1504100 (Migration)

1504100 (Migration) [2016] AATA 4320 (1 September 2016)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  Rajesh Akkineni t/a United Ayr
CASE NUMBER:  1504100
DIBP REFERENCE(S):  BCC2014/2771769
MEMBER:David Dobell
DATE:1 September 2016
PLACE OF DECISION:  Sydney
DECISION:The Tribunal affirms the decision under review to refuse the nomination
Statement made on 01 September 2016 at 9:35am

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 6 March 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).
The applicant applied for approval on 20 October 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 regional criteria in the Direct Entry Nomination stream.
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 nominated position did not have the appropriate skill level.
The applicant appeared before the Tribunal by videolink on 19 August 2016 to give evidence and present arguments. This was a combined hearing with the related visa refusal, MRD No: 1506531.
The applicant was represented in relation to the review by his registered migration agent, who also attended the hearing.
For the following reasons, the Tribunal has decided to affirm the decision under review to refuse the nomination.
CLAIMS AND EVIDENCE
The following relevant documentary evidence is on the Department file:
- Townsville Enterprise Ltd, RCB Advice, re: shop manager, ANZSCO 1421-11, at $45,450 pa, 23 October 2014, and letter
- Statutory Declaration, applicant, 30 October 2014
- Salary Guides, retail manager
- Applicant, Employment Contract with related visa applicant, 15 October 2014, for retail manager, $45,450 pa, 38 hours a week
- Applicant, Profit & Loss forecast, 2014-15
- Applicant, Position Description, retail manager (general) & Organisation Chart
- Applicant, submission to Department, 20 October 2014
- Mahesh Thatimakula, accountant, support for viability of employment at $46,000pa, 20 October 2014
- ANZ, Business bank statements
- Applicant, BAS, 2014 onwards
- United Petroleum Commission Agency Agreement, 26 February 2014 (front pages)
- Applicant, Financial Report, 30 June 2014 p116
- Representative submission, 20 October 2014
- business nomination application
The Department’s decision record has been provided to the Tribunal. The delegate was of the view that the nominated position was more correctly classified as retail supervisor rather than retail manager, and accordingly has a skill level of 4 rather than 1-3 as required by r.5.19(4)(h)(ii)(D).
The following documentary evidence was on the Tribunal file prior to hearing:
- Representative submission, 19 August 2016
- Applicant, Statutory Declaration, 14 July 2016
- Applicant, travel evidence
- ASIC, company registration, Barmera Enterprise Pty Ltd, and ABN Lookup
- Applicant, South Australia (SA) tenancy agreement, April 2016
- Applicant, Telstra statement, showing address in SA, July 2016
At the hearing, the Tribunal made clear to the applicant that he had to meet all the relevant requirements of r.5.19(4), not just the provision that the Department made its decision on.
The applicant confirmed he bought the United Ayr roadhouse in February 2014. He was managing it himself until October 2014, when the related visa applicant began there. Prior to that the visa applicant had been working for Dominos in Ayr on a subclass 457 visa. He worked there on a trial for a month with him, and then after that he handed the operation of the business over to the visa applicant.
Since that time, he has been looking for new business opportunities. He looked at 5 other businesses, and in around August 2015 he decided to purchase the Giru roadhouse, which occurred at the end of 2015, which is some 30kms from Ayr. Later, in March/April 2016 he purchased a business in South Australia and he moved there to live.
He said that he would go into the United Ayr business once a week for 3-4 hours to discuss things with the visa applicant, but it may be less frequent depending on where he is at the time.
As to what happened during his overseas travels in 2015, he said the visa applicant did everything by himself. However, he did phone the applicant to tell him information he needed to know. As to what this was, he said that someone hit the shop and drove off, so it was an insurance matter and he needed to know that.
As to the business opening hours, he said this is 7 days a week, 24 hours a day. The visa applicant works 5 days a week, usually from 6am to 2 pm. He does work occasionally on weekends, and does do extra hours some weeks if someone is sick, and then he has time off in lieu the next week.
As to the salary for the position, the applicant said it was $48,000 but he would have to check it on his computer. He eventually said that the visa applicant was paid $44,000 last year but it would be $45,275 for the nomination. The Tribunal noted that the salary stated in the nomination was $45,450.
It asked whether the position was covered by the General Retail Industry Award and he said it was. The Tribunal noted that from 1 July 2016, the weekly rate for a level 8 retail employee (such as a retail manager) is $904 a week and that there may be different rates for non-standard hours. It was concerned that the nominated salary would be less than the Award rate and he would need to address this (noting that the minimum of $904 a week would equal a salary of $47,008).
The Tribunal asked whether he kept up-to-date with these rates. He said he was ‘in contact with Fair Work’. He will address this issue.
The Tribunal asked whether the visa applicant serves customers in this position. He said he does. The Tribunal noted that this was not specifically listed as a task in the position description. The applicant then explained that the visa applicant would be there mainly by himself, serving customers and preparing food, but there would be someone else there when it was busy. For instance, when the mining bus comes though on Tuesday and Thursdays.
The Tribunal then went through the tasks of retail manager as set out in the ANZSCO guide.
As to determining product mix, stock levels and service standards, the applicant said that the visa applicant does all the stock ordering, which is delivered once a week. There are some 2,000 products from 12 suppliers who deliver there. Later he added that they are bound by their United agreement to purchase only from the set suppliers but the stock levels and ordering is all up to the visa applicant to maintain.
As to formulating and implementing purchasing and marketing policies, and setting prices, he said that the visa applicant is solely responsible for setting the sale price based on the cost price. As to marketing policies, the visa applicant is responsible for in store promotion of stock and food.
As to promoting and advertising the establishment's goods and services, he again said there was in-store promotion and that the visa applicant was responsible for this.
As to selling goods and services to customers and advising them on product use, the Tribunal noted that the applicant had confirmed that the person in the position does this.
As to maintaining records of stock levels and financial transactions, he explained that there is the busy 6 months of the year, when it is sugar cane season, and then the quiet months. The visa applicant is responsible for building up stock for the busy season, and then running it down after that. He said that the visa applicant uses the computer in the back office to maintain stock levels and shrinkage.
As to maintaining records of financial transactions, he said the visa applicant is responsible for paying suppliers by cheque and maintaining records. He complies the records for the BAS, which he gives to the applicant, who then gives them to his accountant to complete and lodge. The applicant confirmed that the visa applicant does the pay but he, the applicant, transfers the money to their accounts. The applicant also confirmed that he checks the visa applicant’s business transactions on the bank statements regularly.
As to undertaking budgeting for the establishment, he again referred to the 6 month busy season, and said that the applicant prepares budget figures based on last year’s busy season and works to these.
As to controlling selection, training and supervision of staff, he said the visa applicant is solely responsible for this as he has to work with them.
He also said that the visa applicant ensures compliance with occupational health and safety regulations day to day.
As to any other duties, he said the visa applicant has to report to the police the ‘drive offs’, being those who get petrol and don’t pay for it.
As to who is responsible for paying United, he said that is an automatic deduction on the business bank account.
The Tribunal expressed concern that there may be limited responsibilities in relation to the first three tasks where United exercises control over the suppliers. He said they still control the price of sales, stock levels and the like but confirmed they must use their preferred suppliers.
The Tribunal then turned to its concerns in relation to the requirements under r.5.19(4).
As to (b) and (d), as to the viability of the business, the Tribunal said it wished to see current financial statements for 2014/15 and 15/16, as it does not have evidence of a full year of the business operating, or where the visa applicant has been employed in the nominated position there for a year. He said the figures show a profit and improving over time.
As to (e), the Tribunal referred to its earlier discussions about the Award rate and whether this was being met, and would be in the future, given the hours worked. It also referred to the employment agreement, and that it should refer to the Award and the NES, and should not use non-NES terms like sick leave rather than personal leave.
As to the regional requirements, the Tribunal said that under (h)(ii)(B) it had to determine whether he was a retail manager or something else, such as a retail supervisor.
Under (h)(ii)(C), the Tribunal said it had no supporting documentary evidence before it that the position cannot be filled by an Australian locally. He said he can find people but they will just leave when it becomes busy season as there is more money elsewhere in the cane season. The Tribunal said it needed documentary evidence to support this claim. He said that he used an employment agency and they could support this claim. He also said later that documentary evidence around this was provided to the RCB. The Tribunal suggested he should provide this to the Tribunal.
As to (h)(ii)(D), the Tribunal said that there were three realistic alternatives before it: that he was a retail manager with skill level 2 as per ANZSCO, or a retail supervisor with additional duties, such that skill level 3 would be appropriate, or thirdly, that he was a retail supervisor at skill level 4 as per ANZSCO, in which case he would not meet this requirement.
After the hearing, on 26 August 2016, the representative provided a submission and the following to the Tribunal:
·Applicant, Financial Statements 2014/15 (part thereof), accountant prepared, showing wages of $72,206
·Applicant, spreadsheet of 2015/16 income and expenses, showing wages of $84,222
·General Retail Industry Award 2010
·Applicant, PAYG Summary, for visa applicant, 2014/15, $25,463
·Applicant, PAYG Summary, for visa applicant, 2015/16, $44,574
·Applicant, payslips to visa applicant, 8 and 15 August 2016, showing he is paid $24.10667 an hour and his pay is $904 per week, for 37.5 hours a week
·Applicant, Gumtree ad for ‘shop manager for fuel station’, 15 October 2014
·United Commission Agency Agreement, applicant, 26 February 2014
The representative’s submission stated relevantly:
·The PAYG Summaries show that he has been paying the visa applicant the appropriate remuneration
·Recent payslips from 1 July 2016 show a payrise and that he meets Level 8 of the Award
·The visa applicant lives on-site with services provided, suggested to be valued at $140 a week
·The visa applicant has confirmed he has received the FWIS and understands the NES and the applicant has confirmed he abides by these
·Townsville Enterprise Ltd gave their approval based upon their local knowledge of the area the business operates in
·An ad for retail manager was placed on Gumtree prior to the lodging of the nomination. No suitable applications were received
·In May 2014 the applicant sought a console operator for his business through Neato Employment Services and a console operator was employed
·The applicant has employed locals but they are only willing to work for the off-season (cane cutting)
·The business is a going concern and operates at a profit. The visa applicant is paid the appropriate remuneration and there is no evidence to suggest that this will not continue
·Another letter from the accountant can be provided as to their belief that the nominee will be paid properly, if necessary
·Procurement is not all through United (as stated at the hearing) for eg food items and cleaning supplies are bought through local businesses. A list of local businesses and amounts spent is provided
·The United Commission agreement is not a franchise. However there are some restrictions placed on the applicant under this
The Tribunal observes that the employment contract provided makes no mention of the provision of free accommodation and associated services as part of the salary package.
The Tribunal also observes that there has been no formal contractual renegotiation of the salary for the nominated position, as $904 per week totals $47,008 pa, whereas the contract remains at $45,450pa.
The Tribunal also observes that the claim that procurement is not all through United is inconsistent with the applicant’s evidence at hearing.
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. The Tribunal turns immediately to the requirements of r.5.19(4)(d).
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.
Implicit in the first requirement is that the business is financially viable such that it can actually afford to pay the person in the nominated position the nominated salary full time for at least 2 years, and continue to operate.
The Tribunal has examined the Employment Agreement dated 15 October 2014 provided by the applicant, which is a 2 year contract from date of visa grant and does not preclude extension, and which is presently stated to be a salary of $45,450 pa.
In terms of the Tribunal being satisfied that the applicant’s business will be viable if he has to employ the person at the nominated salary full time for at least a two year period, it has examined the new financial evidence provided and considered this in light of the applicant’s oral evidence.
It is not in dispute that the General Retail Industry Award 2010 (MA000004) applies here. The Tribunal discussed the nominated position’s work hours with the applicant at the hearing in the context of the business’s overall operations. The applicant stated that business opening hours are 7 days a week, 24 hours a day and that the visa applicant works 5 days a week, usually from 6am to 2 pm. He does work occasionally on weekends, and does do extra hours some weeks, say, if someone is sick, and then he has time off, in lieu, the next week.
Examining the latest financial evidence, total Wages for the first full year of business, 2014/15, were $72,206 and for the first full year with the visa applicant in the nominated position (the applicant having stated that the visa applicant started in October 2014), 2015/16, Wages were stated to be $84,222.
The PAYG Summary provided for the visa applicant for 2014/15 was $25,463 and for 2015/16 it was $44,574.
This means that there was $46,743 spent on other wages to run the business in 2014/15, when the applicant still worked there for a period, and $39,648 spent on other wages for 2015/16, being, as noted, the first year where the visa applicant worked a full year and the applicant was not working there at all, as he was pursuing other business interests.
Returning to the oral evidence that the business is 24 hours a day, 7 days a week, that is a total of 168 hours in any given week. The evidence was that the visa applicant, in the nominated position, usually works 5 days a week, 38 hours a week, 6am to 2pm and any extra worked in one week is made up with time off the next week.
Thus, the applicant would have to be paying other workers the Award wage for the remaining 130 hours a week, and much of this may be at penalty rates, given the odd hours.
The remaining $39,648 paid in wages for that year, would divide to be around $765 in any given week. For the remaining 130 hours a week, that would divide to be around $5.85 an hour. Clearly this amount is well below the Award wage, or minimum wage, for any adult or child: see and >
Given the above and that the nominated position is currently ‘live-in’ at the business, the Tribunal concludes that the visa applicant’s actual regular working hours are far in excess of the claimed regular 38 hours a week, and are without extra remuneration, thus allowing for the proper Award/minimum wage to be paid to the other workers for their hours.
The Tribunal concludes that the person who would be in the nominated position would be expected to continue to do such extra unpaid hours into the future.
Thus the Tribunal is not satisfied on the evidence before it that this business would be financially viable in the future if the person in the nominated person was working an actual 38 hours a week and the applicant was paying the proper Award/minimum rate for the remaining 130 hours to other employees in any given week.
The Tribunal notes the offer of an Accountant’s letter to support the view that the business will continue to pay the nominee appropriately and that the business would still be viable but it considers that the opinion given in such a letter would not be based on the reality of how the Tribunal has found the business actually operates, as set out above.
Thus, in terms of this provision, the Tribunal cannot be satisfied that the applicant will be able to actually employ the person in the nominated position on a full-time basis for at least 2 years, where that person would only be working 38 hours a week, and proper wages were to be paid to other workers, as it is not satisfied that the business would be viable in that period.

Accordingly, the requirement in r.5.19(4)(d) is not met.
Based on the above reasoning, where the nominated person would be expected to regularly work far in excess of the nominated 38 hours a week without extra remuneration, and even after noting the free accommodation and services provided, the Tribunal also cannot be satisfied on the evidence before it that, under r.5.19(4)(e), the actual terms and conditions of employment applicable to the position will be no less favourable than the terms and conditions that are provided or would be provided to an Australian citizen or an Australian permanent resident for performing equivalent work in the same workplace at the same location.
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 and the Tribunal must affirm the decision under review.
DECISION
The Tribunal affirms the decision under review to refuse the nomination.
David Dobell
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 4320

1 September 2016

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Immigration

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Jurisdiction

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Procedural Fairness