2 FRESH PTY LTD ATF CAFE 21 TRUST (Migration)

[2018] AATA 3920

2 FRESH PTY LTD ATF CAFE 21 TRUST (Migration) [2018] AATA 3920 (14 September 2018)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  2 Fresh Pty Ltd ATF Cafe 21 Trust

CASE NUMBER:  1607055

DIBP REFERENCE(S):  BCC2015/447707; OPF2015/2271

MEMBER:Wan Shum

DATE:14 September 2018

PLACE OF DECISION:  Sydney

DECISION:The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.

Statement made on 14 September 2018 at 1:59pm

CATCHWORDS
MIGRATION – nominating employer – regional sponsored migration scheme – temporary residence transition nomination stream – nominee employed as a full time Café manager – adverse information –previously sanctioned for failure to comply with sponsorship undertaking – currently approved as a standard business sponsor following the sanction – salary package within the range of salaries for the occupation – evidence of training plans provided – satisfactory compliance with workplace relations laws – decision under review set aside

LEGISLATION
Migration Act 1958 (Cth), ss 140GB, 140L, 245AR
Migration Regulations 1994 (Cth), rr 1.13A, 5.19, 5.37 Schedule 2 cl 457.223

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 28 April 2016 to reject an application for approval of the nomination of a position in Australia under r.5.19 of the Migration Regulations 1994 (the Regulations).

2. 2 Fresh Pty Ltd ATF Cafe 21 Trust (the nominator) applied for approval for a position on 10 February 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. The nomination is for the position of Café Manager under the Temporary Residence Transition nomination stream. This stream is designed for Subclass 457 visa holders who have worked for their employer for the past two years, and that employer has offered them a permanent position in the same occupation. The person identified for the position was Mrs Perla Culion (the related visa applicant) who held a Subclass 457 visa granted on the basis of sponsorship by the nominator. She has lodged an application for a Permanent Employer Nominated visa in connection with this nomination.

4. The delegate refused the application because there was adverse information known to Immigration, which the delegate did not consider it reasonable to disregard. The information was that on 8 March 2016, the nominator was sanctioned under section 140L(e) of the Migration Act for failure to comply with the sponsorship undertakings required of an approved business sponsor for temporary visas. This sanction was in effect from 8 March 2016 until 8 September 2016. The delegate found that the nomination did not satisfy r.5.19(3)(g) of the Regulations.

5. The nominator sought review of that decision and was represented in relation to the review by a registered migration agent. The Subclass 457 visa holder, whose Subclass 186 visa was subsequently refused, also sought review in relation to the visa refusal decision.

6. The Tribunal hearing was held on 11 July 2018 and Mr Brian Barnes appeared on behalf of the nominator, to give evidence and present arguments by videoconference. The Tribunal also received oral evidence from the related visa applicant. The representative attended the Tribunal hearing.

7. For the following reasons, the Tribunal has decided to set aside the decision under review and substitute a decision approving 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 Temporary Residence Transition nomination stream set out in r.5.19(3), which is extracted in the attachment to this decision. For the nomination to be approved, all the requirements must be met.

9. The nominator is a food retail business established in 2007 and located in Darwin, Northern Territory. The nominator was approved as a standard business sponsor under the temporary business sponsorship program on 18 June 2012 for a period of 3 years. The business nominated Ms Perla Culion for a Subclass 457 visa on the basis that she would be employed by the business as a café restaurant manager on a full-time basis. The nomination under the temporary work program in respect of the related visa applicant was approved on 3 October 2012.

10. In February 2015, the department commenced an audit in relation to the nominator’s compliance with its sponsorship obligations. At that time, the sponsor had 16 visa holders nominated in various positions as follows: 9 cooks, one pastry cook, four café restaurant managers, one customer services manager and an accountant. The Department identified failures to comply with the sponsorship undertakings required of an approved business sponsor for temporary visas, in particular the obligation to ensure equivalent terms and conditions of employment; the obligation to ensure primary sponsored person works or participates in nominated occupation, program or activity and the provision of false or misleading information. A decision was made to bar the nominator for 6 months from sponsoring more people for Temporary Work (Skilled) visas and from making future applications for approval as a SBS for the same period. The nominator was informed of the decision on 8 March 2016 and the sanction remained in force until 8 September 2016.  

11. The nomination that is the subject of this review was not approved as the delegate found that the nominator did not satisfy r.5.19(3)(g) of the Regulations because of the sanction under section 140L(e) of the Migration Act.

12. Since that time, the nominator has had five nominations approved under the Regional Sponsored Migration Scheme in respect of employees who were also subclass 457 visa holders. The positions approved were three cooks, one pastry-cook and one accountant.

13. During the hearing the Tribunal discussed with Mr Barnes the failures identified by the department resulting in the sanction. Mr Barnes told the Tribunal that, at all times, they disagreed with the findings and were of the view that they had not underpaid their employees. He explained that there was a difference of opinion between the department and himself regarding the guaranteed annual earnings (GAE). However, they decided not appeal over the sanction because they considered the sanction was the minimum imposed and that there was ambiguity in terms of the wording of the GAE. The department’s view was that the GAE is to be calculated per week, while their approach was that the annual earnings would be met over the course of a 12-month period, having regard to the seasonal nature of Darwin businesses. The busy season is the dry season and it is quieter over summer. As a food retail business, they guaranteed overtime and more work during the busy periods, and paid the minimum salary over the quiet periods. Thus there were some weeks where the pay was not in accordance with the weekly amount calculated by the department.

14. In relation to ensuring the sponsored person worked in the nominated position, Mr Barnes referred to a pastry cook who was found working behind the coffee machine. He said that the person spent a small percentage of time there, less than 10% but she had originally worked as a barista while studying as a pastry cook and enjoyed making coffees so would sometimes do that when not making pastries/cakes. In relation to another café manager, who was found serving customers behind the counter, Mr Barnes said that the role of a manager is quite hands on in a café. It is not an office role involving lots of paperwork, but includes direct engagement with customers. In respect of another employee who was sponsored as a cook, he admitted that it was their fault as she could not cook very well. They should have terminated her contract but instead had her doing other duties. He explained that the other employees who were identified during the investigation were undertaking duties in addition to their usual duties, and only ever for a minimum amount of time.

15. In terms of whether it was reasonable to disregard the information, Mr Barnes stated that at all times throughout the audit they were helpful and made the payments expected. He iterated that they even though they did not appeal it, they were frustrated by the decision and expressed the view that they had essentially paid wages for work that was not done. Mr Barnes said that they have changed their systems to implement the guaranteed earnings on a weekly basis as expected by the department.  

16. The Tribunal finds that there is adverse information as defined in r.1.13A known to Immigration about the nominator. The Tribunal does not accept the submission that the failure to comply with the obligations occurred a long time ago. However, it notes that the nominator took action to pay the monies deemed owed to those employees identified by the department. In terms of the failure to comply with the obligations to ensure that their employees were working in the nominated occupations, the Tribunal is prepared to accept Mr Barnes’ evidence that the time undertaking these other duties was minimal. It also accepts that in a café business there may be times when it is necessary to share duties when required, for example a café manager serving customers behind the counter. While it is apparent that Mr Barnes did not agree with the breaches found, the department’s records indicate that the directors of the business were cooperative, and had taken steps to rectify the specific problems identified.

17. While the Tribunal considers that the failure to comply with the obligation in respect of terms and conditions of employment provided to the primary sponsored person concerning, it notes that the nominator paid the amounts deemed owing to the visa holders identified during the sponsor monitoring. In terms of the duties undertaken by the visa holders identified as undertaking work other than those described for their respective nominated occupations, the Tribunal accepts that on some occasions additional duties outside of those listed for the occupation under the ANZSCO description may be undertaken by employees in a business of this kind. It is unclear to what extend that this currently occurs. Notwithstanding this, it notes that the department has since approved five Subclass 187 temporary residence transition visas which were lodged after the one that is currently under review. In these circumstances, the Tribunal considers that it is reasonable to disregard that information.

18. Mr Barnes had advised that the nominator had not sought approval again as a standard business sponsor following the sanction. It appears that the nominator was approved as a standard business sponsor in April 2017 for a period of 5 years. In addition, as mentioned above, five of its employees who had been sponsored by them under the 457 visa program have since been granted Subclass 187 visas following nomination by the nominator under the RSMS program. In the circumstances, the Tribunal considers that it is reasonable to disregard the adverse information.

19. Accordingly, the requirement in r.5.19(3)(g) is met.

20. The Tribunal will now consider the remaining requirements of r.5.19(3).

    The application must be compliant: r.5.19(3)(a)

21. Regulation 5.19(3)(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 relevant person and occupation.

22. The material on the departmental file is that the application was made on form 1395, or 1395 (Internet), on 10 February 2015 and accompanied by the fee prescribed in r.5.37.

23. Mrs Perla Culion was identified as the nominated person. The evidence before the Tribunal is that, at the time, she held a Subclass 457 visa granted on the basis of satisfying cl.457.223(4).

24. The occupation of Café Manager was identified on the form. This position is listed in ANZSCO and has the same 4 digit code as the occupation carried out by the Subclass 457 visa holder.

25. Given the above findings, the requirement in r.5.19(3)(a) is met.

    Status of the nominator: r.5.19(3)(b)

26. Regulation 5.19(3)(b) requires the nominator to be or have been the relevant standard business sponsor who is actively and lawfully operating a business in Australia. In addition, the nominator, as that standard business sponsor, must not have met certain criteria relating to the operation of a business overseas, in the most recent sponsorship approval.

27. The evidence before the Tribunal is that the nominator was the standard business sponsor who last identified the holder of the Subclass 457 visa in a nomination made under s.140GB of the Act or under r.1.20G or 1.20GA (pre 14 September 2009). The nominator has provided recent bank statements, BAS and financial statements and the Tribunal finds that the nominator is actively and lawfully operating a business in Australia.

28. Given this, the requirement in r.5.19(3)(b) is met.

    Previous employment of the nominee: r.5.19(3)(c)

29. Broadly speaking, to meet the requirement in r.5.19(3)(c), either:

    ·     the nominee must have been employed full time in Australia in the position for which he or she holds a Subclass 457 visa for at least 2 of the 3 years preceding the nomination application; or

    ·     the nominee holds a Subclass 457 visa on the basis that s/he was identified in a nomination of a specified occupation for that visa, the nominator nominated the occupation, and the nominee has been employed in that occupation for at least 2 years in the 3 years immediately before the application.

30. The relevant period is the 3 year period prior to 10 February 2015. The evidence given to the Tribunal is that the related visa applicant was, and still is, employed full time as a café manager at Café 21 on Smith Street, Darwin. A letter from Mr Barnes dated 25 July 2017 provides a commencement date of 22 October 2012 and sets out the periods of leave taken by the related visa applicant. Mrs Culion gave evidence that she is in charge of operations and undertakes duties consistent with the ANZSCO description for this occupation.

31. The Tribunal has been provided with payslips for the period from 27 October 2014 onwards. It notes that Mrs Culion was interviewed on 1 July 2015 as part of the audit of the sponsor. She was identified as one of the employees that was underpaid, but was not identified in respect of the other two breaches which included failure to comply with the obligations to ensure that their employees were working in the nominated occupations. There was no indication that she was not employed by the nominator at the time. Given this, the Tribunal has formed the view that the nominee was employed full time in Australia as a café manager which is the position for which she held the Subclass 457 visa for at least 2 of the 3 years preceding the nomination application.

32. Given the above findings, the requirement in r.5.19(3)(c)(i) is met.

    Future employment of the visa holder: r.5.19(3)(d)

33. Regulation 5.19(3)(d) only applies to certain nominees (those described in r.5.19(3)(c)(i)). For this class of person, the regulations require that the nominee will be employed on a full time basis for at least 2 years on terms that do not expressly preclude the possibility of an extension.

34. The Tribunal has considered the current contract of employment, information from the Enterprise Agreement, the letter from the director regarding Mrs Culion’s future employment and the financial documents provided. It raised concerns about the profitability of the business in the most recent full financial year ending 30 June 2017. It was explained that the loss was connected to the nominator having sold one of its cafes, 21 on the Wharf, and a letter was provided from the accountants regarding same. The accountant advised that the loss should be viewed as an extraordinary item. The profit/loss statements include the wage expenses for this position. The Tribunal has also considered the income as declared in the Business Activity Statements for the more recent financial year.

35. It is thus willing to accept that the visa applicant will be employed on a full-time basis for at least 2 years as required, and on terms that do not expressly preclude the possibility of an extension.

36. Given the above findings, the requirement in r.5.19(3)(d) is met.

    No less favourable terms and conditions of employment: r.5.19(3)(e)

37. Regulation 5.19(3)(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.

38. There is one Australian citizen performing equivalent work in the same workplace at the same location, but she works two days per week. The payslips provided show that both parties are paid the same hourly rate of $24.27 with annual salary equivalent of $53,818.

39. The applicant’s contract allows for a base salary of $55,386.24 and 9.5% superannuation. The nominee will work a 42-hour week.

40. The Tribunal is satisfied having regard to this information that the salary package attached to the nominated position is within the range of salaries for the occupation.  The Tribunal has also had regard to the pay rate table setting out the pay rates under the 2Fresh as Trustee Enterprise Agreement. The pay offered under the contract of employment matches the highest classification of Level 6A.

41. Having regard to this material the Tribunal is satisfied that the terms and conditions that apply to the position are equivalent to and therefore will be no less favourable than those that are, or would be, provided to an Australian citizen or permanent resident performing equivalent work at the same location

42. Accordingly, the requirement in r.5.19(3)(e) is met.

    Training commitments and obligations: r.5.19(3)(f)

43. Regulation 5.19(3)(f) requires the applicant to have fulfilled any commitments made relating to meeting training requirements, and complying with applicable obligations relating to training  requirements, during the period of the applicant’s most recent sponsorship approval.  These requirements may be disregarded if it is reasonable to do so.

44. In this case, the nominator was approved as a SBS in June 2012 for a period of 3 years. Approval for another period was sought in June 2015 but was subsequently withdrawn, it seems because of the monitoring that was occurring around that time. The most recent approval is from 2017 for a period of 5 years.

45. The applicable training benchmarks are set out in IMMI 12/062 as follows:

    A) Recent expenditure, by the business, to the equivalent of at least 2% of the payroll of the business, in payments allocated to an industry training fund that operates in the same industry as the business, and a commitment, by the business, to maintain expenditure in each fiscal year, to that level, for the term of approval as a sponsor.

    OR

    B) Recent expenditure, by the business, to the equivalent of at least 1% of the payroll of the business, in the provision of training to employees of the business, and a commitment, by the business, to maintain expenditure in each fiscal year, to that level, for the term of approval as a sponsor.

46. Following the hearing, evidence of payments made to Bonafide Certified Australia Pty Ltd for training of a number of the nominator’s employees in July 2016 was provided. In respect of the nominator, a payment of $11,000 was made on 16 July 2016. Another receipt was provided for training expenditure in respect of Cornucopia which is a separate business for which Mr Brian Barnes is also a director.

1. As the most recent approval was from 2017, the Tribunal requested evidence of compliance for the most recent fiscal period ending 30 June 2018. The representative forwarded a training plan from Northwestern Institute Training for the following employees for June 2018: Carlo dela Pena, Sheila Reyes, Rongzhen Huang and Maria Soledad, and evidence of their Australian citizenship or permanent residency. According to the invoice provided, the expenditure on this training amounted to $8,200.

2. The evidence before the Tribunal is that the wages expense for 30 June 2016 was $1,026,595 and for 30 June 2017 was $890,221. According to the BAS for the period April 2017 to April 2018, which is the 12 month period from the most recent approval, the total salary, wages and other payments amounted to around $582,000. The Tribunal finds that there has been recent expenditure to the equivalent of at least 1% of the payroll of the business as set out in IMMI 12/062 under paragraph (B).

3. Accordingly, the requirement in r.5.19(3)(f) is met.

   Satisfactory compliance with workplace relations laws: r.5.19(3)(h)

4. Regulation 5.19(3)(h) requires the applicant to have 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.

5. In relation to workplace relations laws, Mr Barnes informed the Tribunal that the business was involved in a mediation matter before Fair Work Australia with a former employee. He explained that he had terminated this person’s employment without notice and did not pay severance pay. This was because they had found out he was in effect stealing food from the business by cooking food for his family and school fetes. They decided to pay two weeks’ severance pay and dropped the theft charges because it was a nominal amount.

6. Aside from this evidence, there is nothing before the Tribunal to indicate that the nominator has not had 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.

7. Accordingly, the requirement in r.5.19(3)(h) is met.

   Conclusion

8. Based on the findings above, the Tribunal is satisfied that the applicant meets the requirements of r.5.19 for approval of the nomination of the position in Australia.

   DECISION

9. The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.

   Wan Shum
   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.

   Temporary Residence Transition nomination

   (3)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 person who holds a Subclass 457 … visa granted on the basis that the person satisfied the criterion in subclause 457.223(4) of Schedule 2; and

   (iii)     identifies an occupation, in relation to the position, that:

   (A)is listed in ANZSCO; and

   (B)has the same 4-digit occupation unit group code as the occupation carried  out by the holder of the Subclass 457 … visa; and

   (b)the nominator:

   (i) is, or was, the standard business sponsor who last identified the holder of the Subclass 457 … visa in a nomination made under section 140GB of the Act or under regulation 1.20G or 1.20GA as in force immediately before 14 September 2009; and

   (ii)      is actively and lawfully operating a business in Australia; and

   (iii)     did not, as that standard business sponsor, meet regulation 1.20DA, or paragraph 2.59(h) or 2.68(i), in the most recent approval as a standard business sponsor; and

   (c)either:

   (i)       both of the following apply:

   (A)in the period of 3 years immediately before the nominator made the application, the holder of the Subclass 457 …visa identified in subparagraph (a) (ii) has:         

   (I)held one or more Subclass 457 visas for a total period of at least 2 years; and

   (II)been employed in the position in respect of which the person holds the Subclass 457 … visa for a total period of at least 2 years (not including any period of unpaid leave);

   (B)the employment in the position has been full-time, and undertaken in Australia; or

   (ii)      all of the following apply:

   (A)the person holds the Subclass 457 … visa on the basis that the person was identified in a nomination of an occupation mentioned in sub-subparagraph 2.72(10)(d)(iii)(B) or sub-subparagraph 2.72(10)(e)(iii)(B);

   (B)the nominator nominated the occupation;

   (C)the person has been employed, in the occupation in respect of which the person holds the Subclass 457 … visa, for a total period of at least 2 years in the period of 3 years immediately before the nominator made the application; and

   (d)for a person to whom subparagraph (c)(i) applies:

   (i)       the person will be employed on a full-time basis in the position for at least 2 years; and

   (ii)      the terms and conditions of the person’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)       the nominator:

   (A)fulfilled any commitments the nominator made relating to meeting the nominator’s training requirements during the period of the nominator’s most recent approval as a standard business sponsor; and

   (B)complied with the applicable obligations under Division 2.19 relating to the nominator’s training requirements during the period of the nominator’s most recent approval as a standard business sponsor; or

   (ii)      it is reasonable to disregard subparagraph (i); and

   Note Different training requirements apply depending on whether the application for approval as a standard business sponsor was made before 14 September 2009 or on or after that date.

   (g)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

   (h)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.