1412300 (Migration)

[2015] AATA 3095

1412300 (Migration) [2015] AATA 3095 (7 July 2015)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Gill & Gillz Pty Ltd

CASE NUMBER:  1412300

DIBP REFERENCE(S):  BCC2013/1303087 BCC2014/781460

MEMBER:Fraser Syme

DATE:7 July 2015

PLACE OF DECISION:  Brisbane

DECISION:The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.

Statement made on 07 July 2015 at 2:02pm

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1. This is an application for review of a decision made by a delegate of the Minister for Immigration on 24 June 2014 to reject the applicant’s application for approval of the nomination of a position in Australia under r.5.19 of the Migration Regulations 1994 (the Regulations).

2. The applicant applied for approval on 18 March 2014. The requirements for the approval of the nomination of a position in Australia are found in r.5.19 of the Regulations which contains two alternative streams: a Temporary Residence Transition nomination (r.5.19(3)) stream and a Direct Entry nomination (r.5.19(4)) stream. If the application is made in accordance with r.5.19(2) and meets the requirements of either stream, then the application must be approved. If any of the requirements are not met then the application must be refused: r.5.19(5).

3. In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in Direct Entry Nomination stream.

4. The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19(4)(d)(1) of the Regulations. The delegate found the financial circumstances of the applicant at the time of the delegate’s decision did not satisfy the delegate the applicant would be financially viable enough provide full time employment in the nominated position of hair salon manager for two years. The applicant included the delegate’s decision with the review application.

5. The applicant is a company. The directors of the applicant, Ms Kaur and Mr Singh appeared before the Tribunal on 29 June 2015 to give evidence and present arguments. The Tribunal received evidence too from Ms Virk, the nominee for the nominated position. The Tribunal conducted the hearing for the review of the refusal of the nomination and the review of the refusal of Ms Virk’s class RN visa (MRT file 1415712) as a joint hearing. 

6. The applicant was represented in relation to the review by its registered migration agent. The representative attended the Tribunal hearing.

7. For the following reasons, the Tribunal has decided to set aside the decision under review and substitute a decision approving the nomination.

   CONSIDERATION OF CLAIMS AND EVIDENCE

8. The issue in this case is whether the applicant meets the requirements for approval of the nomination under the Direct Entry nomination stream set out in r.5.19(4), which is extracted in the attachment to this decision. For the nomination to be approved, all the requirements must be met.

   The application is compliant: r.5.19(4)(a)

9. Regulation 5.19(4)(a) requires that the application for approval must be in the approved form, must be accompanied by the prescribed fee and must identify a  need for the nominator to employ a paid employee to work in the position under their direct control.

10. In this case, the application was made on form 1395E and was accompanied by the proscribed fee and that application identifies the nominated occupation of hair salon manager. In considering whether there is a “need for a paid employee”, the Tribunal accepts a hairdresser business could have need for a hair salon manager. The organisation chart provided shows that position to be under the direct control of the directors of the applicant. Accordingly, the Tribunal finds the requirement in r.5.19(4)(a) is met

    Nominator is actively and lawfully operating a business in Australia: r.5.19(4)(b)

11. Regulation 5.19(4)(b) requires that applicant is actively, lawfully and directly operating a business in Australia. The Tribunal is satisfied that the applicant is operating hairdressing salon in Caloundra (postcode 4551). The Tribunal has before it business registration, financial statements and taxation records relating to the applicant, and is satisfied that it is actively and lawfully operating a business in rural Australia. The Tribunal finds the requirement in r.5.19(4)(b) is met..

    Position is not labour-hire: r.5.19(4)(c)

12. Regulation 5.19(4)(c) applies to nominators’ whose business activities include those relating to labour hire to an unrelated business.  In these cases, the nominated position must be within the business activities of the nominator.

13. The Tribunal is satisfied on the evidence before it that the applicant is not involved in labour hire. The Tribunal finds the requirement in r.5.19(4)(c) does not apply.

    Term of employment of the visa holder: r.5.19(4)(d)

14. Regulation 5.19(4)(d) requires the nominee to be employed in the nominated position for at least 2 years full time, and the terms and conditions of that employment do not expressly exclude extension of the employment.

15. On the morning of the hearing, the migration agent provided a submission attaching a bundle of documents. He provided a second bundle at the commencement of the hearing. The focus of that submission and of the supporting documents was the financial situation of the applicant.

16. At the hearing, the Tribunal identified the financial viability of the applicant and its continued ability to provide Ms Vick with 2 years full time employment to be a determinative issue. It noted the applicant’s business had operated for almost 2 years. The payslips and bank statements provided demonstrated the applicant had paid Ms Virk her nominated salary of (as the holder of a 457 visa) initially of $55,000 and then of $56,000. These all weigh favourably when considering the financial viability of the applicant.

17. Ms Kaur told the Tribunal Ms Virk remained the sole employee of the applicant. When asked to explain why that was the case, Ms Kaur gave vague responses about trying her best to operate the applicant’s business. She referred to her not being skilled in hairdressing or in managing a hairdressing salon and of difficulty in recruiting hairdressers. She explained Ms Virk assists her with some management, but Ms Virk is too busy hairdressing. Ms Virk has also helped in trying to recruit other hairdressers. Ms Virk gave largely consistent evidence to the Tribunal as to her assisting with management and recruitment. Mr Singh told the Tribunal he was unable to evidence to provide beyond that of Ms Kaur and Ms Virk.

18. The Tribunal noted the organisation chart provided to the delegate (a second, identical copy was provided at the hearing). That chart displayed positions for a salon manager (the nominated position), a senior hairdresser, apprentice hairdresser and casual staff. The Tribunal noted after almost 2 years, the applicant still had only one employee. Ms Kaur explained the organisation chart remained their plan. They have tried very hard, all the time, to recruit other staff.

19. When asked for more detail about recruiting activity, Ms Kaur referred to recruiting evidence provided previously to the department from 2013. The migration agent referred to an ad placed on Gumtree in June 2014 and an ad placed with Gumtree on the date of the hearing, which was included with the evidence provided at the hearing. Mr Kaur told the Tribunal other than those ads, she had been asking around for qualified hairdressers. The Tribunal expressed an opinion it considered the level of recruitment activity was not consistent with her earlier evidence regarding doing her best to try to find staff all the time. It concerned the Tribunal why there was an incongruity between what Ms Kaur was saying and what the evidence suggested were the actual activities of the applicant.

20. The Tribunal discussed with Ms Kaur the profit and loss statements of the applicant. The applicant lost $9,700 in 2013/14,but made a profit of $22,257 in 2014/15 and paid $10,000 in director fees. The Tribunal put to Ms Kaur the reason the applicant had not hired another employee during the prior almost two years was because the applicant’s business could not afford it. Ms Kaur emphasised the applicant had made a profit in financial year 2014/15. She added hiring a second hairdresser would increase the income of the business. She felt the applicant’s business was doing well and would be able to give Ms Virk two years of full-time employment. The Tribunal queried whether any increase in income from hiring a second hairdresser would be enough to cover all of the wages of both hairdressers as well as provided the ‘second income’ that she claimed was the reason she and Mr Singh established the applicant’s business. Further, if hiring that second employee could successfully do so, it again raised the question as to why the applicant had not hired a second employee at an earlier date.

21. The migration agent submitted Ms Virk was unable commence working in the role of salon manager due to the conditions of her current 457 visa, which was for the position of hairdresser. That left the applicant’s business being managed by the inexperienced Ms Kaur and Mr Singh. They are both busy and Ms Kaur was not able to participate in the management for some months due to a medical condition. Were Ms Vick able to take up the nominated position, the financial performance of the applicant’s business would improve, firstly because Ms Vick has better salon management skills than Ms Kaur and Mr Singh and secondly, because Ms Kaur could supervise other hairdressing staff, thus increasing sales. He further submitted the applicant’s business had nevertheless successfully navigated the difficult start up stage and more than doubled sales between its first and second years. He referred to a recent decision of the department to approve a new temporary residence application in relation to the applicant and Ms Vick. The Tribunal noted the criteria for the decisions under review were independent of that application.

22. The Tribunal agreed to the applicant’s request of an additional 7 days to provide further evidence after the hearing. The Tribunal particularly requested detailed balance sheets of the applicant so it could better assess the financial position. The balance sheets provided at the hearing did not disclose any fixed assets or appear to account for the purchase price of the business.

23. After the hearing, the migration agent provided a submission attaching a bundle of documents. The attachments included: a new employment contract between the applicant and Ms Virk; the applicant has exercised the option in its lease, but varied that option from 2 to 1 year; photographs of the salon, including showing three cutting stations and two wash stations; sample, handwritten salon service and record cards; a reply to the applicant’s gumtree employment ad of 29 June 2015; and sample tax invoices from supplies and for equipment dated in 2013. No additional balance sheets were provided.

24. The migration agent largely repeats the submissions he made at the hearing regarding the applicant experiencing difficulty in locating staff, Ms Vick being able to manage the business better than Ms Kaur and Mr Singh, yet, the applicant still achieved growth in its business. Consequentially, the applicant will be able to provide two years of full-time employment to Ms Virk. He advises the applicant is arranging trial employment of the responder to the gumtree ad and arranging a wider approach to recruitment of staff.

25. The Tribunal has had regard to the employment contract provided after the hearing. It is poorly drafted. There is nothing in the operative clauses which stipulates the length of employment. There is a list items which appear at the top of the first page of the contract, prior to what is headed as the operative part.  Therein the ‘term of employment’ is recorded as: ‘full-time for a period of no less than two years’. There is no clause expressly excluding any extension beyond two years. Looking at the document as a whole, the Tribunal is able to infer the intention of the parties is for the employment contract to be for at least two years.

26. The financial position of the applicant is of concern to the Tribunal. Ms Kaur and the migration agent have both stated the financial position of the applicant’s business has improved in its almost two years of operation. That is the case, but off a very low base and significantly, with Ms Virk as the sole employee. The Tribunal is not persuaded by the explanations of Ms Kaur that difficulties in recruiting a new employee is the reason why the applicant’s business has not employed any employee other than Ms Virk. The applicant only placed advertisements at the time of the visa application, the time of the nomination refusal (in June 2014) and on the day of the hearing. This strongly indicates the motivation for conducting the advertising is linked to the applications under review and not a genuine attempt to hire any employee. Supporting such a conclusion is the contradiction in the evidence that hiring an additional employee will improve the financial position of the applicant, but the applicant not so hiring any employee albeit it has operated its business for almost two years.

27. The Tribunal places weight on the evidence of Ms Kaur the reason for her and Mr Singh establishing the applicant’s business was to gain a second income for themselves. The Tribunal notes the applicant paid them director fees of $10,000 in 2014/15. Without detailed balance sheets, the Tribunal is unable to assess what return on investment that represents to them. However, while the figures of $10,000 in director fees and retained profits of more than $12,000 appear modest on their face, they would appear to be quite a reasonable return on investment given the nature of the applicant’s business. For that reason, the Tribunal is satisfied the applicant will continue to operate the business and will be able to provide at least 2 years full-time employment. Accordingly, the requirement in r.5.19(4)(d) is met.

    No less favourable terms and condition of employment: r.5.19(4)(e)

28. Regulation 5.19(4)(e) requires that the terms and conditions of employment applicable to the nominated position will be no less favourable than those that are, or would be, provided to an Australian citizen or permanent resident performing equivalent work in the same workplace at the same location.

29. The applicant provided evidence from job seeker sites regarding indicative terms and conditions for a hair salon manager, which satisfies the Tribunal the nominated salary of $56,000 is within the range of salaries for a hair salon manager. The new employment contract dated July 2015 states Ms Virk’s terms and conditions of employment are in accordance with the National Employment Standards in the Fair Work Act 2009. The Tribunal notes from the form 1404 on the department file that the relevant Regional Certifying Body (“RCB”), Queensland Chamber of Commerce and Industry – has given advice it is satisfied about the terms and conditions of employment being no less favourable. The Tribunal finds the requirements of r.5.19(4)(e) are met

    No adverse information known to Immigration: r.5.19(4)(f)

30. Regulation 5.19(4)(f) requires that there is no adverse information known to Immigration about the nominator or person ‘associated with’ the nominator; or it is reasonable to disregard any adverse information known to Immigration about the nominator or a person ‘associated with’ the nominator. For these purposes, ‘adverse information’ and ‘associated with’ have the meaning given in r.2.57 (2) and (3): r.5.19(7).

31. The material before the Tribunal does not suggest there is anything adverse known to the department about the applicant. The Tribunal finds the requirements of r.5.19(4)(f) are met.

    Satisfactory compliance with workplace relations laws: r.5.19(4)(g)

32. Regulation 5.19(4)(g) requires that the applicant has a satisfactory record of compliance with the laws of the Commonwealth, and of each State or Territory in which the applicant operates a business and employs employees in the business, relating to workplace relations.

33. The material before the Tribunal does not suggest any non-compliance by the applicant. The Tribunal finds the requirements of r.5.19(4)(g) are met.

    Tasks of the position genuine need for the position and training benchmarks r.5.19(4)(h)

34. Regulation 5.19(4)(h) contains a number of alternative requirements.  These are set out in detail in the attachment to the decision but can be briefly summarised as requiring either:

    (h)(i)the tasks to be performed in the position will be performed in Australia and correspond to those of an occupation specified by the Minister and certain specified training benchmarks will be met; or

    (h)(ii)the position and nominator’s business is located in regional Australia, there is a genuine need for the paid position under the nominator’s direct control which cannot be filled by a locally resident Australian citizen or permanent resident, the tasks of the position correspond to those of an occupation at the Australian and New Zealand Standard Classification of Occupations (“ANZCO”) skill level 1, 2 or 3; and that a regional certifying body has advised the Minister about certain matters relating to the position.

35. In the case of the applicant, it is seeking to satisfy the requirements in (h)(ii). Much of the discussion during the hearing related to this criteria. The Tribunal is satisfied from the material before it that the nominated position of hair salon manager and the business of the applicant are located in Caboolture, which is located in regional Australia.

36. The Tribunal is further satisfied on the material before it as noted above that there is a genuine need for a paid employee under the applicant’s direct control to fill the nominated position of hair salon manager. Having regard to the job description provided with the new employment contract and the tasks of a hair salon manager as described in ANZSCO 142114, the Tribunal is satisfied the tasks of the nominated position correspond to that of a hair salon manager – which is ANZSCO skill level 2.

37. As noted above too, the relevant RCB has on form 1404 given advice it is satisfied on the matters in r.5.19(4)(e) and r.5.19(4)(h)(ii)(B) and (C). The Tribunal finds all the requirements of r.5.19(4)(h)(ii) are met and therefore that the requirements in r.5.19(4)(h) are met

    CONCLUSION

38. Based on the findings above, the Tribunal is satisfied that the applicant meets the requirements of r.5.19 for approval of the nomination of the position in Australia.

    DECISION

39. The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.

    Fraser Syme
    Member

    
    

    ATTACHMENT  -  EXTRACTS FROM THE MIGRATION REGULATIONS 1994

    5.19Approval of nominated positions (employee nomination)

    …

    (2)The application must:

    (a)be made in accordance with approved form 1395…; and

    (b)be accompanied by the fee mentioned in regulation 5.37.

    …

    Direct Entry nomination

    (4)The Minister must, in writing, approve a nomination if:

    (a)the application for approval:

    (i)       is made in accordance with subregulation (2); and

    (ii)      identifies a need for the nominator to employ a paid employee to work in the position under the nominator’s direct control; and

    (b)the nominator:

    (i)       is actively and lawfully operating a business in Australia; and

    (ii)      directly operates the business; and

    (c)for a nominator whose business activities include activities relating to the hiring of labour to other unrelated businesses — the position is within the business activities of the nominator and not for hire to other unrelated businesses; and

    (d)both of the following apply:

    (i)       the employee will be employed on a full-time basis in the position for at least 2 years;

    (ii)      the terms and conditions of the employee’s employment will not include an express exclusion of the possibility of extending the period of employment; and

    (e)the terms and conditions of employment applicable to the position will be no less favourable than the terms and conditions that:

    (i)       are provided; or

    (ii)      would be provided;

    to an Australian citizen or an Australian permanent resident for performing equivalent work in the same workplace at the same location; and

    (f)either:

    (i)       there is no adverse information known to Immigration about the nominator or a person associated with the nominator; or

    (ii)      it is reasonable to disregard any adverse information known to Immigration about the nominator or a person associated with the nominator; and

    (g)the nominator has a satisfactory record of compliance with the laws of the Commonwealth, and of each State or Territory in which the applicant operates a business and employs employees in the business, relating to workplace relations; and

    (h)either:

    (i)       both of the following apply:

    (A)the tasks to be performed in the position will be performed in Australia and correspond to the tasks of an occupation specified by the Minister in an instrument in writing for this sub-subparagraph;

    (B)either:

    (I)the nominator’s business has operated for at least 12 months, and the nominator meets the requirements for the training of Australian citizens and Australian permanent residents that are specified by the Minister in an instrument in writing for this sub-sub-subparagraph; or

    (II)the nominator’s business has operated for less than 12 months, and the nominator has an auditable plan for meeting the requirements specified in the instrument mentioned in sub-sub-subparagraph (I); or

    (ii)      all of the following apply:

    (A)the position is located in regional Australia;

    (B)there is a genuine need for the nominator to employ a paid employee to work in the position under the nominator’s direct control;

    (C)the position cannot be filled by an Australian citizen or an Australian permanent resident who is living in the same local area as that place;

    (D)the tasks to be performed in the position correspond to the tasks of an occupation at a skill level of ANZSCO skill level 1, 2 or 3;

    (E)the business operated by the nominator is located at that place;

    (F)a body that is:

    (I)specified by the Minister in an instrument in writing for this sub-subparagraph; and

    (II)located in the same State or Territory as the location of the position;

    has advised the Minister about the matters mentioned in paragraph (e) and sub-subparagraphs (B) and (C).