1420822 (Migration)

1420822 (Migration) [2016] AATA 3419 (8 March 2016)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  JKL Group (Aust) Pty Ltd
CASE NUMBER:  1420822
DIBP REFERENCE(S):  BCC2014/358028 BCC2014/531089
MEMBER:Rania Skaros
DATE:8 March 2016
PLACE OF DECISION:  Sydney
DECISION:The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.
Statement made on 08 March 2016 at 12:45pm

STATEMENT OF DECISION AND REASONS
APPLICATION FOR REVIEW

This is an application for review of a decision made by a delegate of the Minister for Immigration on 8 December 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).
The applicant applied for approval on 22 February 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).
In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in Direct Entry Nomination stream.
The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19(4)(a) and (d) of the Regulations because the delegate was not satisfied that the applicant has a need for a Policy and Planning Manager (ANZSCO 132411). The delegate was also not satisfied that the applicant had the financial capacity to employ the nominee on a full time basis in the position for at least two years.
Mr Lingfeng Zhou, the Director and nominee, appeared before the Tribunal on 16 February 2016 to give evidence and present on behalf of the nominator (the JKL Group). The Tribunal hearing was conducted with the assistance of an interpreter in the Mandarin and English languages. However, Mr Zhou preferred to give his evidence in English for most of the hearing.
The applicant was represented in relation to the review by its registered migration agents.
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
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.
Evidence before the Tribunal
The JKL Group was registered in August 2013 and has three shareholders; the nominee, who owns 70% of the shares in the company, his spouse, who owns 15% and his brother in law, an Australian citizen, who owns 15%. The Group has been involved in a number of business ventures since its establishment in Australia. It purchased a Café in Newtown for $AU 1 million and has invested in excess of $5 million in two property development projects in Queensland. The Group has a 23% shareholding in ZHJ Property Investments Pty Ltd, an entity that provides finance to one of the property development projects.
Prior to the hearing, the Tribunal received documents regarding the nominator’s current operations in Australia, including registration documents, current financial reports, activity statements, documents relating to the business’ payroll, including superannuation payments, and expenditure on training and apprenticeship documents. The Tribunal also received a letter from the nominator’s accountant, a current employment agreement, salary information regarding the nominated position and a letter of support from the nominator’s business associates BPM Constructions and Development Group.
It was submitted that the JKL Group has a need for a Policy and Planning Director to develop, lead and oversee the Group’s investment planning strategies and that there is a need for the nominee, who is the Director and 70% shareholder, to fill that position.
At the hearing, the Tribunal discussed with Mr Zhou his background and employment history, the source of the funds used to purchase the Cafe and invest in projects in Australia and the purpose and tasks of the nominated position.
Mr Zhou gave evidence that he has been involved in his family’s business in China, a retail chain that has exclusive rights to sell western clothing and sports brands, including Addidas, Nike and Lee. Mr Zhou told the Tribunal that his father, who established the business, gave him 40% of the shares in the family company in 2011. He said that the company, which operates 20 retail outlets in Jiangsu and Shandong, has a turnover of about $AU 7 million, of which 25% is profit, and that this has enabled him to accumulate the savings he has used to invest in Australia. He stated that the total investments made in Australia since 2013 has been about $AU 6.1 million, of which $AU 2 million is his and the remainder from his father. In relation to his qualifications and skills, he gave evidence that he completed a diploma in marketing and that he has been involved in the family business from a young age. He stated that on a day-to-day basis he managed the company’s marketing, advertising and promotional activities, set sales targets for each branch and managed personnel.
Mr Zhou told the Tribunal that he initially travelled to Australia with his family on a short stay visa. He liked the environment, the strength of the economy and the political system and considered Australia to be a good place to invest.
In relation to the nominated role, Mr Zhou gave evidence that the position involves developing, planning and managing the Group’s investment strategies in Australia. He stated that before committing funds for to investment, he undertakes detailed research and analysis, including consulting with others and commissioning reports. He stated that in relation to the property investment arm of the business, he works closely with BPM, who have over 20 years of property development experience in Australia, to identify suitable development sites, he consults with designers and architects to assess layout, designs and plans, which he ensures is consistent with the research undertaken about what potential buyers want. When asked about the profile of the buyers, he stated that to the extent the law allows, the properties are marketed and sold to overseas Chinese investors with the remaining being marketed and sold in Australia. Mr Zhou showed the Tribunal a copy of a marketing brochure for one of the development projects. He stated that he had considerable input into the preparation of that material, which he directed be prepared as part of the Group’s marketing and advertising strategy. He said he negotiates pricing on behalf of the group and administers the cash flow of projects. He told the Tribunal that the Group is now working on a large-scale high-rise development project in Melbourne CBD and that it was the intention of the Group to retain the first 10 floors of that building to operate as serviced apartments. Mr Zhou showed the Tribunal detailed reports he had commissioned containing data and analysis on the viability of the project and told the Tribunal that Australia’s tourism industry was booming and that it was part of the Group’s strategy to capitalise on that by investing in serviced apartments. He indicated that he had canvassed a number of other projects on behalf of the Gorup and has to consider cash flow when making decisions on which projects to pursue. In relation to the investment in the Café, Mr Zhou gave evidence that although his brother in law manages the day-to-day operations, he is the one that makes the strategically important decisions to increase the Group’s return on investment. He indicated that he set the criteria about staffing and key positions, and product changes, and he gave the example of approving a change in the coffee bean used by the café, which led to an increase of 20% in sales.
The Tribunal noted that the position contained tasks that appeared to be relevant to other occupations, such as Finance Manager and Investments Manager, and that the duties did not all align with the nominated occupation of Policy and Planning Manager. The Tribunal acknowledged that the occupations of Finance Manager, which was in the same unit group, and Investment Manager were also on the occupations list, and noted that the position appeared to be a mix of those three occupations.
The representative submitted that while some of the duties may overlap with other occupations, the occupation of Policy and Planning Manager was chosen because it is the closest description of the position. The representative also submitted that ANZSCO tasks are only a guide and should not be used prescriptively. The Tribunal acknowledged the submissions but noted that it still had to be satisfied that the duties of the position correspond to an occupation in the instrument.
It was also submitted at the hearing that the Department was concerned about the salary being offered to Mr Zhou and the concern that it was to circumvent the English requirement. The representative referred to Mr Zhou’s role as a Director with the nominator and referred the Tribunal to Mr Zhou’s IELTS test report, which indicated that Mr Zhou achieved a score of 6.0 for speaking, 5.5 overall and no band less than 5.0. It was submitted that the Group had invested a considerable amount of funds in Australia to date which has created employment and benefits to the construction industry.
After the hearing, the Tribunal received submissions regarding the nominated position. It was submitted that within the occupation of Policy and Planning Manager were the specialisations of Corporate Planning Manager and Strategic Planning Manager, which provided a more suitable description of the position nominated. The representative referred to the responsibilities of the role as described by Mr Zhou at the hearing and submitted that the position is more about strategic planning and corporate planning at a management level rather than strictly policy, although policy and strategy, in the context of the applicant’s business, are related.
The application is compliant: r.5.19(4)(a)
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, where applicable, must include the required written certification relating to conduct that contravenes s.245AR(1). The application must also identify a need for the nominator to employ a paid employee to work in the position under their direct control.
Information on the Department’s file indicates that the application for approval was made on the approved form and was accompanied by the fee prescribed. The Tribunal is also satisfied on the evidence before it that the application identified a need for the nominator to employ a paid employee to work in the position.
Accordingly, 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)
Regulation 5.19(4)(b) requires that applicant is actively, lawfully and directly operating a business in Australia.
Having considered the evidence before it, including the financial reports, recent activity statements, employment documents, letters of support and Mr Zhou’s oral evidence, the Tribunal is satisfied that the nominator is actively and lawfully operating a business in Australia and directly operates that business.
Accordingly, the requirement in r.5.19(4)(b) is met.
Position is not labour-hire: r.5.19(4)(c)
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.
The nominator’s business is not involved in labour hire activities.
Accordingly, the requirement in r.5.19(4)(c) does not apply.
Term of employment of the visa holder: r.5.19(4)(d)
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 the possibility of an extension.
The Tribunal has had regard to the terms and conditions of employment contained in the employment contract, which indicate that the nominee will be employed in the position on a full time basis for a period of 3 years which is renewable. The base salary indicated is $186,000 plus superannuation. The Tribunal notes the delegate’s concern regarding the nominator’s financial capacity to pay the nominated salary, however, the current financial reports before the Tribunal indicate that the nominator has an asset base of $3,967,930 and in the last financial year achieved a net profit of $515,023. The Tribunal has also had regard to the letter from the nominator’s accountant setting out the history of the nominator’s financial performance and certifying that the nominator has the ongoing financial capacity to offer full-time employment to the nominee at the nominated base salary.
On the material before it, the Tribunal is satisfied as to the nominator’s financial capacity and finds that the nominee will be employed in the position for at least two years full time and that the terms and conditions of that employment do not exclude the possibility of an extension.
Accordingly, the requirement in r.5.19(4)(d) is met.
No less favourable terms and condition of employment: r.5.19(4)(e)
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.
The Tribunal has had regard to the employment contract, which details the terms and conditions of the nominee’s employment, and indicates that he will be paid a base salary of $186,000 plus superannuation. The Tribunal notes the concerns raised by the delegate in a related nomination about the high level of salary being offered to the nominee, which the delegate did not consider to be consistent with the average salary paid to policy and planning managers. The Tribunal has also considered the representative submission on this point, that the nominee is the Director and 70% shareholder of the JKL Group, that he has invested a substantial amount of his own funds into the business and has a good command of the English language, and that he is accordingly entitled to a high level of remuneration. The Tribunal has also considered the information provided on average salaries, including Payscale statistics for the position Director of Strategy, which indicates the position in Australia attracts a salary of between $101,000 and $329,000, with the median being $163,674, and job vacancy for the occupation of Project Director indicating a salary of up to $200,000.
Having regard to the submissions and information before it, the Tribunal is satisfied on the evidence that he terms and conditions of employment are consistent with those being offered to a person performing a similarly senior strategic role. Accordingly, the Tribunal is satisfied that the terms and conditions applicable to the position will not be less favourable than those provided to an Australia citizen or permanent resident performing equivalent work.
Given the above, the Tribunal finds that the requirements of r.5.19(4)(e) are met
No adverse information known to Immigration: r.5.19(4)(f)
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 such information. For these purposes, ‘adverse information’ and ‘associated with’ have the meaning given in rr.1.13A and 1.13B.
There is nothing on the Department’s records to suggest that there is any adverse information known to the Department about the nominator or a person ‘associated with’ the nominator.
Accordingly the requirements of r.5.19(4)(f) are met.
Satisfactory compliance with workplace relations laws: r.5.19(4)(g)
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.
The applicant has indicated that it has a satisfactory record of compliance with workplace relations laws in the locations in which it operates a business and employs staff, and there is no evidence before the Tribunal to suggest otherwise.
Accordingly 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)
Regulation 5.19(4)(h) contains a number of alternative requirements. The relevant paragraph in this case is r.5.19(4)(h)(i), which requires the tasks to be performed in the position will be performed in Australia and correspond to those of an occupation specified by the Minister (see legislative instrument IMMI (14/049), and certain specified training benchmarks will be met.
The evidence before Tribunal indicates that the tasks of the position will be performed in Australia.
The Tribunal has also considered the nature of the tasks to be performed in the position and whether it correspond to an occupation specified on the relevant instrument. The tasks of the position as set out in documents provided with the nomination largely reiterated the tasks in the ANZSCO for the occupation Policy and Planning Manager. At the hearing, the Tribunal had the opportunity to query Mr Zhou at length about the actual duties of the position. The Tribunal initially formed the view that the tasks to be performed in the position were also consistent with other occupations on the relevant instrument, such as Investments Manager and Finance Manager. However, it was persuaded that the majority of the tasks to be performed in the position, in the context of the nominator’s business activities, sufficiently match the tasks of the nominated occupation of Policy and Planning Manager, and particularly within the specialisations of Corporate/Strategic Planning Manager. The Tribunal was satisfied on the totality of the evidence that the tasks of the position will involve planning, organising, directing, controlling and co-ordinating the Group’s research and advice on which it formulates its strategic investments in Australia.
Given the above, the Tribunal is satisfied that the tasks will be performed in Australia and correspond to the tasks of an occupation specified in the relevant instrument. The Tribunal finds that r.5.19(4)(h)(i)(A) is therefore met.
The Tribunal has also considered the training requirements in r.5.19(4)(h)(i)(B) and the relevant instrument IMMI 13/030 which sets out the requirements relating to training.
As noted above, the JKL Group commenced operation in August 2013. The Tribunal accordingly finds that the nominator has operated for over 12 months and is therefore required to demonstrate it meets the requirements relating to training.
In determining the business’ payroll the Tribunal has had regard to its financial reports and activity statements, which indicate that in the 12 months to 31 December 2016 the business’ payroll, including superannuation, was $344,536. The nominator claims to meet benchmark B, which requires recent expenditure by the business, to the equivalent of at least 1% of the payroll of the business, in the provision of training to employees of the business. The Tribunal finds that 1% of the business’ payroll is $3445. Information provided to the Tribunal, including the financial statements, invoices for training provided by external providers, apprenticeship contracts and payroll records, indicate that in the 12 months up to 31 December 2012, the nominator’s training expenditure was about $8,900, which the Tribunal is satisfied is the equivalent of at least 1% of the business’ payroll. Accordingly, the Tribunal finds that the applicant meets training benchmark B, as specified in IMMI13/030, and accordingly meets r.5.19(4)(h)(i)(B).

Given the above, the Tribunal finds that r.5.19(4)(h)(i) is met and the applicant accordingly meets the requirements of r.5.19(4)(h).
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
The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.
Rania Skaros

Member
ATTACHMENT - EXTRACTS FROM THE MIGRATION REGULATIONS 1994
5.19Approval of nominated positions (employer 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).

[2016] AATA 3419

8 March 2016

Key Legal Topics

Areas of Law

Immigration

Administrative Law

Legal Concepts

Judicial Review

Statutory Construction

Procedural Fairness

Jurisdiction