23 Digital Pty Ltd (Migration) - [2023] AATA 4392

23 Digital Pty Ltd (Migration) [2023] AATA 4392 (15 December 2023)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  23 Digital Pty Ltd
REPRESENTATIVE:  Mrs Thara Namboothiri
CASE NUMBER:  2205922
HOME AFFAIRS REFERENCE(S):          OPF2021/1176
MEMBER:Mary Sheargold
DATE:15 December 2023
PLACE OF DECISION:  Melbourne
DECISION:The Tribunal varies the decision under review by reducing the period of the sponsorship bar from 18 months to 3 months.

Statement made on 15 December 2023 at 9:27pm
CATCHWORDS
MIGRATION – sponsorship bar – failure to satisfy sponsorship obligations – equivalent terms and conditions and ensuring sponsored person works in nominated occupation – ABF investigations – underpayment – calculation of paid lunch break – failure inadvertent – worker’s secondary employment as Uber driver unknown to employers – level of neglect of obligations – consequential effects on other workers and associated company – cooperation, full admissions and steps to rectify – no previous failures – bar period reduced – decision under review varied
LEGISLATION
Migration Act 1958 (Cth), ss 140L(1)(a), 140M(2)
Migration Regulations 1994 (Cth), rr 2.79, 2.86, 2.89(2)
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 Home Affairs to take an action under s 140M of the Migration Act 1958 (Cth) (the Act) in relation to the applicant’s sponsorship.

The applicant was first approved as a standard business sponsor on 14 July 2016. On 1 April 2022, the delegate decided to bar the applicant for 18 months from making applications for approval as a standard business sponsor and temporary activities sponsor under s 140M(2) of the Act on the basis that it was found to have breached reg 2.89 of the Regulations by failing to satisfy two of its sponsorship obligations.
In the Notice of Intention To Take Action (NOITTA) issued to the applicant by Australian Border Force on 24 January 2022, a breach of reg 2.90 was also alleged, with the applicant accused of providing the Department with false or misleading information. After considering the evidence provided by the applicant in response to this allegation, it was not pursued further by ABF.
Mr Ruchir Parekh and Mr Piyushkumar Kotadiya, the directors and shareholders of 23Digital Pty Ltd (the applicant appeared) before the Tribunal on 5 December 2023 to give evidence and present arguments.
The applicant was represented in relation to the review. The representative attended the Tribunal hearing.
6.For the following reasons, the Tribunal has decided to vary the decision under review by reducing the period of the sponsorship bar to 3 months from 18 months.
CONSIDERATION OF CLAIMS AND EVIDENCE
Sections 140K, 140L and 140M of the Act provide for the imposition of sanctions on approved sponsors in certain circumstances.
Under s 140M, if prescribed circumstances exist, the Minister (and the Tribunal on review) may take one or more of the following actions:
·cancelling the sponsorship approval in relation to a class to which the sponsor belongs;
·cancelling the sponsorship approval for all classes…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Continue reading 23 Digital Pty Ltd (Migration)

Details

AGLC: 23 Digital Pty Ltd (Migration) [2023] AATA 4392
Case: [2023] AATA 4392
Decision Date: 15 December 2023

CaseChat Overview and Summary

The Administrative Appeals Tribunal considered a review application by 23 Digital Pty Ltd concerning a sponsorship bar imposed by the Department of Home Affairs. The dispute arose from 23 Digital's failure to satisfy two sponsorship obligations: ensuring equivalent terms and conditions of employment for its sponsored workers and ensuring that a sponsored person worked only in their nominated occupation. These failures were identified during an investigation by the Australian Border Force.

The Tribunal was required to determine whether a circumstance existed for taking action under section 140M of the Migration Act 1958 (Cth) and, if so, what action should be taken. Specifically, the Tribunal had to consider the prescribed criteria for imposing sanctions, including the applicant's past and present conduct, the number and nature of the failures, the period of sponsorship, the impact on others, the intent behind the failures, cooperation with authorities, and steps taken to rectify the situation.

In its reasoning, the Tribunal affirmed the delegate's findings of breaches under regulations 2.79 and 2.86. While the underpayments related to the equivalent terms and conditions obligation were found to be minor and somewhat inadvertent, the Tribunal expressed concern regarding the sponsored worker's undisclosed secondary employment as an Uber driver for 11-14 hours daily, which indicated a level of neglect of sponsorship obligations. However, the Tribunal also took into account 23 Digital's cooperation with the investigation, its admission of multiple breaches, its lack of prior immigration compliance issues since its approval as a sponsor in 2016, and the significant negative impact a prolonged sponsorship bar would have on its associated business.

Ultimately, the Tribunal decided to vary the decision under review by reducing the period of the sponsorship bar from 18 months to 3 months, finding this period warranted considering the totality of the circumstances and the prescribed criteria.

Orders

Orders of the court

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Background

Background to the litigation

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Evidence

Evidence Before The Court

The applicant was represented in relation to the review. The representative attended the Tribunal hearing.6.For the following reasons, the Tribunal has decided to vary the decision under review by reducing the period of the sponsorship bar to 3 months from 18 months.CONSIDERATION OF CLAIMS AND EVIDENCE Sections 140K, 140L and 140M of the Act provide for the imposition of sanctions on approved sponsors in certain circumstances. Under s 140M, if prescribed circumstances exist, the Minister (and the Tribunal on review) may take one or more of the following actions:·cancelling the sponsorship approval in relation to a class to which the sponsor belongs;·cancelling the sponsorship approval for all classes to which the sponsor belongs;·barring the sponsor for a specified period from sponsoring more people under the terms of any existing approval; and·barring the sponsor for a specified period from making future applications for sponsorship approval in relation to one or more classes of sponsor. For these purposes, the circumstances are prescribed in regs 2.89–2.94B and include circumstances in which the Minister, or Tribunal on review, is satisfied there has been: a failure to satisfy a sponsorship obligation; provision of false or misleading information; sponsorship application or variation criteria no longer met; a contravention of the law; unapproved changes to a program; a failure to pay additional security; a failure to comply with certain terms of an agreement; or a failure to pay medical and hospital expenses. Where a prescribed circumstance has been found to exist, the Regulations prescribe criteria that must be taken into account when determining what action, if any, to take: regs 2.89–2.94B. These criteria, as they relevantly apply to the circumstances of this case are set out in the attachment to this decision.Does a circumstance for the taking of an action exist?11.In the present case, the delegate found that the applicant failed to satisfy 2 sponsorship obligations and so was found to have breached reg 2.89.Failure to satisfy a sponsorship obligation: reg 2.89 The Minister may take one or more of the actions in s 140M if satisfied the sponsor has failed to satisfy a sponsorship obligation referred to in Division 2.19 of the Regulations: reg 2.89(2). In this case, the applicant was found to have breached its obligation to ensure equivalent terms and conditions of employment for Subclass 457/482 visa holders (reg 2.79) as well as breaching its obligation to ensure that the primary sponsored person works or participates in their nominated occupation, program or activity (reg 2.86).Regulation 2.79 In respect of the obligation to ensure equivalent terms and conditions of employment for its sponsored workers, the Tribunal notes that the applicant was found to have incurred this breach by making underpayments of less than $2 per hour to 2 of its sponsored workers over a 6 month audit period from September 2020 to March 2021. Those 2 workers were Sarfraz Ahmad and Kaivan Mahendrakumar Mehta.

Decision

Reasons for decision

Mr Parekh and Mr Kotadiya established 23Digital in 2007 with no capital funding. They have built the company to one with a multi million dollar turnover and have established a second company, operating primarily in Brisbane, providing significant and valuable IT infrastructure and support to the early childhood education sector. The impact of this sponsorship bar has been felt by that second company, and the Tribunal accepts the evidence given at the hearing that if that company is no longer able to sponsor workers, it will not be able to continue to meet its contractual obligations with its clients.45.Considering the totality of the circumstances, and having regard to the prescribed criteria the Tribunal finds that action mentioned in s 140M(1)(d) to bar the applicant from making future applications for approval as a work sponsor for a period of 3 months is warranted.DECISION46.The Tribunal varies the decision under review by reducing the duration of the sponsorship bar from 18 months to 3 months.Mary SheargoldMemberATTACHMENT – Extract from the Migration Regulations 19942.89 Failure to satisfy sponsorship obligation…(3) For paragraph 140L(1)(b) of the Act, the criteria that the Minister must take into account in determining what action (if any) to take under section 140M of the Act in relation to the circumstance mentioned in subregulation (2) are:(a) the past and present conduct of the person in relation to Immigration; and(b) the number of occasions on which the person has failed to satisfy the sponsorship obligation; and(c) the nature and severity of the circumstances relating to the failure to satisfy the sponsorship obligation, including the period of time over which the failure has occurred; and(d) the period of time over which the person has been an approved sponsor; and(e) whether, and the extent to which, the failure to satisfy the sponsorship obligation has had a direct or indirect impact on another person; and(f) whether, and the extent to which, the failure to satisfy the sponsorship obligation was intentional, reckless or inadvertent; and(g) whether, and the extent to which, the person has cooperated with Immigration, including whether the person informed Immigration of the failure; and(h) the steps (if any) the person has taken to rectify the failure to satisfy the sponsorship obligation, including whether the steps were taken at the request of Immigration or otherwise; and(i) the processes (if any) the person has implemented to ensure future compliance with the sponsorship obligation; and(j) the number of other sponsorship obligations that the person has failed to satisfy, and the number of occasions on which the person has failed to satisfy other sponsorship obligations; and(k) any other relevant factors.

Ratio Decidendi

Legal Principle Established

In considering what action to take, the Tribunal has had regard to the prescribed criteria, as extracted in the attachment to this decision.23Digital’s past and present conduct in relation to Immigration and the period of time over which it has been an approved sponsor 23Digital was first approved as a standard business sponsor on 14 July 2016. It has successfully nominated and sponsored 6 primary visa holders in the Subclass 457 and then Temporary Skills Shortage visa schemes. The ABF’s investigation is the first time 23Digital has been subject to monitoring. The evidence before me suggests that Mr Parekh and Mr Kotadiya and their representative have cooperated with the Department to the best of their ability, and they have not intentionally obstructed ABF’s investigations or intentionally misled ABF officers in any way.The number of occasions on which 23Digital has failed to satisfy its sponsorship obligations Mr Parekh and Mr Kotadiya have admitted and accepted that there were multiple breaches of 23Digital’s sponsorship obligations. They were identified by the delegate, and those findings are affirmed by me at review. 23Digital breached its obligation under 2.79 on 29 occasions. It breached its obligation under s.2.86 on 1 occasion.The nature and severity of the circumstances relating to the failure to satisfy the sponsorship obligations, including the period of time over which the failure has occurred As set out above, the breaches of reg 2.79 are relatively minor and somewhat explicable. However, the Tribunal notes that but for ABF’s investigation, it is probable that the status quo would have continued indefinitely. Of more concern is the circumstance regarding the failure to ensure that Mr Ahmad worked only for 23Digital (or an associated entity as defined). It is extraordinary that Mr Ahmad could go undetected for at least 11 months, working an additional 11-14 hours per day for Uber, while maintaining a good quality work product for the applicant’s business. The Tribunal accepts that while Mr Parekh and Mr Kotadiya themselves should not be expected to monitor each worker’s work patterns on a daily basis, the reporting lines within the company should have been strong enough to ensure they were made aware of an employee who was effectively working two full time jobs. To have never picked up on this until alerted to the fact by ABF shows a level of neglect or disregard for 23Digital’s sponsorship obligations.Whether, and the extent to which, the failure to satisfy the sponsorship obligation has had a direct or indirect impact on another person In the Tribunal’s view, the failure to satisfy the sponsorship obligations under r.2.79 has had neither a direct nor indirect impact on another person. The sponsored workers were paid their required salary for a full time work week that may or may not include a paid lunch break. It has not impacted their actual earnings nor their expected hours at work, being 9:00am to 5:00pm Monday to Friday. These are standard business operating hours.