1512040 (Migration)

1512040 (Migration) [2016] AATA 4148 (22 July 2016)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  KERP GROUP PTY LTD
CASE NUMBER:  1512040
DIBP REFERENCE(S):  BCC2015/858202
MEMBER:David Dobell
DATE:22 July 2016
PLACE OF DECISION:  Sydney
DECISION:The Tribunal sets aside the decision under review and substitutes a decision approving the nomination
Statement made on 22 July 2016 at 10:44am

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 13 August 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 17 March 2015. 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 criteria in Direct Entry Nomination stream. The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19(4)(a) of the Regulations.
Dr Sanjiv Shah, sole Director and shareholder of the applicant company (hereafter ‘the applicant’) appeared before the Tribunal on 23 June 2016 to give evidence and present arguments. This was a combined hearing with MRD No: 1513831 (related subclass 187 visa refusal) and MRD No: 1601453 (related subclass 457 visa refusal).
The applicant was represented in relation to the review by its registered migration agent, who attended the hearing.
For the following reasons, the Tribunal has decided to set aside the decision under review and substitute a decision approving the nomination.
CLAIMS AND EVIDENCE
The following documentary evidence is on the Department file:
- Kerp Group, letter re need, undated
- Overall Organisational Chart – ‘General accountant’ nominated position
- Mittagong Convenience Organisational chart
- Mittagong Convenience Store, for retail manager
- Kerp Group, letter re duties, SD Jain, undated
- Southern Highlands News, Classified ad, 17 September 2014
- Payscale, median $45,416 for retail manager, etc
- Kerp Group, Company Tax Return, 2014
- Employment contract, March 2015
- Certificate of registration
- RDA Southern Inland, RCB Advice, positive, 23 April 2015, retail manager, $50,000pa
- Nomination- 17 March 2015
In coming to their decision the delegate noted:
- Nominated position is retail manager ANZSCO 142111
- Company has 10 employees, 6 of which are Australian
- $50,000 pa is the nominated salary
- It was claimed that the visa applicant has been working as a casual employee since July 2013, but no evidence of this was provided
- There is no evidence to support the claim the person is needed to oversee/growth expansion of the business
- They were not satisfied there was a genuine vacancy for the nominated position under r.5.19(4)(a)(ii)
The following documentary evidence was on the Tribunal file prior to hearing:
- Ezymart Alliance Agreement, 1 January 2016 (change of name etc)
- Photos of store
- Organisational Chart- Dr Sanjiv Shah, Director, Rimpal Jain Manager
- Applicant company, letter, 14 June 2016, re background and new director/shareholder
- Business Plans for remaining businesses
- Applicant company, Financial Statements, 2015
- BAS (2)
- Commonwealth Bank, applicant company statements, late 2015 to March 2016
- Retail Manager - duty description, 15 September 2015
- CSA duties
- ASIC Company details
Significantly, the ASIC details showed that the applicant became the sole director and shareholder of the applicant company in September 2015.
The letter from the company dated 14 June 2016 states that the following businesses of the company had closed down, because they were too far away from the applicant:
·Marulan Convenience store
·Kerp Wholesale, Marulan
·Bukhara of Beechworth
The letter stated that Mittagong Convenience store was continuing and he was proposing to open Gforce Racing and hobby business, and also to open the Bukhara Indian restaurant in the Southern Highlands.
The letter also stated that the new business owner has worked for 14 years in Australia as a GP, and has had a medical practice in Merrylands for 10 years, and that he plans to retire to the Southern Highlands and so wants to set up various businesses there.
At the hearing, the following documentary evidence was provided:
·Employment Agreement, applicant company and visa applicant, 15 January 2016
·PAYG Payment Summary, visa applicant, 2014/15, showing $51,250 pa
·Job outlook and Payscale information for retail manager
·General Retail Industry Award, from 1 July 2015, Level 8 (top level) $23.23 p/hr, $29.04 Saturday
The applicant said he took over the applicant company on 15 September 2015. The company had begun rationalising its businesses prior to him taking over. Now what remains as an active business is only the convenience store in Mittagong. He is starting a remote control (RC) business, with the visa applicant’s husband presently doing contract work on this. No store has been established as yet. He also hopes to get the restaurant up and running in the Southern Highlands area.
As to staffing, he said there are 4 part time Australian citizen/permanent residents employed by the business. There is also a subclass 457 visa holder, ‘Prakesh’, working as an accountant.
The applicant explained that he is a very busy GP in the Merrylands area, having been practising there for 10 years.
As to the Ezymart relationship, he said this is not a franchise arrangement. It had been going before he took over. They offer business advice as well as purchasing through their warehouse. However, they are not compelled to buy through them- and so are independent.
The Tribunal referred to the latest BAS (January to March 2016) and asked what proportion of this was the store. He said this was all the store, and the new RC business would be in the next BAS.
The applicant confirmed that the visa applicant is the current retail manager, working 38 hours a week, and that she has been doing this at least since he took over. When asked, he advised that the visa applicant was related to the previous company owner.
The store is open every day, from 7am to 7 pm and a bit less on weekends. The visa applicant works full-time, including Saturdays but has a day off during the week to compensate.
As to his contact with the business, he said he would visit once a fortnight, for 1-2 hours. Then there would be almost daily phone conversations, of 10-20 minutes, and also daily text messages of business information. He requires a daily report of how the business is going, and to know of any issues, or plans.
As to his involvement in the business, he agreed he is very ‘hands-on’. He said these type of businesses have to be watched very carefully as things can change very quickly. He has a big investment tied up in this and wants to protect it.
He has had input into store procedures, and wants to know, for example, if a new product line is to be introduced, and why. He confirmed that he has not recently been involved in this type of business, so it is as much about him learning about the business from the visa applicant.
The Tribunal asked who was responsible for paying suppliers. He said that Prakash handles this. He is based in the store also. As to what else Prakash does, he said he does invoicing, and payrolls, and BAS and disbursements, and monthly statistics and banking for example.
The applicant explained that Prakash was previously looking after all the businesses, before the reorganisation. The Tribunal noted that it is really only one business now, and noting he might not have as much work as in the past, asked whether he was also performing any of the tasks a retail manager might usually do. The applicant said ‘no’, the visa applicant did all those.
The Tribunal then went through the tasks of retail manager, as set out in the ANZSCO:
- determining product mix, stock levels and service standards - the visa applicant looks after all of this, but she will consult with him. He said there are some 2,000 items of stock, and some 10 suppliers, and their independent purchases, and whilst she consults with him, she looks after this
- formulating and implementing purchasing and marketing policies, and setting prices - she does all of the setting of prices, in consultation with him, and they have both been involved in determining policies/procedures
- promoting and advertising the establishment's goods and services – she looks after this but it is mainly in-store promotions
- selling goods and services to customers and advising them on product use – this is clearly the visa applicant’s responsibility
- maintaining records of stock levels and financial transactions – This is done through the POS registers on a day-to-day basis. Prakash will identify any trends and bring these to the applicant’s attention
- undertaking budgeting for the establishment - she has a role in budgeting, but Prakash would do this, and then present it to the applicant, and then he would give it to the visa applicant
- controlling selection, training and supervision of staff - the visa applicant is responsible for this on a day-to-day basis
- ensuring compliance with occupational health and safety regulations- the visa applicant is also responsible for this on a day-to-day basis, but given his business background, the applicant has had input into this
The Tribunal then examined the latest job description, dated 15 September 2015. The applicant said he prepared this from what he expected, and did not know what the original owner had put down about this.
It said that these duties were generally consistent with what is stated in the ANZSCO descriptor. It said in relation to Determine strategy changes by reviewing operating and financial statements and sales records - that, this would be more likely to originate with Prakesh, and go to him, and then involve the visa applicant.
The Tribunal then turned to the regulations of concern.
It noted the new employment agreement provided at hearing, which spelt out the position was 38 hours a week, and referred to the NES. He said there is an Award, and the salary of $50,000 pa is over this, even after considering weekends work and loadings. He gave the Tribunal a copy of the Award details.
The Tribunal said that on the evidence before it, it would accept that this position was a retail manager, Skill Level 2.
The Tribunal said however that it was concerned about labour market testing. It noted that this position was regional, but was quite close to Sydney. The applicant said he has not tested the market, but thought it was done last year. The Tribunal said the information on file showed it was actually done in 2014. He said he will advertise in Seek, and in a local paper for 2 weeks, and will provide the outcome to the Tribunal after 1 month.
On 20 July 2016 the Tribunal received documentary evidence from the representative, showing the applicant’s recent attempts to fill the position, through an ad in the Southern Highlands News, Adzuna, Gumtree, and a shop window ad. None of the applicants for the position was judged to be suitable, and reasons for this were given.
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 application is compliant: r.5.19(4)(a)
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, where applicable, must include the required written certification relating to conduct that contravenes s.245AR(1).
The application must also identify a need for the nominator to employ a paid employee to work in the position under their direct control.
The Tribunal is satisfied that the requirement in r.5.19(4)(a)(i) is met as the application was made in accordance with subregulation (2) and the Department issued an acknowledgement of nomination application received and noted the application was being processed.
The Tribunal is also satisfied that the requirement in r.5.19(4)(a)(ii) is met as the applicant has identified in the application for approval a need for the nominator to employ a paid employee to work in the position under the nominator’s direct control.
Whether or not this identified need is genuine is addressed later at r.5.19(4)(h)(ii)(B).
Nominator is actively and lawfully operating a business in Australia: r.5.19(4)(b)
Regulation 5.19(4)(b) requires that applicant is actively, lawfully and directly operating a business in Australia.
From the oral and documentary financial evidence before the Tribunal, it is satisfied that the requirement in r.5.19(4)(b) is met.
Position is not labour-hire: r.5.19(4)(c)
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.
The requirement in r.5.19(4)(c) does not apply here.
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.
The Tribunal has examined the new Employment Agreement provided by the applicant dated 15 January 2016, which is a 3 year contract and does not preclude extension.
Further, the Tribunal is satisfied from the financial documentary evidence provided that the applicant will be able to afford to employ the visa applicant for at least a two year period.
Accordingly, the requirement in r.5.19(4)(d) is met.
No less favourable terms and condition of employment: r.5.19(4)(e)
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.
The Tribunal has examined the terms and conditions of the new 38 hour a week Employment Agreement, which refers to the National Employment Standards (NES) as the minimum, and provides for a Fair Work Information Statement to be given to the visa applicant.
As to the salary of $50,000, the Tribunal accepts from the documentary evidence provided at hearing that this is a market rate for a retail manager and is also just above the relevant Award rate for level 8. The Tribunal notes that the rates have increased from 1 July 2016 and that the Award figure would come in at around $49,000 pa, given the Saturday work.
Accordingly the requirements of r.5.19(4)(e) are met.
No adverse information known to Immigration: r.5.19(4)(f)
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 such information. For these purposes, ‘adverse information’ and ‘associated with’ have the meaning given in rr.1.13A and 1.13B.
There is no adverse information before the Tribunal and accordingly the requirements of r.5.19(4)(f) are met.
Satisfactory compliance with workplace relations laws: r.5.19(4)(g)
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 the Tribunal to suggest that the applicant has an unsatisfactory record of compliance and accordingly the requirements of r.5.19(4)(g) are met.
Tasks of the position genuine need for the position and training benchmarks r.5.19(4)(h)
Regulation 5.19(4)(h) contains a number of alternative requirements. The regional requirements are applicable here at (h)(ii).
(A) the position is located in regional Australia;
The Tribunal is satisfied that Mittagong NSW is located in regional Australia under the relevant instrument.
(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;
The delegate was not satisfied that there was a genuine need for a retail manager because of the limited documentary evidence provided to support the application.
The Tribunal refers to ANZSCO for guidance in relation to retail manager, noting that the 2013 amended version would apply here as this was released on 26 June 2013, prior to the time of nomination lodgement:
From:
UNIT GROUP 1421 RETAIL MANAGERS
RETAIL MANAGERS organise and control the operations of establishments which provide retail services.
Indicative Skill Level:
Most occupations in this unit group have a level of skill commensurate with the qualifications and experience outlined below.
In Australia:
AQF Associate Degree, Advanced Diploma or Diploma (ANZSCO Skill Level 2)
In New Zealand: NZ Register Diploma (ANZSCO Skill Level 2)
At least three years of relevant experience may substitute for the formal qualifications listed above. In some instances relevant experience and/or on-the-job training may be required in addition to the formal qualification.
Registration or licensing may be required.
Tasks Include:
•determining product mix, stock levels and service standards
•formulating and implementing purchasing and marketing policies, and setting prices
•promoting and advertising the establishment's goods and services
•selling goods and services to customers and advising them on product use
•maintaining records of stock levels and financial transactions
•undertaking budgeting for the establishment
•controlling selection, training and supervision of staff
•ensuring compliance with occupational health and safety regulations
Occupations: 142111 Retail Manager (General)
…
142111 RETAIL MANAGER (GENERAL)
Alternative Titles: Retail Store Manager
Shop Manager
Organises and controls the operations of a retail trading establishment.
Retail Pharmacists are excluded from this occupation. Retail Pharmacists are included in Unit Group 2515 Pharmacists, in Occupation 251513 Retail Pharmacist.
Skill Level: 2
Specialisations:
Fast Food Manager
Newsagent
Retail Bakery Manager
The most recent job description states as follows:
Job description 15/09/2015
The following are the duties of the Retail Manager in this company:
oTo monitor and maintain stock
oTo recruit, train, supervise and motivate staff
oIntroduce new product lines and create strategies for their promotions
oPromote quality products and services to customers
oAssist customer with complaints in regards to product satisfaction, delivery and others matter arising therein with a mutually positive resolution
oLiaise with the owner regarding all aspects of sales and marketing
oEnsure that health, safety and cleanliness standards are upheld at all times
oTo ensure compliance with all local, state and federal laws within the scope of the convenience/food store operations
oDetermine strategy changes by reviewing operating and financial statements and sales records
oPrepare promotional materials and displays
oFormulate pricing policies by reviewing merchandising activities, determining additional needed sales promotions and authorising clearance sales
oInitiating changes to improve the business, e.g. Revising opening hours to ensure the store can compete effectively in the local market
oEnsure the store is attended throughout the hours of business
oEnsure till reconciliation takes place each day at close of business and banking of cash
oPremises are securely closed and alarm set each evening
oPerform all duties necessary to keep the business open and trading
oManage staff holiday and sickness

The Tribunal is first satisfied that the duties of the nominated position generally align with those set out in ANZSCO for retail manager, using ANZSCO by way of a guide.
The Tribunal considers that someone has to be the retail manager of the convenience store in question. After talking to the new owner, who is a busy GP in Sydney, the Tribunal is satisfied that that person is the nominated person, the visa applicant.
Whilst the applicant has day-to-day contact with the visa applicant about the business, and visits it once a fortnight, the Tribunal is satisfied that this is in the context of protecting his investment in the business, rather than exercising a managerial role over the business.
His background is in medicine and he has not recently had any experience in the running of a retail business. Of course, he would have views about certain business areas that might be considered ‘generic’, but in general he is learning about how the business operates from the visa applicant rather than the other way around.
He also receives input on how the business is operating overall from the accountant, Prakash, which he also feeds back to the visa applicant. The Tribunal is satisfied that Prakash is performing duties which go beyond those normally undertaken by a retail manager, but there may be some cross-over, say, in terms of preparing budgets. However, as expressed at the hearing, it wonders whether he is performing his nominated occupation duties on a full-time basis given the drastic decline in the number of businesses the applicant company operates.
Thus the Tribunal is satisfied that there is a genuine need for the nominator to employ a paid employee to work in the position of retail manager under the nominator's direct control, and (B) is satisfied.
(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;
The Tribunal can accept that it may be difficult to find a suitable person for this position in a regional area such as Mittagong, but it needs to be satisfied in each particular case that the position cannot be filled by an Australian citizen or an Australian permanent resident who is living in the same local area.
The applicant has now provided the Tribunal with documentary evidence showing that he did recently advertise for a fortnight for a retail manager at a salary of $50,000, and that there were 5 applications received but not one of these persons was suitable for the position.
In the circumstances of this case, the Tribunal will accept that, based on the above evidence, the position cannot be filled by an Australian citizen or an Australian permanent resident who is living in the Mittagong area, and thus (C) is satisfied.
(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;
The Tribunal is satisfied that the tasks to be performed in this position correspond to the tasks of a retail manager at an ANZSCO skill level of 2. Thus (D) is satisfied.
(E)the business operated by the nominator is located at that place;
The Tribunal is satisfied that the business operated by the nominator is located in Mittagong.
(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).
The Tribunal has before it the positive Regional Certifying Body Advice of RDA Southern Inland dated 23 April 2015, in regards the position of retail manager, at $50,000 pa. Thus (F) is also satisfied.
Accordingly the requirements of r.5.19(4)(h) are met.
All relevant requirements of r.5.19(4) being met, the Tribunal is satisfied that the applicant meets the requirements of r.5.19 for approval of the nomination of the position of retail supervisor at ANZSCO skill level 2 in Australia.
DECISION
The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.
David Dobell

Member
ATTACHMENT - EXTRACTS FROM THE MIGRATION REGULATIONS 1994
r.5.19Approval of nominated positions (employer nomination)- as at time of lodgement
…
(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 4148

22 July 2016

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