We have been advised by Immigration NZ (INZ) that their legal section has recently sent out a reminder to all staff that partnerships are not considered to be legal entities and therefore cannot support work visa applications.
INZ issued a Visa PAK 237 back in 2015 stating that only three entities could be an employer of migrant workers in their opinion:
- Human Beings
- Corporate persons including:
- Companies formed under the Companies Act; whether limited or unlimited e.g. Progressive Enterprises Limited
- Corporations formed under specific statue
- Incorporated societies
- Incorporated charitable trust boards
- The Crown including Crown organisations as defined by the Crown Organisation (Criminal Liability Act)
Their concern with partnerships seems to be mostly around employee disputes and the fact that an employee would have limited avenues of recourse given their employer is not a legal entity. However, it is entirely legal for a partnership to be an employer in New Zealand.
The immigration instructions, which case officers use to assess visa applications, seem to be silent on whether or not the employer is required to be a legal entity. Therefore, it seems INZ are applying policy in this case.
Relevant to this was a decision from INZ in 2019 that partnerships could not meet immigration instructions to become an accredited employer. Again, it was mentioned that disputes was the main point of contention.
For those employers that are currently partnerships, the only real fix here is to have the employment agreements in the name of a limited liability or the names of the actual partners. I do have some reservations with this as this could raise sustainability issues. In most cases the limited liability is not the main vessel for the financials as this would be on the partnership. If INZ are not satisfied with the close nexus between the partnership and the limited liability there could be issues.
This is especially concerning in regards to accreditation applications, and given accreditation will become mandatory next year, it will be interesting to see if a common sense approach would be taken to the assessment of employer sustainability.
For further information please call Cameron at VisaAide – 09 281 3372 or email email@example.com