1513283 (Migration)

[2016] AATA 3909

1513283 (Migration) [2016] AATA 3909 (19 May 2016)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Pastacup WA Pty Ltd

CASE NUMBER:  1513283

DIBP REFERENCE(S):  BCC2015/1289062

MEMBER:Steve Georgiadis

DATE:19 May 2016

PLACE OF DECISION:  Adelaide

DECISION:The Tribunal affirms the decision under review to refuse the nomination.

Statement made on 19 May 2016 at 6:55pm

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 on 11 September 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).

2. The applicant applied for approval on 4 May 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).

3. In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in the Direct Entry nomination stream.

4. The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19(4)(h)(ii) of the Regulations as the delegate was not satisfied that there was a full-time need for a Retail Manager in the business.

5. Mr Stuart Bernstein, Director of the applicant, Pastacup WA Pty Ltd appeared before the Tribunal on 16 May 2016 to give evidence and present arguments. The Tribunal also received oral evidence from a recent former Director, Pastacup WA Pty Ltd, Ms Siri Solumsmoen. 

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

7. For the following reasons, the Tribunal has decided to affirm the decision under review to refuse the nomination.

   CONSIDERATION OF CLAIMS AND EVIDENCE

8. 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.

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

9. The Tribunal has considered the documentary and oral evidence before it discussed, including the applicant’s written submissions made under cover letter of 2 May 2016 and 13 May 2016 and the material previously provided to the Department and the Tribunal. 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. 

10. The oral evidence provided by Mr Bernstein is that he is currently the sole Director of Pastacup WA Pty Ltd and formerly a Director of another related company in the same group, Pastacup Australia Pty Ltd, until such time as that company was ‘wound up voluntarily’ in November 2014. The current extract from the ASIC register in respect of that company ACN: 150392340, sets out: “strike off action in progress”.  When questioned about this at the hearing Mr Bernstein’s explained that the decision was taken to wind up the company after a former Director had passed away in April 2014.  He explained that the widow of the former Director was not prepared to stay involved with that company and accordingly, liquidators were appointed to wind up Pastacup Australia Pty Ltd following creditor meetings conducted as part of that process.

11. When asked about the applicant’s financial viability Mr Bernstein’s evidence is that the company is in a ‘solid financial position’. The Tribunal reflected to Mr Bernstein concerns over the credibility of his response and the applicant’s solvency in circumstances where the applicant’s profit and loss statement for the period July 2014 to February 2015 provided to the Tribunal records a total income of $183,104 against wage/salaries expenses of $196,717 and a net loss of $37,024 for that period. His response was that a net loss of some $37,000 for the applicant, is insignificant when overall the group has sales in ‘the millions’. The Tribunal is satisfied from the applicant’s oral evidence, substantiated by the aforementioned profit and loss statement, that the applicant, as a discrete company entity, has expenses in excess of its income and has operated as a loss making business.

12. The Tribunal considers as weighing in the applicant’s favour, the oral evidence from Mr Bernstein that an unfair dismissal application brought by a disgruntled employee of another related company of which he is a Director, Pastacup Morley Pty Ltd, was ultimately dismissed by Fair Work Australia.  He explained, when asked, there is no other industrial disputation involving the business.

13. The evidence from Ms Solumsmoen is that she is a recent past Director of Pastacup Australia Pty Ltd, a company that was registered with ASIC at the same time as Pastacup WA Pty Ltd, on 12 April 2011. She described herself as a ‘business partner’ of Mr Bernstein in respect of the applicant and explained that she remained a Director of Pastacup WA Pty Ltd until around the time of the birth of her third child after which she ceased being a Director, in around March / April 2015. The Tribunal notes this is immediately before the nomination application made on 4 May 2015. Later in the hearing, when asked about bankruptcy of any person associated with the applicant, Ms Solumsmoen conceded that bankruptcy proceedings had been commenced against her regarding non-payment of certain debts following a payment arrangement notice dated December 2014, which she claims she did not receive.  She confirmed at the hearing, when questioned further, that she is now declared bankrupt but that she intends to challenge the basis for this.

14. For both ENS and RSMS applications made on or after 2 April 2005 but before 1 July 2012, it is a requirement for approval that nothing adverse is known to Immigration about the business background of the employer or any officer of any of the entities that constitute the employer or any individual who is a member of a partnership that is one of the entitles that constitute the employer. There is a similar, but not identical, requirement for post 1 July 2012 Temporary Residence Transition nominations and Direct Entry  nominations - without reference to the business background of the employer.  It instead requires that there is nothing adverse known to Immigration about the nominator or an associated person, and allows for the requirement to be disregarded in certain circumstances.

15. For post 1 July 2012 applications as is the case here, the requirement is not limited to adverse information about the ‘business background’ of the employer, an officer or partner. It extends to any ‘adverse information’ known to Immigration about the nominator or a person associated with the nominator. For the purpose of this provision, the terms ‘adverse information’ and ‘associated with’ are defined in r.1.13A and r.1.13B, respectively. 

16. On the basis of the oral evidence discussed above, the Tribunal is satisfied that there is adverse information known to Immigration about the nominator or a person associated with the nominator within the meaning under rr.1.13A and 1.13B for this purpose.

    Should the adverse information be disregarded?

17. Unlike the pre 1 July 2012 requirement, the adverse information may be disregarded if it is reasonable to do so. The Explanatory Statement to the regulation introducing this requirement is silent on the intention behind this aspect of the criterion but the Tribunal is guided by the identically worded requirement in r.2.72 for temporary work nominations. The Explanatory Statement to the regulations introducing the then r.2.72(1)(i) (now r.2.72(9)) states that it may be ‘reasonable’ to disregard information if, for example, the person had developed practices and procedures to ensure the relevant conduct was not repeated.

18. Departmental Guidelines (PAM 3) states that there are no definitive rules as to when it will be reasonable to disregard adverse information about a nominator. The Tribunal has had regard to the guidelines taking care not to elevate these to the equivalent of a legislative instrument.  The Tribunal has weighed up and assessed the circumstances taking into account relevant factors discussed in deciding whether it is reasonable to disregard the adverse information. 

19. The Tribunal places weight on the nature of the adverse information which relates to financial aspects of persons associated with the applicant including current and past Directors.  In respect of the nature of the adverse information, the Tribunal accepts that as past Director, Mr Bernstein has been subject to administrative action by a competent authority in this case ASIC, in relation to the ‘strike off action in progress’ for the related company established at the same time and in the same food business as the applicant, which involved a common Director of both companies.  As aforementioned, the Tribunal has concerns relating to the applicant’s financial viability given the oral evidence of circumstances where the company’s wages and salaries expenditure exceed the total income over the period and has been operating unprofitably with a net loss.

20. The Tribunal has considered the overall context of the business operations. The Tribunal note the favourable outcome relating to the unfair dismissal application but also weights against this the oral evidence from Mr Bernstein that the applicant has been fined by the Australian Taxation Office (ATO) for non-lodgement of certain returns.  The Tribunal accepts the oral evidence that this resulted in the applicant being fined $1,500 in respect of non-compliance.  The Tribunal also considered the applicant’s oral evidence regarding Director’s obligations that he had ‘not read the document’ relating to the ATO fine, later changing his evidence that he ‘read this enough’ to refer it to his accountant to deal with.  The Tribunal considers that the reference to the notice from the ATO as being from a credible source in respect of that matter.

21. The Tribunal also considers that adverse information relates to relatively recent events involving common Directors of the applicant in respect of matters of financial viability. The Tribunal considers the fine by the ATO for the non-lodgement breach is fresh and places weight that these matters did not occurred a long time ago.

22. The guidelines are not exhaustive and the determination of whether it is reasonable to disregard the information is a question of degree to be weighed up from all the relevant circumstances. Having regard to the above evidence provided at the hearing and the overall circumstances of the adverse information known, the Tribunal considers on balance, that it is not reasonable to disregard that information.

23. Accordingly the requirements of r.5.19(4)(f) are not met.

24. 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. Therefore, the Tribunal must affirm the decision under review.

    DECISION

25. The Tribunal affirms the decision under review to refuse the nomination.

    Steve Georgiadis
    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).