1514878 (Migration)

[2016] AATA 3990

1514878 (Migration) [2016] AATA 3990 (14 June 2016)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  HONG REN TANG AUSTRALIA Corporation Pty Ltd

CASE NUMBER:  1514878

DIBP REFERENCE(S):  BCC2015/1140760

MEMBER:Fraser Syme

DATE:14 June 2016

PLACE OF DECISION:  Brisbane

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

Statement made on 14 June 2016 at 2:01pm

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 21 October 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 16 April 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). An extract of the relevant legislation is attached to this decision.

3. In this case, the applicant has applied for approval of a nomination for the position of chief executive officer or managing director (“CEO or MD”), seeking to satisfy the criteria in the Direct Entry Nomination stream. The applicant’s business is it operates three traditional Chinese medicine (“TCM”) herbal centres in Brisbane and the Gold Coast and has purchased premises with a business plan to operate a TCM health retreat on the Gold Coast.

4. The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19(4)(a)(ii) of the Regulations. The delegate was not satisfied the applicant had identified the need for a paid employee in the nominated position. The applicant included the delegate’s decision record with the review application.

5. The applicant is a company. Mr Zhao, a director of the applicant appeared before the Tribunal on 12 April 2016 to give evidence and present arguments. The Tribunal also received oral evidence via telephone from Ms Huo who is the wife of Mr Zhao. The Tribunal received oral evidence too from Ms Shi the nominee for the nominated position. The Tribunal hearing was conducted with the assistance of an onsite interpreter in the Mandarin and English languages. Mr Zhao partly addressed the Tribunal in competent English. Ms Huo provided her evidence in English. Ms Shi provided her evidence in English, but what she told the Tribunal was not relevant to the issues set out below.

6. The applicant was represented in relation to the review by its registered migration agent. The migration agent attended the Tribunal hearing in person and provided submissions before and after the hearing, which the Tribunal has had regard to and are set out relevantly in more detail below.

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.

   The application is compliant: r.5.19(4)(a)

9. 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.

10. The delegate made the decision under review against this criterion. Mr Zhao explained to the Tribunal how he and Ms Huo are busy and require a CEO to free them up and to help the applicant’s business achieve the growth goals set out in the business plan, including operating the TCM health retreat. At the hearing however, the Tribunal put to the applicant it had concerns regarding other criteria in r.5.19(4), which are discussed in more detail below. Given those findings below, it is unnecessary for the Tribunal to reach any finding regarding r.5.19(4)(a).

    No less favourable terms and condition of employment: r.5.19(4)(e)

11. 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.

12. As evidence it satisfied the requirements of r.5.19(e), the applicant provided to the delegate a letter from the migration agent dated April 2015 stating the results of a salary search on the website seek.com indicated the market salary rate for a CEO or MD was $180,000-$200,000 (plus superannuation). Therefore, the proposed salary of $185,000 plus superannuation for the nominated position of CEO met the current market salary. Attached to the letter are job vacancies from the seek.com website. The first is a CEO of a pollution control infrastructure company in Melbourne with a negotiable salary of $200,000+. The second is for a project director for retail shopping centre developments in Melbourne with a salary of $180-200,000. The third is for a senior manager in tax consulting at a firm of chartered accountants in Melbourne with a salary negotiable up to $200,000. At the hearing, the Tribunal put to Mr Zhou it had difficulty accepting that evidence established what the baseline terms and conditions would be for the nominated position. It pointed out most of the advertisements were not in a similar industry to that of the applicant’s business and all were located far from the location of the nominated position. The applicant also provided to the delegate a fourth advertisement for a director of medical services in Cairns with a remuneration package of up to $439,000.

13. The Tribunal has had regard too to the employment contract provided to the delegate. The employment contract includes various references to work hours and holiday entitlements being in accordance with the Fair Work Act 2009. While the Tribunal is mindful it can be provided via other means, the Fair Work Information Statement is not attached to the employment contract.

14. Mr Zhao explained to the Tribunal how he decided the terms and conditions of the nominated position. The Tribunal found Mr Zhao’s evidence on this issue problematic. He initially told the Tribunal he did some market research, which led him to conclude $185,000 was a reasonable salary for a CEO and would be lawful. The Tribunal queried why that figure would be lawful. Mr Zhao avoided to answer that question. He then said someone told him that. When the Tribunal asked who told him, Mr Zhao again avoided to answer. He then said he asked many Chinese people he knew running business in Australia. He chose the figure based on his research and Ms Shi requested she receive a minimum salary of $180,000. He later said some of the people he asked told him to increase the business’ turnover to $5-6 million he would have to pay a CEO $170-200,000. The Tribunal put to Mr Zhao it was concerned he was avoiding to answer its question about who told him $185,000 was the lawful figure for a CEO.

15. Mr Zhao added he is not an experienced businessperson. He does not do formal market research, he usually relies on his own intuition. The Tribunal noted that caused it to have concern whether the terms and conditions of the nominated position were suitable. He then claimed by not doing formal market research he meant he did not engage a research company to do the research for him. He did do some research regarding Chinese visitor numbers to the Gold Coast. He then referred to global sub-health figures. The Tribunal noted that research seemed unrelated to what research he did to ascertain the terms and conditions for the nominated position. He added he asked Ms Huo to do online research with job vacancies sites. She told him to hire a CEO to perform a lot of duties for a large scale business, the salary should be $170-180,000.

16. It was at this point the Tribunal received evidence from Ms Huo via telephone. She told the Tribunal she thought the salary would be between $100-200,000. She did not do any research regarding the salary of CEO. Mr Zhao took care of that and discussed it with her. They spoke about whether the CEO would receive a salary, plus a commission based upon sales performance. Adopting the procedure in s.359AA, the Tribunal put to Mr Zhao the evidence of Ms Huo was inconsistent with his evidence that she did market research of job websites and that the inconsistencies in their evidence caused the Tribunal to doubt the credibility of his evidence. That would be part of the reason to affirm the decision. Mr Zhao elected to respond at the hearing. He said the conversation with Ms Huo happened more than a year ago and took place during their daily lives together. He recalls asking her to do some research online, which she agreed to do. A few days later, he asked her again and she told him $170-180,000. Husbands and wives do not keep records of such conversations.

17. The Tribunal put to Mr Zhao the evidence before it was neither he nor Ms Huo had carried out any research regarding the CEO salary, but four advertisements were provided to the delegate. He told the Tribunal he asked his migration agent to carry out that research to meet the criteria for the nomination approval. Later in the hearing, the migration agent (who is not a legal practitioner) submitted Mr Zhao told her he had done research for the market salary rate of the nominated position, that it was $170-180,000. The Tribunal noted the migration agent was undermining the evidence of Mr Zhao, who told it he had not done any market research. She continued that Mr Zhao told her he had spoken with his friends, but provided no documents to her. Therefore, she did the research to obtain the job vacancies provided to the delegate (on seek.com). She requested additional time after the hearing to provide further evidence of the market salary rate for the nominated position. 

18. The Tribunal put to Mr Zhao at the hearing, the evidence before it was the only market research he had done was to ask some of his friends about the terms and conditions of the nominated position. It further put to him the evidence the migration agent provided to the department was not persuasive due to the disparity in location and industries to the nominated position. It was concerned whether 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.

19. After the hearing, the migration agent provided what is described as an “updated market salary report”. She submits that report demonstrates “the salary package for the nominated position is not less favourable than local Australians who perform the same duties in the same industry.” The report asserts the terms offered in the nominated position are similar to what would be offered to any Australian worker, including but not limited to: salary; superannuation; annual leave; sick leave; working hours; overtime payments; annual leave loading and other entitlements. There is no evidence provided for these assertions. That actually is unsurprising given it is untenable to make these assertions if regard is had to the plethora of terms and conditions that exist between employers and employees across the immense variety of employment arrangements in Australia, in all sectors, in all industries, at all levels of qualifications, skills sets and experience. The report includes too: a series of extracts of job vacancies from seek.com; wage data from payscale.com, and an associations salary survey. The Tribunal assess each of these in more detail below.

20. There are four advertisements from seek.com. One advertisement bears a date 31 March, but it is uncertain which year, the other three advertisements do not declare a date. The first is for the CEO of an Aboriginal medical service in Alice Springs with a salary of $150,000 plus an accommodation package of unspecified value. The second is for a regional manager of 30 aged care facilities in Sydney with a salary of $160-175,000. The third is a seeking a qualified accountant for a director of community and corporate services for a local government in the Northern Territory with a salary of $165,000, including a car. The fourth is the same director of medical services position in Cairns provided to the delegate, but, the advertisement has been cropped to conceal the remuneration package is up to $439,567.

21. Again, the sample job vacancies provided are located far from the location of the nominated position. That reduces the weight the Tribunal can put on that evidence. When the accommodation package is reckoned in, the terms and conditions of the position in Alice Springs would most likely exceed that of the nominated position. The position in Sydney is for one of three regional managers, which suggests it is a far lower managerial position than that of a CEO. The position with the Northern Territory local government is for an accountant. For those reasons, none of them is a suitable guide upon which the Tribunal can assess the terms and conditions of the nominated position. The position in Cairns is the closest in terms of industry and is also in Queensland. But the terms and conditions of that position far exceed those of the nominated position and the Tribunal is not impressed by the conduct of the migration agent attempting to conceal that from the Tribunal in the report provided with the post-hearing submission.

22. The information from payscale.com states the salary range for CEO positions in Australia as at March 2016 was between $97,533 and $363,509 and the median is $178,084. A closer look at that data reveals CEO remuneration is often comprised of not only a salary, but also bonuses, profit sharing and commissions. The terms and conditions in the employment contract provided to the delegate for the nominated position provide only for a salary. That suggests the terms and conditions of the nominated position may be less favourable as it does not provide for any bonus, profit sharing or commission, which would be common in a remuneration package for a CEO. The post-hearing submission is silent as to that issue. Also extracted in the report from payscale.com is a ‘your payscale report’ which the migration agent submit shows the average salary for a CEO in Brisbane in the health management industry is $121,144. The Tribunal notes the data for that report was self-inputted by the queriest and is based upon 45 responses. The Tribunal considers the low data sample and self-selective nature of the data means it is unable to place much weight on the ‘your payscale report’. Furthermore, the ‘your payscale report’ is limited to salary information only and does not account for any of the other terms and conditions of employment, including bonuses, profit sharing or commissions.

23. The migration agent submits the extract from the associations salary survey shows the average salary package for a CEO in Australia is $184,500 and that the majority of the data from that survey is for people employed in the health and medical industry. The  Tribunal reviewed the complete associations salary survey online. The preface to that survey states it is an examination of salary and employment trends in associations in the not-for-profit sector. [1] The Tribunal considers terms and conditions of employment in the not-profit-sector will usually have a lower level of remuneration than terms and conditions of employment for a similar position in a commercial enterprise. Given the applicant is operating a profit seeking business, the Tribunal places lessor weight on the information in the associations salary survey as a guide upon which the Tribunal can assess the terms and conditions of the nominated position.

    [1] Wentworth Advantage, “Associations salary survey 2015” >

    On the evidence before it, for the above reasons, the Tribunal is unable to reach a state of satisfaction as to whether the terms and conditions applicable to the nominated position will be no less favourable than those that would be provided to an Australian citizen or permanent resident performing similar work in the same workplace at the same location. Accordingly the Tribunal finds the requirements of r.5.19(4)(e) are not met.

    Tasks of the position genuine need for the position and training benchmarks r.5.19(4)(h)

24. Regulation 5.19(4)(h) contains a number of alternative requirements. For the sake of completeness, the Tribunal notes during the hearing Mr Zhao provided a satisfactory explanation as to the training benchmark evidence provided with the migration agent’s pre-hearing submission. However, given the finding above in relation to r.5.19(e), it is unnecessary for the Tribunal to make any finding regarding r.5.19(h)(i).

    CONCLUSION

25. 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

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

    Fraser Syme
    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).