Under a controversial visa program that allows employers to bring in these workers for up to four years, the meat industry is permitted to import only slaughterers.
But those coming in have been given other jobs, such as boning and slicing, prompting union complaints that employers are going beyond the law.
The Australasian Meat Industry Employees Union also says some workers are being used for unskilled labouring, and that people are being exploited with low wages and below-standard conditions.
The Government is about to release results of an inquiry into a company against which allegations were made.
Immigration Minister Amanda Vanstone yesterday acknowledged there were problems in parts of the industry.
These were in relation to "people being required to work below their proper skill capacity, and allegations of inadequate pay."
In 2004-05 nominations were approved for fewer than 200 slaughterers.
But in 2005-06, the number was approaching 2000 (the figure includes some butchers).
Under the proposed deal between the Government and the industry, the skills category would be widened so that companies can bring in any worker who has a basic meat industry trade qualification.
The agreement would aim also to cover pay rates, commitment to training Australian workers, arrangements for settling foreign workers in local communities, and English skills, including training where these were inadequate. It might also include a cap on percentages of foreign workers allowed.
"We can tailor a labour market agreement to meet the needs of the meat industry and, at the same time, strengthen the protection of overseas workers and training opportunities for Australians," Senator Vanstone said.
But the union's federal secretary, Graham Bird, said: "The proposed labour agreement is a way of the Government and employers allowing what is currently unlawful to become lawful."
He called for a study to demonstrate that there is, in fact, a shortage of Australian workers for the industry.
"It shouldn't be necessary to bring these people in," Mr. Bird said. "But if it is necessary, they should come in as permanent migrants, with the rights of any other permanent resident of Australia."
But Senator Vanstone said companies did not always need permanent workers, and that people on this visa could move to permanent status.Related:
• Australia debates visa changes to allow semi-skilled workers
• Australia needs more migrants to boost economy
• Changes to the Working Holiday Visa in Australia
• Australia Expos for Skilled Immigrants
• Australia's skilled immigration policies working
• Competition for immigrant skilled labour in Australia