pass holders who are living abroad and not unemployed for longer than a continuous period of six months at the time of application; P2 Pass holders that have at least two years' working experience on a P Pass. They should earn a fixed salary of at least SGD $30,000 in the preceding year; Q1 Pass holders with at least five years' working experience on a Q1 pass. They should earn a fixed salary of at least SGD $30,000 in the preceding year; Foreign graduates from institutions of higher learning in Singapore with at least two years' working experience on a P or Q1 Pass. They should earn a fixed salary of at least SGD $30,000 in the preceding year;
The PEP visa is not renewable. Dependants of PEP holders can apply for a social visit pass or a dependant pass according to their situation.
3.15.6 Employment Pass Eligibility Certificate (EPEC)
The Employment Pass Eligibility Certificate (EPEC) is a very specific visa which enables foreign nationals to settle in Singapore up to one year in order to find employment in the country. The EPEC employment pass is mainly designed for trained foreign nationals and former holders of employment passes the country. The EPEC employment pass is not a work visa: if an EPEC pass holder finds employment in Singapore, an application for an employment pass (P1, P2, Q1, Q2 or S) must be filed to the “Work Pass Division” directly in the country.
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3.15.7 Work permits in Singapore (WP)
The work permit in Singapore is a work visa designed for skilled foreign workers holding specific qualifications in demand in Singapore. Application procedure for a WP must be initiated by the employer and submitted to the controller of work permits. Foreign workers on a work permit in Singapore should not earn more than SGD $1,800 per month and must hold specific professional qualifications. The work permit does not allow family entry and settlement in Singapore.
Sources: http://www.mom.gov.sg/foreign-manpower/passes-visas/employment-pass/before-you- apply/Pages/default.aspx http://www.business.gov.sg/NR/rdonlyres/2261F04F-49CD-4B99-A000- 33F36FD46FC8/7325/AGeneralGuideonWorkPermits_06Mar06_1.pdf
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4. Analytical Framework
Table 1 below provides the analytical framework to compare the various regulatory measures for controlling foreign labour inflow used across the countries studied. However, only a subset of the more interesting countries are included in the analytical framework to keep it of manageable size. The framework reviews the various types of visas/work permits offered by the selected countries, and compares their duration; whether a sponsoring employer is required; whether the foreign work is bound to that employee for the duration of their visa; the skills or qualifications required of the foreign workers; the employee‟s work entitlements; whether or not the job is subject to an LMT or some other similar regulatory measures; whether there is any additional relevant information; and, whether the visa/work permit provides a pathway to permanent residence.
To expand the information base provided by this study, Appendix 1 provides a summary of comparative immigration and employment regulations in relation to skilled human resources in eight ASEAN member states.13
13 Appendix 1 is sourced from the Free Flow of Skilled Labour Study. (Iredale, et al 2010).
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Table 1: Analytical Framework – Summary of Visa/Work Permit Conditions by Country
Country/ Visa Sponsorship Bound to Skill / Work LMT Additional Pahthway Visa/Work Duration Required Employer Qualifications Entitlements Requirements Information to Permit Type Requirements permanent residence
Australia Long Stay 1 day up to Yes, by an No, can Occupation must Must be offered No formal LMT. Dependants May apply Temporary 4 years employer change be on relevant full time work; Argued that have full for ENS with Business 457 employers skill shortage list; Must be paid raising pay rates work/study formal skills w/o new visa Formal skills market rate to market rate rights; assessment assessment for and requiring Employers have or after 2 some occupation to be additional years occupations; on skill shortage obligations continuous Must have list makes LMT work in the English language redundant occupation skills unless in Australia; exempted May apply for RSMS Labour 3 months Yes, by Yes Can be used to fill Must be offered Must provide Aim is to provide Both Agreement to 4 years employer who occupations not full-time work evidence of flexible response temporary has entered on the on the shortages in the for industries and into an skill shortage list required skills with ongoing skill permanent agreement or not covered by shortages visas can be with the ANZCO issued department under this program Employer Permanent Yes, by an No, can Occupation must Must be offered No. But Nomination resident employer change be on the relevant full time work for 3 occupation must Scheme employers skill shortage list; years be on relevant (ENS) Skills assessment skill shortage list by relevant authority; three years full time
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work experience & registration or licensing if required; Must have English language skills Skilled Permanent No No Occupation must Unrestricted None Must have Independent resident be on relevant recently skilled shortage completed list & skills Australian assessed by qualification in relevant Australia or have assessing recent relevant authority work experience Canada Temporary For skilled Yes Yes Worker must be Must be offered Labour Market Hiring worker Foreign workers - filling a position in full-time Opinion is should expand Worker length of a shortage employment; required; job opportunities Program contract; occupation Wages must be Minimum for Canadians; For semi- comparable to advertising worker should skilled Canadian workers period transfer skills; workers – in same Dependants 1 to 2 occupation have full years work/study rights but spouse needs work permit Skilled Permanent No, but No Applicants should No Migration having job have an offer helps occupation on the skill shortage list New Zealand Skilled Permanent Points are earned Preference given Migrant on the basis of a to those with migrant‟s occupations on qualifications, the Long Term work experience, Skill Shortage
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age, close family List (LTSSL) in New Zealand, and job (or job offer). Talent Temporary Yes Yes for Must meet any Salary of at least LMT required if Dependants Can apply (Accredited – up to 3 temporary occupational NZ$55,000, and job is not on the have full for residency Employer) years or visa registration have a job offer of LTSSL. work/study rights through the Work to Permanent requirements in at least 30 hours a but spouse Work to Residence their industry. week for at least needs work Residence Category Aged 55 years or two years. permit. Partner & programme under. children must after working meet English in New language Zealand for requirements or two years. have paid tuition for courses. Talent (Long 3 years Yes Yes Must have a job Job offer must be Job must be on Dependants Can apply Term Skill offer in an at least 2 years. LTSSL so LMT have full for residency Shortage) occupation on the Salary of at least not required. work/study rights through the Work to LTSSL. Must NZ$45,000 (based but spouse Work to Residence meet profession- on a 40-hour needs work Residence Category al registration week). permit. Partner & programme requirements if children must after working necessary to meet English in New practice language Zealand for occupation. requirements or two years. have paid tuition for courses. Essential Up to 3 Yes Yes Two streams – No specified If occupation is Dependants can Skills Work years skilled stream is minimum salary not on the ISSL, accompany Category for workers who the Department temporary (Temporary) have an of Labour worker if occupation on the undertakes a minimum income Intermediate Skill LMT to confirm threshold of Shortage List skills not $33,675 is (ISSL). available locally. meant.
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Occupations not Employer on list require evidence of local LMT. recruitment efforts could include advertisements placed, responses received, industry statistics on vacancies, training in place to address shortages. Ireland Green Card 2 years Job offer from Yes Must have the Job offer 2+ years. No LMT Employment Permit Permits registered relevant Available for most permit will not be intended to company qualifications, occupations granted to a lead to required. skills and paying €60,000 company if more permanent experience per year. Also than 50% of the residence required for the available for employees job. selected would be non- occupations EEA nationals. paying above Dependants can €30,000 but less work but must than €60,000 obtain work permit subject to LMT. Work Permits 2 years, Job offer from Must stay Must have the Annual salary LMT required for Work permits not May be renewable registered with initial relevant must exceed all work permit granted for possible to for 3 years company employer for qualifications, €30,000 per year. applications. Job occupations on acquire required. 12 months. skills and must be ineligible list. permanent experience advertised with Dependants can residence required for the the FÁS/EURES work but must after five job. employment obtain work years. network for at permit subject to least 8 weeks LMT.
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and additionally in local and national news- papers for six days. Intra- 2 years, Must have Must stay Skills required Annual salary No LMT Number of intra- company extendable been with determined by must be at least company transfer to 5 years employed by multinational multinational €40,000. transferees scheme multinational company employer. should not for at least 12 exceed 5% of months. the total Irish workforce in a firm, except in special circumstances. UK Tier 1 2 years, Job offer not No Applicants are No specified No LMT Visas/work Permanent (General) extendable necessary. awarded points salary. permits only residence (There are to 5 years based on their required by non- possible other Tier 1 qualifications, EEA nationals. after 5 categories: previous Current limit on years. Entrepreneur, earnings, UK Tier 1 (General) Investor & experience, age, is 600 per Post-study English language month. work). skills and maintenance (funds). Tier 2 3 years Must have Yes, but can General & Intra- Must be paid the Resident LMT Partners are Permanent (General) with certificate of work a company appropriate salary required unless allowed to residence There are possible sponsorship second job in transferees rate to ensure that job is on the accompany possible other Tier 2 extension from a duly same require a skill the resident labour shortage sponsored after 5 categories: licensed occupation level of the market is not occupation list. worker but must years. Minister of employer. for up to 20 Scottish/ National undercut. All vacancies not be able to speak Religion, hours per Vocational on shortage & understand Sportsperson week. Qualification level occupation list English. & Intra- 3 or above as must be Children can company indicated in the advertised to accompany
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transferee codes of practice settled workers sponsored relevant to the for 28 calendar worker but both sector and to the days. parents must be job. in the UK. Applicants are awarded points based on their qualifications, previous earnings, UK experience, age, English language skills and maintenance (funds). Denmark Green Card 3 years Entry with or No Points bases Salary and No LMT Family members Permanent Scheme with without job system. Points employment may accompany residence possible 1 offer are awarded conditions must work. Spouse available year according to correspond to allowed to work after 4 years extension educational level, Danish standards. full-time. if sufficient language skills, points are work experience obtained on and age. Bonus a points points granted if based test. migrants come from an acknowledged university, and if they have trained/qualified within one of the fields/ professions included in the Positive List of Shortage Occupations
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Danish Pay 3 years Entry with or No Only condition is No LMT Family members Permanent Limit Scheme with without job that job must pay may accompany residence possible 4 offer at least USD work. Spouse available year 80,000 per year. allowed to work after 4 years extension Some full-time. if sufficient professional points are occupations may obtained on required Danish a points authorization. based test. Positive List Up to 4 Job offer Yes, but if The minimum Salary and No LMT, but Family members Permanent Work Permit years required. job educational level employment occupation must may accompany residence Scheme terminated required for a conditions must be on the work. Spouse available through no position on the correspond to Positive List allowed to work after 4 years personal Positive List is a Danish standards. (Skill shortage full-time. if sufficient fault or Professional list) points are contract Bachelor's obtained on expires, degree, such as a a points worker has nurse or based test. six months to pedagogue. In search for some cases, you another job. must obtain a Danish authorisation. Sweden Work Permit Period of Must have job Bound to a Employer sends Prior to Dec Immediate family Can apply contract up offer. sponsoring the job offer to the 2008 at LMT was members may for to 2 years, employer concerned trade necessary, also apply work permanent renewable and union for involving a and residence residence for another occupation. approval of salary minimum period permit. If after 4 2 years and working of advertising, approved, this years. conditions. but now it is no will allow them to longer live, work and necessary. Also, study in Sweden before jobs for the duration needed to be on of worker‟s skill shortage list, employment and but this is no residence
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longer the case. permit.
Malaysia Professional Minimum 2 Must have job Bound to Foreign No LMT. Limited number Work Permit - years, can offer. sponsoring professionals of foreign Employment be employer must meet specialists/ Pass (DP10 extended and professional experts per Visa) to 12 years occupation. standards of institution relevant subject to organisation. registration and There are 6 fulfillment of authorized bodies residency / agencies to requirements. approve the Expatriate application based on the "core business" of the company.
Singapore Employment 1 to 2 Must have a Yes, if Salary more than No LMT. Dependants of Pass P1 years, job offer. change S$7000 per month However, the P1 pass holders renewable employers a number of new have to apply for new pass is foreign doctors a “Dependant required. registered each Pass”. The year may be dependant pass limited is a residence depending on visa only; it is the total supply strictly forbidden of doctors. An to undertake any intra-corporate paid activity on a transferee must dependant pass. have had prior However, employment with dependant pass
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a foreign holders are subsidiary of not allowed to work less than one in Singapore year immediately provided that preceding the they hold a date of their specific work application for permit. admission. Employment 1 to 2 Must have a Yes, if Employment pass Salary more than No LMT. Dependants of Pass P2 years, job offer. change P2 applicants S$3500, but less P2 pass holders renewable employers a must have than S$7000 per have to apply for new pass is recognized month a “Dependant required. professional Pass”. The qualifications dependant pass assessed by the is a residence Ministry of visa only; it is Manpower in strictly forbidden Singapore. to undertake any paid activity on a dependant pass. However, dependant pass holders are allowed to work in Singapore provided that they hold a specific work permit Employment 1 to 2 Must have a Yes, if Employment pass Salary more than No LMT. Dependants of Pass Q1 years, job offer. change Q1 applicants S$2500, but less Q1 pass holders renewable employers a must have than S$3500 per have to apply for new pass is recognized month a “Dependant required. professional Pass”. The qualifications dependant pass assessed by the is a residence Ministry of visa only; it is
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Manpower in strictly forbidden Singapore. In lieu to undertake any of recognised paid activity on a qualifications, dependant pass. compensatory However, factors such as dependant pass skills and years of holders are experience may allowed to work also be in Singapore considered (a provided that minimum of five they hold a years relevant specific work work experience permit is recommended. S Pass 2 years Yes Yes Mid-level skills. S Minimum salary of No LMT, but job Quotas of S Pass applicants S$1800 per should be on pass holders are assessed on month. skills-in-demand apply in multiple criteria list. Singapore and including salary, companies education should not qualification, exceed 25% of S skills, job type pass holders in and work their staffs. experience. Job prospects Salary must be increased if job is at least $S2500 on the skills-in- before demand list. dependants can join worker.
Work Permit 2 years Yes Yes This work permit Salary less than No LMT, but job Must be from an is for low to S$1800 per month should be on approved source medium skilled skills-in-demand country. and trade workers list. Employer must pay foreign worker levy.
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Dependants not allowed to accompany worker.
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5. Study Findings
5.1 Specific Country Lessons
Australia Australia removed in 2001 the requirement that vacant positions must be advertised under the temporary skilled migration program. It was considered that the system was unwieldy and difficult to operate. To ensure the integrity of the program, employers must now pay “market rates” as opposed to the previous minimum salary level; workers are no longer bound to the employer who sponsored them; and, more effort is being put into ensuring that the occupational shortage list is both accurate and up to date.
Canada Compared to the other developed countries reviewed in this study, Canada has the most regulated regime for the employment of foreign workers on a temporary basis. Each application requires a „Labour Market Opinion‟ from Human Resources and Skills Development Canada as to whether:
the job offer is genuine the wages and working conditions being offered to the foreign worker(s) are comparable to those currently offered to Canadians working in the occupation the employer has made reasonable efforts to hire or train Canadians for the job the foreign worker is filling a labour shortage occupation the employment of the foreign worker will directly create new job opportunities or help Canadians retain their jobs the foreign worker will transfer new knowledge and skills to Canadians employing a foreign worker will not affect a labour dispute or the employment of any Canadian worker involved in such a dispute.
New Zealand Like Australia, New Zealand has largely moved away from the classic LMT, relying instead on a detailed skills shortage list and minimum annual salaries. However, their minimum salaries pertain to a visa category and not to an occupation as in other countries. Recruitment of lower skilled workers and those not on the Intermediate Skill Shortage List does require a LMT
Ireland Ireland is the only country of those reviewed that uses a Negative List approach. That is, work permits will not be granted for occupations on the Ineligible List. Moreover, a LMT is required for all work permit applications. In contrast to other countries, in Ireland minimum annual salary pertains to visa category and not to occupation.
UK As is the case in New Zealand, companies wishing to recruit foreign workers on a temporary basis must undergo a LMT unless the job is on the shortage occupation list (SOL). Employers are required to use an Occupation Codes of Practice list to identify the Standard Occupational Code for the job they wish to fill. Each SOC is linked to another page that
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provides information on the occupations skill level, salary, whether it is on the skill shortage list, and how to meet the resident LMT if the occupation is not on the SOL
Denmark
Denmark‟s Positive List Work Permit Scheme revolves around a list of occupations that are in short supply. Foreign workers from outside the European Economic Area/Switzerland are eligible for work and residence if they have a job offer in one of these occupations from a Danish employer. The foreign worker must have a written job offer that states his/her expected salary and employment conditions. Salary and employment conditions must meet Danish standards. Work and residence permits can be obtained for up to three years under the Positive List scheme with the possibility of extension of up to four years.
Sweden As of December 2008, LMTs are no longer required in Sweden nor is the occupation required to be on the skill shortage list. However, employers must send any job offer to a foreign worker to the relevant trade union for approval of salary and working conditions.
Singapore Singapore is very open to highly skilled and professional persons. There are no LMTs or other restrictions placed on Employment Passes P1, P2 and Q1, with the exception that the highly skilled must meet Singapore standards either through authorisation or accreditation. For mid-level skilled workers on an S pass or Work Permit, jobs should be on the skills-in- demand list, but there is no LMT.
5.2 General Lessons
Table 1 indicates that there is considerable cross-country variation in approaches to the management of the inflow of foreign workers. Importantly, methods of regulation of labour market entry have become more complex and go beyond the LMT procedure of requiring an employer to genuinely search for a worker from the resident labour market. Increasingly, countries are relying on two measures to regulate labour inflow, viz. compilation and ongoing maintenance of a detailed list of skill shortages by occupation (Positive List), and ensuring that employers pay the market rate of pay as opposed a minimum salary level (MSL), as well as providing other working entitlements comparable to a resident worker in the same occupation.
Motivations for this move away from the classic LMT have varied across countries. Some believe that the advertising requirements are easily manipulated by employers to ensure that they can report that no qualified workers from the resident labour market are available. Also, countries have been concerned with problems of exploitation of foreign workers. The move toward market rates of pay and comparable working entitlements has been designed to explicitly address this problem. The argument is that an employer is unlikely to take the time and incur the expense of recruiting a foreign worker who must be given pay and conditions equivalent to those received by a domestic worker unless there truly is a shortage in the specific occupation the employer is seeking to fill.
As can be discerned from Table 1, with regard to rates of pay, some countries still rely on a minimum salary level (MSL). However, insofar as MSLs are lower than market rates, as they
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usually are in dynamic labour short economies, then employers will have an incentive to use foreign workers to save on their wage bill.
As is indicated in Table 1, a measure that is much less widely employed to protect foreign workers relates to the binding of the foreign worker to the employer that has sponsored him/her. Only a couple of the countries in Table 1 allow temporary foreign workers to change employers. Others allow it, but only with the issuance of a new visa/permit. This can be onerous and expensive if the foreign worker has to leave the country to apply for another visa/work permit. If s/he does not then there is some opportunity to find another employer who would be willing to act as a sponsor for the application for a new visa/permit.
The use of a Positive List approach that is being increasingly employed as a regulatory measure is seen as a method of ensuring that the recruitment of foreign workers will make a positive contribution to the economy by relieving labour shortages in specific occupations. However, being on the list does not necessarily protect a foreign worker from exploitation by an employer. Other policy measures, as noted above, need to be pursued to achieve this objective.
Another important advantage of the use of a Positive List is that it sends labour market signals to educational and training institutions, and their clients, that specific occupations are in short supply and hence easy to find employment in if the right credentials are obtained.
A final general lesson that we have learned is that a country‟s international obligations with regard to not using LMTs or other methods of regulating the inflow of skilled labour only apply to certain categories of service suppliers. A country‟s labour market tests and similar measures apply to a broader range of sectors and occupations than the GAT/AFAS service sectors. These tests are used to assist in achieving specific economic and social objectives. Under GATS and AFAS concern is raised only when such tests result in a restriction of market access to opportunities for service providers from other member countries. Nonetheless, GATS rules allow a member country to impose whatever tests it wants, as long as it explicitly mentioned in that country‟s commitments, and hopefully with clear criteria and transparency regarding their implementation or operation.
6. Policy Considerations for the Regulation of Foreign Worker inflow into the Philippines
The introduction of LMTs and other methods for regulating the inflow of foreign workers is not inconsistent with the Philippines commitments under AFAS/GATS. It is generally agreed amongst GATS and AFAS members that only skilled service providers that are currently covered, and they can only access the job market on a temporary basis. It does not cover service workers seeking access to a member‟s employment market; it principally covers highly skilled contract workers.
Bearing in mind that the goal of the free flow of skilled labour is unlikely to be achieved under AFAS by 2015, the objective in the interim should be to clarify the use of ENTs such as LMTs and similar measures by advancing clear and detailed criteria for their application. With respect to Mode 4 MNP as service providers, the AMS should attempt to construct a common list of natural persons supplying services within the region. Agreement on such a common list would result in clear criteria for LMTs and similar measures that apply to specific categories of natural persons affected.
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For the Philippines specifically, there is menu of measures to choose from for regulating the inflow of skilled foreign workers, as the cross-country review has shown. The Philippines can: . use the classic LMT, requiring employers to make a genuine attempt to fill a job with a local before being permitted to employ a foreigner . put a greater amount of resources into the development of a skill shortage list - the Positive List approach, or . develop a list of occupations that are ineligible to be filled by foreigners – the Negative List approach . specify minimum work entitlements to ensure resident workers are not undercut by foreign workers . use any one or combinations of the above
On the basis of discussions held at the Workshop associated with this study, it is recommended that the Philippines adopt a Positive List of occupations that are hard to fill. This can be based on current efforts already underway in this area in the form of the BLE‟s Integrated Survey of Occupational Shortages and Surpluses14 and statistical information underpinning PHIL-LMI and Phil-JobNet. This information should be supplemented with additional information whose collection can be guided by study of the various methodologies used in some of the countries discussed above. Australia, in particular, has well developed methodologies that are used to identify existing and emerging skill shortages that are used both to inform education and training policy and provide guidance in the creation of a skill shortage list to guide immigration policy.
For example, the Department of Education, Employment & Workplace Relations (DEEWR) has developed survey techniques for identifying skill shortages.15 The DEEWR information is fed to Skills Australia who is responsible for the development of a Skilled Occupations List, which is essentially a skills shortage list, for migration purposes. Skills Australia uses the DEEWR survey data, as well as information on education, labour markets and migration data and considered evidence from DEEWR and the Department of Immigration and Citizenship. It also receives informed by feedback from peak industry associations, the Industry Skills Councils and a range of professional associations. Once it identifies a shortage occupation it develops a summary sheet for that occupation that provides considerable detail as to the current and anticipated demand and supply situation for that occupation.16
New Zealand‟s experience would also be helpful to developing a robust methodology for identifying skill shortages. Its methodology is not to be found in online publications as is the case with Australia. However, through communications with the New Zealand authorities the author was able to acquire details of the methods and data sources used to establish
14 See: http://www.bles.dole.gov.ph/SURVEY%20RESULTS/BITS/shortages.html 15 DEEWR (2010), Skill Shortage Methodology, http://www.deewr.gov.au/Employment/LMI/SkillShortages/Pages/MethodologyPaper.aspx
16 Skills Australia (2010) http://www.skillsaustralia.gov.au/SOLsummarysheets.shtml. A discussion of Skills Australia‟s methodology can be found in Skills Australia (2010), Australian Workforce Futures: A National Workforce Development Strategy, http://www.skillsaustralia.gov.au/PDFs_RTFs/WWF_strategy.pdf
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whether particular skills are in short supply. This methodology was reviewed in the country study of New Zealand above.
As noted above, the Positive List can serve two purposes. First, it can provide important information on skill shortages that can inform domestic policy on education and training. Second, it can provide the Philippines with a list of occupational shortages that can feed into a policy discussion in AFAS aimed at the development of a common list of occupations and/or sub-sectors for which LMTs can be abandoned. In view of the very slow progress on mode 4 liberalisation in AFAS, this would be a positive development that could assist in moving the liberalisation process forward.
The Philippines will also need to consider other measures when developing a new labour market test and associated regulatory measures. Assuming that it has in place a Positive List that identifies shortage occupations, it must decide whether occupations not on the list are to be closed to foreigners. Alternatively, it can undertake a labour market test in relation to the particular job opening or, drawing upon the Canadian experience, order a Labour Market Opinion regarding the position. It would seem unwise to close to foreigners all occupations that are not on the skills shortage list. The list itself is a dynamic instrument and skills are added to it as a result of the experiences of companies at the coal face of the labour market.
Another measure that should be addressed is the need to ensure that wages and working conditions are at least equivalent to what a domestic worker would receive in the same occupation in the same sector. This ensures that employers will make an effort to recruit or perhaps train locals to fill vacant positions rather than resorting to foreign labour recruitment because it is easier.
Finally, another regulatory measure that the Philippines may want to consider in developing its foreign worker entry requirements is extent to which foreign workers should be bound to their sponsoring employer. With regard to the latter, at a minimum it would seem desirable from a human rights perspective that a foreign employee should be able to apply for another visa/permit under another sponsor if so desired without having to leave the country. This provides the foreign workers with a least minimal scope for extricating themselves from an exploitive situation, or one in which actual work entitlements were less than promised.
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SOURCES
Deegan, Barbara (2008), Visa Subclass 457 Integrity Review, Final Report, Department of Immigration and Citizenship, Canberra, http://www.immi.gov.au/skilled/457-integrity- review.htm
DEEWR (2010), Skill Shortage Methodology, Department of Education, Employment and Industrial Relations, Canberra, http://www.deewr.gov.au/Employment/LMI/SkillShortages/Pages/MethodologyPaper.aspx
DOLE (1997), Proceedings of the Sectoral Consultation with the Business and Professional Sector Regarding the Review of the Labor Market Test, Manila, September 3-4, mimeo.
Gera, S., S. Larvea & T. Songsakul 2004, International mobility of skilled labour: analytical and empirical issues, and research priorities, Working Paper 2004 D-01, Human Resources Development Canada.
Iredale, R., T. Turpin, C. Stahl & T. Getuadisorn ( 2010), Free Flow of Skilled Labour Study, ASEAN Secretariat, Final Report, 10 November.
Jansen M. & R. Piermartini 2004, „The impact of Mode 4 on trade in goods and services‟, WTO, Economic Research and Statistics Division, Staff Working Paper ERSD-2004-07.
Mamdouh, H. 2004, „Movement of natural persons under the GATS‟, IOM/World Bank/WTO Seminar on Trade and Migration, Geneva, 4 October 2004.
Morris, Rosemary (2001), “The Scheduling of Economic Needs Tests in the GATS: An Overview”, Trade in Services: Negotiating Issues and Approaches, OECD, Paris, pp. 27-47.
OECD 1995, SOPEMI Trends in international migration, Annual Report, 1995 Edition, Organisation for Economic Co-operation and Development, Paris.
PriceWaterhouseCoopers (PWC) 2006, Managing mobility matters, http://www.pwc.ch/user_content/editor/files/publ_tls/pwc_managing_mobility_matters_e.pdf
Skills Australia (2010), Australian Workforce Futures: A National Workforce Development Strategy, Canberra, http://www.skillsaustralia.gov.au/PDFs_RTFs/WWF_strategy.pdf
Stahl, C. 2001, „The impacts of structural change on APEC labour markets and their implications for international labour migration‟, Asian and Pacific Migration Journal,. 10(3-4): 349-77.
Tabladillo, Stephanie B. (2009), “The Philippine labor market test in a global working world”, Intitute for Labor Studies, Policy Briefing, Issue 5, July, Manila.
UNCTAD (1999), Lists of economic needs tests in the GATS schedules of specific commitments, UNCTAD/ITCD/TSB/.
Wongboonsin, P. 2008, Services trade and labour migration in ASEAN: what has been achieved, paper presented at a sub-regional conference on Services Trade Liberalisation and Labor Migration Policies in ASEAN: Towards the ASEAN Economic Community, organised by the Asian Development Bank Institute & Chulalongkorn University, 23-26 September.
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World Bank 2004, „Labour mobility and the WTO: liberalising temporary movement‟, in Global economic prospects 2004, Washington, D.C. World Bank, pp. 173-76.
WTO (2005), “Communication from Canada: Mode 4 Commitments and Economic Needs Tests”, Council for Trade in Services, TN/S/W/46, S/CSC/W/47. Nathan Associates (2009), Economic Needs Tests in Services Schedules of ASEAN Member States: Analysis and Recommendations, USAID.
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APPENDIX 1
Comparative immigration and employment regulations in relation to skilled human resources in 8 AMS, 2010
AMS Major immigration regulations affecting Major labour regulations affecting Perceptions of future prospects for incoming skilled human resources foreign (ASEAN) skilled human change resources
Cambodia 1) If employer sponsors, get work permit Labour Law of 1997 allows employers to Very open approach in some sectors and prior to entry and stay permit on arrival. request employees from o/s, up to 10% of encouraging of new investments and most workplaces but 18-20% where immigrant professionals. 2) If independent arrival (eg tourist visa), necessary. apply for job and then apply for work permit Other areas are largely closed to locals, (Labour) and stay permit (Ministry of Interior). Some professions, eg. medicine, nursing except where shortages of specialist skills Work permits can be 1 or 2 years. and engineering, are regulated and prevail. procedures exist for assessing and recognizing foreigners. No quota and flexibility with numbers if find need more workers from o/s.
Indonesia Business visit visa for 60 days up to 180 Many agreements need to be opened up – Some respondents expressed concern days. Multiple business. visit visa valid for 1 eg law limits foreigners in broadcasting, about foreigners coming in, except in yr but individual visits of only 60 days. postal services, etc. areas of high skills shortages. Others have a more open perspective and see the benefits that could be gained. .
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Laos PDR The following types of visas are applicable Foreign investors are obliged to upgrade Following the Lao PDR National to foreign workers: the skills of their Lao employees. Under Consultation on the Protection and the Decree on the Business Law, Annex Promotion of the Rights of Migrant Business visas (N1 B2), (ST B2): Business III, certain professions are closed to Workers the government is seeking to visas are issued for foreign experts foreign workers. improve the flow of workers, mostly performing assignment under projects unskilled and semi-skilled, between provided by loan agreements and as All foreign investors and foreign Thailand and Lao PDR. provided by employment contracts or employees must obtain work visas and projects, to expert or volunteers of non- work permits. No mention has been made of skilled or government agencies, expert of education high skilled workers in government Tour guides and tour companies are both and medical staff members of diplomatic announcements. restricted to those with Lao nationality mission, general consulates, the United only. Nation agencies and other international organisations holding ordinary passport for the countries or from third countries, as well as foreign business persons. Business visas (B2) are subject to payment of mandatory visa and service fees, Multiple
entry visas may be obtained for a period of one year, six months and three months and may be renewed every year, six months, or three months until completion of assignments. Journalist Visas (M B2). Journalist visas are issued to the foreign media who will collect the news in Lao PDR. Malaysia Professional Work Permit is an Foreign professionals must meet Increased inward mobility of skilled Employment Pass (DP10 Visa). professional standards of relevant people will rely on reform of the various Professional Work Permit can be obtained organisation. Acts that restrict entry. Progress will be by an expatriate from another country is uneven as some professional groups Limited number of foreign highly skilled and is offered a skilled job in continue to seek protection. specialists/experts per institution subject to
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Malaysia. Examples of skilled categories registration and fulfillment of residency include IT Professionals, Teachers, Doctors, requirements. In wholesale & retail trade, Nursing and Managers. The initial validity of foreign managers/executives must been the pass is 2 years but it can be extended employed by the company outside for 12 years. Malaysia for a minimum of three years. Professional Worker - Visit Pass Some professions require 180 days of (Professional) issued to a foreigner who residency before they can register and holds acceptable professional qualifications practice or specialist skills and enters Malaysia to take up professional work for short term period not exceeding twelve (12) months. Applicant must be outside Malaysia at the time of application. There are four categories: 1) Expert/Volunteer; 2) Artist; 3) Mubaligh (Muslim); 4) Missionary/worker of other religions.
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Philippines A visa to take up pre-arranged employment There are currently formidable legal barriers While there is doubt that laws protecting will only be issued if it is established that no to skilled workers finding employment in the the professions will be changed any time person can be found in the Philippines Philippines. There are 42 professions that soon, there may be scope for willing and competent to perform the labour are covered under existing laws that restrict maneuvering around these legal or service for which the non-immigrant is employment in these professions to restrictions. Professional bodies could desired and that the non-immigrant‟s Filipinos. The laws governing the become more involved in setting admission would be beneficial to the public professions are constitutionally based and standards, making decisions on interest. hence very difficult to change in order to accreditation matters, and developing promote liberalisation. Foreigners who are codes of conduct. Once these bodies employed are tied to specific project and see advantage in trade in their must have an offer of employment to professional services then pressure will acquire a temporary work permit. These are be put on legislators to craft exceptions usually intra-company transferees. There is to existing laws. little, if any scope for IPs or CSS workers to
enter. All positions are subject to a labour market test to determine if there is a qualified and willing Filipino to fill an advertised vacancy. Thailand Relevant types of non-immigrant visas Most foreigners who intend to work in The number of laws that would need to applicable to aliens entering on a temporary Thailand are subject to the Alien Employment changed is very high and the perception is basis for a specific purpose: Act B.E. 2521 (A.D. 1978). Under the that in the short term it is better to work provisions of this Act, a foreigner cannot within existing laws. Business (B): For foreigners engaged in perform any act of work or service unless a general business. Length of stay: max 1 year work permit has been issued by the Investment thru Ministry (IM): For investors Department of Employment, Ministry of approved by various Thai government Labour, or unless the individual, or the work ministries and agencies. Length of stay: max performed, falls within an exception to the 1 year Act. Investment thru BOI (IB): For The term „work‟ is defined very broadly, investors/foreign workers whose projects are covering both physical and mental activities, promoted by the Board of Investment. whether or not for wages or other
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Length of stay: max of 90 days. remuneration. Working without a valid work permit even for a day is a criminal offence. Research & science (RS): For aliens The validity period of a work permit is engaged in scientific research or teaching in governed by the holder's immigration status, a research or educational institution in i.e. a work permit usually expires on the last Thailand. Length of stay: max of 90 days day of the period of stay allowed by Experts (EX): For performing skilled or immigration officials as shown on the alien's expert work. Length of stay: max of 90 days visa. Length of stay: max of 90 days The Department of Employment establishes Mass media (M): To work as a film-producer, criteria for the approval of a work permit journalist or reporter. which can be summarised as follows: The Board of Investment coordinated the Job or profession must not be prohibited; establishment of a One-Stop Service centre Whether the job can be done by Thai for Visas and Work Permits. Through joint national. cooperation with the Immigration Bureau and Amount of invested capital. the Ministry of Labour, the centre can Whether the transference of technical process applications or renewals of visas and knowledge is of benefit to Thai nationals. work permits within three hours, upon receipt Whether the salary paid to foreigner is at a of proper and complete documentation. The high rate, in which case a work permit is centre handles other transactions, including more likely. the issuance of multiple re-entry stamps, Other special circumstances. changes in visa status (to non-immigrant Royal Decrees 1973&1979 listed 39 from tourist or transit), and payment of fines, occupations and professions that were all within three hours or less. prohibited to foreigners. Most are less skilled For obtaining type „B‟ visa, the following occupations with the exception of: requirements apply: Specialised work in primary industries Thai company must have 4 Thai employees, Supervising, auditing or giving services in valid work permit, registered capital of THB 2 accountancy mln, audited balance sheet, with minimum of Brokerage or agency (excluding brokerage or THB 1 mln equity and meet minimum salary agency in international trade business). Engineering work in civil engineering branch
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rate (for managers at least 50,000 concerning designing and calculation, Baht/month) organisation, research, planning, treating, construction supervision or advising (excluding specialised work) Architectural work concerning designing, drawing of plan, estimating, construction directing or advising Guide or conducting sightseeing tours Legal or lawsuit services.
Viet Nam Must have work contract to get visa. Decree No 34 (2008) on foreign workers - Decree 34 being revised. No scope Qualifications and experience assessed by 20% of employees and management must be currently for waiving provisions for other MOLISA or DOLISA. Or relevant government Vietnamese. AMS. department. Employers have to prove that they need a Obligation to own population means Maximum visa is for 36 months. specific skill or not enough local people are protect jobs and develop human available to bring in a high skilled person. resources. Will open up when others do. LMT required. LMT requires 1 advertisement Eventually want to send high skilled in nat. and local newspaper. If not successful workers offshore, like Philippines and in 1 months can apply to bring in foreigner. India. Revising regs so that income and bonuses must be declared in advertisement. Labour contract sent to MOLISA and 64 provincial DOLISAs and work permits issued, depending on length of contract. ICTs must have worked for one year with company before coming. Work permit based on length of work contract – linked to employer. Can be extended to 36 months. Work permit requires: 1. >18 yrs
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2. good health 3. highly skilled 4. no criminal record 5. work contract. 6. New employer requires new work permit.
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