5 Spice Indian Cuisine Pty Ltd (Migration)

5 Spice Indian Cuisine Pty Ltd (Migration) [2023] AATA 2617 (24 July 2023)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  5 Spice Indian Cuisine Pty Ltd
REPRESENTATIVE:  Mr Ireneusz Lasocki (MARN: 0102034)
CASE NUMBER:  2008956
HOME AFFAIRS REFERENCE(S):          OPF2019/12563
MEMBER:Kate Millar
DATE:24 July 2023
PLACE OF DECISION:  Adelaide
DECISION:The Tribunal affirms the decision under review.

Statement made on 24 July 2023 at 4:26pm

CATCHWORDS
MIGRATION – sponsorship cancellation or bar – equivalent terms and conditions of employment – ensuring equivalent terms and conditions of employment – period of unpaid leave overseas approved – extended Leave Without Pay period for personal reasons – annual guaranteed earnings not paid – decision under review affirmed
LEGISLATION
Fair Work Act 2009
Migration Act 1958, s 140
Migration Regulations 1994, rr 2.57, 2.72, 2.79, 2.82, 2.89-2.94

STATEMENT OF DECISION AND REASONS
APPLICATION FOR REVIEW

The, 5 Spice Indian Cuisine Pty Ltd (‘5 Spice’) operates an Indian restaurant and was approved as a standard business sponsor on 18 November 2016.
5 Spice employed Mr Praveen Reddy Padamari as a chef. In April 2018, the Director of 5 Spice, Mr Umamaheshwar Chada, approved leave for Mr Padamari for approximately three and a half months.
As a result, a delegate of the Minister found that 5 Spice had breached its obligation to ensure equivalent terms and conditions of employment. This was because the unpaid leave resulted in Mr Padamari being paid less than the guaranteed annual earnings of $58,500 per year specified in the nomination of his position.
On 7 May 2020, the delegate decided to bar 5 Spice from sponsoring more people under the terms of the approved standard business sponsorship for a period six months under s 140M of the Migration Act 1958 (the Act) on the basis that 5 Spice had failed to satisfy the obligation to ensure that equivalent terms and conditions of employment were provided to a sponsored person as would be provided to an Australian citizen or permanent resident.
An application to the Minster to waive the bar under s.140O of the Act was unsuccessful.
5 Spice has applied for review of a decision by to take an action under s 140M of the Migration Act 1958 (Cth) (the Act) in relation to its’ sponsorship.
Mr Umamaheshwar Chada, the Director of 5 Spice, was given leave to appear by telephone as he was overseas at the time of the hearing. He appeared before the Tribunal on 8 March 2023 to give evidence and present arguments. The Tribunal also received oral evidence from Mr Padamari. Following the provision of further information from 5 Spice about Mr Padamari’s income in the 2019/2020 financial year, the hearing was resumed on 24 July 2023 (following deferrals at the request of 5 Spice) to allow an opportunity to respond to the effect of this information on an assessment of whether Mr Padamari’s earning were less in that year than those specified in the nomination. 5 Spice was represented in relation to the review. The Tribunal was assisted by an interpreter in the Telugu and English languages.
For the following reasons, the Tribunal has decided to affirm the decision under review.
CERTIFICATE ISSUED UNDER SECTION 376 OF THE MIGRATION ACT 1958
The Department file contained a certificate issued under s.376 of the Migration Act 1958 (the Act). A certificate that has been validly issued under s.376 of the Act, the Tribunal may have regard to any document or information the subject of the certificate and may disclose the document or information to the applicant or any other person who has given oral or written evidence to the Tribunal.
A copy of this certificate was provided to the applicant, through its representative, prior to the hearing and the applicant was invited to comment on the validity of the certificate.
BACKGROUND
This matter has come before the Tribunal because Mr Padamari was given permission to take over 3 months of leave, most of it unpaid.
5 Spice provided the original request from Mr Padamari which states he planned to go on vacation to India from 14 May to 14 August 2019 for his marriage proposal and “other personal works”. A letter from Mr Chada approves this leave on condition that he returns strictly on the specified date as they are a small business and will struggle to provide a replacement. The approval states two weeks of the leave is paid in accordance with Mr Padamari’s entitlement, and the remaining is unpaid leave.
On 3 August 2019, Mr Padamari sent an email requesting an extension of his leave. Mr Chada replied that his leave cannot be extended. Mr Padamari replies that “the work is not done from my end due to the sudden accident of my uncle (met with electric shock).” Mr Padamari says he will make sure his date of travel is 24 August 2019. Mr Padamari returned to work on 28 August 2019. His total leave was from 14 May 2019 to 28 August 2019.
The delegate decided to bar the sponsor from sponsoring more people under the terms of approved standard business sponsorship for a period of 6 months.
Since then, Mr Padamari has applied for and had been granted a permanent Subclass 187 visa. This indicates that it was considered reasonable to disregard adverse information as a result of the bar.
5 Spice want the decision reviewed despite the bar having expired and the grant of Mr Padamari’s visa as it remains as potential adverse information for future nominations.
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.
Section 140L sets out that the Regulations may prescribe circumstances in which a sponsor may be barred, or the sponsor’s approval cancelled. For the purposes of s. 140L. r.2.89 of the Migration Regulations 1994 (the Regulations) states that a circumstance is that a person has failed to satisfy a sponsorship obligation in Division 2.19.
The circumstances are prescribed in regs 2.89–2.94B and include the circumstance relied on by the delegate, which is that the Minister, or Tribunal on review, is satisfied there has been a failure to satisfy a sponsorship obligation.
In this case, the sponsorship obligation the delegate found that 5 Spice did not meet is the obligation in 2.79(3).
Where a prescribed circumstance has been found to exist, the regulations prescribe criteria that must be considered 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?
In the present case, the delegate found that 5 Spice failed to satisfy a sponsorship obligation.
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).
The sponsorship obligation in question is the obligation in r.2.79(3). This applies to a person who is a sponsor of the primary sponsored person if the primary sponsored person holds a Subclass 457 or a Subclass 482 visa. Ms Padamari held a Subclass 457 visa, and the application for approval of the nomination was made 13 January 2018.
The obligation in r.2.79(3) that applies to nominations made before 18 March 2018 is that
the terms and conditions of employment provided to the primary sponsored person are:
(iii) no less favourable than the terms and conditions of employment that the Minister was satisfied, under paragraph 2.72(10)(c) (as in force before 18 March 2018), were no less favourable than the terms and conditions of employment that are provided, or would be provided, to an Australian citizen or an Australian permanent resident; and
(iv) no less favourable than the terms and conditions of employment that the person provides, or would provide, to an Australian citizen or an Australian permanent resident to perform equivalent work in the person's workplace at the same location; or
The term in r.2.72(10)(c) is that:
the terms and conditions of employment of the person identified in the nomination will be no less favourable than the terms and conditions (including, if applicable, the terms and conditions provided by an enterprise agreement under the Fair Work Act 2009) that are provided or would be provided to an Australian citizen or an Australian permanent resident for performing equivalent work at the same location.
Under r.2.57(3A) a set of terms and conditions of employment of a person (the first set) is less favourable than another set of terms and conditions if the earnings provided are less, and there is no substantial contrary evidence that the first set is not less favourable than the second set.
The meaning of “earnings” is set out in r.2.57A as including the person’s wages and amounts applied or dealt with in any way on the person’s behalf or as the person directs and the agreed money value of non-monetary benefits. Non-monetary benefits and items that are not considered earnings are further defined.
Were the earnings no less than those in the nomination?
In this case, the delegate found Mr Padamari’s earnings were less than the amount in the nomination. At the time the nomination was approved, the terms and conditions of employment included an annual salary of $58,500 as stated in Mr Padamari’s employment contract. This is the amount on which the nomination was approved.
Mr Padamari took leave, which included unpaid leave, in the period 14 May 2018 until 28 August 2018.
In the 2018/2019 financial year, Mr Padamari’s pay as you go payment summary shows he earned $42,856. A letter from the accountant for 5 Spice states that this was an error, that the gross payment amount was $53,625 and they had listed the net amount in error. A revised PAYG payment summary was provided for the 2019 financial year with gross payments of $53,625. A copy of Mr Padamari’s 2019 tax return lists a gross income of $53,625.
It was suggested that at some stage Mr Padamari was provided with an accommodation allowance. No such allowance appears in his income tax returns and it was also found that Mr Padamari had to repay this allowance. A letter dated 30 June 2018 states that the employer will offer three months’ accommodation free when he started. This expired before the period in question which is from May to August 2019. Any accommodation allowance does not amount to earnings in the relevant period.
After the hearing a QuickBooks entry was provided for Mr Padamari for the financial year 2019/2020 showing a gross income for Mr Padamari of $43,875. The Tribunal requested his PAYG payment summary for the 2020 financial year. This shows his gross salary was $43,875. The taxable oncome on this notice of assessment is $43,189. This is considerably less than the annual salary of $58,500
Contained in the Department file is a letter from Mr Chada stating Mr Padamari’s 2020/2021 salary was $58,701.22 and it is noted that attached is the ATO annual income statement for Mr Padamari for 2020/2021. This is more than the annual salary of $58,500 and his earnings were more than the earning in the nomination in the 2020/2021 period.
The Tribunal has found that Mr Padamari’s earnings were less than those specified in the contact that accompanied the application for approval of a nomination in the 2019 and 2020 financial years. This is because of the unpaid leave provided by 5 Spice.
As a result, 5 Spice has breached the obligation in r.2.79. It is not necessary to consider where the terms and conditions were less than the Award, however the Tribunal notes it was submitted that the amount in the contract was greater than the amount that was payable under the Award.
As the terms and conditions were less favourable than those under which the Minister approved the nomination, the prescribed circumstance in reg 2.89 exists for the purpose of s 140M of the Act.
Action to be taken
For these reasons, the Tribunal is satisfied that a relevant circumstance for s 140L(1)(a) exists. Accordingly, it is necessary to consider whether one or more of the actions mentioned in s 140M should be taken.
In considering what action to take, the Tribunal has had regard to the prescribed criteria.
(a) the past and present conduct of the person in relation to Immigration
The Tribunal is satisfied that 5 Spice has done its best to comply with requests of Immigration. There is no information to suggest its conduct has been less than satisfactory.
(b)the number of occasions on which the person has failed to satisfy the sponsorship obligation
The breach of the obligation occurred due to the approval of unpaid leave for Mr Padamari of three months, which he then extended by two weeks towards the end of the leave period.
While it was originally suggested in the notice of intention to take action that 5 Spice had provided false and misleading information by providing a PAYG payment summary that was incorrect, the accountant for the business has provided a statement that this was an error in the accounts. The Department did not press this as a breach of the obligations, and the Tribunal had no further regard to the incorrect PAYG payment summary.
(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
The failure occurred over the period Mr Padamari was on leave from 14 May to 28 August 2019.
(d) the period of time over which the person has been an approved sponsor
5 Spice has been an approved sponsor from at least 18 November 2016. While the delegate refers to approval form 10 August 2017, a letter appears in the Department file approving 5 Spice as a sponsor on 18 November 2016.
(e)whether, and the extent to which, the failure to satisfy the sponsorship obligation has had a direct or indirect impact on another person
The effect of the failure was that Mr Padamari did not receive the annual guaranteed earnings in 2019 and 2020. This was at his request as he was granted extended leave.
However, the purpose of sponsoring a person on a Subclass 457 visa is to fill temporary labour shortages, and this is not achieved by granting long term leave to a Subclass 457 visa holder.
(f)whether, and the extent to which, the failure to satisfy the sponsorship obligation was intentional, reckless or inadvertent
The Tribunal accepts that the employer considered it had to grant Mr Padamari’s request. Mr Chada said that because Mr Padamari was not available, he had to work as the sole chef in the business which had an adverse impact on his health. He provided a medical report dated 8 October 2019, after Mr Padamari returned, showing he attended an emergency department with headache and chest pain and was hypertensive
(g)whether, and the extent to which, the person has cooperated with Immigration, including whether the person informed Immigration of the failure
As noted in the decision record, the Department identified the breach while monitoring Spice, however 5 Spice was co-operative in proving information to the monitoring.
(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
5 Spice has since been monitored by the Fair Work Commission without any adverse findings, and Mr Padamari has been granted a Subclass 187 visa. The Tribunal accepts this shows there have not been any further breaches and action was taken to rectify the beach.
(i)the processes (if any) the person has implemented to ensure future compliance with the sponsorship obligation
Mr Chada says that when we became aware that granting this leave was not permissible, he has not granted any other unpaid leave.
(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
It has not been established that 5 Spice has failed to satisfy any other sponsorship obligations.
(k) any other relevant factors
5 Spice submitted that it was complying with its obligations as an employer is providing leave without pay. It was submitted that Mr Padamari received unpaid leave for his marriage ceremony overseas, and this ws a compelling and compassionate reason for the leave. 5 Spice was asked to provide any information which supported that granting leave in these circumstances is a required under Australian laws. None of the information provided shows that this is a requirement of an employer.
Mr Padamari wanted leave for the purposes of his engagement. He extended his leave slightly and said this was due to the illness of his uncle. The National Employment Standards do not provide for unpaid leave to arrange and attend his engagement and does not provide for paid or unpaid carers leave where his uncle is not a member of his household.
CONCLUSION
While the Tribunal acknowledges that the employer reluctantly agreed to a long period of unpaid leave at the requested of Mr Padamari and may have considered it was required to do so, long periods of unpaid leave undermine the purposes of granting a visa to fill temporary skills shortages. It is contrary to the obligations of a sponsor, and it is the responsibility of the sponsor to be aware of these obligations.
Considering the totality of the circumstances, and having regard to the prescribed criteria, the Tribunal finds that the action mentioned in s 140M(1)(c) should be taken to impose a bar on 5 Spice from sponsoring more people under the terms of the approved standard business sponsorship for a period of 6 months.
This is a very short period to be barred and has not affected the subsequent grant of the visa to Mr Padamari, however does acknowledge that the action taken by 5 Spice in allowing extended unpaid leave is not consistent with the responsibilities of being the sponsor of a Subclass 457 visa holder.
DECISION
The Tribunal affirms the decision under review.
Kate Millar
Senior Member

ATTACHMENT – Extract from the Migration Regulations 1994
2.89   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.
…

[2023] AATA 2617

24 July 2023

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