9th House Traders Pty Ltd (Migration)

[2020] AATA 2990

9th House Traders Pty Ltd (Migration) [2020] AATA 2990 (10 July 2020)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  9th House Traders Pty Ltd

CASE NUMBER:  1726193

DIBP REFERENCE(S):  BCC2017/1343327

MEMBER:Susan Reece Jones

DATE:10 July 2020

PLACE OF DECISION:  Melbourne

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

Statement made on 10 July 2020 at 3:45pm

CATCHWORDS

MIGRATION – application for approval of nomination of position – temporary residence transition stream – business actively operating – new director and business model after former director’s family issues and reduction in trading – nominee’s expertise and working relationship with clients – training benchmark payments – new director unaware of requirement – previous shortfalls rectified – reasonable to disregard requirement – decision under review set aside

LEGISLATION

Migration Act 1958 (Cth), s 359(2)

Migration Regulations 1994 (Cth), r 5.19(3)(b), (f)(i)(A), (ii)

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 5 October 2017 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 11 April 2017. The requirements for the approval of the nomination of a position of Graphic Designer (ANZSCO 232411) 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 Temporary Residence Transition nomination stream.

4. The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19 (3) (f) of the Regulations because the applicant failed to provide any evidence of payroll expenditure and full accounting of training benchmark payment obligations.

5. On 10 March 2020, the Tribunal wrote to the applicant under s359 (2) of the Migration Act inviting them to provide the Tribunal with further information in support of this application.

6. On 20 March 2020, the Tribunal received a letter from representative Mr Nabeel Lang of Red Earth Migration, requesting an extension until 19 April 2020 on the basis that the applicant’s (then and now former) sole director, Mr Sankaranandan Parthasarathy, was not in Australia and nor was he contactable. The Tribunal acknowledges that Mr Lang maintained regular contact and provided numerous updates to the Tribunal in relation to providing the necessary evidence from the applicant in order to manage this application.

7. The Tribunal granted the extension of time until 20 April 2020.

8. On 21 April 2020, the applicant submitted the following:

   ·     ASIC full company search dated 14 April 2020 showing incorporation date of 17 March 2010, previous registered office car of Mr Parthasarathy and current director Anthony Stapleton 

   ·     ASIC Business name dated 16 October 2013

   ·     Business Activity Statements (BAS) for 2020

   ·     Financial Statements for 1 January 2020 to 31 March 2020

   ·     Nominee Employment Contract dated 15 December 2016 noting annual salary $55,000 (plus superannuation), in accordance with the Graphic Arts, Printing and Publishing Award 

   ·     Payslips for the nominee: 2020

   ·     Letter from the applicant’s recently appointed sole director, Mr. Anthony Stapleton (dated 17 March 2020).

9. On behalf of the applicant, Mr Stapleton appeared before the Tribunal on 15 May 2020 to give evidence and present arguments. The Tribunal also received oral evidence from the nominee Mrs Ashaben Patel and representative, Mr Lang.

10. Following the hearing, on 12 June 2020, the applicant provided the Tribunal with Financial Statements from 2015 to 2019 (and ATO Tax returns), and Training Benchmarks payment analysis, together with documentary evidence in support. On 3 July 2020, the applicant provided the Tribunal with confirmatory evidence of Training Benchmark payments in compliance with the obligations under r.5.19 (3) (f) of the Regulations.

11. 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

12. 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.

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

13. 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.

14. Based on the information in the Department of Immigration's (the Department’s) file, the Tribunal is satisfied that the application was made on the relevant form and was accompanied by the prescribed fee. The relevant s.245AR(1) certification was also provided in the application form.

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

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

16. 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.

17. The Department’s records indicate that the applicant was approved as a standard business sponsor (SBS) from 18 September 2014 to 18 September 2017. The Tribunal is satisfied that the company was the standard business sponsor who last identified the nominee, Mrs Ashaben Patel, and nominated her for a subclass 457 visa. The Tribunal is further satisfied that the company did not meet certain criteria relating to the operation of a business overseas in its most recent sponsorship approval.

18. The applicant is a digital media business (printing, web design and email marketing) known as Planet9, which is located in Perth, Western Australia.

19. Mr. Stapleton, the applicant’s recently appointed director, and the representative both provided the Tribunal with detailed background information in relation to the status of the applicant as nominator, namely:

    ·     The nominee commenced working for the applicant on 8 November 2014. The nominee took maternity leave from September 2017.

    ·     The applicant reduced trading to the extent it was barely operational in 2018 and 2019 due to circumstances relating to the applicant’s (then director) Mr. Parthasarathy who had to return to India to resolve extensive family issues.

    ·     In 2018, Mr Sankar Parthasarathy, former director of the applicant, approached Mr. Stapleton to see if he would be interested in buying the applicant’s business. 

    ·     Since 2018 / 2019, Mr. Stapleton has been developing an online portal which enables registered clients to purchase Print Collateral and Digital Media items online. Mr. Stapleton advised the Tribunal that this technology represents the future of print transactions as most portals fail (eg: Vistaprint.com and Canva.com) and only provide an end user with generic templates. The system is designed to be limited to opt-in clients where the applicant pre-builds all templates and loads them into the system for reuse and reorder. By the account of Mr. Stapleton, the system will allow its clients flexibility, speed of access and brand integrity. As the applicant has a well-established client list, Mr. Stapleton acquired the applicant in January 2020 so that he could access and on-board the established clients using his new technology.

20. It is not sufficient that a business is lawfully operating; it must also be actively operating.   The applicant business was an established, albeit very small business up to 2017 and as evidenced by the ASIC documentation, had been trading since 2013. Following the hearing, the applicant submitted financial statements and ATO Tax returns which show turnover as follows:

$	2015	2016	2017	2018	2019	2020 Jan-March BAS
Sales	75,768	117,097	6,345	5,550	9,660	49,175

1. At hearing, the Mr. Stapleton advised the Tribunal that he had paid out the creditors of the applicant and has implemented management activities to the extent that the applicant has in the first quarter of 2020 (January – March), achieved sales of $49,175. He further advised the Tribunal that despite COVID-19, the applicant business was expanding well as clients needed to develop online capabilities and the applicant’s product is designed to assist in that regard. Mr Stapleton also provided the Tribunal with evidence of the applicant’s new products and design.

2. Mr. Stapleton further explained to the Tribunal that the applicant had been approaching previous clients and offering its services whilst building the templates for its new online platform known to be known as campaigna.com.au. In addition, the applicant had successfully bought on 112 new clients in the first quarter of 2020 and was generating sales such that the applicant expects to be profitable by the third quarter of 2020.

3. Ultimately, whether a business is actively operating is for the Tribunal, a question of fact to be determined in light of the entirety of the evidence, rather than the existence or otherwise of certain documents. On this basis, the given the documentary evidence provided and Mr Stapleton’s oral evidence at hearing, the Tribunal is satisfied that the applicant at the time of decision, is actively trading.

4. Given the above, the requirement in r.5.19(3)(b) is met.

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

5. 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.

6. The Tribunal is satisfied on the evidence before it that:

   • the nomination was made on 11 April 2017 for the position of Graphic Designer;
   • the relevant 3-year period is therefore 11 April 2014 to 11 April 2017;
   • The nominee was initially employed by the applicant on 8 November 2014 while the holder of a 457 visa;
   • the nominee originally applied for a subclass 457 visa on 13 February 2012 and was granted the 457 visa on 27 March 2012 valid to 31 March 2015; and granted a Bridging visa from 30 March 2015 valid to 14 August 2015;
   • the nominee applied for a further subclass 457 visa on 30 March 2015 on the basis of her nomination by the applicant as Graphic Designer and was granted a bridging visa A on that date;
   • she was then subsequently granted a subclass 457 visa on 14 August 2015 valid to 14 August 2018.
   • she had therefore worked for the applicant in the nominated position for over 2 years prior to the nomination application being lodged.

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

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

8. 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.

9. At the hearing, Mr. Stapleton advised the Tribunal that he was not aware of the visa issue relating to the nominee and this application until March 2020. In late 2019, Mr. Stapleton had sought out the nominee to discuss her working with Mr. Stapleton given she was considered critical the applicant’s business.  On this basis and because of the nominee’s expertise as a Graphic Designer and her personal knowledge of, and a good working relationship with, the applicant’s client list, Mr. Stapleton told the Tribunal that he was “highly motivated’ not to lose the nominee. He also repeatedly stated that, “Asha is critical to the success of my business…..,I cannot over-emphasise enough her importance to our company as key personnel”.

10. The applicant’s Organisation chart shows that in addition to Mr. Stapleton and the nominee, the applicant employs six others, all of whom are Australian citizens. The nominee’s initial Employment Contract was dated 15 December 2016. More recently, as Mr. Stapleton began operating the applicant’s business, the applicant has provided the nominee’s new Employment Contact dated 1 January 2020. The applicant provided the Tribunal with documentary evidence including PAYG and payroll statements from the applicant to show that the nominee has been paid as contracted.

    31.      Given the additional material provided to the Tribunal, including the most recent 2020 BAS Statement, and the evidence provided by Mr. Stapleton, the Tribunal is satisfied that it has the financial capacity to continue to employ the nominee on a full-time basis for at least 2 years. Further, as Mr. Stapleton advised the Tribunal that the applicant is weathering the COIVD-19 challenges and in the Tribunal’s view, the applicant is very likely to benefit from the need for businesses to transact online, the Tribunal is satisfied that the terms of the current employment contract between the applicant and the nominee offer the nominee full time employment on a full-time basis for at least 2 years on terms that do not expressly preclude the possibility of an extension.

11. 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)

12. 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.

13. The applicant provided additional documentary evidence for the Tribunal’s assessment including the nominee’s Employment Contract dated 1 January 2020 which provides a salary of $55,000 (plus superannuation), which is commensurate with the Graphic Arts, Printing and Publishing Award.

14. The Tribunal has consulted a range of sources of information, including:

    • the Payscale website (accessed 3 July 2020) indicates that a Graphc Designer in Australia earns an average salary of $53,686 per annum, with the salary range being from $42,000 - $71,000 annually:
    • advertisements for experienced / qualified Graphic Designer positions in Perth listed on Seek.com.au as at 3 July 2020 however there are no salary ranges, therefore the Tribunal has had regard to advertisements for the position in Melbourne is where a salary range is given as being $50,000 -$70,00 as featured in one advertisement: >

      From the above, the Tribunal is satisfied that the proposed salary associated with the nominated position is within the salary range of what an equivalent Australian employee would be paid in Perth, Western Australia.

    • The Tribunal is further satisfied that the contract of employment dated January 2020 for the nominee has standard provisions relating to leave and termination that are consistent with those in the Fair Work Act 2009 (Commonwealth) and National Employment Standards (NES).

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

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

    • Regulation 5.19(3)(f) requires the applicant to have fulfilled any commitments made relating to meeting training requirements, and complied 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.

    • The most recent Standard Business Sponsorship (SBS) for the applicant commenced on 18 September 2014. The SBS Agreement was valid until 18 September 2017.

    • Specifically, the training requirements applicable for an established business with approval as a standard business sponsor in that period are set out in written instrument IMMI 13/030 as follows:

      • A) recent expenditure by the business to the equivalent of at least 2% of payroll of the business, in payments allocated to an industry training fund that operates in the same or related industry of the business; 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.

    • The delegate refused the application on the basis that the Applicant did not satisfy the requirements of subparagraph 5.19(3)(f)(i)(A), which required it to demonstrate that it had made the Training Benchmarks payments.

    • The Department’s decision noted that the applicant did not provide evidence of total payroll expenditure during the sponsorship period, from which to calculate whether 2% of the payroll had been allocated to an industry training fund operating in the same industry as the business (Benchmark A) or evidence of having spent 1% of payroll in the provision of training to employees of the business (Benchmark B).

    • At hearing, the applicant’s director Mr. Stapleton provided evidence to the Tribunal that until very recently, he was unaware of the issues relating to the visa of the nominee and nor was he aware of the Training Benchmark obligations. At hearing the Tribunal discussed the applicant’s obligations at some length with Mr. Stapleton. In response, Mr. Stapleton committed to providing the Tribunal with the necessary Financial Statements and verifiable evidence as to payments regarding Training Benchmark obligations, noting to the Tribunal that if there were any outstanding Training Benchmark payments due, he would undertake to make the payments in support of the application.

    • The applicant as committed, provided the Tribunal on 3 July 2020 with the verifiable proof as to the Training Benchmarks payments (including the Financial Statements prepared by the applicant’s former accountant prior to Mr. Stapleton taking over the applicant business), and analysis shows as follows:

Year	2014	2015	2016	2017
Training Benchmarks 2 % obligations	$ 663	$ 653	$ 1,305	$ 1,199	$ 3,820
Training Paid	$ 990	$ 1,320	$ 1,030	$3,340
Balance paid by applicant in 2020	$2,200

1. The Tribunal notes that Mr. Stapleton has paid the shortfall in Training Benchmarks payments on the basis of rectifying the commitment to making the payments and that the sum paid recently (June 2020) of $2,200 to Keystone College of Business and Technology, Perth (RTO Code 41183), (significantly) exceeds the sum the applicant was obligated to pay.

2. In considering whether it is reasonable to disregard the requirements in r.5.19(f)(i), the Tribunal has first had regard to the evidence received from the applicant director Mr. Stapleton at the hearing. As noted above, he had recently taken over the applicant business and had undertaken significant investment in so doing, and the nominee’s skills were critical to Mr. Stapleton’s development plans for the business because of her unique knowledge regarding the applicant’s long-standing client base. Further, despite being unaware of the issues relating these proceedings and the applicant’s Training Benchmark payment obligations, he undertook to make the payments so that the sum paid is in complete compliance in paying the training contributions.

1. The Tribunal gives weight to the fact that the required contributions have now been made.         

2. The Tribunal accepts that the applicant has met its training obligations, albeit not within the period of its most recent SBS approval. Given the training payments made to date actually exceed what would have been payable during its last SBS approval period, the Tribunal considers it reasonable to disregard the requirements of r.5.19(3)(f)(i) in this case, as permitted by r.5.19(3)(f)(ii).

3. In considering the evidence overall and given the evidence of the recent $2,200 training contribution payment by the applicant, the Tribunal considers the requirement in r.5.19(3)(f) is met.

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

   No adverse information known to Immigration: r.5.19(3)(g)

5. Regulation 5.19(3)(g) 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. 

6. The Tribunal has reviewed the Department's records, including its Integrated Client Services Environment (ICSE) and has found nothing to indicate that there is any adverse information known to Immigration about the nominator or person associated with the nominator.

7. There is no information before the Tribunal to indicate that there is adverse information known to the Department about the nominator or an associated person.

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

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

9. 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.

10. There is no evidence before the Tribunal of any breaches of the workplace relations laws of the Commonwealth or Western Australia by the applicant.

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

12. 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

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

    Susan Reece Jones
    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

    (aa) include a written certification by the nominator stating whether or not the nominator has engaged in conduct, in relation to the nomination, that constitutes a contravention of subsection 245AR(1) of the Act; 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.