1416168 (Migration)

[2015] AATA 3628

1416168 (Migration) [2015] AATA 3628 (13 November 2015)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Tripod Services Pty Ltd

MRT CASE NUMBER:  1416168

DIBP REFERENCE(S):  BCC2013/2071030

TRIBUNAL MEMBER:  Mary-Ann Cooper

DATE:13 November 2015

PLACE OF DECISION:  Melbourne

DECISION:The Tribunal affirms the decision under review to refuse the nomination.

Statement made on 13 November 2015 at 2:13pm

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 15 September 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 11 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)(a)(ii) or r.5.19(4)(h)(ii)(B) of the Regulations because he was not satisfied that the nominator had the need for a paid employee to work in the nominated position.

5. The applicant, as represented by its director, appeared before the Tribunal on 11 June 2015 to give evidence and present arguments. The Tribunal also received oral evidence from the applicant’s Chief Operating Officer (COO). 

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

7. For the following reasons, the Tribunal has decided to affirm the decision under review to refuse 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. The Department’s file demonstrates that the application for approval was made on the approved form. No fee is prescribed for the application.

11. The nomination application identifies the need for a Diesel Mechanic to work in the applicant’s vehicle maintenance team at its workplace in regional Victoria. According to the submissions and materials provided before the hearing, the applicant is a large-scale producer of fresh loose-leaf lettuce varieties which grows, picks, packs and delivers its produce to its clients. It stated that it had previously contracted its vehicle maintenance and repair but this had proved costly and inefficient because of the delays inherent in such an arrangement. As the business has expanded, there has been a need to increase their maintenance team and, because outsourcing had proved financially and operationally unsuccessful, it was decided to move the maintenance in-house. As the director further explained at the hearing, this is a 24-hour a day operation and consequently there is a need to have its fleet operational 24 hours a day. It was claimed that the applicant operates on over 2000 acres, uses and maintains over 1100 items of its own plant and equipment, and has approximately 120 direct employees and 330 contractors.  

12. As recorded in the Department’s decision, a copy of which was provided with the review application, the delegate was not satisfied that there was a genuine need for paid employee because the nominee was then working for applicant but not in the nominated role. He also considered that the organisational chart appeared to show sufficient numbers of diesel mechanics and was not satisfied the applicant need another.

13. At the hearing, the applicant’s director told the Tribunal that currently there are two diesel mechanics at the nominee’s workplace in Bacchus Marsh, the visa applicant and his supervisor. He said he was again advertising to fill vacant positions. On the basis of his oral evidence and the documentation provided, including the financial information which demonstrates the business’ significant turnover, the Tribunal is satisfied that the applicant has demonstrated a need for the nominated position  

14. Accordingly, the requirements in r.5.19(4)(a) are met.

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

15. Regulation 5.19(4)(b) requires that applicant is actively, lawfully and directly operating a business in Australia.

16. Documentation provided to the Tribunal demonstrates that the applicant is a proprietary company, established in 1989 and duly registered under the Australian corporations law. It conducts its business in regional areas in Victoria, and retains an active Australian Business Number (ABN) status and ongoing registration for Goods and Services Tax (GST).

17. Based on the significant amount of documentation provided the Tribunal is satisfied that the applicant is actively and lawfully operating a business in Australia and directly operates that business.

18. Accordingly, the requirements in r.5.19(4)(b) are met.

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

19. 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.

20. There is no evidence before the Tribunal that the applicant is involved in labour hire activities and the director confirmed this at the hearing.

21. Accordingly, the requirement in r.5.19(4)(c) does not apply.

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

22. 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. 

23. The applicant’s director confirmed that the employment contract provided to the Tribunal, dated 27 April 2015, was the nominee’s current contract. It specifically provides that the nominee’s employment is for 2 years and this may be extended. Therefore, it does not expressly exclude the extension of the employment.

24. Based on the financial documentation provided which demonstrates an annual turnover in the last financial year of over $20m , the Tribunal is satisfied that the applicant has significant financial capacity and that 2 years’ employment would be available to the employee.

25. On this basis the Tribunal is satisfied that the nominee will be employed in the nominated position for 2 years and that there is no express exclusion of an extension of that employment.

26. Accordingly, the requirements in r.5.19(4)(d) are met.

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

27. 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.

28. As the Department’s guidelines provide,

    Terms and conditions

    The regulation requires the nominated position's pay, hours of work and leave entitlements (among other things) to be no less favourable than those provided to Australian citizens and permanent residents performing the same or similar work in the nominator's workplace.[1]

    [1] PAM - Div 5.3 - General > PAM - Div5.3/Reg5.19 - Approval of nominated positions (employer nomination) > Page 2 of 4 Reg 5.19 - Approval of nominated positions (employer nomination) accessed 12 November 2015

29. The Tribunal acknowledges that it is not bound by Departmental guidelines but considers this policy is consistent with the ordinary and accepted meaning of the phrase and has considered the provision in this context.

30. At the hearing, the applicant’s director told the Tribunal that currently there are only two mechanics in the Maintenance Division at Bacchus Marsh, one supervisor and the nominee, who is working in the nominated position. Therefore there is no Australian citizen performing equivalent work in the same workplace at the same location. It follows that the Tribunal must consider what terms and conditions would be provided to an Australian citizen or permanent resident performing work in the same workplace at the same location.

31. The Tribunal was provided with the Tripod Services Agreement 2009-2013 (the Agreement) which, it was confirmed, still covered the workplace. The Tribunal notes that it covers the employees of Tripod ‘who fall within the classifications contained in the Appendices of this Agreement.’ and ‘deals comprehensively with the terms and conditions of employment of employees bound by it..’(cl. 34). As confirmed by the nominee’s contract of employment, the terms and conditions of the nominated position are governed by the Agreement. As also confirmed at the hearing by the COO, the nominated position falls within the C10 classification at Appendix E of the Agreement.

32. The Tribunal is therefore satisfied that the Agreement provides the legally minimum standard for wages and working conditions for the nominated position and is the appropriate measure against which to assess whether 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 working in the same position at the same location, that is, as a diesel mechanic at the applicant’s Bacchus Marsh operation.

33. In this context the Tribunal notes that it is not possible for an employment contract to provide less than that provided for in the enterprise agreement. This is confirmed by information on the website of the Fair Work Ombudsman which states:

    Employment contracts

    An employment contract is an agreement between an employer and employee that sets out terms and conditions of employment. A contract can be in writing or verbal.

    Can a contract provide for less than the legal minimums?

    An employment contract cannot provide for less than the legal minimum set out in:

    ·the National Employment Standards (NES)

    ·awards, enterprise agreements or other registered agreements that may apply.

    All employees are covered by the NES, regardless of whether they’ve signed a contract. A contract can’t make employees worse off than their minimum legal entitlements.[2]

    [2] accessed 13 November 2015.

34. The nominee’s employment contract specifies that the nominee’s ordinary hours of work are 50 per week plus any reasonable additional hours in order to complete the work. The salary is specified to be $75,140.00 per annum. The contract makes no provision for penalty rates, shift allowances, and, notwithstanding its acknowledgement that the employment is governed by the Agreement, states that the applicant’s base salary “is inclusive and paid in full satisfaction of all payments and benefits that the Company is legally obliged to provide to you under the Agreement or the Fair Work Act 2009 (Cth) including but not limited to any allowances, penalty rates and annual leave loading.” It does however, somewhat inconsistently, also provide for payment for approved overtime. As confirmed with the applicant’s COO at the hearing, the employment contract is not, and does not purport to be, an individual flexibility arrangement (cl. 31 of Agreement).

35. As well as the nominee’s contract of employment and the Agreement, the employer had also provided a schedule indicating how the employee’s annualised salary has been calculated.

36. At the hearing the COO told the Tribunal that the nominated position is required to work night shift Monday to Friday from midnight to 10.00 am and confirmed that these were 10-hour shifts, not including a break. The Tribunal noted that the employment contract specifies 50 ‘ordinary hours’ of work per week however the Agreement, which he confirmed was still in operation, and which the employment contract specifies covers the nominee’s terms and conditions, stipulates that the ordinary hours of work are 38 per week, and are not to exceed 152 hours in any 28 day period (clause 13.2). The COO confirmed the Tribunal’s calculations that the nominee works 200 hours over 28 days.  The Tribunal asked how this was consistent with the terms of the Agreement and how it was not less favourable than what would be required to be provided to an Australian citizen or permanent resident. This issue was addressed in a later submission discussed below.

37. The nominee’s contract classifies his employment at level C10 of Appendix E of the Agreement. Appendix E is headed “Maintenance employees”. In relation to the hours within which the job is performed, the Tribunal noted that Appendix E allows for work up to 12 hours a day by agreement, but expressed its view that this did not derogate from the maximum 38 ordinary hours per week or 152 hours in a 28-day period. Appendix E also specifies that the ordinary spread of hours is between 6.00 am to 6.00 pm Monday to Friday and does not embrace a midnight to 10.00 am shift. In addition it noted that the Agreement defined a ‘Maintenance shift worker’ as someone who is “occasionally called in to work”  for an afternoon shift or a night shift – not for someone to work such hours permanently as indicated by the employment contract for the nominated position. The Tribunal observed that the Agreement included the availability of Individual Flexibility Arrangements (IFA) which allowed for a separate agreement as to when the work is to be performed however it did not provide for an extension of the ordinary hours of work. The Department’s file had included an IFA for the nominee which had stipulated 38 ordinary hours per week but the COO confirmed this agreement was no longer operational.

38. In addition, in relation to the salary calculations, the Tribunal had assessed the applicable annual salary according to the terms of the Agreement, that is, for a maintenance shift worker working night shift. Clause 9(d) of Appendix E provides that workers performing such work are entitled to time and a half for the first 3 hours and double time thereafter for each shift. The Tribunal observed that its calculations led to a higher salary than that which was being paid to the nominee in the nominated position. The COO explained his calculations as to the appropriate pay rate and confirmed the lower pay rate for the work after 8.00 am on the basis that the night shift spread of hours only went to 8.00 am in the morning and the nominee worked until 10.00 am. That is, he had applied the ordinary, lower rate of remuneration for the period 8.00 am to 10.00 am.    

39. The Tribunal allowed the applicant some time to consider the Tribunal’s observations and provide a response. In his response, the COO referred to various provisions relating to ‘reasonable hours’ in the Fair Work Act 2009 (Cth), claiming it is common practice to work long hours and long shifts in the horticulture industry and that “anyone who works over 38 hours or outside the span of ordinary hours is paid overtime in accordance with the Agreement or a salary that included payment for the set overtime hours.” The submission asserted that ordinary hours of work (being no more than 38) and the span of hours under the Agreement are established to ensure that employees are not required to work excessive hours at base rates of pay and that work outside these hours is properly remunerated either through shift penalties and/or overtime rates.

40. It was further acknowledged that Appendix E covers the nominee’s work and that it provides the ordinary hours of work in a day may not exceed 8, that the spread of hours is 6 am to 6 pm, and that permanent  employees are entitled to overtime at time and a half for first three hours and double time thereafter.  It is stated that the nominee works 10 hours from midnight to 10 am each night over 5 days per week but the position is not a shift position because it does not fall within the definition of afternoon or night shift (any shift finishing after midnight and at or before 8 am), so shift penalties do not apply. It is further asserted that, because the nominee does not work beyond 8 “ordinary” hours, which the submission identifies by reference to the spread of hours of 6.00 am to 6.00 pm, the nominee’s work from 6.00 am to 10.00 am does not attract any “overtime penalty” rate. For reasons which are not entirely clear, it is then stated that the nominee is paid overtime at time and a half for his first three hours, and double time for the next 3 hours and after that is paid ordinary hours. In summary, the nominee is paid 20 hours ordinary time under the Agreement, 15 at time and a half and 15 at double time and, it is asserted, this equates to a salary of $75,140. It is stated that 30% of the applicant’s workforce work 50 hours as a standard week. It is therefore claimed, in conclusion, that the nominee is employed under the standard terms and conditions provided to all the applicant’s employees  and therefore they are no less favourable than those that would be provided to an Australian citizen or permanent resident performing the same work.

41. The Tribunal notes that the submission does not address the issues it queried. Specifically, while maintaining that 50 hours’ work per week, all on night shift, are “reasonable” hours, it does not address the issue of the specific provision in the Agreement for 38 “ordinary hours” per week with a maximum of 152 in a four week period. In addition it provides no details on the salary calculations as requested and therefore the Tribunal’s concerns in this regard remain. They are addressed further below.

42. Other than the Agreement, the Tribunal does not have before the terms and conditions of the other 30% of the applicant’s workforce to which the submission referred, and the applicant has made it clear at the hearing that there are no other employees in the same position at the same location performing the same work. Therefore the Tribunal has proceeded to make its assessment on the basis of the terms of the Agreement.

43. It notes that the applicant’s above submissions are inconsistent with its  submission provided prior to the hearing. In that bundle of documents,  under the heading  “2. Role of Diesel Mechanics at Tripod” it is stated,  “this position is done through the night and is classified as a shift work position. The Diesel mechanic  that completes this position is subject to all loadings and shift allowances in accordance with our enterprise bargaining agreement.” On the later submission of the applicant’s COO, and following the Tribunal’s specific queries regarding the calculation of the salary, the COO maintained that this is not a shift work position because the hours of work do not fit within the definition of shift work in the Agreement. The Tribunal does not accept this depiction of the work required by the nominated position. Under clause 9 of Appendix E, a “maintenance shift worker”, is a maintenance employee who is “”occasionally called in to work during the hours set out in clause 9(b)”. This clause provides that an afternoon shift is one which finishes after 6 pm and before midnight and a night shift is any shift finishing after midnight and before 8 am. The nominated position commences at midnight and finishes at 10.00 am and on this basis the applicant has later claimed that the nominated position is not a shift position. The Tribunal considers this submission contrived and does not accept that, because the nominee works in excess of the hours identified as night shift, the work is not appropriately characterised as shift work within the ordinary understanding of the term and as acknowledged in the applicant’s original submissions.

1. The COO also claimed that the applicant ordinarily works 50 hours a week and this is consistent with contract which provides “Ordinary Hours of Work” are 50 per week. It was also agreed that this amounted to 200 hours in a four-week period. The Tribunal notes however that, in the absence of an individual flexibility agreement, 50 ‘ordinary hours’ per week are less favourable (and arguably in contravention of) the Agreement which specifically provides for ‘ordinary hours’ of 38 hours per week with a maximum of 152 hours in any four week period. The Tribunal acknowledges that Appendix E provides for 12 hours work a day  by agreement, but this clause specifically incorporates and is qualified by cl.13.2 of Agreement and the requirement that these hours are not to exceed 152 in a 28-day period. Therefore the Tribunal considers that the identification, in the applicant’s employment contract, of “ordinary hours” of work as 50 per week, is incompatible with the provisions of the Agreement and less favourable than the terms and conditions it provides. As noted above (paragraph 34) an employment contract cannot provide for less than an enterprise agreement. The Tribunal notes that the Agreement was approved by Fair Work Australia on 7 April 2010, with a number of undertakings by the employer which are not disclosed, and, as noted above, is stated to cover all employees who fall within its classifications. The nominated position is acknowledged by the applicant, and specifically by the employment contract, to be governed by the Agreement. Therefore the Tribunal is not satisfied that the hours of work of 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.

2. The Tribunal acknowledges that there is provision for overtime in the Agreement however it is defined in clause 4 as “hours worked by an employee in excess of their ordinary hours of work.” If the applicant is to be consistent in its characterisation of the applicant’s employment, then this would mean, with 50 hours as his “ordinary hours” of work, the applicant would not be entitled to any overtime payment. While the applicant might be seen, by virtue of its payment of overtime to the applicant from the commencement of each of his shifts,  to be providing more favourable terms and conditions than those provided by the Agreement, this is counterbalanced by the payment of his ordinary hourly rate for the last four hours of his shift.  That is, while the payment of time and half for his first three hours and double time for the next three hours, might be seen to provide a more favourable wage for nominee, given his ‘ordinary hours’, it does not do so when compared to rate of payment required to be made if the position is characterised, as claimed in original submissions, as shift work (p7 of “Tribunal Information Brief”). 

3. The Tribunal considers that the applicant’s initial submission correctly identifies the nature of the work performed  and accepts it as an appropriate characterisation of the nominated position. That is, that the nominee’s work from midnight to 10 am is appropriately characterised as shift work, and accordingly, as claimed by that submission, would be paid all relevant shift allowances. On the terms of the Agreement this would be time and a half for first three hours and double time thereafter (clause 9(d) of Appendix E). That is, the payment of double time would extend to 10.00 am, when the nominee finishes work and not revert to ordinary rates at 6.00 am, as he is now paid. Therefore, on the basis of the evidence before it,  the Tribunal is not satisfied that the salary of the  nominated position is no less favourable than that that would be paid ( or indeed legally required) to be paid to an Australian citizen or permanent resident performing the same work at the same location.

4. The Tribunal also considers that the terms of the Agreement do not contemplate shift work as a regular pattern of work but something for which a maintenance employee is “occasionally called in to work” (Appendix E, clause 9(a)).  In this context the requirement for the nominee to regularly work a midnight to 10 am shift five days per week is not an arrangement sanctioned or authorised by the Agreement and to that extent, in respect of the nominated position, it provides for less favourable terms and conditions than those that otherwise apply to employees at the workplace.

5. Having carefully considered all the evidence, and for the reasons outlined above, the Tribunal is not satisfied that the hours and pattern of work of the nominated position, and the salary paid, are no less favourable than those that would be required to be paid to an equivalent Australian worker.

6. Therefore the Tribunal is not satisfied 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.

7. Accordingly the requirements of r.5.19(4)(e) are not met.

8. It follows that the requirements of r.5.19(4) as a whole, are not met.

   CONCLUSION

9. For the above reasons the Tribunal is not satisfied that the applicant meets the requirements of r.5.19(4). The applicant has not sought to satisfy the criteria in Temporary Residence Transition Nomination stream, and as such has not met the requirements in r.5.19(3). Accordingly, the nomination of the position cannot be approved. Therefore, the Tribunal must affirm the decision under review.

   DECISION

10. The Tribunal affirms the decision under review to refuse the nomination.

    Mary-Ann Cooper
    Member

    ATTACHMENT  -  EXTRACTS FROM THE MIGRATION REGULATIONS 1994

    5.19     Approval 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).