Australian Natural Foodstuff Pty Ltd (Migration)

Australian Natural Foodstuff Pty Ltd (Migration) [2017] AATA 853 (30 May 2017)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  Australian Natural Foodstuff Pty Ltd
CASE NUMBER:  1509961
DIBP REFERENCE(S):  OPF2014/4148
MEMBER:Marten Kennedy
DATE:30 May 2017
PLACE OF DECISION:  Adelaide

DECISION
The Tribunal sets aside the decision under review and substitutes a decision to take action under s.140M(1)(b) and (c) of the Migration Act 1958 with effect that:
·the applicant’s approval as a sponsor for all classes to which the sponsor belongs is cancelled; and
·the applicant is barred from making future applications for approval as a sponsor in relation to standard business sponsorship for the period 6 July 2015 to 31 May 2017.

Statement made on 30 May 2017 at 1:19pm

CATCHWORDS
Migration – Cancellation – Standard business sponsorship – Sponsorship obligations not met – Proper records not kept – Sponsored person did not work in nominated occupation

LEGISLATION
Migration Act 1958, ss 140GB(1), 140K, 140L, 140M, 359A
Migration Regulations 1994, r 2.57, r 2.72, r 2.79, r 2.82, r 2.84, r 2.86, r 2.89, r 5.19, r 5.94

STATEMENT OF DECISION AND REASONS

This is an application for review of a decision made by a delegate of the Minister for Immigration to take an action under s.140M of the Migration Act 1958 (the Act) in relation to the applicant’s sponsorship.
The applicant was approved as a standard business sponsor on 3 September 2012. On 6 July 2015, the delegate decided to bar the sponsor for the duration of the existing sponsorship approval from sponsoring more people for temporary work visas and to bar the sponsor for three years from making future applications for approval as a standard business sponsor. The delegate took these actions because the delegate considered the applicant had failed to satisfy a number of sponsorship obligations relating to the terms and conditions of employment, keeping records, providing information to the Department and ensuring sponsored persons worked in their nominated occupation.
Procedure
The matter was first heard by the Tribunal, differently constituted, on 1 March 2016 in a combined hearing with a related review of a visa cancellation (matter 1512758). The previously constituted Tribunal wrote to the applicant as it was obliged to do under section 359A of the Migration Act to invite comment or response to relevant adverse conclusions it had provisionally reached in the related visa cancellation review. In response, the applicant provided submissions generally as to the review, but also asked the previously constituted Tribunal to recuse itself on the grounds of apprehended bias, having communicated its provisional views. The previously constituted recused itself and the matter was reconstituted to me.
A hearing originally listed for 18 August 2016 could not proceed, and further hearing arrangements were delayed to ensure that a witness would be available to attend the hearing. A further hearing in the matter was conducted by the reconstituted Tribunal on 8 March 2017.
In reviewing the matter, I have had regard to the evidence given in the previous Tribunal hearing as it was recorded in the decision record for the related visa cancellation matter 1512758. I informed the applicant of my intention to do so at the hearing before me in this matter and aspects of that evidence were discussed in detail at the hearing. The applicant was represented in relation to the review by its registered migration agent.
CONSIDERATION
Sections 140K, 140L and 140M of the Act provide for the imposition of sanctions on approved sponsors in certain circumstances.
Under s.140M, if prescribed circumstances exist, the Minister (and the tribunal on review) may take one or more of the following actions:
·cancelling the sponsorship approval in relation to a class to which the sponsor belongs;
·cancelling the sponsorship approval for all classes to which the sponsor belongs;
·barring the sponsor for a specified period from sponsoring more people under the terms of any existing approval; and
·barring the sponsor for a specified period from making future applications for sponsorship approval in relation to one or more classes of sponsor.
For these purposes, the circumstances are prescribed in r.2.89 - r.2.94B and include circumstances in which the Minister, or tribunal on review, is satisfied there has been: a failure to satisfy a sponsorship obligation; provision of false or misleading information; sponsorship application or variation criteria no longer met; a contravention of the law; unapproved changes to a program; a failure to pay additional security; a failure to comply with certain terms of an agreement; or a failure to pay medical and hospital expenses.
Where a prescribed circumstance has been found to exist, the regulations prescribe criteria that must be taken into account when determining what action, if any, to take: r.2.89 – r.2.94B.
Does a circumstance for the taking of an action exist?
Failure to satisfy a sponsorship obligation: r.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: r.2.89(2).
It is convenient to examine all allegations against the applicant at this point, as the totality of any breaches of obligation is to be taken into account in deciding sanction.
Regulation 2.79 – Obligation to ensure equivalent terms and conditions of employment
Regulation 2.79 applies to a person who is a standard business sponsor of a primary sponsored person if that person holds a subclass 457 visa, or the last substantive visa held by that person was a subclass 457 visa. The applicant was the sponsor of Ms Yanxia Jiang and of Mr Hao Huang.
Regulation 2.79(2) requires that the applicant ensure that the terms and conditions of employment provided to the sponsored persons are no less favourable than the terms and conditions of employment that the applicant provides or would provide to an Australian citizen or permanent resident to perform equivalent work in the applicant’s workplace at the same location.
The Department alleged in its Notice of Intention to Take Action of 27 February 2015 (the ‘NOITA’) that it had requested evidence of market salary for both Ms Jiang and Mr Huang.
In relation to Ms Jiang, it was alleged that in response the same document was provided to the Department that was provided to support the nomination, but the employment contract had been changed to increase the salary paid to Ms Jiang from the rate identified in that information.
In relation to Mr Hao, the Department was provided with the same document as had been relied upon to support the nomination. The Department had observed that the evidence was now two years old.
In its decision of 6 July 2015, the Department appears to place weight on the fact that the migration agent had provided old evidence of market salary, and on that basis concluded that the applicant was in breach of the obligation.
I am unable to follow the allegation or the reasoning of the Department attempting to put in issue the applicant’s compliance with its obligation to ensure that the terms and conditions of employment provided to the sponsored persons are no less favourable than the terms and conditions of employment that the applicant provides or would provide to an Australian citizen or permanent resident to perform equivalent work in the applicant’s workplace at the same location I do not understand why the applicant’s reliance on the market research undertaken in support of the nomination is said to reveal a breach of the obligation. This is particularly the case when the contractual documentation provided by the applicant in relation to Ms Jiang showed that she was being paid more than the product of that research in any event.
No cogent evidence is before me to demonstrate that an Australian citizen or permanent resident perform equivalent work in the applicant’s workplace would be paid more than the salary identified in the market research relied upon by the applicant in response to the Department’s request, and I am unable to identify any obligation on the applicant to produce new research in response to the Department’s requests, or any justification for the default assumption of breach if the applicant does not do so..
It may be that the allegation in relation to r.2.79(2) is conflated with the allegation in relation to r.2.79(3). In any event, and to avoid doubt, I am not satisfied that the applicant is in breach of its obligation under r.2.79(2) on the evidence before me.
As to r.2.79(3), essentially, the applicant must ensure that the terms and conditions of employment provided to a sponsored person are no less favourable than the terms and conditions of employment that the Minister was satisfied, under paragraph 2.72(10)(c) of the Regulations, were no less favourable than the terms and conditions of employment that are provided or would be provided to an Australian citizen or permanent resident.
Paragraph 2.27(10)(c) of the Regulations falls within the Regulation governing the approval of a nomination of a subclass 457 visa. A criterion for approval under that regulation (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 that are provided or would be provided to an Australian citizen or permanent resident performing equivalent work at the same location.
Sub regulation 2.57(3A) provides that a set of terms and conditions of employment for a person are less favourable than another set… if the ‘earnings’ provided for in the first set are less than the earnings provided for in the other set, and there is no substantial contrary evidence that the first set is not less favourable than the other set.
‘Earnings’ are defined at r.2.57A and include wages, amounts applied on the person’s behalf as the person directs and the agreed money value of monetary benefits. Earnings expressly do not include payments that cannot be determined in advance, reimbursements or compulsory employer contributions to superannuation.
The allegation in the NOITA is, in relation to Ms Jiang, that an analysis of her pay records reveals that she was underpaid by 8c per hour. Representing $104.58 less than ‘Guaranteed Annual Earnings’ over the period 1 November 2013 to 30 June 2014. This calculation proceed on the basis that Ms Jiang’s ‘GAE’ is $54 000pa and proceeds on the basis that Ms Jiang is to work a 38-hour week.
The decision record sets out the number of hours Ms Jiang worked in each pay period, which I note were based on calendar months. Inevitably, the number of hours varied each month but on balance indicate she was working slightly more than 38 hours per week.
The allegation in the NOITA is, in relation to Mr Huang, that an analysis of his pay records reveals underpayment of $1.55 per hour , and therefore $3 224 in total less than ‘Guaranteed Annual Earnings’ between 1 July 2013 and 30 June 2014. This calculation proceeds on the basis that Mr Huang’s ‘GAE’ is $65 000pa but has worked a 40-hour week. The underpayment is identified as a consequence of the GAE relating to a 38 hour week.
In response to the allegation, the applicant initially submitted in response to the NOITA that the underpayment was an oversight.
Further submissions queried the basis on which the pay information was converted to an hourly rate and it was submitted that Ms Jiang and Mr Huang held salaried positions and that there was no guarantee of any particular hourly rate. On this basis the applicant did not concede any breach of r.2.79(3).
At hearing, no issue was taken in relation to the amounts actually paid to Ms Jiang or Mr Huang appearing in the Department’s decision record taken from the pay records of the applicant.
In order to assess whether the applicant had not provided ‘terms and conditions of employment to Ms Jiang or Mr Huang that are no less favourable than the terms and conditions of employment that the Minister was satisfied, under paragraph 2.72(10)(c) of the Regulations, were no less favourable than the terms and conditions of employment that are or would be provided to an Australian citizen or an Australian permanent resident’, I must be able to identify the relevant terms and conditions of employment that the Minister was relevantly satisfied of under paragraph 2.72(10)(c) of the Regulations.
In this regard, I have taken into account the nomination approval notice in respect of Ms Jiang of 12 September 2013 and noted the amount of $54 000 appears in a table against ‘Guaranteed Annual Earnings’. The Notice of approval does not refer to weekly hours, but I note the contract of employment in relation to Ms Jiang does identify a maximum working week of 38 hours.
I do not have before me the nomination approval notice in respect of Mr Huang, but am prepared to infer from other Departmental records before me referring to ‘Nom Salary’ (for example) that the GAE for Mr Huang would reflect that figure. Mr Huang’s contract of employment limits his weekly hours to 38 hours per week, but also expressly indicates that the parties to the contract recognise the nature of the employment may require him to work more and that this is factored into the salary.
In submissions, the applicant has drawn my attention to legislative instrument IMMI 09/109, which sets out a method for working out a level of salary at any point in time for various purposes although not expressly including r.2.72(3). The examples in the instrument are however illustrative.
In my view, the comparison between the terms and conditions of employment provided to a sponsored person and the terms and conditions of employment that the Minister was satisfied of under paragraph 2.72(10)(c) must incorporate provision for the number of hours worked. Failing to do so would present and obvious risk that sponsored persons may be required by their sponsors to work in excess of contracted hours without compensation without a breach being established. This is not consistent with the scheme in the Act and Regulations. I consider therefore that implicitly, the comparison must make provision for the number of hours actually worked.
In this case therefore, I accept the calculations of the Department in respect of both Ms Jiang and Mr Huang, and find that the breach of obligation is established. However, I also accept the submission of the applicant that the breach in relation to Ms Jiang is trivial, and I note the submission that it was rectified. In relation to Mr Huang the monetary sum is much higher, but as Mr Huang is a director of the applicant and so has effectively underpaid himself, in context the breach remains trivial.
I am satisfied that applicant has failed to satisfy the sponsorship obligation prescribed in r.2.79(3), but in a trivial way.
Regulation 2.82 – Obligation to keep records
Regulation 2.82 obliges the applicant to keep various records. Specifically relevant to this case, r.2.82(3)(f) imposes an obligation to keep a copy of the written record of employment under which the sponsored person is employed.
The allegation set out in the NOITTA seems to be that the Department assumes a contract of employment exists that has not been produced on request. The applicant provided the Department with a contract of employment specifying annual salary of $52 000. A salary of this amount would not have met the TSMIT requirements for approval of the nomination on 12 September 2013, and so the Department assumes there must exist another contract for a salary above the TSMIT that was operative at the time the nomination was approved.
The applicant does not concede that such a document exists, but as I understand it acknowledges there is some degree of mystery as to how the nomination might have been approved by the Department without it.
A subsequent contract of 9 March 2015 (post-dating the approval of the nomination) was produced, but as I understand it the Department is of the view that there must be another contract in existence that has not been kept, contrary to r.2.82(3)(f).
The applicant in submissions speculates that perhaps its former migration agent may have simply informed the Department that salary of $54 000pa would be provided in order to address the change to the TSMIT of 1 July 2013, and something along these lines must have happened in order for the nomination to be approved on 11 July 2013. On this basis it is submitted there may be no contract. It is submitted that the relevant salary may have been varied without a new contract of employment having been signed. In this regard, I note the submission that a different agent acted for the applicant at the time and that agent cannot be contacted.
I consider that the reference to ‘keep records’ is aimed squarely at avoiding the uncertainty presented in the evidence before me and I do not understand that term to be limited to physically retaining possession of documents that actually exist, but also encompasses the requirement to create and retain documents that ought to be created and retained. I further consider that a ‘contract of employment’ would include ancillary documentation such as a letter or other instrument varying an important term of the primary contract, such as salary.
I consider the obligation on the applicant includes an obligation to create and keep appropriate records, such as documenting employment arrangements. I consider that if there was a variation to salary prior to the approval of the nomination, then the applicant has an obligation to keep a record of that, because it is an essential and pivotal term of a contract of employment. I consider that the fact that the applicant is unable to explain, by reference to contemporaneous records that it has retained, how the salary moved from a salary below TSMIT to above TSMIT prior to nomination approval demonstrates breach of the obligation to keep a copy of the written contract of employment under which the sponsored person was employed.
As to how the nomination was ever approved by the Department in September 2013 in the circumstances (absent documentary evidence of salary above the TSMIT) remains a mystery on the documentation before me, but this is beside the point as to the issue of whether the applicant has complied with its obligations.
I find that the applicant is in breach of its obligation to keep proper records, namely a copy of the written contract of employment under which the sponsored person is employed. I consider this breach to be a breach of substance.
Regulation 2.84 – Obligation to provide information to Immigration when certain events occur.
The Department does not specify in the NOITA or its decision which sub-regulation of r.2.84 is in issue. I am unable to identify any aspect of r.2.84 that engages with the factual allegations made by the Department. Similarly, I am unable to identify any obligation imposed in r.2.84 that is to be notified to the Department within 10 days, noting the remarks in the decision record. It may be that the allegation is misconceived as a result of confusing the sponsor with the primary sponsored person.
The sponsor in this matter is the applicant, Australian Natural Foodstuff Pty Ltd, and not its director, Mr Huang. The NOITA and Decision record appear to confuse these entities. The decision record introduces the concept of a ‘sponsored location’ that does not appear in r.2.84. The Department’s allegation turn on its understanding that Mr Huang had moved to Sydney, and the Department had not been informed of this.
The applicant responded to the NOITA by pointing out that the sponsor continues to operate out of its main office in Adelaide, and its location has not changed.
There is no obligation in r.2.84 for the applicant to inform the Department when a sponsored person changes their address – only if the sponsor itself changes its address. The Department does not allege that the applicant company has changed its address, and nor is there any evidence of this before me in relation to material times.

I record for completeness that, in any event, Mr Huang denies that he changed his address to an address in Sydney, but merely worked there from time to time because the applicant has a showroom in Campsie.
I am not satisfied that the applicant has failed to comply with its obligation to notify Immigration when certain events occur.
Regulation 2.86 – Obligation to ensure sponsored person works in nominated occupation
Relevantly, sub-regulation 2.86(2) requires that the applicant ensure that Ms Jiang and Mr Huang do not work in an occupation unless the occupation was nominated by the applicant under subsection 140GB(1) of the Act, and the nomination was approved.
Ms Jiang was nominated by the applicant to work in the occupation of Accountant (General) ANZSCO 221111. Mr Huang was nominated to work in the occupation of Corporate General Manager ANZSCO 111211.
Ms Jiang
I have taken into account the description provided by the ANZSCO dictionary in understanding the nature of the occupation of Accountant. Relevantly (and extracting from ANZSCO):
ACCOUNTANTS plan and provide accounting systems and services relating to taxation and the financial dealings of organisations and individuals, and advise on associated record-keeping and compliance requirements.
Tasks Include:
oassisting in formulating budgetary and accounting policies
opreparing financial statements for presentation to boards of directors, management, shareholders, and governing and statutory bodies
oconducting financial investigations, preparing reports, undertaking audits and advising on matters such as the purchase and sale of businesses, mergers, capital financing, suspected fraud, insolvency and taxation
oexamining operating costs and organisations' income and expenditure
oproviding assurance about the accuracy of information contained in financial reports and their compliance with statutory requirements
oproviding financial and taxation advice on business structures, plans and operations
opreparing taxation returns for individuals and organisations
oliaising with financial institutions and brokers to establish funds management arrangements
ointroducing and maintaining accounting systems, and advising on the selection and application of computer-based accounting systems
omaintaining internal control systems
omay appraise cash flow and financial risk of capital investment projects
The allegation set out in the NOITTA is that Ms Jiang is not working as an accountant. Certain observations made by the Departmental officers in the course of a site visit and interview led to that conclusion. It is suggested that Ms Jiang is working in an occupation of a lower level, such as a bookkeeper.
It is apparent that certain events at the site visits aroused the Department’s officer’s suspicions, including that the business premises of the applicant appeared unoccupied at the time of the site visit, and then inconsistent and inaccurate information appears to have been provided to the officers about the whereabouts of the Ms Jiang and Mr Huang.
Specifically as to her duties and role, Ms Jiang is recorded to have told the officers that she prepared quarterly financial documents and ‘some taxation things because we need to do exporting things’. The officers observed Ms Jiang needed prompting in explaining her duties in a typical day. Ms Jiang is reported to have told the officers that she undertook some simple administrative tasks.
A concurrent interview with Mr Huang is also described in the NOITTA. Mr Huang referred to Ms Jiang preparing balance sheets and profit and loss.
In evidence to the previously constituted Tribunal, I note that Member Smolicz received evidence that after completing studies Ms Jiang undertook four months unpaid work experience with the applicant before successfully applying for an advertised position as a full-time accountant. At the time of the hearing before Member Smolicz Ms Jiang had ceased working for the applicant, and she was not produced to the Tribunal at the hearing before me.
At the hearing before Member Smolicz, in response to questions about her day to day duties for the applicant Ms Jiang said that she:
- provide financial advice to Mr Huang in relation to when to purchase US currency
- monitored cash flow and provided 12 monthly projections regarding ANF’s financial position
- prepared yearly budget plans for cost of sales for products sold by ANF such as honey, olive oil and wine.
- prepared monthly profit and loss
- ensured the company complies with its accounting standards
- monitored accuracy of book-keeping entries
Member Smolicz observed that the evidence given by Ms Jiang contradicted information provided to the Department. For example. Ms Jiang had told the Department she provided taxation advice in the response to the NOITTA but conceded before Member Smolicz that all taxation work(preparation of BAS and financial statements) was undertaken by an external accountant.
I explored this issue further with Mr Huang in his evidence. He confirmed that the company used an external accountant, and that his wife (who is an accountant) would also work on the company’s financial statements and tax returns.
I asked Mr Huang why he would engage an external accountant if he was employing a person who held a Masters of Accounting from the University of South Australia. It was submitted that the applicant company was only one of a number of companies owned by Mr Huang’s family and the accountant looked at the entire financial picture.
I noted the concern that Ms Jiang had no contact with the external accountant. Mr Huang told me that Ms Jiang did not have any contact with the external accountant because his wife would attend to everything in that regard.
I noted the concern that the person employed as an accountant was not the authorised signatory for taxation returns. Mr Huang told me that Ms Jiang was not an authorised signatory for the company, but his wife was.
I noted the concerns of Member Smolicz as to Ms Jiang not having access to the company’s accounting software. Mr Huang told me he preferred to see financial information on Excel spread-sheets.
I noted the concern that Ms Jiang was unable to state the company’s annual income or profits to Member Smolicz. Mr Huang said she would have known this but probably forgot it.
I noted remarks made by Ms Jiang in an interview to the Department’s officers outlining a number of basic administrative tasks she would undertake. Mr Huang told me she would also do the profit and loss statement and undertake some currency hedging. As to her statements about undertaking basic office administration tasks, Mr Huang said the company was small and she would need to do some of those jobs because she could not spend 5 days per week doing accounting work. Mr Huang emphasised she would analyse the company’s bills.
I noted that Ms Jiang had told Mr Smolicz that Mr Huang’s wife would have invoices entered into the accounting software when she was in Australia. Mr Huang again explained that he preferred to monitor the financial performance of the company on Excel.
I observed that Ms Jiang was unable to inform Member Smolicz of the whereabouts or cost of the company’s Sydney showroom. Mr Huang said the showroom was rented without cost from a supplier, but did not believe knowing information about these arrangements was related to Ms Jiang’s duties.
I invited Mr Huang to comment on Member Smolicz’s remarks to the effect that providing taxation advice and preparing taxation returns and business activity statements are central tasks for an accountant, and that if a business was large and complex then it may be appropriate to engage an external accountant, but then it would be expected that the external accountant would liaise with company accountant. According to Member Smolicz, it was inconsistent with Ms Jiang’s claimed role as an accountant that the business was very small, she was the main employee attending on a daily basis, she had limited knowledge of the company’s taxation affairs, had no contact with the external accountant (and did not know the accountant’s name) and did not have access to the company’s accounting software.
In response Mr Huang said that Ms Jiang would prepare profit and loss statements and undertook financial analysis. She undertook preparatory work for tax requirements. Mr Huang described Ms Jiang analysing the profits from proposed deals, giving examples of particular transactions and savings she had identified. Mr Huang said she would supervise the company’s inventory, enter data and monitor cash flow.
I have also had regard to the letter sent by Member Smolicz under section 359A of the Act, and more specifically, I have had regard to the response provided by the applicant. I am unable to engage with Member Smolicz’s observations of Ms Jiang as a poor witness as I have made no observations for myself. I will base my assessment on the record of evidence given by Ms Jiang in the decision record for matter 1512758 and the evidence of Mr Huang. I also received evidence from Mr Moughelbay, but his evidence did not further my understanding of Ms Jiang’s duties.
Having considered that evidence, I have formed the view that Ms Jiang was not working in the occupation of an Accountant, as that term is understood by applying the ANZSCO dictionary description.
I agree that attending to the taxation affairs of a company, particularly a small company, are akin to a fundamental characteristic of the role of an accountant. This is supported by the description in ANZSCO. I do not accept that a person undertaking the occupation of an accountant for a small company would have such limited involvement in preparing BAS, have no direct contact with an external accountant and would not have access to the company’s accounting software.
I accept Mr Huang’s evidence that Ms Jiang would attend to some level of financial analysis to assist him, but I do not accept that this suffices to characterise her work as the work of an accountant. I am reinforced in this conclusion by noting Mr Huang’s evidence to the effect that Ms Jiang would also attend to monitoring the inventory, basic administrative tasks and some level of data entry. Essentially, my view is that the accountancy work of the company was performed by people other than Ms Jiang, and she performed work of a lower skill level. I reach this finding notwithstanding that Ms Jiang held accountancy qualifications. I am reinforced in this view by the observations to the effect that Ms Jiang was unable to recount rudimentary information about the business’ financial performance.
I find that the applicant is in breach of its duty to ensure that Ms Jiang worked only in the occupation nominated and approved, contrary to r.2.86(2). I consider this to be a breach of substance.
Mr Huang
I have taken into account the description provided by the ANZSCO dictionary in understanding the nature of the occupation of Corporate General Manager ANZSCO 111211. Relevantly (and extracting from ANZSCO):
GENERAL MANAGERS plan, organise, direct, control and review the day-to-day operations and major functions of commercial, industrial, government and defence organisations through departmental managers and subordinate executives.
Tasks Include:
oplanning policy, and setting standards and objectives for organisations
oproviding day-to-day direction and management of organisations, and directing and endorsing policy to fulfil objectives, achieve specific goals, and maximise profit and efficiency
oassessing changing situations and responding accordingly by issuing commands and directives to subordinate staff
oconsulting with immediate subordinates and departmental heads on matters such as methods of operation, equipment requirements, finance, sales and human resources
oauthorising the funding of major policy implementation programs
orepresenting the organisation at official occasions, in negotiations, at conventions, seminars, public hearings and forums, and liaising between areas of responsibility
opreparing, or arranging for the preparation of, reports, budgets and forecasts, and presenting them to governing bodies
oselecting and managing the performance of senior staff
omay undertake responsibility for some or all of accounting, sales, marketing, human resources and other specialist operations
At the hearing, I invited Mr Huang to tell me more about his company and its structure. Mr Huang told me he started the business on 26 August 2011 mainly for import and export after graduating in international business studies.
Mr Huang said his father owns 380 supermarkets in China and exporting wine to those businesses was his first target. Gradually the business started to export olive oil and honey and has recently moved into sorghum and barley.
Mr Huang told me every year sales increase to a current estimate of approximately $US4.6 million mainly relating to sales of sorghum grown in Queensland. The sorghum is used in China to produce a Chinese spirit.
As to the structure of the company, Mr Huang told me there are only two employees: himself and Mr Moughelbay. I suggested it may be difficult to apply the ANZSCO description relating to subordinate managers and departmental heads, essentially requiring a degree of vertical management hierarchy, to a company with only two employees.
Mr Huang said the company used to have an accountant, sales manager and a marketing manager. Mr Huang would divide various tasks to those employees, and now liaises with the other employee on a daily basis.
I explained that my concern was that the nature of the business he was describing may be too small to attract the description of ‘Corporate General manager’ to his job. Mr Huang told me the business was growing and there was an intention to find a new accountant.
I mentioned to Mr Huang that I had seen an ANZSCO description relating to an ‘Importer Exporter’ and the description of that occupation seemed to fit perfectly with his role. Mr Huang emphasised that he would delegate tasks to all the staff, but acknowledged there was only one other staff member.
I accept Mr Huang’s evidence as to the nature and structure of the company, and his role. However, I do not accept that Mr Huang’s role can be described as that of a Corporate General Manager in circumstances where the ANZSCO descriptor clearly envisages large and complex organisations requiring delegated management through subordinate executives and departmental heads.
I am not satisfied that Mr Huang has been working in the occupation of a Corporate General Manager. It is clear from his description of his role in the context of the size and scope of his company that he is working in some other occupation.
It follows that I find the applicant is in breach of its obligation to ensure that Mr Huang not work in an occupation unless the occupation was nominated by the applicant under subsection 140GB(1) of the Act, and the nomination was approved.
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 in r.2.89 of the Regulations.
As to the past and present conduct of the person in relation to Immigration, I raised my concerns at hearing arising out of observations made by Immigration, and set out in the decision record, regarding the conduct of Mr Huang and Ms Jiang on 15 October 2014 during a site visit undertaken by the Department. Officers observed that Ms Jiang and Mr Huang gave conflicting information about each others’ whereabouts, from context in a way to mislead the officers. I suggested to Mr Huang that this account of dealing with Immigration did not place him (as Director of the applicant) in good light.
Mr Huang denied that the Department was lied to during the site visit as to his and Ms Jiang’s whereabouts, and described an issue with the back door to the office. I further particularised the observations made by the Department’s officers, and Mr Huang said that he was sorry about that.
I have taken into account the description of events of 15 October 2014 and do not consider that the conduct described as acceptable conduct for persons dealing with immigration officers undertaking their duties. I place adverse weight on Mr Huang’s and Ms Jiang’s general conduct, and through them the conduct of the applicant in considering what action is to be taken.
As to the number of occasions on which the person has failed to satisfy the sponsorship obligation, and 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 I take into account the findings I have reached above and identify five breaches, with three of substance. The breach of r.2.82 is a one-off breach, but the breaches in respect of r.2.86 were ongoing.
As to 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, I take into account my characterisation of the breaches of r.2.79 as trivial, but my characterisation of the remaining breaches as breaches of substance.
I consider the breaches of the obligation to ensure sponsored person works in their nominated occupations as fundamental breaches, in that the breach goes to the very purpose of the 457 visa scheme. It is fundamental in the sense that the scheme envisages that visas are granted to meet specific skill shortages, and this purpose is defeated when visa holders work other than in the approved occupation.
I have taken into account Mr Huang’s evidence that Ms Jiang is no longer with the company, and note the submission that the occupation of importer and export may have been approved. I note the evidence of Mr Huang to the effect that systems are now in place to ensure people work in accordance with their duties, but place limited weight on this submission given the very small workforce of the company.
As to the period of time over which the person has been an approved sponsor, I take into account that approval as a standard business sponsor was granted on 3 September 2012, and but for cancellation would have expired on 3 September 2015. I note the Department did not cancel the sponsorship but barred the sponsor from sponsoring more people for the remainder of the sponsorship.
As to whether, and the extent to which, the failure to satisfy the sponsorship obligation has had a direct or indirect impact on another person, I am of the view that the applicant’s failure has had a limited impact on Ms Jiang and Mr Huang in relation the breach of r.2.79(3) only. I accept that any shortfall in salary has been rectified to Ms Jiang, and take into account that Mr Huang is the Director of the applicant in any event.
As to whether and the extent to which, the failure to satisfy the sponsorship obligation was intentional, reckless or inadvertent, I consider that the breaches in respect of r 2.79 – Obligation to ensure equivalent terms and conditions of employment and r.2.82 – Obligation to keep records were, on the evidence, likely to be unintentional and inadvertent.
I consider that the most fitting description of the breach of r. 2.86 – Obligation to ensure sponsored person works in nominated occupation - is that the breach was reckless. I reach this finding because I consider that it is quite clear that the tasks of Ms Jiang and Mr Huang manifestly did not fit the description of the ANZSCO classification. I consider that had Mr Huang, as director of the applicant, genuinely turned his mind to the appropriateness of the descriptions it would have been clear that they were unsuitable. I am not however satisfied, on the evidence before me, that this was a knowing and intentional failure.

As to whether, and the extent to which, the person has cooperated with Immigration, including whether the person informed Immigration of the failure, I find that the applicant did not inform the Department of the failure. I have placed adverse weight on my observations of Mr Huang’s and Ms Jiang’s general conduct in relation to Immigration arising out of the events of 15 October. Other than the incidents of that day, there is no evidence before me to suggest the applicant has not cooperated with the Department.
As to the steps (if any) the person has taken to rectify the failure to satisfy the sponsorship obligation and the processes (if any) the person has implemented to ensure future compliance with the sponsorship obligation, including whether the steps were taken at the request of Immigration or otherwise, I accept that any short payment has been rectified, and note Mr Huang’s indication that steps are in place to ensure that any future sponsored person will work only in their approved occupation.
As to any other matter, I have taken into account the evidence provided by the applicant as to their ongoing operations, business and plans for the future. I note the submission at hearing to the effect that evidence of the company’s operations have been provided to demonstrate to me that the business is legitimate and not solely a migration vehicle.
I have taken into account that the business has moved to new premises and has expanded the nature of its trade recently. I take note of the company entering into new contracts for sorghum export. I was assisted in gaining an understanding of the business’ operation by the evidence of Mr Moughelbay.
Sanction
In circumstances where insufficient care and insight into the selection of the ANZSCO occupation description was used by the applicant at the time of a related nomination application, I consider it would ordinarily be appropriate to, at least, cancel the sponsorship approval and require a fresh assessment to be made of any future application for approval and nominations by the sponsor. I think this reflects my observations to the effect that breaching the obligation to ensure sponsored person works in nominated occupation undermines the entire scheme of the Act and regulations for regulation of foreign labour in Australia.
I consider that the sanction of cancelling the applicant’s approval for all classes to which the sponsor belongs is as logical, appropriate and suitable reaction to the breach of the obligation to ensure sponsored person works in nominated occupation. I consider that cancellation of approval is more appropriate than the sanction imposed by the Department to bar the sponsor for a specified period from sponsoring more people under the existing approval. I consider the breach of the obligation to ensure a sponsored person works in nominated occupation taints the approval of the applicant as a sponsor and that approval should be cancelled.
I recognise that the reality is that the applicant’s approval and a standard business sponsor would have ceased a number of years ago, but I consider that the cancellation of the previously approved sponsorship should remain on record as a sanction. In this regard it is appropriate in my view to send a message to sponsors and those who advise them that inaccurate occupation descriptions will carry a sanction, with cancellation of approval as a sponsor being the most obvious such sanction.
Furthermore, in circumstances where I have identified other factors calling for sanction, such as the nature of the conduct of Mr Huang and Ms Jiang in responding to the Department’s site visit, and have formed the view that the obligation to ensure sponsored person works in nominated occupation was breached in circumstances I have characterised as reckless, I will impose a further sanction on the applicant of barring the sponsor from making applications for approval as a standard business sponsor through to the day after the date of this decision. I take this step in acknowledging the delay in the completion of the review, but on the basis that I consider the applicant’s inability to participate in the 457 visa scheme during this period is entirely appropriate having regard to the breaches of obligation I have identified.
I have taken into account the evidence of Mr Huang and Mr Moughelbay about the growth and promise of their exporting business. Given the length of time that the business has remained under sanction pending the outcome of this review, I consider it is appropriate for any future application for approval as a standard business sponsor should be assessed on its merits by the Department.
I note also Mr Huang’s concern that the existence of a sanction on the record may have wider implications for other nomination applications lodged by the applicant in respect of him. I am conscious that is provided for in the migration law, but also note that such considerations are generally accompanied with discretion: for example in r.5.94(3)(g) and r.5.19(4)(f) of the Regulations. While I understand Mr Huang’s concerns, I consider these matters should be considered in the exercise of discretion should they arise in future matters, and should not inform on the nature of the sanction I consider appropriate having regard to the circumstances of this matter.
I will set aside the Department’s decision and substitute the sanctions I have explained I consider appropriate. Considering the totality of the circumstances, and having regard to the prescribed criteria the Tribunal finds that the actions under s.140M(1)(b) and (c) should be taken: specifically:
·the applicant’s approval as a sponsor for all classes to which the sponsor belongs is cancelled; and
·the applicant is barred from making applications for approval as a sponsor in relation to standard business sponsorship for the period 6 July 2015 to 31 May 2017.
DECISION
The Tribunal sets aside the decision under review and substitutes a decision to take action under s.140M(1)(b) and (c) of the Migration Act 1958 with effect that:
·the applicant’s approval as a sponsor for all classes to which the sponsor belongs is cancelled; and
·the applicant is barred from making future applications for approval as a sponsor in relation to standard business sponsorship for the period 6 July 2015 to 31 May 2017.
Marten Kennedy
Member

[2017] AATA 853

30 May 2017

Key Legal Topics

Areas of Law

Immigration

Administrative Law

Statutory Interpretation

Legal Concepts

Judicial Review

Procedural Fairness

Remedies

Statutory Construction

Appeal