BALENCE PTY LTD (Migration)

[2021] AATA 1878

BALENCE PTY LTD (Migration) [2021] AATA 1878 (23 April 2021)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Balence Pty Ltd

CASE NUMBER:  1816500

HOME AFFAIRS REFERENCE(S):          BCC2017/2333953

MEMBER:Wan Shum

DATE:23 April 2021

PLACE OF DECISION:  Sydney

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

Statement made on 23 April 2021 at 1:30pm

CATCHWORDS

MIGRATION – approval of a nomination – Temporary Residence Transition Nomination stream – position of Cook – financial capacity to employ the nominee for at least 2 years – terms and conditions of employment – updated business information – impact of the COVID19 outbreak – employed in the nominated position previously – reasonable to disregard the training requirements – decision under review set aside

LEGISLATION

Migration Act 1958, ss 140, 245
Migration Regulations 1994, rr 1.13, 5.19, 5.37

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1. This is an application for review of a decision made by a delegate of the Minister for Home Affairs on 30 May 2018 to reject an application for approval of the nomination of a position in Australia under r.5.19 of the Migration Regulations 1994 (the Regulations).

2. The requirements for the approval of the nomination of a position in Australia are found in r.5.19 of the Regulations, which contains 2 alternative streams: a Temporary Residence Transition nomination stream (r.5.19(3)) and a Direct Entry nomination stream (r.5.19(4)). 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. Balence Pty Ltd (the nominator) applied for approval of a nomination on 30 June 2017 under the Temporary Residence Transition nomination stream for the position of Cook. The person identified for the position was Mr Bal Bhadra Thapa, the nominee. The occupation had previously been approved under the temporary business sponsorship (and the associated temporary (work) Subclass 457 visa) program. The nominator is seeking to continue the employment of the nominee. He lodged a Subclass 186 visa application in respect of this nomination.

4. The delegate refused the application, finding that the appointment will not provide the employee with full-time employment for at least 2 years and that the nomination did not satisfy r.5.19(3)(d)(i) of the Regulations. The visa application was subsequently refused because the nomination had not been approved.

5. Applications for review were lodged in respect of these decisions and both parties were represented in relation to the review by the same registered migration agent.

6. Mr Andrew Thomas, a Director, appeared before the Tribunal on behalf of the nominator by Microsoft Teams video on 24 February 2021. The Tribunal also received oral evidence from the nominee by phone in this matter. The representative was present via video from a different location.

7. 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

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). For the nomination to be approved, all the requirements must be met.

9. The nominator in this case and Jersie Pty Ltd, an associated entity, operate a pub known as The Winston located in Winston Hills, Sydney. According to ASIC records, the nominator was established in 2003. There are 4 directors, including Mr Thomas. He explained that it is a family business and they also run another 2 pubs, The Entrance and The Oaks, under different entities. A statement from the accountant explains that the nominator provides payroll services to Winston Hills Hotel Trust and that Jersie Pty Ltd is the Trustee of the Thomas Family Settlement No. 2. WH Management Pty Ltd is the Trustee of the Winston Hills Hotel Trust. All entities are controlled by Mr Thomas.

10. The application form for the nomination under the Temporary Residence Transition stream was completed with ‘Cook’ as the position to be filled, with the same occupation identified, which has ANZSCO code 351411.

11. The nominator provided information on training and payroll expenditure for the previous 5 years but did not submit any other information relevant to the financial performance of the business such as financial reports or tax returns. The delegate was of the view that the business had not demonstrated the financial capacity to be able to pay the full-time salary for the nominated position for at least 2 years.

12. The Tribunal was provided with financial statements for the financial years ending 30 June 2017, 30 June 2018, 30 June 2019 and 30 June 2020 of the nominator. The reports reflect an operating loss for those years. Mr Thomas explained that the income from operating the pub was reflected in the financial statements of one of the associated entities. Following the hearing, the Tribunal was provided with a copy of the Winston Hills Hotel Trust financial statements for financial year 2019, which includes the 2018 comparative figures. This reflects a turnover of over $10 million in each financial year. The Tribunal does not have the 2020 financial year figures and understands that there would have been an impact on sales from the COVID19 outbreak due to the initial lockdown and ongoing restrictions on capacity. Mr Thomas mentioned that the week prior to the hearing, the sales had increased following an increase in numbers permitted on the premises. While the Tribunal has not seen the actual figures, it is prepared to accept that this occurred.

13. The Tribunal was also provided with a current organisation chart, which indicates that the nominated position of Cook, of which there are 17, reports to a Sous Chef and Head Chef, who both report to the Licensee, who in turn reports to Mr Thomas as the Director. Mr Thomas advised that due to the COVID19 outbreak, the business utilised the JobKeeper scheme until September 2020 for the Australian staff and they managed to continue the employment of some of the non-Australian staff. But for those that they could not continue to employ they tried to support them by purchasing meat and vegetables in bulk once a week/fortnight, and the visa holders would attend the premises and take what they needed. He acknowledged that JobKeeper allowances would end on 28 March 2021.

14. According to the information provided on review, the nominee in this matter has been employed by the nominator full-time since June 2015, shortly after he was granted a Subclass 457 visa, and as a casual staff member prior to that. His full-time position was approved under the 457 visa program as a Cook. More recently, he applied for a Subclass 482 visa as Cook sponsored by the nominator which was approved in May 2019. Having regard to the evidence given at the hearing and other material, which includes copies of payslips, Notices of Assessment and PAYG, the Tribunal accepts that the nominee has been working for the nominator since 2014.

15. On the evidence before the Tribunal, it considers that the nominator is able to pay the increased full-time salary of $60,623.68 for the nominated position for at least the next 2 years. It notes that the PAYG provided reflects that the nominee has been paid at least $54,000 per annum since the financial year ending 2016 such that his wages have been included as an expense of the business since that time. While more recent sales figures have not been provided, Mr Thomas gave evidence that sales have been down about 30% but had been picking up with the restrictions on capacity beginning to lift. Noting the performance of the nominator and he Winston Hills Hotel Trust in the financial years prior to COVID19, the Tribunal has formed the view that the nominator will continue to pay the nominee’s wages for the next 2 years.

16. As to whether the nominee has been working as a Cook, the Tribunal has given careful consideration to this below, having noted that the payslip summary of the nominee reflects that he was employed as a ‘Pizza – kitchen attendant’ since 1 July 2018 and only recently had his classification changed to ‘Cook – bistro’.

17. The Tribunal will now proceed to consider the remaining requirements under r.5.19(3).

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

18. 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.

19. The material on the departmental file is that the application was made on form 1395 (Internet), on 20 April 2017 and accompanied by the fee prescribed in r.5.37. The application form included a written certification by the nominator concerning s.245AR(1) of the Migration Act 1958 (the Act) under the `Paying for visa sponsorship' declaration.

20. Mr Bal Bhadra Thapa was identified as the nominated person. The information before the Tribunal is that, at the time of the nomination, he held a Subclass 457 visa granted on the basis of satisfying cl.457.223(4).

21. The application the subject of this review identified the occupation of Cook, in relation to the position. This position is listed in ANZSCO (Code 351411) and the Tribunal has considered whether it has the same 4-digit unit group code as the occupation that was approved under the Subclass 457 visa program, by comparing the position that was carried out by the nominee to the ANZSCO description. 

22. Having noted that description of the position on the nominee’s payslips, the Tribunal had concerns as to whether he had been employed as a Cook as claimed or in a lesser skilled position such as a kitchen attendant.

23. Mr Thomas explained that they have 2 commercial kitchens; the main kitchen is near the bistro and the smaller kitchen is a satellite kitchen located near the bottle shop. This is where the loading dock is located and where deliveries are received and checked, with the food items stored in the cool room or deep freeze. Prior to COVID19, the main kitchen serviced the bistro with 9 or 10 chefs and 2 kitchenhands. The satellite kitchen was the main pizza kitchen where mussel pots, pizza and desserts were prepared, as well as food for functions. Since COVID19, they have a reduced menu. In terms of numbers of staff in the kitchen, Mr Thomas referred to the head chef, sous chef, around 10 to 12 Cooks and 2 to 3 kitchenhands whose tasks are to wash the dishes, engage in a bit of preparation, use the fryer and sweep the floor. He added that they have a consultant chef who is engaged to undertake training and educate the staff about once a year and that the turnover of staff in comparison is not high in the kitchen due to a good harmonisation. The nominee gave evidence that for the past year, he has been carrying out his duties in the main kitchen, which the Tribunal understands was the only kitchen being used when dining premises reopened in June 2020 as dining capacity had been much reduced in compliance with the government guidelines. The nominee gave evidence that his main duties after the 457 visa was granted were cooking pizzas and mussels, prepping food, seasoning, examining food quality, handling deliveries, checking quality, and working with the head chef on menu changes. When he was a casual member of staff, he engaged in more simple prepping, but his responsibilities grew when he became full-time.

24. While it appeared to the Tribunal that it could be said that the nominee’s duties were limited to the cooking of a restricted range of dishes, having considered the oral evidence given at the hearing and the duties and responsibilities set out in the employment contract, on balance the Tribunal considers that the duties of the nominee are consistent with the ANZSCO description of Cook and not a lower skill occupation.

25. The Tribunal thus finds that the occupation identified in relation to the position is listed in ANZSCO and has the same 4-digit occupation unit group code as the occupation carried out by the nominee, being the occupation that was approved under the Subclass 457 visa program.

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

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

27. 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.

28. The information before the Tribunal is that the nominator was the standard business sponsor who last identified the holder of the Subclass 457 visa in a nomination made under s.140GB of the Act. Based on the oral and written evidence provided as to the financial position and activities of the nominator, the Tribunal finds that the nominator is actively and lawfully operating a business in Australia.

29. Furthermore, the Tribunal accepts that the nominator did not meet r.1.20DA, or r.2.59(h) or r.2.68(i), in the most recent approval as a standard business sponsor, as the nominator is not an overseas standard business sponsor.

30. Given the above, the requirements in r.5.19(3)(b) are met.

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

31. 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.

32. The nominee was granted a Subclass 457 visa on 1 May 2015. The nominee gave evidence at the hearing that he had worked for the nominator since 2014, having started in a casual capacity.

33. The information provided regarding the related visa holder’s employment with the nominator includes various documents and evidence given at the hearing regarding his duties and responsibilities since commencing employment. The Tribunal also has copies of payslips from June 2015 which reflect that his hours were full-time from the pay period commencing 15 June 2015, although he is recorded as a casual.

34. The application was made on 30 June 2017, and the Tribunal finds that on the evidence before it, the nominee was employed as a Cook by the nominator on a full-time basis from 15 June 2015 to 30 June 2017, which is for just over 2 years. The location of employment was in Sydney, NSW and was thus undertaken in Australia. The evidence presented supports a finding that the nominee was employed by the nominator in the position of ‘Cook’ full-time, in Australia, for at least 2 of the 3 years immediately prior to the nomination application being made. This was the position for which he held the Subclass 457 visa.

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

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

36. 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.

37. The Tribunal has considered the current contract of employment and the financial statements for the Winston group, which includes the nominator, as well as the associated entities, to have a true picture of the financial performance of the pub business. The business reported a profit before income tax of over $1 million in the 2019 and 2018 financial years.

38. The Director explained that the COVID19 pandemic had an impact on the business but that the pub industry was relatively stable and added that they had managed to survive through the global financial crisis in 2017. He referred to the recent relaxation of restrictions on capacity in indoor spaces and said that this had an immediate positive impact on sales. The Tribunal considers that this is plausible.

39. Having regard to the length of employment to date and the continued operation of the business throughout 2 major financial events that have had a direct impact on the Australian and worldwide economies in the past 15 years, the Tribunal accepts that the nominee will be employed on a full-time basis for at least 2 years as required. It also accepts that the terms do not expressly preclude the possibility of an extension.

40. 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)

41. 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.

42. According to the organisation chart and other evidence provided, there are 17 others employed in the position of Cook. The Tribunal has referred to the copies of email communications between Mr Thomas and the external payroll company, which advise that the nominee has been paid at the level of Cook – Grade 4 from 8 December 2020 on instruction from the migration agent, and that prior to this he was a Cook – Grade 3. The relevant award referred to in these emails is the Hospitality Industry (General) Award. The Tribunal requested evidence that the nominee’s remuneration and conditions were the same as any Australian cooks. In response, the Tribunal was informed that the company refers to the Award to pay the appropriate salary, paying the minimum plus 25%. The Tribunal was provided with copies of recent payslips of one Grade 3 cook and a Grade 4 cook, who are currently employed there as casuals and would therefore not be equivalent.

43. The Tribunal accepts that the Award has been referred to as the benchmark for the salary offered to the applicant, and that the salary is higher than the Award rate for this occupation which it was explained by the external payroll consultant is the ‘Salary Absorption rate’ which includes an additional 25% to ensure compliance with the Award. There is nothing to suggest that the Award rate is not appropriate for the business or location or that a different salary should be offered. The terms and conditions of the contract make reference to the National Employment Standards.

44. Having regard to the information before it, the Tribunal is satisfied that the terms and conditions that apply 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 at the same location.

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

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

46. 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.

47. As the nominator’s business has operated for at least 12 months, the nominator must meet the requirements for the training of Australian citizens and Australian permanent residents that are specified by the Minister in an instrument in writing for r.5.19(4)(h)(i)(B). Under IMMI13/030, which is the relevant instrument for an application made on 20 April 2017:

    The business is required to show that the training that has been, and continues to be, provided to employees who are Australian citizens and Australian permanent residents is related to the purpose of the business.

    The training benchmarks for an established business are:

    A)Recent expenditure, by the business, to the equivalent of at least 2% of the payroll of the business, in payments allocated to an industry training fund that operates in the same industry as 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.

1. In determining whether the training meets the terms of IMMI 13/030, the Tribunal had regard to expenditure that can be counted and expenditure that cannot be counted as set out in the instrument. It notes that for internal training, such as “on-the-job training”, additional evidence is required in accordance with the terms of IMMI 13/030.

2. The period of the most recent sponsorship approval was 5 years from 5 May 2017.

3. The Tribunal discussed its concerns at hearing that the training requirements did not appear to have been met for each full 12-month period of the most recent SBS approval until 12 August 2018. This is because, where the most recent standard business sponsorship period commenced before 18 March 2018 and extends past 12 August 2018, the training obligations under r.2.87B continue to apply but only in relation to full periods of 12 months that end before 12 August 2018.[1] Accordingly, the Tribunal has considered the evidence of training expenditure and the payroll of the business from 5 May 2017 until 4 April 2018.

   [1] This is the effect of the transitional provisions in Schedule 13 to the Migration Amendment (Skilling Australians Fund) Regulations 2018 (F2018L01093), specifically cl.7602(6), which expressly preserves the need to comply with the r.2.87B training obligation for r.5.19 nominations made before 12 August 2018, and cl.7602(5), which exempts such requirement in relation to a period of 12 months ending on or after 12 August 2018.

4. The payroll amount (wages plus superannuation) was advised by the accountant to be $3,864,642. It is claimed that the business spent $62,000 on training employees. This figure appears to be based on the claim that they employ a Senior Duty Manager, who is a ‘dedicated trainer’. At the hearing, Mr Thomas confirmed that part of the Manager’s role is to give training but that they do not employ a dedicated trainer. Moreover, given the job title, the Tribunal has doubts that a key part of the Senior Duty Manager’s job is to provide training such that it could be counted for the purposes of training benchmark B in IMMI 13/030. Following the hearing, a letter signed by the Hotel Manager was provided claiming that training expenditure was $63,750 for the 12 month period being a portion of the Senior Manager, Manager and Head Chef’s salaries claiming that they are “dedicated trainers”. Again, the Tribunal does not consider that there is sufficient information to justify counting 25% of each of their salaries.

5. The Tribunal has also considered the 6 page document outlining the on-the-job training that is given to all employees. It does not consider that there is sufficient information provided regarding the internal training which would meet the specifications set out in IMMI 13/030 such as evidence of ‘the use of qualified trainers to develop the program and set assessments’. Given this, the Tribunal does not accept that $62,000-$63,750 was spent on training expenditure and is of the view that the evidence does not support a claim that training was at least 1% of the training benchmarks for the first year of the most recent sponsorship approval.

6. The Tribunal has thus considered whether it is reasonable to disregard the requirement. In doing so it has considered the Company Policies Booklet, Liquor Policy and Procedures Training document, and Induction and Training program. A number of sheets recording employees’ names and signatures acknowledging that they have read and understood the policies and procedures in place, countersigned by a manager, are also before the Tribunal. Having regard to all the information provided and noting the significant legislative changes to the training benchmarks, the Tribunal finds that it is reasonable to disregard the requirement in this case.

7. Accordingly, r.5.19(3)(f) is met.

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

8. Regulation 5.19(3)(g) requires that there is no adverse information known to Immigration about the nominator or a 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. 

9. The Tribunal is not aware of any information which meets the definition of ‘adverse information’ known to Immigration about the nominator or a person ‘associated with’ the nominator. Accordingly, the Tribunal finds that the requirement in r.5.19(3)(g) is met.

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

10. 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.

11. There is nothing before the Tribunal to indicate that the nominator has not had 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.

12. The Tribunal finds that the requirement in r.5.19(3)(h) is met.

    Conclusion

13. Based on the findings above, the Tribunal is satisfied that the nominator meets the requirements of r.5.19 for approval of the nomination of the position in Australia.

    DECISION

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

    Wan Shum
    Member