1501309 (Migration)

[2016] AATA 3397

1501309 (Migration) [2016] AATA 3397 (24 February 2016)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Infinity SA Pty Ltd

CASE NUMBER:  1501309

DIBP REFERENCE(S):  BCC2014/1909659

MEMBER:Kate Millar

DATE:24 February 2016

PLACE OF DECISION:  Adelaide

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

Statement made on 24 February 2016 at 9:38am

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1. Infinity SA Pty Ltd (Infinity) is a furniture store that operates in Adelaide and has the trading name Boscus.  Infinity want to employ Mr Zeli Wang as an office manager and applied for approval of a nomination of a position.  A delegate of the Minister for Immigration and Border Protection refused the application for a nomination because the delegate was not satisfied the tasks of the nominated position corresponded to the required skill level in the Australian and New Zealand Standard Classification of Occupations (ANZSCO). 

2. Infinity applied for approval on 5 August 2014. The requirements for the approval of the nomination of a position in Australia are found in r.5.19 of the Migration Regulations 1994 (the Regulations) which contains two alternative streams, and of these it sought approval in the 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. The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19(4)(h)(ii)(D) of the Regulations because the delegate was not satisfied that the skill level of the position matched the required skill level in this provision.

4. Mr Shaoxin Zhang, the director of Infinity, appeared before the tribunal on 17 September 2015 to give evidence and present arguments. The tribunal also received oral evidence from Mr Zeli Wang. A further hearing was held on 10 February 2016 at which the tribunal heard from Mr Zhang and accountants for Infinity, Mr Jerri Rossi and Mr Larry Aloi. 

5. Infinity was represented in relation to the review by its registered migration agent.

6. 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

7. 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)

8. 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. The application was on the correct form, and there is nothing to show the fee was not paid.  The application identified a need for the nominator to employ a paid employ to work under its direct control.

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

9. Regulation 5.19(4)(b) requires that applicant is actively, lawfully and directly operating a business in Australia. Infinity provided draft and final 2015 financial statements to the tribunal and 2013 and 2014 profit and loss statements to the Department.  It provided a current extract from the Australian Securities and Investments Commission. 

10. Mr Zhang said the business has become more profitable since moving to the Mile End Homemaker Centre.  The business at the Mile End Homemaker Centre is called Design initial furniture.  A search of the business name of Infinity, BOSCUS, links to this site.

11. A search of the business name Design initial furniture shows a separate company, J&J Infinity SA Pty Ltd, owns this business name.  J&J Infinity SA Pty Ltd has a different ABN and ACN to Infinity.   The applicant was asked to provide further information on who employs the visa applicant, and an explanation for the trading name being held by another entity.  In  response it provided information that Infinity and J & J Infinity have the same directors and shareholders, and Infinity has the right to use the trading name Design initial furniture under a license agreement.  An undated license agreement was provided. At hearing in February 2016 Mr Zhang said this was signed recently, in the last month or two.  This was approximately the same time a further explanation for the use of the business name had been requested by this tribunal. 

12. Mr Zhang further said that he started Design initial furniture with a business partner.  His business partner moved to Queensland and they divided the business, with his previous partner starting Design initial Brisbane.  He said that Infinity SA hold the BOSCUS trading name and J & J Infinity holds the Design initial trading name.  This was because they wanted to start a franchise and were advised that this was the best way to hold the business name. 

13. The tribunal requested, and Infinity provided, business activity statements for the previous 12 months, pay as you go payment summaries for the employees as well as the 2015 tax return. 

14. While it was concerning that Infinity did not hold the trading name for the business for which the visa applicant is working, on the basis of the explanation for the trading name, the ASIC extract, the BAS statements, the tax return and the PAYG payment summaries I am satisfied that Infinity is lawfully and actively operating a business in Australia. 

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

15. 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. There is no indication the Infinity’s business activities include labour hire, and the requirement in r.5.19(4)(c) does not apply.

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

16. 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. 

17. Whether Infinity met this requirement became a significant concern to the tribunal as at the first hearing when asked about the item “employee contributions” in the financial statement of the company, the visa applicant said this may be contributions he made to the company.  It became apparent that he had contributed approximately $100,000 over the 2013 and 2014 financial years.  After the hearing, submissions were made that this was a legitimate purchase of shares in Infinity, and was supported by a copy of the transfer of the shares.  These submissions further stated that the employee contributions were for the private use of company cars.

18. Concerns about the company’s ability to employ Mr Wang for at least two years full time were compounded by the provision of incomplete financial statements and draft financial statements that did not match either the final financial statements or the tax return of Infinity when these were provided following a request under s.359(2) of the Act.  It was a laborious process to obtain these documents. 

19. The visa applicant, Mr Wang, has contributed over $100,000 to the business over the 2013 and 2014 financial years.  He initially said this may be the employee contributions listed ibn the books of the company, but later produced a share certificate showing two transfer of shares to him, one trsnfger of 103 shares from Mr Zhang and a transfer of 137 shares to him from Mr Gao.  The share transfer is dated 30 January 2013, with stamp duty paid on this transfer on 21 June 2013.  A further transfer of shares form Mr Gao to Mr Wang of 360 shares is dated 18 May 2015, and a share certificate and stamp duty assessment for this transfer were provided by Infinity.

20. Mr Wang and Mr Zhang provided statements regarding the share transfers, with both stating the transfer of shares was separate to the employment relationship and was not a requirement for Infinity to sponsor Mr Wang for the visa.   

21. A loan of approximately $270,000 from Infinity to Mr Gao, a previous shareholder and director, was discharged in the 2015 financial year.  Mr Aloi, the company accountant, said he was not in a position to say whether this amount had in fact been paid to Infinity by Mr Gao.  Mr Gao ceased being a director of the company in the 2015 financial year.  Mr Rossi said that if this loan had been forgiven rather than paid it would appear in the tax return as a capital gain.  There are no capital gains recorded in the tax return.  Mr Zhang said the loan was forgiven because Mr Gao left the business and is no longer responsible for the business.  It is not clear to me whether the discharge of this loan is connected to the purchase of shares by Mr Wang, however both Mr Wang and Mr Zhang provided statements that the share transfers happened outside of the operation of the business. 

22. In 2013 the business made a loss.  In 2014 the business made a small profit.  The 2015 draft profit and loss statement showed a profit of $75,612.  When the tribunal required the final balance sheet and financial statements, the profit and loss statement showed a loss of $111,180.  Notes to the financial statements had also not been provided.  When these were required by the tribunal, they showed items such as income received in advance of $164,192, and loans to J & J Holding Trust ($2,765), GS Holdings Trust ($2,474), Infinity Holding Trust ($140,659) and Design Initial Brisbane ($90,965).  These loans to other entities provided a boost of approximately $300,000 to the balance sheet which, even having included these amounts as assets, shows a negative equity of $109,980. 

23. Mr Aloi said the loan to Design initial Brisbane was a result of the division of the business between Mr Zhang and his previous business partner, and that this loan represented the value of the business name and the goodwill of the business.  Mr Aloi was unable to provide any information on the GS Holding Trust, nor could Mr Zhang shed any light on this entity and why it owed Infinity money.  Mr Aloi said te Infinity Holding Trust was Infinity’s landlord when it was operating at a previous address and that this Trust is not related to Infinity.  He said the trustee is Tun Mar Pty Ltd.  Infinity moved to new premises in approximately June 2015.  None of those who gave evidence could provide an explanation of why Infinity Holding Trust owed Infinity $140,659.

24. Mr Aloi gave evidence that the decrease in sales between the draft and financial statements was due to income received in advance as deposits for stock.  He said this cannot be included for tax purposes as sales until the sale is complete.  This is an amount of $164,192. He said removing this amount from the total sales of the company had reduced its profitability.   

25. I found Mr Aloi and Mr Rossi provided careful evidence, and did not try to explain matters that were beyond their knowledge, such as the discharge of the loan to Mr Guo and the loans by Infinity to other entities.  As such, I consider I can rely on their oral evidence.

26. Mr Aloi said that he has been the accountant for Infinity since 2011, and they also provide business advice on matters like key performance indicators where they compare indicators against those of furniture retailers in general.  Mr Aloi said with the relocation of the business to the Mile End Homemaker Centre, sales have been strong and the forecast is good for the company. 

27. While the financial statements of the company, and the difference between the draft and final  financial statements provided to the tribunal has caused me considerable disquiet, on balance I am satisfied that the business has the financial ability to employ Mr Wang for at least two years full time.  I am also satisfied that there is no express exclusion of him remaining employed for more than two years. 

28. Accordingly, the requirement in r.5.19(4)(d) is met.

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

29. 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.

30. Infinity provided an employment contract tot eh department that shows terms and conditions consistent with those of Australian citizens or permanent residents. 

31. Accordingly the requirements of r.5.19(4)(e) are met.

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

32. 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).

33. There is nothing before the tribunal to show adverse information is known about Infinity or a person associated with Infinity and the requirements of r.5.19(4)(f) are met.

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

34. 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.  There is nothing before me to show that Infinity does not have a satisfactory record of compliance with laws relating to workplace relations. 

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

35. Regulation 5.19(4)(h) contains a number of alternative requirements. These are set out in detail in the attachment to the decision, and as they apply to Infinity require:

    ·     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

    ·     The position 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 ANZSCO skill level 1, 2 or 3; and

    ·     A regional certifying body has advised the Minister about certain matters relating to the position.

36. All of South Australia is regional Australia (IMMI 13/049), and both the position and business are located in regional Australia. The required regional certification was provided to the Department.  I am satisfied that Mr Zhang wanted to pursue his interests in property development and therefore genuinely required a paid position to fill the role. 

37. The delegate was not satisfied that the tasks of the position were those of an office manager, which has a skill level in The Australian and New Zealand Standard Classification of Occupations (ANZSCO) of 2.  ANZSCO lists the tasks of an office manager as:

    ·     contributing to the planning and review of office services, and setting priorities and office service standards

    ·     allocating human resources, space and equipment

    ·     assigning work to and monitoring work performance of staff

    ·     managing records and accounts of the office

    ·     liaising with Professionals to coordinate office business and to facilitate resolution of problems

    ·     ensuring office equipment and supplies are maintained

    ·     ensuring compliance with occupational health and safety regulations

    ·     ensuring work complies with relevant government legislation, policies and procedures

    ·     coordinating personnel activities such as hiring, promotions, performance management, payroll, training and supervision

38. Mr Zhang said he was exploring other business activities in property development and was not often at the store, attending approximately once a month.  Mr Wang gave detailed evidence about the operation of the business, including the roles and management of various staff members, the allocation of work to staff members, rostering, pays and preparation of business activity statements.  Emails were provided showing Mr Wang is the person who liaises with the accountants about the preparation of documents.

39. Mr Zhang gave evidence that Mr Wang is the person who has hired the most recently recruited staff member.  They both gave evidence that profitability is not what they would like at the moment so Mr Wang had decreased the hours of some staff.

40. I am satisfied that on the basis of Mr Wang’s detailed knowledge of the business that he works extensively within the business.  I am satisfied he undertake tasks such as allocating human resources, managing records and accounts, assigning work, liaising with the accountants and coordinating personnel activities.  As such I am satisfied the tasks of the position are those of an office manager. 

41. Accordingly the requirements of r.5.19(4)(h) are met.

42. Based on the findings above, I am satisfied that the applicant meets the requirements of r.5.19 for approval of the nomination of the position in Australia.

    DECISION

43. The tribunal sets aside the decision under review and substitutes a decision approving the nomination.

    Kate Millar
    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).