A.C.E TUITION CENTRE PTY LTD (Migration)

[2018] AATA 5397

A.C.E TUITION CENTRE PTY LTD (Migration) [2018] AATA 5397 (20 December 2018)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  A.C.E TUITION CENTRE PTY LTD

CASE NUMBER:  1710235

DIBP REFERENCE(S):  BCC2016/3650995

MEMBER:Denise Connolly

DATE:20 December 2018

PLACE OF DECISION:  Sydney

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

Statement made on 20 December 2018 at 3:29pm

CATCHWORDS

MIGRATION – nomination of an occupation (employer nomination) – Temporary Residents Transition Nomination stream – position of Finance Manager – financial capacity to employ the nominee for two years – anticipated income from overseas contract – standard business sponsor – limited provision for superannuation – nominee took unpaid leave – decision under review affirmed         

LEGISLATION

Migration Act 1958, ss 140GB, 245AR
Migration Regulations 1994, Schedule 2, cl 457.223; r 2.72

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 3 May 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 2 November 2016. 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. 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)(d) of the Regulations because she was not satisfied the applicant had demonstrated a financial capacity to employee the nominee for at least two years on the base salary offered in the employment contract. Nor was she satisfied that r.5.19(3)(f)(i)(A) was met as she formed the view the applicant had not provided evidence demonstrating that it had fulfilled commitments it made relating to meeting its training requirements during the period of its most recent approval as a standard business sponsor.

5. Mr Binh Viet Pham appeared before the Tribunal, on behalf of the applicant, on 15 November 2018 to give evidence and present arguments.

6. The applicant was represented in relation to the review by its registered migration agent.

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 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 applicant has provided to the Tribunal a copy of the delegate’s decision record. It records that the Department’s records indicate that the applicant offers tuition services in maths and English to students from Years 1 to 6 and that it was in the process of developing an online learning platform called S.T.A.R. Online. The business was established in October 2013. The nominee, Mr Thanh Long Nguyen was sponsored to be employed in the nominated position Finance Manager (ANZSCO 132211).

10. The Department’s records confirm that the nominee was the holder of a Subclass 457 visa at the time of application. The records also confirm that the applicant’s most recent standard business sponsorship was approved on 27 January 2015 for a period of three years.

11. The nomination application form states that the applicant employs 4 Australian citizens/permanent residents and one foreign employee. The application form records that as at November 2016 the gross payroll expenditure in the previous 12 months was $69,615. The applicant is offering to the nominee a base rate of pay of $60,000.

12. The applicant provided evidence of leasing premises to run the business and various financial documents. The applicant also provided evidence from Job Outlook indicating Finance Managers in 2016 earned weekly earnings before tax of about $2150. The applicant also provided PayScale information indicating the median salary for a Finance Manager was $88,050. The applicant provided a copy of the employment contract recording a base salary to work in the nominated occupation of $60,000 plus the superannuation guarantee.

13. The applicant provided its business plan indicating that at the time of application it employed 4 Australian citizens/permanent residents and the nominee as a Subclass 457 visa holder. It expected its turnover in the 2017 financial year to increase from $150,000 to $285,000 via its tuition centre and S.T.A.R. Online. Other documents indicate it anticipated revenue of $350,000 in the 2018 financial year with a net profit of $112,345. The applicant provided View Activity Statements for periods in 2016. It also provided bank statements and evidence that it was actively operating a business.

14. The delegate was not satisfied the applicant had provided sufficient evidence demonstrating that it had the financial capacity to provide to the nominee full-time employment for at least two years. She was also not satisfied that the applicant had provided evidence demonstrating that it had met its training obligations as a standard business sponsor in the most recent sponsorship period.

15. Prior to the hearing the applicant provided documentation including the following:

    a. a written submission addressing the various requirements of r.5.19(3). The representative confirms that the nominee has held a Subclass 457 visa since 7 January 2014. The occupation identified is Finance Manager. The business has continued to actively and lawfully operate in Australia. The nominee has been employed on a full-time basis in Australia for at least 2 of the 3 years preceding the nomination application. The applicant’s substantial negative equity as seen in the 2016 financial report was a result of the Director’s cash injections into the business. The representative provided the company’s 2016, 2017 and 2018 tax returns. It is submitted the business is about to engage in an upcoming project opportunity for which it will receive a $60,000 deposit from Sabjernet Enterprise Group Company Limited in Vietnam. It is submitted that this will enable the business to sustain the position of Finance Manager at the salary of $60,000 per year.

    b.   The representative explains that the employment terms and conditions for all employees of the company are the same. All staff have signed the same employment contract with variations regarding their duties. The representative advises that the company has now changed its name to A.C.E Tech Solutions Pty Ltd. It is submitted that the terms and conditions are no less favourable than those that would be provided to an Australian citizen or permanent resident and that these are in accordance with salary survey websites.

    c.   Regarding the training requirements, the representative advises that the applicant has nominated training benchmark A, which provides that at least 2% of the payroll of the business will be paid towards an industry training fund. The sponsorship period is 27 January 2015 to 27 January 2018. The applicant has provided evidence of payroll expenditure in this period as follows:

    Period  Payroll expenditure                Paid

    i.January 2015-January 2016   $75,745 (2% = $1515)           $1392

    ii.January 2016-January 2017   $62,677 (2% = $253)             $1500

    iii.January 2017-January 2018   $72,705 (2% = $1454)           $1500

    TOTAL     $4222            $4392

    d.It is submitted that there is no adverse information known about the nominator or a person associated with the nominator.

    e.It is submitted that the sponsoring company has always been compliant with Commonwealth and State laws in relation to the workplace. The company has no outstanding debts to ATO.

    f.The applicant provided ASIC information confirming the company’s registration and ATO information regarding its registration for GST purposes.  

    g.The applicant provided Activity Statements from the ATO portal including for recent quarters, indicating sales income and salary expenditure as follows:

    i.July 2017 to September 2017            sales income $50,820 and salary, wages and other payments of $15,440

    ii.October 2017 to December 2017      sales income $46,255 and salary, wages and other payments of $16,090

    iii.January 2018 to March 2018             sales income of $60,620 and salary, wages and other payments of $23,680

    iv.July 2018 to September 2018            sales income $53,380 and salary, wages and other payments of $19,372.

    Hearing on 15 November 2018

16. At the hearing the Tribunal explained to the applicant the requirements of the law. The following is a summary of the oral evidence provided at the hearing.

17. The applicant claimed that the business currently employs 5 people: the nominee as Finance Manager: Mike Nguyen, permanent resident, a tutor who works up to 20 hours a week; Bhavin, permanent resident, developer, now contracted to work 30 hours a week but as a student he worked up to 20 hours a week; Kevin Pham, permanent resident, developer who is contracted to work up to 20 hours a week; Kevin Ngo, permanent resident, engineer who is contracted to work up to 20 hours a week; and Lyn. Three staff have been on contracts since September 2018 to work for $20 an hour as required.

18. The Tribunal noted that the declared payroll expenditure in the relevant period was relatively low given the number of staff employed by the business. The applicant indicated that Bhavin and Kevin Pham’s days were not fixed. There might have been times when they only worked 10 hours a week. He then indicated that previously Bhavin, Kevin Pham and Kevin Ngo were not paid as they were getting work experience. The Tribunal questioned whether the business had the capacity to pay them. The applicant claimed that it could pay them but he wanted to better utilise the capital. The Tribunal indicated this evidence regarding employment and payroll expenditure appeared to be vague and changing. He indicated that the business did not have a budget to employ university students. However it allowed them to work at the business as students to give them a chance to develop their skills.

19. The Tribunal asked about the business. The applicant indicated he started the business with his business partner, Tuan Pham. He was a technical consultant working full-time and his partner managed operations. He has now split from the partner who pulled out in 2016.

20. The Tribunal questioned why such a small business has needed a full-time Finance Manager. He indicated that he wants to turn it into a large tuition business with franchises. The tuition arm of the business has been going slow. He did not know about the financial aspects of business. Given the business’ budget they could not afford to hire a local Finance Manager because their salary rates would be very high. A mate introduced him to the nominee. The Tribunal noted that this indicates the business did not and would not pay the nominee the equivalent salary that would be paid to an Australian citizen or permanent resident. The applicant indicated that at the time the market rate for a Finance Manager was $60,000. He indicated that local employees would not stay in the business so he employed the nominee.

21. The Tribunal noted that the applicant has stated that the business has employed several employees.  However it notes that the business’ salary expenditure has been very low. It asked why the salary expenditure is so low. The applicant indicated that the business has had the development work done offshore to save money. The business’ growth has been slow so there has not been a big need to employ people. The Tribunal indicated that this raises concerns about the future of the nominee’s employment with the business. The applicant indicated the business now has a business opportunity that will result in it making more money. While it is a small business, he has not wanted to risk employing people locally. The nominee is an asset for the business. Local employees are a big commitment and have an element of risk. They might leave if they find a better opportunity. However he also told the Tribunal that he has now employed Australian citizens and permanent residents; Mike, Bhavin, Kevin and Kevin. Bhavin is contracted to work a 38 hour week but only works 20 hours.

22. The Tribunal noted that the business activity statement for the period April 2018 to June 2018 is missing. The applicant indicated that he will provide this.

23. The Tribunal noted that the company’s tax return for 2018 indicates total income of only $204,323. It noted that the activity statements do not indicate an increase in sales as forecasted. It explained that this raises concerns as to whether the business will have the financial capacity to employee the nominee for at least 2 years on a base salary of $60,000. The applicant indicated that, based on the sales revenue, the business is able to employ the nominee and some of the other employees. He indicated that the contract with the Vietnamese company should generate income of $300,000. The Tribunal asked if the nominee is involved with the Vietnamese company. He denied this.

24. The Tribunal noted that the company tax return for 2018 indicates that the business had superannuation expenditure of only $2170. It noted that this is less than the superannuation guarantee for a person earning $60,000. It indicated that this raises concerns as to whether the business is paying superannuation in accordance with legislation. The applicant indicated that this is something his accountant did. Because the software is part of the company’s intellectual property, and the nominee manages the business’ finances, the accountant has arranged for the company’s intellectual property to be considered an asset of the business. He claimed that some of the expenditure on the nominee’s superannuation is diverted to software development expenses. This is because part of the nominee’s job is related to the software development. He claims that if somebody wants to buy the software this enables the business to quantify the software’s value. He claimed that he could provide a receipt demonstrating that the nominee’s superannuation had been correctly paid.

25. The Tribunal noted that the business’ 2018 tax return does not have wages or salary expenditure identified. The applicant indicated that this has been diverted to the costs of developing software as it is part of the worth of the software as an asset. The Tribunal asked, in those circumstances, how the applicant has calculated the payroll expenditure for the purposes of meeting its training obligations, as it appears from his evidence that that expenditure may be recorded as a software development expense. The applicant referred to the accountant’s statement on payroll expenditure (as set out above). The Tribunal indicated it still did not understand how those figures were calculated.

26. The Tribunal raised its concern that the 2017 tax return records no wages, salary expenditure or superannuation expenses. It explained this might indicate that the applicant was not paying the nominee in accordance with the requirements. The applicant indicated that in 2015/2016 the nominee’s parents were ill and he was away for a month. The Tribunal questioned why he would not have taken paid leave. He indicated the nominee decided to take unpaid leave. He has kept his recreation leave.

27. The Tribunal noted that the applicant’s financial documents indicate that in 2017/2018 the business received sales revenue of $200,000 and a profit of $90,000. It noted however that the applicant had indicated that he did not pay his staff. It questioned why he did not pay the staff if the business made a profit. He indicated that the business still had payroll expenses and some staff were paid. He indicated that the software development should be complete in February 2019 and that they project sales revenue of $600,000, $300,000 being from local sales. He indicated that if they complete the project on time they will receive $300,000 from the Vietnamese company.

28. The Tribunal noted that the applicant has indicated that 3 of his permanent resident staff are now on contracts since September 2018 and that they are working about 20-30 hours per week. He also indicated that Lyn would be working for the business although it was not clear how many hours she has worked, or would be working in the future.  He then indicated the staff would be pay $25 an hour. The Tribunal estimated that this would amount to payroll expenditure of over $109,000 a year. He also indicated that he is paid it Director’s fee of $10,000 per year. The Tribunal questioned whether the applicant had the financial capacity to provide the terms and conditions of employment as set out in the contract for at least 2 years if the business has contractual obligations to its other employees. The applicant indicated that the business has generated income of $200,000 in Australia since the software was released in January 2018 and it is generating a profit.

29. The Tribunal asked the applicant about the duties of the position. He indicated that the nominee works on the financials and budgeting. He indicated that because much of their work is outsourced the nominee looks at the financials and budgets and what is being delivered. He reviewed the financial viability of the Vietnamese contract. The applicant explores local business opportunities and the nominee advises him but this does not happen often. The Vietnamese contract is the main one the nominee works on. He believes the need for the nominee will increase as the company grows.

30. The Tribunal noted that the applicant is seeking to rely on a contract with an overseas company in Vietnam. It indicated it may not be satisfied that this future arrangement is secure enough to provide the business with sufficient financial resources to pay the nominee in accordance with the contract. The applicant indicated that he did a demonstration with the Vietnamese company and they liked the platform. The Vietnamese company gave the business certain deliverables and if the business completes those by February 2019 and the Vietnamese company likes them, they have agreed to enter into a contract. He indicated that the Vietnamese company has agreed that if the business finishes its development in February that it will give them $60,000.

31. The Tribunal noted that the applicant’s bank statements suggest that only one employee is being paid. The applicant indicated that the payroll is run monthly. However the nominee is sometimes paid by cash. The Tribunal questioned why a Subclass 457 visa holder is being paid by cash. He said that sometimes the staff are paid by cash when they want it. The Tribunal raises concerns that this mode of payment is not verifiable.

32. The Tribunal noted that Payscale.com now indicates that a Finance Manager will be paid an average salary nationally of $92,242 and in Sydney a Finance Manager can expect to receive a salary of $100,494[1]. It noted the salary range for the occupation in Sydney is $70,015 to $137,147. It also noted that Joboutlook.gov.au records that a Finance Manager can expect to be paid $2073 per week[2]. It raised its concern that the terms and conditions being offered to the nominee are 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. The applicant indicated that in the coming year the business plans to increase the salary to be closer to the median. He indicated that it is a small business and the duties are not the same as a medium to large business.

    [1] accessed 14 November 2018

    [2] accessed 14 November 2018

1. The Tribunal questioned, given the size of the business, whether the business genuinely needs a full-time Finance Manager. The applicant indicated that the business is growing and its turnover is increasing. He indicated that the business is not just reflected by its payroll. As the business increases its sales, it will have a greater need for a Finance Manager. The nominee advises on funds and investments. He then indicates the duties are the same as other businesses where the scope is bigger. He claimed that the nominee was employed on a full-time basis in 2014, 2015 and 2016.

2. The Tribunal asked the applicant if he had any other evidence to give as to why it should be satisfied that the relevant requirements of r.5.19(3) are met. The applicant acknowledged that some of the evidence is vague. He indicated that since its inception the business has been improving and growing. Even if there was no contract with the Vietnamese company, since the software launch, its revenue has increased. He indicated that the nominee has done a good job as he understands the logistics of dealing with an overseas company. The business is now employing more people and grooming them to be full-time employees.

3. The representative requested that the Tribunal postpone making its decision until the accountant can provide written submissions explaining the business’ payroll expenditure. The Tribunal agreed to wait for the applicant to provide evidence. The Tribunal also requested that the business provide its bank statements from January 2017 to date. The Tribunal agreed to postpone its decision until 22 November 2018.

4. After the hearing the applicant provided further evidence. On 22 November 2018 the applicant provided a written submission in which he states that when he started the business he and his partner only wanted to hire a graduate Finance Manager because they did not have capital to hire an experienced one. They made a choice to hire a foreigner instead of a local Australian because they needed commitment. He is of the view that a local Finance Manager would opt to work for larger, well-established companies rather than a start-up business which is high-risk in nature as its future can be uncertain. He is of the view the local employment market would not have given his business a chance. By hiring a Subclass 457 visa holder the business had commitment and dedication from the employee. They met the nominee through a friend and, after a formal interview, decided he would be a good candidate. The main purpose of hiring a Finance Manager was to manage the investments, budgets and cash flow. He and the partner were not accountants and had no idea how to handle cash flow or budgets. At the time of applying for the 457 nomination there was no requirement for the company to undergo labour market testing.

5. Regarding training, the applicant submitted that the payroll summary provided is correct according to his MYOB accounts. The records generated for the sponsorship period show the pay for each employee in the business for that period. In the period January 2017 to December 2017 the company had 10 employees. The nominee was paid his correct annual salary of $60,000 and other employees had only worked a few hours a week over the 12 month period. This is why the total payroll for that year was only $66,530 plus $6,175 in superannuation. In 2016 the company had only 3 employees. The nominee was paid a base salary of $55,000 because he took one month’s unpaid leave. Other employees were only casual and the total payroll was $57,452 plus $ $5,279 in superannuation. The sponsorship period is different to the financial year and therefore looking at tax returns or financial reports will not show the exact amount. The business however can provide the BAS records to confirm payroll amounts from January to December for each of those years.

6. Regarding staff employment, since its inception the business had to budget and took on many work experience students and casual employees because they wanted to limit their expenses to inject more capital into their software project. They outsourced work to overseas IT contractors to lower their expenses. Since August 2018, when they tentatively secured a contract with the Vietnamese company, they put a permanent IT team together and offered the 5 casual employees (not including the nominee and director) fixed contracts which were signed in September 2018. Once the contract with the Vietnamese company is secured they will transition the contracted employees to full-time employment.

7. Regarding the salary survey, the applicant understands that the nominee’s salary may not be at the current market salary. However the company is growing steadily and is aiming to increase sales revenue to $600,000. Once the contract with the Vietnamese company is secured, the business will increase the nominee’s pay to $75,000 per year. He claimed that, if the Tribunal felt that it was imperative that the nominee salary be fairly paid, then it would review its budget and increase his pay to $75,000 a year, prior to securing the contract with the Vietnamese company. He is of the view the business is financially viable. The company currently has a positive equity, its software asset valued at $847,117.

8. The applicant acknowledges that at first glance the business has an unorthodox business model. It started as a tuition centre providing education to primary children and then went on to be a software company providing education to thousands of students in Australia and providing teachers with a useful tool to help them manage their class. Throughout this turbulence the nominee has been part of the journey and his contributions have seen the business generate sustainable growth.

9. The applicant provided the same table of payroll expenditure set out above and a payroll summary for the 2017 calendar year indicating that the business employed 10 people although one earned no income and 6 employees earned $200 or less. The applicant provided receipts from TAFE dated 19 December 2017 recording a $1500 payment, and 14 January 2016 recording a $1392 payment. Also provided were the ATO View activity statements for the periods in 2015 and 2016. The applicant did not provide the business’ bank records.

10. Further evidence was provided on 23 November 2018: evidence from the applicant’s payroll summary indicating that in the 2016 calendar year the applicant employed 3 people, including the nominee who was paid $55,000 gross; a receipt from TAFE dated 2 November 2016 in the amount of $1500; and ATO View activity statements for the periods in the 2017 calendar year.

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

11. 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. The Tribunal is satisfied this requirement applies in this case.

12. The applicant has provided a copy of the employment agreement between the applicant and the nominee signed on 7 January 2016 recording that the nominee will be paid a base salary of $60,000 plus 9.5% superannuation to work in the occupation Finance Manager on a full-time basis. The terms and conditions will commence on the date the nominee’s Subclass 186 visa is granted.

13. The delegate refused the nomination, in part on the basis that the delegate was not satisfied the applicant had demonstrated a financial capacity to provide the nominee with those terms and conditions of employment. The delegate formed the view the applicant did not meet r.5.19(3)(d)(i) which requires that the nominee will be employed on a full-time basis in the position for at least 2 years. The Tribunal raised concerns with the applicant at the hearing as to whether the business had the financial capacity to provide those terms and conditions, particularly given that the business has now contracted several other Australian citizens/permanent resident employees to work in the business. Accordingly its payroll obligations have increased significantly. The applicant sought to rely on a contract it hopes to enter into with a Vietnamese company to demonstrate it has the financial capacity. The applicant told the Tribunal that if certain conditions are met the Vietnamese company will pay the business $60,000 in February 2019. The business also anticipates receiving sales revenue of $300,000 from the Vietnamese company, if certain conditions are met. The Tribunal is of the view that it is speculative as to whether the applicant will receive the revenue from the Vietnamese company as it anticipates. It notes that the applicant has claimed he demonstrated his software to the Vietnamese company and they liked the platform. The applicant has claimed the Vietnamese company gave the business certain deliverables and if the business completes those by February 2019, and the Vietnamese company likes them, they will enter into a contract. The applicant has also claimed the Vietnamese company has agreed that if the business finishes its development in February 2019 that it will give the business $60,000. However the Tribunal notes that the contract with the Vietnamese company provided to the Tribunal is merely a letter formalising a collaboration. Before any money is paid certain upgrades need to be completed and certain conditions are to be met. On the basis of the evidence before the Tribunal is not satisfied there is any certainty that the applicant will receive the revenue from the Vietnamese company in the foreseeable future as anticipated.

14. The Tribunal takes into account the applicant’s most recent financial documentation including the ATO Activity statements for periods in 2018 indicating increased sales. However it notes these sales are not at the level forecast by the applicant. It notes in 2017/2018 the business claims to have received sales revenue of $200,000 and a profit of $90,000. However it also notes the business has now entered into a number of employment contracts with local staff and it is of the view, on the evidence before it, the applicant may struggle to meet those obligations, particularly if the Vietnamese contract is not agreed on.

15. The Tribunal also notes that the applicant’s payroll expenditure in the past has been very low. Essentially the only person who has been paid on a full-time basis in the past 3 years is the nominee. The Tribunal notes that there was a year when the nominee only received $55,000 because he took one month’s leave without pay. It is not satisfied the applicant has provided an adequate explanation as to why the nominee was not paid for his leave in that year. The Tribunal takes into account the applicant’s evidence that the business was starting up and injecting its resources into the software development but it has concerns that the applicant’s forecasts in the past have been ambitious and unrealistic. It note the applicant claims to have an asset of significant value, the software which it has valued at $847,117, but there is no evidence the business intends to sell the asset in the foreseeable future. The Tribunal also notes the applicant has not provided the business’ bank statements as requested at the hearing. In these circumstances the Tribunal has concerns as to whether the applicant has sufficient accessible financial resources to employ the staff under the agreements described at the hearing.

16. The Tribunal has taken into account all of the applicant’s evidence regarding its financial circumstances and its anticipated future growth. However it continues to have concerns as to whether the business has the financial capacity to employ the nominee on a full-time basis for at least 2 years and provide the terms and conditions set out in the employment agreement.

17. Given the above findings, the Tribunal is not satisfied the requirement in r.5.19(3)(d) is met.

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

18. 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.

19. The Tribunal also has serious concerns about the evidence provided in relation to the requirements of r.5.19(3)(e). The applicant provided to the Department evidence from Payscale.com and Joboutlook.gov.au clearly indicating that a Finance Manager could expect to be paid a base salary exceeding the proposed $60,000 per annum. The applicant’s own evidence to the Department from Job Outlook indicated Finance Managers in 2016 earned weekly earnings before tax of about $2150 (that is, an annual salary of $111,800). The applicant also provided Payscale information to the Department indicating the median salary for a Finance Manager was $88,050.

20. At the hearing the Tribunal explained to the applicant that the current information from Job Outlook indicates that Finance Managers in Australia can expect to earn $2073 per week (that is $107,796 per annum). It explained that the current information from Payscale indicated that a Finance Manager in Sydney, on average, could expect to earn $100,494. The applicant indicated that his business was small and that those salaries were provided by larger businesses. He also admitted ultimately to the Tribunal however that while the scope of the role in larger businesses might be wider, the duties of the position are the same as Finance Managers in other businesses.  The Tribunal accepts that the applicant’s business may be small. However it is of the view the range of salaries described in Payscale, in Sydney where the position is based, $70,015 to $137,147, reflects the range of salaries according to business size and complexity of duties. The Tribunal is of the view, based on the information from Payscale, that a Finance Manager working in a small business can expect to be paid a base salary of at least $70,015, about $10,000 more than the base salary proposed.

21. The Tribunal notes that the applicant admits that his business could not afford to hire a local Finance Manager because their salary rates would be very high. It has concerns that this indicates the applicant does not intend to provide to the nominee equivalent terms and conditions to those that would be provided to an Australian citizen or permanent resident performing equivalent work in the same workplace at the same location. It takes into account his view that local employees would not stay in the business. However it has formed the view that this may be because the applicant does not intend to, or cannot, provide equivalent terms and conditions to those that would be provided by another employer.

22. The Tribunal has taken into account the applicant’s written submission provided after the hearing in which he acknowledges that the nominee’s salary may not be at the current market salary. It has taken into account his evidence that the company is growing steadily and is aiming to increase sales revenue to $600,000. It is not satisfied on the evidence before it that there is any certainty that this will be achieved. It notes his evidence that if the contract with the Vietnamese company is secured the business will increase the nominee’s pay to $75,000 per year. However it has concerns about whether the contract with the Vietnamese company is guaranteed. It also takes into account his submission that, if the Tribunal felt that it was imperative that the nominee’s salary be fairly paid, then it would review its budget and increase his pay to $75,000 a year, prior to securing the contract with the Vietnamese company. It notes that he is of the view the business is financially able to do this as it has a positive equity, its software asset valued at $847,117. However the Tribunal is of the view that it is for the applicant to demonstrate that the requirements in r.5.19(3) are met. It is not for the Tribunal to decide the base salary for the nominee. The applicant has been given an opportunity to demonstrate, both at the hearing in the oral evidence, and after the hearing in written submissions, that the requirements of r.5.19(3), including r.5.19(3)(e), are met. This issue was discussed at the hearing. The Tribunal is of the view it has been reasonable and fair in giving the applicant an opportunity after the hearing to address those issues raised, including the Tribunal’s concern regarding the terms and conditions applicable to the position. The current evidence before the Tribunal regarding the base rate of pay is the employment agreement signed in January 2016, and the nomination application, which state that the base rate of pay will be $60,000 per annum. The applicant has not provided to the Tribunal a new employment agreement. It is not for the Tribunal to direct the applicant to provide a particular base salary. In these circumstances, the Tribunal finds that the base salary offered to the nominee to work in the position of Finance Manager is $60,000 per annum.

23. Having regard to the information from Payscale and Job Outlook discussed above the Tribunal is not satisfied the terms and conditions applicable to the 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.

24. Accordingly, the requirement in r.5.19(3)(e) is not met.

25. As the applicant has not met requirements of r.5.19(3), it is not necessary for the Tribunal to consider and make findings on the other requirements.

26. For the above reasons the Tribunal is not satisfied that the applicant meets the requirements of r.5.19(3). The applicant has not sought to satisfy the criteria in Direct Entry nomination stream, and as such has not met the requirements in r.5.19(4). Accordingly, the nomination of the position cannot be approved. Therefore, the Tribunal must affirm the decision under review.

    DECISION

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

    Denise Connolly
    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.