The Maritime Union of Australia is calling for a royal commission into the 457 skilled migrant visa program for temporary overseas workers.
There are allegations that an American oil and gas drilling company operating off the West Australian coast is using a special roster system to help its fly-in, fly-out employees reduce their tax obligations in Australia.
The allegations concern the United States-based oil and gas drilling company Diamond Offshore, which operates two rigs off the coast of Western Australia.
According to the West Australian newspaper, one-third of the company's workforce is from overseas, mostly Americans on the sub-class 457 visa for temporary skilled migrants.
It has obtained internal documents it that allegedly show they're employed on a 183-day-a-year roster.
The National President of the Maritime Union of Australia, Christy Cain, said this means the workers remain below the Australian Taxation Office's threshold for residency for tax purposes, and can minimise their tax liability.
Mr Cain wants a royal commission into the practice, which the union believes is more widespread.
"They are getting away with it by working them just less than six months over a roster cycle, which they say excludes them from putting Australians on that rig," he said.
"It's the biggest rort of all time. Australians have a right to work in their own country and the border doesn't stop at the waterline. It's certainly Australian waters and these jobs should be given to Australians who pay tax in this country."
He said there is no skills shortage for oil and gas operators in Western Australia and the 457 visa system is disadvantaging local workers.
"What they are doing in our view may not be illegal but it's immoral. Just in my union alone there are hundreds of workers now out of work.
"There is no boom on the west coast of Australia and the offshore oil and gas industry is at an all-time and there are plenty of Australians who could do those jobs on that rig or on them rigs quite easily."
The Federation of Ethnic Communities' Councils of Australia (FECCA) sees the 457 program as giving the Australian economy a much-needed boost.
Chairperson Joe Caputo said workers who come to Australia in this category are already in a precarious position.
"In terms of the 457 workers themselves, we do find that in many instances, they are also the most vulnerable workers in Australia because they often don't know the industrial relations system, industrial laws etc.," he said.
"I think it is very important to ensure that if there are any problems within the system the authorities look at it and ensure that these problems are resolved, because given the insecurity that many people on 457 visas (have) they could open themselves up to exploitation.
"The last thing we want in Australia is to have a dual labour market where some workers are protected and others are not."
Mr Caputo said a royal commission would be a step too far, preferring the authorities deal with any related issues on a case-by-case basis.
"I don't think a royal commission is warranted in this instance. I think what's warranted is society to ensure that if there are any operators or any companies that abuse the system, then the government should ensure that that does not happen. I think that that's what the authorities are there for."
The West Australian has quoted what it calls an "insider" on one of Diamond Offshore's rigs, who claimed it is widely known that overseas workers stayed under the 183-day rule to minimise tax.
The Ocean Monarch rig is drilling the Phoenix South Two well in the northwest shelf off Western Australia.
Eighty per cent of the venture is owned by the Quadrant Energy company and 20 per cent by Carnarvon Petroleum.
A Quadrant spokesman told Fairfax Media the drilling had been conducted over several months.
He said the company expected all service contractors to comply with local laws and regulatory requirements and it had no advice to suggest they weren't.
SBS has attempted to contact Diamond Offshore.