1501051 (Migration)

[2016] AATA 4206

1501051 (Migration) [2016] AATA 4206 (11 August 2016)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Origo & Co. Pty Ltd

CASE NUMBER:  1501051

DIBP REFERENCE(S):  BCC2014/380798

MEMBER:Brook Hely

DATE:11 August 2016

PLACE OF DECISION:  Melbourne

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

Statement made on 11 August 2016 at 3:34pm

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 5 January 2015 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 10 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).

3. In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in Temporary Residence Transition nomination stream.

4. The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19(3)(c)(a)(i)(A) of the Regulations because the delegate was not satisfied that the relevant subclass 457 Visa holder had been employed in the position to which they held that these are for a period of at least 2 years in the 3 year period immediately before the nomination was lodged.

5. The applicant appeared before the Tribunal on 21 April 2016 to give evidence and present arguments, with Mrs Hii giving evidence on the applicant’s behalf. The Tribunal also received oral evidence from Shinji Kaidatsu, the nominated worker. The Tribunal hearing was conducted with the assistance of an interpreter in the Japanese and English languages. Given the convergence of issues, and with the agreement of the applicant and its agent, for convenience this hearing was conducted as a combined hearing with the related refusal of the nominated worker’s visa (Case Number 1502534) and the decision of the Department to impose a sponsorship bar on the applicant (Case Number 1502857).

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 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 Temporary Residence Transition nomination stream set out in r.5.19(3), which is extracted in the attachment to this decision. For the nomination to be approved, all the requirements must be met.

   Decision of the delegate

9. As noted above, the delegate was not satisfied that the relevant subclass 457 visa holder had been employed in the position to which they held that visa for a period of at least 2 years in the 3 year period immediately before the nomination was lodged. Specifically, the delegate referred to site visits conducted by the Department and other information provided which led the delegate to conclude that the relevant nominated worker’s duties were more closely aligned to those of a Retail Manager (ANZSCO minor group 142), rather than the occupation of Retail Buyer (ANZSCO 639211) for which he had been granted his subclass 457 visa.

10. For the reasons that follow, it is ultimately not necessary for the Tribunal to reach a finding on this issue for the purposes of this decision. This is because the applicant fails to meet the necessary criteria for approval of the nominated position on other grounds. For completeness, however, the Tribunal notes that it set aside the Department’s decision to bar the applicant from making future sponsorships on the basis that the Tribunal accepted the applicant’s evidence that the nominated worker had been engaged as a Retail Buyer as claimed (Case Number 1502857).

    Satisfactory compliance with workplace relations laws: r.5.19(3)(h)

11. Regulation 5.19(3)(h) requires the applicant to have 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.

    Evidence at the hearing

12. When asked about the applicant’s record of compliance with workplace relations laws, Mrs Hii gave oral evidence at the hearing in relation to an investigation carried out by the Fair Work Ombudsman (‘FWO’) in response to complaints over pay made by two employees. In summary, it was her evidence that the applicant was investigated by FWO, which resulted in the applicant conducting an audit of its CBD store and supplying the relevant information to FWO. She said that the applicant identified underpayment for staff, which the applicant subsequently repaid.

13. When asked about the quantum of this underpayment, Mrs Hii said that it was between $300,000 – $400,000 over a two-year period. When asked why this figure was so high, she said that the applicant had breached a ‘12 hour rule’ by mistake. Specifically, the relevant shop closed at 9:30 PM and reopened at 9 AM the next morning. If the same staff member worked until close and then again at opening the next morning they were supposed to be then paid double time, rather than regular time, as there had been less than 12 hours between their two shifts (‘the 12 hour rule’). The Tribunal put to Mrs Hii that it was part of the applicant’s role as an employer to properly understand its obligations towards its employees with respect to meeting Award requirements. She said that the organisation had since received proper training and has changed its rostering arrangements and contracts accordingly. The Tribunal also noted that this might seem to have involved a substantial breach of its workplace obligations, raising questions as to whether the applicant has a satisfactory record of compliance with workplace relations laws. Mrs Hii responded that the applicant runs six stores and they only had problems at this CBD store because of the unusual opening hours which do not permit a full 12 hour break between closing and opening. She also asserted that the applicant has had another audit with FWO and everything was okay. She also confirmed that the applicant has paid out all of the relevant amounts of backpay owed to staff.

14. Following the above evidence, the applicant’s agent submitted that no penalty was imposed by the FWO other than repayment of backpay. The agent also submitted that the FWO had accepted that the applicant’s breach was an oversight.

    Documents provided to the Tribunal

15. Following the hearing, the applicant’s agent provided several documents relating to the FWO investigation.

    Findings and reasoning

16. The Tribunal’s ability to assess the documents submitted in relation to the FWO investigation was hampered by the failure of the applicant to provide a comprehensive set of documents relating to this investigation. Various documents in the correspondence chain are missing, including any of the correspondence sent by (or on behalf of) the applicant to FWO in response to the alleged contraventions. Nevertheless, on the information provided, the Tribunal has serious difficulty in accepting that the applicant’s non-compliance with workplace relations laws was as minor or isolated as claimed by the applicant and its agent.

17. First, contrary to what was suggested at the hearing, the contraventions of workplace relations laws alleged by FWO against the applicant covered a variety of other matters besides the 12 hour rule. In its initial Determination dated 9 April 2014, the FWO identified 14 separate contraventions of the relevant Award (the General Retail Industry Award (MA000004)). Following negotiations with the applicant, by its letter dated 10 June 2014 the FWO agreed to not pursue two contravention, namely contravention 4 (laundry allowance) and contravention 11 (rest breaks). However, the FWO maintained that the following contraventions occurred:

Contravention No	Summary	Gross underpayment arising from contravention
Contravention 1	Failure to enter into written agreements with part-time employees in relation to work patterns	Nil (however the FWO noted that this failure had rendered it impossible to calculate overtime entitlements for some employees)
Contravention 2	Failure to pay part-time employees the correct minimum rate for ordinary hours	$973.09
Contravention 3	Failure to pay junior employees the correct minimum rate for weekly wages	$17.50
Contravention 5	Failure to pay full-time employees the correct rate for overtime	$677.81
Contravention 6	Failure to pay part-time employees the correct rate for overtime	$10,468
Contravention 7	Failure to pay evening penalty rates	$4,056.57
Contravention 8	Failure to pay Saturday penalty rates	$2532.24
Contravention 9	Failure to pay Sunday penalty rates	$7988.63
Contravention 10	Failure to pay public holiday penalty rates	$419.28
Contravention 12	Failure to pay penalty rates under the ’12 hour rule’	$12,745.18
Contravention 13	Failure to pay leave loadings	$1440.32
Contravention 14	Failure to pay out annual leave on termination	$1494.16
Total:	$42,812.78

1. As highlighted by the above table, the contraventions identified by the FWO extended well beyond a breach of the 12 hour rule, but encompassed a wide array of contraventions. Whilst the breach of the 12 hour rule was certainly responsible for the single largest sum of underpayment identified, it comprised less than a third of the overall sum of underpayment.

2. Second, the Tribunal notes that the quantum of underpayment identified in the FWO audit was substantial. The above calculations of underpayment related to 27 employees over a three-month period covered by the FWO’s audit (1 September 2013 - 30 November 2013).  Whilst not all underpayments affected each employee equally, in broad terms this equates to approximately $6,116 per employee. When extrapolated annually, this amounts to approximately $24,464 per employee. Given that the relevant employees held relatively low-paid positions, mostly classed as Retail Employees Level 1 under the Award, this represents a substantial proportion of their overall income.

3. Third, the contraventions affected full-time, part-time and junior employees. In combination with the range of contraventions identified in the audit, this further demonstrates that the scope of the applicant’s failures was widespread.

4. Fourth, in addition to the quantum identified in the above table arising from the FWO audit, the retrospective 2 year audit that the applicant was required to undertake resulted in further backpay being owed to its employees to the total of $318,000 (according to the documents submitted by the applicant). It is not clear from the documents submitted as to the basis or cause of this underpayment. Nevertheless, it is clear from the sums involved that the overall level of underpayment was substantial.

5. Fourth, contrary to the submission made by the applicant’s agent at the hearing to the effect that the FWO accepted that the applicant’s failure was a mere omission, as well as the evidence of Mrs Hii to the effect that this was an isolated failure by the applicant, the documents from the FWO tell a different story. Whilst ultimately agreeing to the applicant entering an enforceable undertaking in the alternative to litigation, the FWO noted in its letter dated 14 May 2014 that:

   There are good public interest grounds warranting litigation in relation to these contraventions, including the history of previous complaints against the [applicant] in relation to similar underpayments and the large number of employees affected. (emphasis added)

6. Similarly, in its letter dated 10 June 2014 responding to various submissions that had apparently been made on the applicant’s behalf, the FWO sought clarification as to whether the applicant admitted Contravention 12 (breach of the 12 hour rule). Far from indicating its acceptance that this was a mere omission, the FWO wrote:

   I am instructed that, based on the evidence known to us, the FWO will not accept an EU (Enforceable Undertaking) from [the applicant] that does not include an admission to this contravention, as we consider this to be a significant breach of [the applicant’s] obligations. (emphasis added)

7. The Tribunal acknowledges that the applicant has provided evidence to show that it complied with its Enforceable Undertaking, including by conducting audits, repaying workers, publishing an apology, sending letters of apology to affected workers, producing new workplace training materials and making a $5000 donation to Youth Law. Nevertheless, for the reasons above the Tribunal finds that the contraventions identified by the FWO were wide-ranging. The quantum of underpayment was substantial. The FWO regarded the contraventions as serious, including the breach of the 12 hour rule. And, the FWO indicated that the applicant had been the subject of similar complaints of underpayment previously. Viewed together, the Tribunal is not satisfied that the applicant has a satisfactory record of compliance with workplace relations laws in the locations in which it operates and employs staff. Accordingly, the requirement in r.5.19(3)(h) is not met.

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

   DECISION

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

   Brook Hely
   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.

   Temporary Residence Transition nomination

   (3)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 person who holds a Subclass 457 … visa granted on the basis that the person satisfied the criterion in subclause 457.223(4) of Schedule 2; and

   (iii)     identifies an occupation, in relation to the position, that:

   (A)is listed in ANZSCO; and

   (B)has the same 4-digit occupation unit group code as the occupation carried  out by the holder of the Subclass 457 … visa; and

   (b)the nominator:

   (i)       is, or was, the standard business sponsor who last identified the holder of the Subclass 457 … visa in a nomination made under section 140GB of the Act or under regulation 1.20G or 1.20GA as in force immediately before 14 September 2009; and

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

   (iii)     did not, as that standard business sponsor, meet regulation 1.20DA, or paragraph 2.59(h) or 2.68(i), in the most recent approval as a standard business sponsor; and

   (c)either:

   (i)       both of the following apply:

   (A)in the period of 3 years immediately before the nominator made the application, the holder of the Subclass 457 …visa identified in subparagraph (a) (ii) has:         

   (I)held one or more Subclass 457 visas for a total period of at least 2 years; and

   (II)been employed in the position in respect of which the person holds the Subclass 457 … visa for a total period of at least 2 years (not including any period of unpaid leave);

   (B)the employment in the position has been full-time, and undertaken in Australia; or

   (ii)      all of the following apply:

   (A)the person holds the Subclass 457 … visa on the basis that the person was identified in a nomination of an occupation mentioned in sub-subparagraph 2.72(10)(d)(iii)(B) or sub-subparagraph 2.72(10)(e)(iii)(B);

   (B)the nominator nominated the occupation;

   (C)the person has been employed, in the occupation in respect of which the person holds the Subclass 457 … visa, for a total period of at least 2 years in the period of 3 years immediately before the nominator made the application; and

   (d)for a person to whom subparagraph (c)(i) applies:

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

   (ii)      the terms and conditions of the person’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)       the nominator:

   (A)fulfilled any commitments the nominator made relating to meeting the nominator’s training requirements during the period of the nominator’s most recent approval as a standard business sponsor; and

   (B)complied with the applicable obligations under Division 2.19 relating to the nominator’s training requirements during the period of the nominator’s most recent approval as a standard business sponsor; or

   (ii)      it is reasonable to disregard subparagraph (i); and

   Note Different training requirements apply depending on whether the application for approval as a standard business sponsor was made before 14 September 2009 or on or after that date.

   (g)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

   (h)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.