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February 04, 2022

Labor & Immigration Implications of New Australia/United Kingdom Free Trade Agreement: What to Expect

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Key Takeaways

  • On December 17th, 2021, Australia and the United Kingdom signed a new free trade agreement marking the most comprehensive and ambitious free trade agreement that Australia has enacted to date (outside of its relationship with New Zealand).

On December 17th, 2021, Australia and the United Kingdom signed a new free trade agreement marking the most comprehensive and ambitious free trade agreement that Australia has enacted to date (outside of its relationship with New Zealand). This agreement, titled Australia-United Kingdom Free Trade Agreement (‘A-UKFTA'), will create new opportunities for workers and businesses in both countries while driving economic growth across multiple sectors and strengthening the countries' bilateral relationship.

As both companies and employees alike work to recover from the economic impact the pandemic has had worldwide, A-UKFTA will allow professionals from both the UK and Australia to take advantage of eased restrictions on mobility to expand their job opportunities - and for businesses to expand their applicant pool. Australian workers will now have the same access to the UK jobs market as their EU competitors, allowing them to compete on an even field with EU nationals for the first time in almost a half a century. Young workers can now be granted longer stays in the UK for a working holiday - up to three years in each country - and have more time with which to take advantage of these opportunities as the eligible age has been expanded to youths under 35 years (from 30 years).

A-UKFTA also provides for several immigration benefits and visa updates. Under this reciprocal agreement, Australian businesses can sponsor foreign employees without the current mandatory labor market testing requirements. An especially welcome change from the current system is that once A-UKFTA is in force, employers will not be restricted to sponsoring only occupations on the Skilled Occupation List - greatly expanding the types of positions employers can sponsor.

Another immigration provision of the treaty allows UK citizens and their families to work for a business in Australia for up to four years under any working arrangement. A number of visa classifications will be amended and/or updated to provide more favorable movement between the two countries. As a result, Australian and UK nationals stand to benefit greatly from these new immigration provisions.

Both UK and Australian businesses will see economic advantages from the agreement as well, with Australian businesses being given the guaranteed right to bid to a now larger assortment of UK government contracts, and UK businesses offered enhanced incentives to invest in Australia and establish regional headquarters in the country.

Consistent with Australia's treaty process, now that A-UKFTA has been signed it goes to Parliament to be considered by the Joint Standing Committee on Treaties. The treaty itself will come into force approximately 30 days after the domestic procedures have been completed and it has been ratified by both the UK and Australia. At the moment there is no indication of when A-UKFTA may be ratified but we will continue to track any developments in this area as to keep our clients well-informed of any imminent upcoming changes.

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