Compliance matters: Protecting your business from migration sanctions
Compliance matters: Protecting your business from migration sanctions
The spotlight on Australia’s evolving migration regulations continues to intensify, making compliance imperative for businesses. Recent enforcement actions underscore the significant risks and consequences of non-compliance.
The Australian Border Force (ABF) recently updated its Register of Sanctioned Sponsors, revealing that 16 businesses faced sanctions in September 2024, contributing to 83 sanctioned entities for the year. This development highlights the importance of adhering to sponsorship obligations to avoid severe repercussions.
Key issues highlighted by recent Border Force sanctions
The ABF’s updated register names entities that have failed to meet their obligations under the Migration Act. Inclusion on this list not only results in financial penalties but may result in prohibition from employing foreign workers and can also cause lasting reputational damage.
Primary areas of concern include:
- Fair compensation: Ensuring migrant workers receive appropriate pay in line with Australian labour laws
- Workplace conditions: Upholding safe and lawful working conditions for all employees
- Documentation and reporting: Maintaining accurate records and reporting any employment changes promptly to the relevant authorities.
Lessons from recent non-compliance cases
McCrystal litigation
The Fair Work Ombudsman is acting to protect visa holder workers and ensure compliance across the agriculture sector as a priority. The litigation involving McCrystal Agricultural Services serves as a cautionary tale. The Fair Work Ombudsman has commenced legal action against the labour hire business and sweet potato farm, alleging it unlawfully deducted money from migrant employees - a situation that can result in costly penalties and extensive legal fees.
The farm workers, who were from Vanuatu, performed tasks such as cutting and sorting sweet potato vine into bundles; planting and packing sweet potatoes; weeding; general farm hand tasks; and constructing boxes for packaging. The Fair Work Ombudsman is seeking penalties against McCrystal Agricultural Services Pty Ltd and Mr McCrystal for alleged contraventions of the Fair Work Act. The company faces penalties of up to $66,600 per contravention and the Director, Mr McCrystal, faces a penalty of up to $13,320.
This case emphasises the need for organisations to foster a culture of compliance, where employees and employers are educated about their rights and responsibilities under Australian law. Proactive measures, such as regular training and audits, can help mitigate risks and ensure adherence to regulations.
Manningham Food, Restaurant and Café (FRAC) inspections
In October 2024, the Fair Work Ombudsman (FWO) announced that Manningham FRAC faced significant scrutiny due to compliance failures related to work practices and employee entitlements. The inspections revealed a series of violations that impacted the workers and exposed the company to legal repercussions and financial penalties. The inspections are part of the FWO’s national Food Precincts Program, which assesses compliance with the Fair Work Act in food precincts. This case illustrates the necessity of robust compliance mechanisms, to ensure that visa-holders and employees’ rights are protected and that labour laws are followed. Organisations should regularly review their practices to identify any potential compliance gaps.
The broader implications for your business
The implications of these sanctions extend beyond immediate penalties. They reflect a broader trend towards stricter enforcement of labour laws and greater scrutiny of employer practices. This trend will likely continue, driven by increasing public and governmental focus on protecting vulnerable workers and ensuring fair treatment.
For businesses, this means that compliance is not just a legal obligation but a critical component of corporate responsibility and reputation management. Companies that fail to meet these standards risk not only financial penalties but also damage to their brand and trust with stakeholders.
Protecting reputation and operations
Non-compliance with migration laws can lead to severe repercussions, including legal actions, financial penalties, and loss of business opportunities. Companies must prioritise compliance to protect their operational integrity and reputation. Engaging in regular compliance audits, staying updated with legislative changes, and fostering an organisational culture that values ethical practices are essential to safeguarding against non-compliance risks.
Building client trust
Demonstrating compliance not only protects the organisation but also builds trust with clients. Clients are increasingly aware of the importance of working with compliant firms, and those showcasing their commitment to ethical practices are more likely to attract and retain business. Transparency in compliance efforts and clear communication about processes can enhance client relationships and reinforce credibility.
Strategic approaches to compliance
To avoid severe penalties, businesses should adopt a proactive and strategic approach to compliance. This includes:
- Regular audits and reviews: Conducting regular internal audits to ensure compliance with all relevant laws and regulations. This helps identify potential issues before they escalate
- Employee training and awareness: Ensuring that all employees, especially those in HR and management, are well-informed about compliance requirements and best practices
- Robust reporting mechanisms: Implementing systems for accurate and timely reporting of employment conditions and any changes to the relevant authorities
- Cross-functional collaboration: Leveraging expertise from various business functions, such as legal, HR, and international trade, to create a comprehensive compliance strategy.
BDO comment
The ABF and FWO’s recent actions serve as a reminder of the critical importance of compliance in migration and employment. For businesses, this is an opportunity to avoid sanctions and demonstrate leadership in ethical employment practices. By adopting a proactive and strategic approach to compliance, businesses can protect their interests, enhance their reputation, and contribute to a fair and just workplace environment.
Recent compliance failures highlight the crucial importance of adhering to migration regulations. The lessons learned from these developments are clear: compliance is not merely a legal obligation; but a cornerstone of sustainable business practice. Businesses must proactively ensure compliance, protecting their operations, reputation, and client relationships. This includes compliance with current laws and a proactive approach to potential future changes, adapting to new regulations and societal expectations. Investing in staff training and development and utilising technology to streamline compliance processes can position firms to navigate these changes effectively.
How BDO can help
At BDO, our Migration Services are designed to help businesses navigate these complex compliance requirements. Our team offers a range of services to support your business, including:
- Sponsorship management: We help ensure your business meets all sponsorship obligations, reducing the risk of sanctions
- Compliance audits: Our thorough audits identify and rectify compliance issues before they escalate
- Migration risk management: Our specialist team of immigration lawyers can assist you in Risk management strategy and program design, including strategy, governance, policies, procedures and training
- Resources: We provide resources and webinars for HR and management teams to stay updated on migration requirements.
Leveraging BDO’s cross-business expertise
In addition to our Migration Services, BDO's provides expert advice across Payroll Advisory, People Advisory, Consulting, Tax, Audit and more. Our multi-disciplined teams can provide valuable insights and support to help businesses navigate the complexities of cross-border employment and compliance. Contact us to discuss your compliance requirements.
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