1504463 (Migration)
[2016] AATA 3246
•15 February 2016
1504463 (Migration) [2016] AATA 3246 (15 February 2016)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT: Darren David Stride ATF Stride Family Trust
CASE NUMBER: 1504463
DIBP REFERENCE(S): BCC2014/2722155
MEMBER:Christopher Smolicz
DATE:15 February 2016
PLACE OF DECISION: Adelaide
DECISION:The Tribunal affirms the decision not to approve the applicant as a standard business sponsor.
Statement made on 15 February 2016 at 10:54am
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 11 March 2015 not to approve the applicant as a standard business sponsor (SBS).
The applicant applied for approval as a SBS under s.140E of the Migration Act 1958 (the Act) and r.2.61 of the Regulations on 15 October 2014.
The delegate decided not to approve the application on the basis that the applicant did not satisfy r.2.59(d) of the Migration Regulations 1994 (the Regulations) because he was unable to satisfy the training benchmarks. In a separate decision the delegate refused the nominee’s related Subclass 457 visa application because the SBS was not approved. [1]
[1] MRD file ref.1506415.
On 31 May 2015, the applicant applied to the Tribunal to review the delegate’s decision. On 11 May 2015 the nominee Mr Gujreet Singh also applied to review the decision to refuse to grant him the subclass 457 visa. At the time the applicant and the nominee were both represented by Mr Ged Boylan, registered Migration Agent.
On 26 October 2015, the Tribunal wrote to the applicant and Mr Gurjeet Singh and invited both applicants to appear before the Tribunal on 2 December 2015 to give evidence and present arguments at a combined hearing.
On 9 November 2015, Mr Boylan responded to the hearing invitation confirming that the nominee would take part in the hearing and he would need to take further instructions from the applicant (Mr Stride).
On 30 November 2015 Mr Boylan emailed the Tribunal and provided the following information on behalf of the sponsor, Mr Stride:
I wish to advise that I have been contacted by the sponsor who has a hearing scheduled (combine hearing) The sponsor does not wish to proceed with a hearing. I have been advised by the sponsor’s accountant that the sponsor nor the accountant will be able to provide any information nor attend the hearing to provide evidence. Given this the visa applicant, Mr Gurjeet Singh understands that as his appeal is linked to that of the sponsor, he has little prospect of success.
Shortly, prior to the hearing the Tribunal received two new Appointment of Representative Forms which declared that Mr Stride and Mr Singh appointed Mr Atul Kapoor as their migration agent and would be taking part in the hearing.
The Tribunal conducted a combined hearing 2 December 2015.
For the following reasons, the Tribunal has decided to affirm the decision under review not to approve the applicant as a standard business sponsor.
CONSIDERATION OF CLAIMS AND EVIDENCE
Mr Stride is the trustee for the Stride Family Trust trading as Stride Bricklaying. Mr Stride said that he is a registered builder and has been working as a bricklayer and builder for about 10 years. He does not employ any employees and only relies on independent subcontractor labour in running his business.
The Tribunal asked Mr Stride to explain the email communication from Mr Boylan dated 30 November 2015. Mr Stride said that he has spoken to the visa applicant and obtained a new migration agent (Mr Kapoor) and wanted to proceed with the hearing.
Mr Stride said that the visa applicant has worked for him for about two years as a full time bricklayer. He does not issue payslips and Mr Singh was employed as a subcontractor operating under his own ABN. Mr Stride said that using subcontractors labour in his business meant that he had certain advantages in running his business and did not need to be concerned with issues such as occupation health and safety of employees.
The Tribunal explained to Mr Stride the requirements of the training benchmarks in instrument IMMI 13/030. Mr Stride said he has not directly contributed to any industry training fund (Benchmark A) and was unable to provide evidence on how he met Benchmark B. The Tribunal provided Mr Stride with further time after the hearing to provide further evidence and submissions.
On 18 December 2015 the applicant’s migration agent provided further evidence and submissions in support of the application.
In a statutory declaration, Mr Stride declared that “…. After misinformation and misguidance of my appointed agent Mr Ged Boylan, I decided to change the agent who could provide a good and well informed service”.
Mr Stride declared that his business turnover was $724,903 for the financial year ended 2014 and $616,145 in the 2015 financial year. He engages in excess of 10 bricklayer subcontractors. Mr Stride states that based on his need for a full time employee he has sponsored Mr Singh to work full time however presently Mr Singh is only able to work part time due to his visa conditions and restrictions. Mr Singh has worked in the position of bricklayer since May 2014.
Mr Stride declared that he did not employ any full time employees in his business other than Dillon Banfield who was employed for a period from 17 August 2015 to 2 October 2015. Mr Stride declared that “… Mr Banfield was employed on a trial basis to potentially become an apprentice. Gross wages were $1,350, no tax is required to be withheld. Super payable was $116.85.” Mr Stride declared “My subcontractors are independent contractors and are not on my payroll as employees.”
In support of the evidence, the Tribunal was provided with one page of handwritten notes detailing payment of wages to Mr Banfield for the period 17 August 2015 to 2 October 2010 (a period of 1 month and 16 days) totalling $1,350. The Tribunal was also provided with various documents in support of his employment of Mr Banfield. The Tribunal was also provided with BAS covering the periods January 2015 to April 2015 and profit and loss statement for the 2015 financial year. According to the financial documents Mr Stride’s expenses on subcontractors was $438,002 in 2015 and $532,264 in 2014.
Training benchmarks
The issue in this case is whether the applicant meets the requirements for approval of a standard business sponsor in accordance with the criteria in r.2.59 and the additional criteria in r.2.60S, which must be satisfied regardless of when the application for approval was made. For the application to be approved, all the requirements must be met: s.140E(1).
Regulations 2.59(d) and (e) contain alternative criteria relating to training requirements that an applicant must satisfy if the applicant is lawfully operating a business in Australia depending on how long the applicant has been trading.
If the applicant has traded in Australia for 12 months or more, the applicant must meet the benchmarks for the training of Australian citizens and Australian permanent residents specified in a written instrument: r.2.59(d). The relevant instrument is IMMI 13/030. If the applicant has traded for less than 12 months, the applicant must have an auditable plan to meet the benchmarks specified in that relevant instrument: r.2.59(e).
The Tribunal is satisfied that the applicant lawfully operated a bricklaying business in Australia for more than 12 months.
It is not submitted by the applicant that he meets the benchmarks, otherwise than through a consideration of his employment of an apprentice, Dillon Banfield. Mr Stride did not provide any evidence that he has made any recent expenditure towards an industry training fund (Benchmark A).
The Tribunal finds that there is no evidence, and no reason for otherwise finding that the applicant has ever made any relevant contribution to an industry training fund.
There is no evidence of graduate employment by the applicant, nor any evidence of any scholarship, payment of course costs or employment of an internal or external trainer by the applicant. His application at this point rests upon the relationship that he has with Mr Banfield as the basis for meeting the benchmark.
There is no legal definition of ‘payroll’ in the Act, Regulations or IMMI 13/030. Accordingly, the Tribunal considers it relevant to have regard to the Departmental policy guidelines as set out in the Procedures Advice Manual (PAM3) for Sponsorship Applicable to Division 3A of Part 2 of the Act, which provides as follows:
Payroll refers to the amount of money an employer pays in wages to their employees, in the 12 months prior to application lodgement. Payroll expenditure includes any wages, remuneration, salary, commission, bonuses, allowances, superannuation contributions (mandatory or otherwise) or eligible termination payments that are defined as wages in the Act relating to payroll tax in the relevant State/Territory.
Payments made to contractors or sub-contractors should be included as payroll expenditure if the contractor provides some labour services in fulfilling the requirements of the contract (in other words, they have a common law relationship of employer/employee).
As stated above the applicant told the Tribunal that he operated his business using sub contract labour so that he would minimise his legal obligations. He engaged sub contractors who operate under their own ABN. He did not issue payslips and would be invoiced direct. Specifically, the Tribunal notes the applicant’s evidence where he declared “my subcontractors are independent contractors and are not on my payroll as employees.” On this basis the Tribunal is satisfied that the applicant’s subcontractors are properly regarded as independent contractors and do not have a common law (or other) employer/employee relationship with the applicant.
Therefore the Tribunal does not accept that expenses of $438,002 in 2014 and $532,264 in 2015 on sub contractor fees is evidence of the payroll of the business and need to be excluded from any assessment of the applicant’s payroll for the purpose of IMMI 13/030.
The Tribunal notes Mr Stride’s evidence, however, that he did employ Mr Banfield, an apprentice, in the period 17 August 2015 to 2 October 2015 and paid him wages.
The Tribunal accepts that the expenditure on employment of an apprentice by Mr Stride was $1,466.85 (wages and superannuation). The Tribunal therefore accepts that Mr Stride’s expenditure on payroll was $1,466.85 in the 2015 financial year.
Having considered the issue, the Tribunal is of the view however that while there is evidence that the applicant did employ Mr Banfield as an apprentice, the employment, is not of a kind as required in the legislative instrument as that which can be counted towards Benchmark B.
The Benchmark requires the employment of apprentices on an ongoing basis in numbers proportionate to the size of the business. Mr Stride declared that Mr Banfield was only employed on a “trial basis to potentially becoming an apprentice”. He was only paid gross wages of $1350 plus $116.85 in superannuation.
The Tribunal has had regard to the migration agent’s submissions but finds them speculative and of little assitance. The agent submitted that calculation of gross wages for the apprentice employee was $1,350 for a 3 month period and therefore 12 month period of full employment would exceed $5,400 and meet training benchmark B, even if wages paid to subcontractors of $532,264 is considered.
The Tribunal does not accept the agent’s submissions that applicant can be said to have employed Mr Banfield for a full 12 months. The Tribunal does not accept that the applicant paid Mr Banfield $5,400 as extrapolated over a 12 month period by the migration agent. The Tribunal does not accept that employment of one apprentice for a period of 1 month and 16 days meets the requirement of IMMI 13/030, namely employment of apprentices on an ongoing basis in numbers proportionate to the size of Mr Stride’s business.
The Tribunal finds that Mr Banfield was only employed from 17 August 2015 to 2 October 2015. Mr Banfield’s employment as apprentice is therefore confined to this short, one off trial period. There is no evidence of employment of any other apprentices, trainee or recent graduate.
Considered overall it is the view of the Tribunal that the applicant cannot demonstrate any expenditure which can be counted towards meeting the required training benchmarks A and B.
The applicant, therefore, does not meet the requirements at r.2.59(d), because he does not meet the benchmarks for training Australian citizens and permanent residents as specified in the relevant instrument.
DECISION
The Tribunal affirms the decision not to approve the applicant as a standard business sponsor.
Christopher Smolicz
MemberATTACHMENT - Extracts from the Migration Regulations 1994
2.59 Criteria for approval as a standard business sponsor
For subsection 140E (1) of the Act, the criterion that must be satisfied for the Minister to approve an application by a person (the applicant) for approval as a standard business sponsor is that the Minister is satisfied that:
(a)the applicant has applied for approval as a standard business sponsor in accordance with the process set out in regulation 2.61; and
(b)the applicant is not a standard business sponsor; and
(c)the applicant is lawfully operating a business (whether in or outside Australia); and
(d)if the applicant is lawfully operating a business in Australia, and has traded in Australia for 12 months or more — the applicant meets the benchmarks for the training of Australian citizens and Australian permanent residents specified in an instrument in writing made for this paragraph; and
(e)if the applicant is lawfully operating a business in Australia, and has traded in Australia for less than 12 months — the applicant has an auditable plan to meet the benchmarks specified in the instrument, in writing, made for paragraph (d); and
(f)if the applicant is lawfully operating a business in Australia — the applicant has attested, in writing, that the applicant has a strong record of, or a demonstrated commitment to:
(i)employing local labour; and
(ii)non-discriminatory employment practices; and
(g)either:
(i) there is no adverse information known to Immigration about the applicant or a person associated with the applicant; or
(ii) it is reasonable to disregard any adverse information known to Immigration about the applicant or a person associated with the applicant; and.
(h)if the applicant is lawfully operating a business outside Australia and does not lawfully operate a business in Australia – the applicant is seeking to be approved as a standard business sponsor in relation to a holder of, or an applicant or proposed applicant (the visa applicant) for a [Subclass 457 visa], and the applicant intends for the visa holder or visa applicant to:
(i) establish, or assist in establishing, on behalf of the applicant, a business operation in Australia with overseas connections; or
(ii) fulfil, or assist in fulfilling, a contractual obligation of the applicant.
(i)the applicant has provided to the Minister the number of persons who the applicant proposes to nominate during the period of the applicant’s approval as a standard business sponsor, and:
(i) the proposed number is reasonable, having regard to the information provided to the Minister; or
(ii) if the Minister proposes another number of persons as part of considering the application — the applicant has agreed, in writing, to nominate no more than the other number of persons during the period of the applicant’s approval as a standard business sponsor; and
(j)if the applicant has previously been a standard business sponsor:
(i) the applicant:
(A)fulfilled any commitments the applicant made relating to meeting the applicant’s training requirements during the period of the applicant’s most recent approval as a standard business sponsor; and
(B)complied with the applicable obligations under Division 2.19 relating to the applicant’s training requirements during the period of the applicant’s most recent approval as a standard business sponsor; or
(ii) it is reasonable to disregard subparagraph (i).
[Note …]
2.60S Additional criteria for all classes of sponsor — transfer, recovery and payment of costs
(1)For subsection 140E(1) of the Act, the criteria in this regulation are in addition to the criteria in regulations 2.59 to 2.60M.
(2)The criteria that must be satisfied for the Minister to approve an application by a person (the applicant) for approval as a sponsor mentioned in any of regulations 2.59 to 2.60M include a criterion that the Minister is satisfied that:
(a)the applicant has not taken any action, and has not sought to take any action, that would result in the transfer to another person of some or all of the costs, including migration agent costs, associated with the applicant becoming an approved sponsor; and
(b)the applicant has not taken any action, and has not sought to take any action, that would result in another person paying to a person some or all of the costs, including migration agent costs, associated with the applicant becoming an approved sponsor; and
(c)the applicant has not taken any action, and has not sought to take any action, that would result in the transfer to another person of some or all of the costs, including migration agent costs, that relate specifically to the recruitment of a non-citizen for the purposes of a nomination under subsection 140GB(1) of the Act; and
(d)the applicant has not taken any action, and has not sought to take any action, that would result in another person paying to a person some or all of the costs, including migration agent costs, that relate specifically to the recruitment of a non-citizen for the purposes of a nomination under subsection 140GB(1) of the Act; and
(e)…
(f)....
(3)The criteria that must be satisfied for the Minister to approve an application by a person (the applicant) for approval as a sponsor mentioned in any of regulations 2.59 to 2.60M include a criterion that the Minister is satisfied that:
(a)the applicant has not recovered from another person some or all of the costs, including migration agent costs:
(i) associated with the person becoming an approved sponsor; or
(ii) that relate specifically to the recruitment of a non-citizen for the purposes of a nomination under subsection 140GB(1) of the Act; and
(b)the applicant has not sought to recover from another person some or all of the costs, including migration agent costs:
(i) associated with the person becoming an approved sponsor; or
(ii) that relate specifically to the recruitment of a non-citizen for the purposes of a nomination under subsection 140GB(1) of the Act; and
(c)…
(d)…
(4)However, the Minister may disregard a criterion referred to in subregulation (2) or (3) if the Minister considers it reasonable to do so.
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