1501652 (Migration)

[2015] AATA 3697

1501652 (Migration) [2015] AATA 3697 (20 November 2015)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  MGDPS Pty Ltd

CASE NUMBER:  1501652

DIBP REFERENCE(S):  OPF2014/5617 OPF2014/636 OPF2015/424 OPF2015/425 OPF2015/678

MEMBER:Glen Cranwell

DATE:20 November 2015

PLACE OF DECISION:  Brisbane

DECISION:The Tribunal affirms the decision under review.

Statement made on 20 November 2015 at 10:46am

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 to take an action under s.140M of the Migration Act 1958 (the Act) in relation to the applicant’s sponsorship.

1. The applicant was approved as standard business sponsor on 8 February 2012. On 30 January 2015, the delegate decided to bar the applicant for 9 months from sponsoring more people for Subclass 457 visas under s.140M on the basis that the applicant failed to satisfy r.2.89.

2. Mr Monish Pathak and Mrs Deepti Pathak appeared before the Tribunal on 20 November 2015 to give evidence and present arguments on behalf of the applicant.

3. The applicant was represented in relation to the review by its registered migration agent.

   5.For the following reasons, the Tribunal has decided to affirm the decision under review.

   CONSIDERATION OF CLAIMS AND EVIDENCE

4. Sections 140K, 140L and 140M of the Act provide for the imposition of sanctions on approved sponsors in certain circumstances. 

5. Under s.140M, if prescribed circumstances exist, the Minister (and the tribunal on review) may take one or more of the following actions:

   ·cancelling the sponsorship approval in relation to a class to which the sponsor belongs;

   ·cancelling the sponsorship approval for all classes to which the sponsor belongs;

   ·barring the sponsor for a specified period from sponsoring more people under the terms of any existing approval; and

   ·barring the sponsor for a specified period from making future applications for sponsorship approval in relation to one or more classes of sponsor.

6. For these purposes, the circumstances are prescribed in r.2.89 - r.2.94B and include circumstances in which the Minister, or tribunal on review, is satisfied there has been: a failure to satisfy a sponsorship obligation; provision of false or misleading information; sponsorship application or variation criteria no longer met; a contravention of the law; unapproved changes to a program; a failure to pay additional security; a failure to comply with certain terms of an agreement; or a failure to pay medical and hospital expenses.

7. Where a prescribed circumstance has been found to exist, the regulations prescribe criteria that must be taken into account when determining what action, if any, to take: r.2.89 – r.2.94B. These criteria, as they relevantly apply to the circumstances of this case are set out in the attachment to this decision.

   Does a circumstance for the taking of an action exist?

   10.In the present case, the delegate found that the applicant failed to satisfy r.2.89.

   Failure to satisfy a sponsorship obligation: r.2.89

8. The Minister may take one or more of the actions in s.140M if reasonably satisfied the sponsor has failed to satisfy a sponsorship obligation referred to in r.2.78 - r.2.87A of the Regulations in the manner or within the period prescribed: r.2.89(2).

9. The applicant employs 5 Subclass 457 visa holders. 

10. The delegate found that the applicant breached r.2.82, which requires that the record of wages paid to the sponsored person be in a manner that is capable of being verified by an independent person.  The applicant’s submissions dated 19 December 2014 acknowledge that Mr Manish Kumar and Mr Raman Sharma were paid in cash.  Although Mr and Mrs Pathak submitted at the hearing that they maintained a wage register and provided statutory declarations from the employees claiming the wages were paid, the Tribunal is of the view that it is still not possible for an independent person to verify cash payments.  Accordingly, the Tribunal finds that the applicant has not satisfied r.2.82.

11. The applicant’s submission also concedes that Mr Sharma was underpaid by $150 for financial year 2013/2014.  Accordingly, the Tribunal finds that the applicant has not satisfied r.2.79.

12. Accordingly, the Tribunal is satisfied that the prescribed circumstance in r.2.89 exists for the purpose of s.140M of the Act.

    Action to be taken

13. For these reasons, the Tribunal is satisfied that a relevant circumstances for s.140L(1)(a) exists. Accordingly, it is necessary to consider whether one or more of the actions mentioned in s.140M should be taken.

14. In considering what action to take, the Tribunal has had regard to the prescribed criteria, as extracted in the attachment to this decision. The criteria to be considered where there is failure to comply with sponsorship obligation, are set out in r.2.89(3).

15. The Tribunal now turns to its consideration of the criteria under r.2.89(3).

    (a)     the past and present conduct of the person in relation to Immigration

16. With the exception of the failure to satisfy the sponsorship obligations identified above, there is nothing before the Tribunal to suggest that the applicant’s conduct has been unsatisfactory.

    (b)     the number of occasions on which the person has failed to satisfy the sponsorship obligation

17. The Tribunal has found that the applicant has failed to satisfy r.2.79 and r.2.82.  The failure to satisfy r.2.82 was an ongoing failure.

    (c)     the nature and severity of the circumstances relating to the failure to satisfy the sponsorship obligation, including the period of time over which the failure has occurred

18. While Mr and Mrs Pathak maintain that the employees were paid on time and in full, the Tribunal considers that the failure to record wages in a manner that is capable of being verified by an independent person to be very serious.  This undermines the transparency of the Subclass 457 visa program, which is designed to prevent overseas workers from being paid less than equivalent Australian workers.

19. The Tribunal considers that, in general, the underpayment of a Subclass 457 visa holder to be a serious failure.  The Subclass 457 visa program is designed to prevent overseas workers from being paid less than equivalent Australian workers.  However, in this case, the underpayment was relatively insignificant.

    (d)     the period of time over which the person has been an approved sponsor

20. The Tribunal finds that the applicant had been a standard business sponsor since 8 February 2012. 

    (e)     whether, and the extent to which, the failure to satisfy the sponsorship obligation has had a direct or indirect impact on another person

21. The failure to satisfy r.2.82 means that is not possible to determine more generally whether the sponsored workers were financially disadvantaged.  The failure to satisfy r.2.79 means that the sponsored worker in question was financially disadvantaged in the sum of $150, which is a minor amount.

    (f)     whether, and the extent to which, the failure to satisfy the sponsorship obligation was intentional, reckless or inadvertent

22. The Tribunal finds that the failures to satisfy r.2.82 were reckless.  Mr and Mrs Pathak gave evidence that they thought payment in cash was legal, and that the payments were made at the request of the employees.  They had no bad intentions.  While payment in cash is legal, it does not comply with the applicant’s sponsorship obligations.  Mr and Mrs Pathak should have been aware of the applicant’s sponsorship obligations.  It leaves the Tribunal to conclude that the applicant made minimal, if any, efforts to comply with the requirement to record wages in a manner that is capable of being verified by an independent person.

23. The Tribunal accepts that the failure to satisfy r.2.79 was inadvertent.

    (g)     whether, and the extent to which, the person has cooperated with Immigration, including whether the person informed Immigration of the failure

24. There is no evidence that the applicant has not cooperated with the Department.

    (h)     the steps (if any) the person has taken to rectify the failure to satisfy the sponsorship obligation, including whether the steps were taken at the request of Immigration or otherwise

25. The applicant has reimbursed the underpayment of salary to Mr Sharma.

    (i)     the processes (if any) the person has implemented to ensure future compliance with the sponsorship obligation

26. The applicant provided evidence that it has changed its processes to pay salary by electronic funds transfer.

    (j)        the number of other sponsorship obligations that the person has failed to satisfy, and the number of occasions on which the person has failed to satisfy other sponsorship obligations

27. The Tribunal has not found that the applicant has breached any other sponsorship obligations. 

    (k)     any other relevant factors

28. Mr and Mrs Pathak gave evidence that the applicant had to close 1 of their 4 restaurants as a consequence of the bar, and suffered a financial loss of $150,000.

29. Considering the totality of the circumstances, and having regard to the prescribed criteria the Tribunal finds that the action mentioned in s.140M(1)(c), to bar the applicant for 9 months from sponsoring more people for Subclass 457 visas, should be taken. This period is to commence from the date of the delegate’s decision.

30. While Mr and Mrs Pathak had hoped to remove the “black mark” against the applicant’s name, the Tribunal does not consider that the failure to comply with sponsorship obligations is a matter in respect of which no action should be taken.  In the Tribunal’s experience, a 9 month bar is within the range to be expected for breaches of the nature under consideration.  The Tribunal notes that the period has now come to an end.

    DECISION

    34.The Tribunal affirms the decision under review.

    Glen Cranwell
    Member

    
    

    ATTACHMENT – Extract from the Migration Regulations 1994

    2.89   Failure to satisfy sponsorship obligation

    …

    (3) For paragraph 140L(1)(b) of the Act, the criteria that the Minister must take into account in determining what action (if any) to take under section 140M of the Act in relation to the circumstance mentioned in subregulation (2) are:

    (a)     the past and present conduct of the person in relation to Immigration; and
    (b)    the number of occasions on which the person has failed to satisfy the sponsorship obligation; and

    (c)     the nature and severity of the circumstances relating to the failure to satisfy the sponsorship obligation, including the period of time over which the failure has occurred; and

    (d)    the period of time over which the person has been an approved sponsor; and

    (e)     whether, and the extent to which, the failure to satisfy the sponsorship obligation has had a direct or indirect impact on another person; and

    (f)     whether, and the extent to which, the failure to satisfy the sponsorship obligation was intentional, reckless or inadvertent; and

    (g)    whether, and the extent to which, the person has cooperated with Immigration, including whether the person informed Immigration of the failure; and

    (h)    the steps (if any) the person has taken to rectify the failure to satisfy the sponsorship obligation, including whether the steps were taken at the request of Immigration or otherwise; and

    (i)    the processes (if any) the person has implemented to ensure future compliance with the sponsorship obligation; and

    (j)    the number of other sponsorship obligations that the person has failed to satisfy, and the number of occasions on which the person has failed to satisfy other sponsorship obligations; and

    (k)     any other relevant factors.

    …