Candelori Labour Hire Pty Ltd (Migration)

Candelori Labour Hire Pty Ltd (Migration) [2023] AATA 8 (10 January 2023)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:   Candelori Labour Hire Pty Ltd
REPRESENTATIVE:  Mr Ross Ahmadzai
CASE NUMBER:  2203184
HOME AFFAIRS REFERENCE(S):             OPF2021/4876
MEMBER:Deputy President J.L Redfern PSM
DATE:10 January 2023
PLACE OF DECISION:   Sydney
DECISION:The Tribunal varies the decision under review         by:
reducing the period of the bar under subsection 140M(1)(c) to 18 months namely the applicant is barred from(a) sponsoring more people under the terms of the approved temporary activities sponsorship until 25 August 2023; and
reducing the period of the bar under subsection 140M(2) to 18 months, namely the applicant is barred from making applications for approval as a standard business sponsor until 25 August 2023.(b)

Statement made on 10 January 2023 at 12:47pm
CATCHWORDS
MIGRATION – sponsorship bar imposed – 2 year sponsorship bar – failure to satisfy its sponsorship obligations over an extended period – standard business sponsorship approval had already expired – obligation to ensure equivalent terms and conditions of employment – pay below the minimum Award requirement – sponsored employees had not been allowed or paid time in lieu entitlements in accordance with Award – obligation to provide records and information – sponsored persons not working in the nominated occupation – performing duties of a different occupation – whether false or misleading information provided at time of nomination – cooperation with Department monitoring – whether adequate steps taken to rectify breach – consideration of prescribed circumstances – direct or indirect impact on another person – intentional, reckless or inadvertent – decision under review varied
legislation
Migration Act 1958, ss 140K, 140L,140M
Migration Regulations 1994, regs 2.79, 2.83, 2.86, 2.89, 2.90
Cases
Catsbeauty Pty Ltd (Migration) [2022] AATA 3461
Katunga Fresh Trading Pty Ltd Limited (Migration) [2022] AATA 2006
SECONDARY MATERIALS
President’s Direction, Conducting Migration and Refugee Reviews dated 1 August 2018
Procedural Instruction – Migration Regulations – Divisions – Sponsorship Compliance Framework: Penalties, Sanctions and Enforcement
(reissued 27 March 2022)

STATEMENT OF DECISION AND REASONS
APPLICATION FOR REVIEW

This is an application for review of a decision made by a delegate of the Minister for Home Affairs and Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs to take an action under s 140M of the Migration Act 1958 (Cth) (the Act) in relation to the applicant’s sponsorship status in the temporary activities and standard business classes.
The applicant, Candelori Labour Hire Pty Limited (Candelori), operates an Italian restaurant. It has been trading since 1999 and has had longstanding approvals as a standard business and temporary activities sponsor. Its most recent approval as a standard business sponsor expired on 26 October 2021 and its approval as a temporary activities sponsor expires on 8 October 2025.
On 25 February 2022, the delegate decided to bar the applicant from sponsoring more persons under its temporary activities sponsorship and from making applications for approval as a standard business sponsor for a period of two years, until 25 February 2024. The delegate identified various breaches of the sponsorship obligations and concluded that the applicant had provided false and misleading information to the Department, when lodging a nomination application for one of its employees, and to Australian Border Force (ABF), when ABF officers conducted monitoring of the applicant’s compliance with its sponsorship obligations from March 2021. The effect of the bar was to prevent the applicant from sponsoring more persons for the period specified in the bar and from making future applications for approval as a work sponsor. The applicant sought a review of the decision to this Tribunal and applied for priority, which was granted.
The applicant appeared, through its officers and legal representative, before the Tribunal on 11 July, 26 August and 25 October 2022 to give evidence and present arguments. The Tribunal also received oral evidence from Ms Gina Candelori, financial controller of Candelori, and Mr Ross Candelori, director of Candelori.
The applicant was represented by lawyer, Mr Ross Ahmadzai, in relation to the review. The representative attended the Tribunal hearing and provided detailed submissions and evidence in support of the application for review. Extensive written submissions were provided, with the final submissions being provided by email dated 30 November 2022.
For the following reasons, the Tribunal has decided to vary the decision under review by:
(a)reducing the period of the bar under subsection 140M(1)(c) to 18 months namely the applicant is barred from sponsoring more people under the terms of the approved temporary activities sponsorship until 25 August 2023; and
(b)reducing the period of the bar under subsection 140M(2) to 18 months, namely the applicant is barred from making applications for approval as a standard business sponsor until 25 August 2023.
LEGAL FRAMEWORK
Sections 140K, 140L and 140M of the Act provide for the imposition of sanctions on approved sponsors in certain circumstances.
Section 140K(1) provides that if a person is an approved sponsor and any of the circumstances prescribed under s 140L are established, the Minister (or the Tribunal on review) may take one or more of the actions set out in the subsection, including barring the sponsor from doing certain things, cancelling the person’s approval as a work sponsor, imposing a civil penalty order, accepting an undertaking or issuing the person with an infringement notice.
Section 140L provides that the regulations may prescribe circumstances in which a sponsor may or must be barred or the sponsor’s approval may or must be cancelled.
For these purposes, the ‘prescribed circumstances’ are set out in regs 2.89–2.94B. Relevant to this case, this includes circumstances in which the Minister, or the Tribunal on review, is satisfied that there has been a failure to satisfy sponsorship obligation (reg 2.89) or where the Minister, or Tribunal on review, is satisfied that the applicant has provided false or misleading information to Immigration or the Tribunal (reg 2.90).
The sponsorship obligations are those obligations referred to in Division 2.19 (reg 2.89(2)) and include the obligation to ensure equivalent terms and conditions of employment (reg 2.79), the obligation to provide records and information to the Minister (reg 2.83) and the obligation to ensure that the primary sponsor person works or participates in the nominated occupation, program or activity (reg 2.86).
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.
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: regs 2.89–2.94B.
BACKGROUND
The applicant was first approved as a sponsor for a standard business sponsorship agreement on 28 November 2012, with the most recent approval expiring on 26 October 2021. The applicant submitted a further application for a standard business sponsorship approval on 25 October 2021, which was subsequently refused on 4 May 2022. The applicant was approved as a temporary activities sponsor on 8 October 2020 and this approval expires on 8 October 2025.[1] At the time of the delegate’s decision, the applicant was employing several employees under the standard business sponsorship program.
[1] Delegate’s decision record dated 25 February 2022 pp14 and 15.
By the time of my decision, several employees had left the employ of the applicant, with one of the sponsored employees, Ms Ilaria Mariotto, still employed as a restaurant manager. Her application for a Subclass 186 Employer Nomination Scheme visa is currently pending for consideration before the Department, although the applicant’s nomination relating to Ms Mariotto has been refused.
The ABF commenced monitoring of the applicant’s compliance with sponsorship obligations on 25 March 2021. As part of this process, the ABF made requests for information and conducted on-site visit and interviews with employees. The period monitored was from 1 January 2021 to 21 April 2021. Information was provided by the applicant directly and through its accountants over an extended period.
By letter dated 8 September 2021, headed Notice of Intention to Take Action (the first NOITTA), an officer of the ABF particularised a number of concerns in relation to the applicant’s compliance with its sponsorship obligations. The notice outlined concerns that the applicant may have failed to satisfy sponsorship obligations in regulations 2.79 and 2.86. The particulars provided related to four sponsored employees, being Ilaria Mariotto, Gagandeep Singh Sandhu, Sukhwinder Singh and Katarzyna Wanda Jedrzejewska. According to the NOITTA, the investigator had concerns that the applicant had significantly underpaid each of these workers. Firstly, it was identified that the base salary paid was less than the base salary that should have been paid under the relevant award, being the Restaurant Industry Award 2020 (the Award). Secondly, the ABF identified that the employees had regularly worked overtime for which they were not paid, sometimes working up to 60 hours a week. The first NOITTA also detailed concerns about the applicant’s compliance with the obligation to ensure that Katarzyna Wanda Jedrzejewska, who was approved to work as an accountant, worked in her nominated occupation. These concerns arose out of interviews with staff and time records provided, which revealed that Ms Jedrzejewska had been working on split shifts with 103 shifts as a ‘host’ and 12 shifts as a ‘bookkeeper’.
In response to the first NOITTA, the applicant’s accountant provided a letter dated 23 September 2021, which stated, amongst other things, that each of the employees were paid wages based on annualised working hours of 44 hours per week and any amounts over and above this were accrued as time in lieu of paid overtime. The accountant provided additional payroll records said to particularise the base salary paid to each employee and the accrued time in lieu. It was also noted that one of the employees, Ms Jedrzejewska, had requested to take on an additional role as a host, which was agreed by the applicant. On 24 September 2021, the applicant’s accountant provided emails from three employees detailing their work experience at Candelori’s and advised that Mr Sukhwinder Singh has provided details of his work experience directly to the Department. Ms Candelori then sent an email to the ABF on 8 December 2021, reproducing the letter dated 23 September 2021 from the accountant in her own letter, which appears to be incorrectly dated as 8 September 2021.
By letter dated 4 January 2022, also headed Notice of Intention to Take Action (the second NOITTA), an officer of the ABF provided particulars of the concerns which formed the basis of the notice of intention. The letter particularised concerns about the compliance with the Award in relation to the four sponsored employees and concluded that each of the employees were significantly underpaid based on the annualised hourly rate for each employee calculated by reference to the 44 hours particularised in the applicant’s email dated 8 December 2021 in response to the first NOITTA. Unfortunately, the second NOITTA did not particularise precisely how the annualised salary was calculated but it is apparent from its contents that the officer applied the standard hourly rate under the Restaurant Industry Award 2020 and then calculated the annual salary based on an increased annualised hourly rate, representing 125 percent of the minimum weekly rate under clause 20 of the Award.
According to the second NOITTA, the annualised salary payable for each of the four sponsored employees should have been as follows:
·Illaria Mariotto - $59,576.40 as at 31 January 2021 and $60,613.80 from 1 February to 31 October 2021;
·Gagandeep Singh Sandhu - $56,078.88 as at 31 January 2021 and $57,027.36 from 1 February to 18 April 2021;
·Sukwinder Singh - $60,613.68 from 1 February to 31 October 2021; and
·Katarzyna Wanda Jedrzejewska - $56,078.88 as at 31 January 2021 and $57,027.36 from 1 February to 31 October 2021.
It is also relevant to note that the ABF based the salaries of both Mr Sandhu and Mr Singh on the Award classification as Level 5, Cook Grade 4 which was, in Mr Sandhu’s case, more than the Level 4, Grade 3 nominated by the applicant for Mr Sandhu.
The ABF concluded that each of the four employees have been earning a lower salary than required under the Restaurant Industry Award 2020, they had been working excessive hours and had not been paid for those hours. It was therefore concluded that the applicant had not met the obligation to ensure that the four sponsored employees were on equivalent terms and conditions of employment as those provided to Australian citizens or permanent residents.
The ABF also identified that there had been a breach of regulation 2.83, namely the obligation to provide records and information to the Minister. The particulars in relation to this noted that the sponsor was issued with a notice requesting for documents and information on 22 April 2021, the applicant had requested an extension of time on 4 May 2021 and that the ABF received documents on 14 May 2021 which the ABF considered were inadequate. The ABF noted that there were insufficient records to demonstrate what tasks were being performed by the primary sponsored employees, which may include tasks sheets, rosters, performance reviews and references. Because this information had not been provided, the ABF officer concluded that the applicant had breached regulation 2.83.
The ABF also concluded that there had been a breach of the obligation under regulation 2.86 to ensure that the primary sponsored person works or participates in the nominated occupation, program or activity. This finding was based on information provided by a third party, being timesheets for each of the four employees. The ABF noted that Mr Singh, who was nominated as a cook, had worked over the monitoring period as a Chef De Partie for 50 shifts and a kitchen hand for 37 shifts. A further issue that was raised in the NOITTA was that four of the sponsored employees were being paid a travel allowance, which the ABF noted was inconsistent with their nominated occupations.
Finally, the second NOITTA identified a breach of regulation 2.90 because the applicant had provided information to the Department in support of the application for a temporary business entry nomination for Katarzyna Wanda Jedrzejewska under the temporary work skilled subclass 457 program. The information provided to the Department was to the effect that Ms Jedrzejewska would be undertaking tasks in accordance with the nominated position as an accountant. These tasks, classified by reference to the Australia and New Zealand Standard Classification of Occupations code (ANZSCO), included tasks in formulating budgetary and accounting policies, preparing financial statements, conducting financial investigations and preparing reports, examining operating costs and income and expenditure, providing financial and taxation advice and preparing tax returns. In support of the application, the applicant provided the proposed contract of employment for Ms Jedrzejewska which noted that her tasks included daily and weekly banking, monthly reconciliation of bank accounts, liaising directly with external accountants to complete monthly year-end reporting and inventory management. According to the NOITTA, at the site visit and in reviewing the timesheets provided, it was apparent that Ms Jedrzejewska worked as a host and bookkeeper and not as an accountant. It was noted that this was also acknowledged by the applicant in its response of 8 December 2021. Accordingly, the ABF officer considered that the applicant had provided false and misleading information to the Department in lodging an application for a highly skilled position of an accountant when Ms Jedrzejewska worked as a host with occasional bookkeeping tasks in an unskilled position.
The applicant was given 14 days to respond to the second NOITTA.
The applicant retained lawyers to assist and by letter dated 24 January 2022, Mr Ahmadzai (principal of Crystal Migration) provided detailed submissions. In summary, it was contended that the overtime worked by the sponsored employees was not paid but they were given time in lieu for the additional hours worked. It was also denied that the four sponsored employees were underpaid, and the representative referred to the relevant Award rates. In essence, it was denied that the applicant had breached its obligations under regulation 2.79.
In relation to Katarzyna Wanda Jedrzejewska, it was submitted that she was performing most of the tasks listed in the ANZSCO description and that the information obtained by the ABF as a result of the site visit could not be relied upon because the ABF officer referred to another ‘Kate’ who was employed in the restaurant. It was also denied that there was a breach of the obligation under regulation 2.83 to provide records and information to the Minister and further information was provided in response to the previous requests. The applicant denied that there had been a breach of regulation 2.90 based on the information provided at the time of Ms Jedrzejewska’s application for a temporary business entry nomination. It was submitted that the information was not incorrect and there was never any intention to provide false or misleading information. In response to the question of other relevant factors that should be considered by the delegate, it was submitted that the applicant had a long history in sponsoring foreign nationals, the applicant understood the importance of compliance and had engaged Crystal Migration to ensure compliance and training. The applicant had cooperated with ABF and was willing to rectify any breaches. It was contended that this was in the applicant’s favour.
DECISION UNDER REVIEW
The delegate considered this response but rejected many of the contentions. By decision dated 25 February 2022, the delegate found that the applicant breached reg 2.89 because it had failed to satisfy several of its sponsorship obligations, being the obligation under regulation 2.79 to ensure an equivalent terms and conditions of employment for its sponsored employees, the obligation under regulation 2.83 to provide records and information to the Minister and the obligation under regulation 2.86 to ensure that the primary sponsored person works or participates in the nominated occupation. The delegate also found the applicant breached reg 2.90.
Relevantly, the delegate found that the four sponsored employees were underpaid and worked excessive hours for which they were not paid during the period monitored, namely from 1 January to 21 April 2021. The underpayments and excessive hours worked were those as particularised in the second NOITTA. The delegate concluded as follows:
While I acknowledge that the sponsor has provided a very detailed response to both NOITTA’s, there are a number of inconsistencies. Mainly that the sponsor is not adhering to their own contracts and the sponsored employee can be no worse off than their contract terms and conditions or Award for their industry. In the case of the sponsored employees, MARIOTTO, SANDHU and SINGH who are on annualised salary arrangements as per their contracts with time in lieu conditions, the sponsor has continued to pay them a lesser salary over a period beyond monitoring and has not rectified prior periods for underpayments. While I acknowledge the sponsor has recalculated the sponsored employees time in lieu, they have not acknowledged the annualised salary arrangements and underpayments affecting multiple years.

The delegate also found that there had been a breach of regulation 2.83 because the applicant had not provided records to demonstrate what tasks were being performed by the primary sponsored persons in response to the requests. The documents provided were said to be inadequate. The delegate found there had been a breach of regulation 2.86. In this regard, the delegate noted that there was evidence that Katarzyna Wanda Jedrzejewska was not performing her duties as an accountant. This breach was also said to be evidenced by the information suggesting that Mr Singh, who was nominated as a cook, was working as a Chef De Partie for 50 shifts and a kitchen hand for 37 shifts. It was noted that all employees were being paid a travel allowance and there was evidence that they were conducting deliveries and various tasks for the business which was not in line with their nominated occupations. Furthermore, the delegate found that the applicant had provided false and misleading information in relation to its temporary business entry nomination application for Ms Jedrzejewska which nominated her in the position of an accountant.
Having found that the applicant failed to satisfy its sponsorship obligations, the delegate then went on to consider the matters set out in regulation 2.89(3) in determining what action to take.
The delegate found that the sponsor had failed to satisfy the obligation under reg 2.79 to ensure equivalent terms and conditions on 53 occasions, it had failed to satisfy the obligation under reg 2.83 to provide records and information to the Minister on four occasions and had failed to ensure that the sponsored persons worked in the nominated occupation, in compliance with reg 2.86, on three occasions. The breaches were serious because the applicant failed to meet these obligations over an extended period. The fact that the sponsor continued to pay a travel allowance to the sponsored employees suggested they were continuing to allow them to work outside the nominated role. The financial impact on each of the four sponsored employees, which was a direct result of the failure of the applicant to satisfy its sponsorship obligations, was significant. The delegate considered that the underpayments were intentional and that the failure to provide the information requested was reckless. The breach of regulation 2.86 was also said to be intentional. The delegate accepted that the applicant had responded to most requests and made themselves available to assist but was not satisfied that the applicant had rectified the breaches and there was no evidence that the applicant had provided any backpay for the annualised salary arrangements. This was said to be a significant factor in the decision of the delegate.
On the positive side, the delegate found that the applicant had provided information and cooperated with the compliance audit, it had engaged Crystal Migration to provide further training and to undertake regular health audits and it was willing to undergo any other monitoring requests deemed appropriate to demonstrate a commitment to meeting its obligations. These matters were in favour of the applicant.
OUTLINE OF EVIDENCE AND SUBMISSIONS
In support of the application for review, the applicant provided detailed submissions and evidence. In summary, those documents included payroll, payslips and timesheet records for the employees who were the subject of the audit, extracts of the relevant industrial awards and pay rates, statutory declarations from Gina Candelori and Ross Candelori and extracts from the Fair Work Ombudsman and the Australian government about COVID-19 pandemic payments.
The applicant also provided responses to requests for information about documents which were the subject of a non-disclosure certificate under section 375A of the Act, being information provided to the Tribunal by the Department on 30 March 2022, apparently incorrectly dated 30 March 2020 because the information which was the subject of the notice was dated February 2022. This non-disclosure certificate was revoked and a new certificate under section 376 was issued in August 2022. Section 375A does not permit disclosure of information, which is the subject of the notice, but section 376 gives the Tribunal discretion to disclose part or all of the information.
The information comprised of a redacted sponsor monitoring recommendation report dated 25 February 2022 and extracts of WhatsApp and email messages between Gina Candelori and a former employee of the applicant, emails from the former employee to the ABF and an audio recording of a conversation between the former employee and a third party. The report formed the basis for the decision and was subsequently disclosed to the applicant to assist in explaining the grounds for the delegate’s findings. The WhatsApp and text messages and emails were disclosed as adverse information because the content raised concerns about whether the employee was undertaking the tasks of his nominated occupation and because it raised concerns about whether the applicant had cooperated with the ABF monitoring processes.
It is accepted by the applicant that the relevant award for assessing entitlements of its employees is the Restaurant Industry Award 2020 (the Award). The ordinary hours for work for full time employees is an average of 38 hours per week in a period of no more than four-weeks (clause 15 of the Award). Clause 20 provides that an employee may agree to be paid an annualised salary, which satisfies all penalty rates and overtime under the Award, and this salary must be at least 125% of the minimum weekly rate. Clause 23 of the Award sets out the provisions applying to employees who work overtime. Where an employee works overtime, the employer must pay 150% of the minimum hourly rate for the first two hours and double time for any additional hours. There are also penalty rates payable on the weekends. Clause 23.5 provides that an employee and employer may agree in writing to the employee taking time off instead of being paid for overtime worked by the employee and the period of time that the employee is entitled to take is equivalent to the overtime payment that would have been made.
This is also known as ‘time in lieu’ and was a critical issue in the case because the applicant contended that its employees were not underpaid but they were allowed time in lieu pending payment for overtime. Clause 23.5(c) provides that the time off must be taken within the period of six months after the overtime is worked. Clause 23.5(e) provides that if time is not taken within the six months period, the employer must pay the employee for the overtime in the next pay following those six months at the overtime rate applicable to the overtime when worked.
The applicant accepts that four of its employees worked over and above the 38-hour or 40-hour week nominated in their contracts on a regular basis but contends that the employees were each given credit of time in lieu for those hours worked. It is also submitted that this time in lieu was subsequently paid.
According to the applicant, the alleged underpayments can be explained by the applicant’s practice, at their employees’ requests, to give them time in lieu of payment for overtime worked. It is also submitted that COVID-19 travel restrictions made it difficult for the employees to take the time in lieu to travel overseas thus they were later paid their salary representing the time in lieu. According to Gina Candelori, the COVID-19 pandemic made business operations very difficult, caused trading difficulties, and the rules in relation to COVID-19 payments were complicated.
While extensive documentation was provided about the time in lieu assessed for each employee, it is difficult to be confident about the accuracy of these figures. My findings about these matters are set out below.
Gina Candelori gave evidence about her role with the applicant. She is the financial controller of the applicant and is responsible for payroll. She also assists with management of the business and worked with the applicant’s accountants to provide information to the ABF in relation to the audit. According to Gina Candelori, it was the practice of the applicant not to pay overtime to their employees but to give them time in lieu of payment at some later stage. This was said to be the preference of the sponsored employees who wanted to be able to take time in lieu so that they could travel overseas to visit their families from time to time. She acknowledged that these arrangements were entered into in discussion with the employees but were not documented in writing, although this practice had changed from January 2022 when it came to her attention that formal written documentation was required under the Award.
Ms Candelori was asked about her response to specific findings raised in the ABF audit, which were adopted by the delegate. According to Ms Candelori, the ABF made an assumption about underpayments without properly taking into account the submission made that the employees were given leave in lieu of overtime payments. She said that Ilaria Mariotto, Gagandeep Singh Sandhu, Sukhwinder Singh and Katarzyna Wanda Jedrzejewska were not underpaid because their overtime was credited as time in lieu and which they were subsequently paid. When questioned about the payroll records that showed high levels of accrued time in lieu for three of the sponsored employees, Ms Candelori said that these payroll records were not necessarily accurate because the software program seemed to result in a double counting for the time in lieu for all but Mr Sandhu. Ms Candelori could not explain why but noted that the time in lieu recorded was double what she believed the records should have shown. She believed the records needed to be reconciled to adjust for the double counting.
Ms Candelori also said that she did not agree with the classification levels attributed by the ABF to Mr Sandhu and Mr Singh who, in her opinion, were properly classified level 3 Cooks. She said that Katarzyna Wanda Jedrzejewska was actually an accountant not a bookkeeper, as suggested in the ABF audit, and that it was necessary to look at the tasks undertaken by Ms Jedrzejewska to assess whether they were in accordance with the nominated occupation. Ms Candelori said that Ms Jedrzejewska undertook costings, reviewed profitability, worked with the external accountants and prepared the basic financial statements to submit to the accountants. This was consistent with her nominated occupation as an accountant. According to Ms Candelori, a number of the employees helped out with deliveries during the COVID-19 pandemic and they were paid travel allowances for this, in addition to their salary.
Ms Candelori stated that the business was locked down because of the COVID-19 restrictions from 26 June 2021 until midnight 10 October 2021. The business operated in a limited capacity, mainly offering takeaway services and she rotated the roster to enable as many employees as possible to work between 10 and 20 hours a week. This allowed them to receive a salary together with the COVID-19 supplementary funding paid by the government at this time. Ms Candelori further stated that when the New South Wales Government announced that it would not be necessary for employees to draw on their entitlements before being eligible for support payments, she understood this to mean that this would include all entitlements, including time in lieu. Ms Candelori acknowledged that her understanding may not have been correct but said that she had done everything at the time to attempt to be compliant with the law (statutory declaration sworn 9 September 2022).
Ms Candelori was asked about the communications between her and one of her former employees suggesting that she had counselled him to avoid speaking with the ABF auditors and to give them specific information. She said that these communications were taken out of context. She denied suggesting to the employee that he should not cooperate with ABF investigators. She said he was very anxious about speaking to the ABF and she was simply trying to calm him down and to give him some perspective.
Mr Ross Candelori provided a statutory declaration dated 11 October 2022 and gave oral evidence to address the issue of whether Mr Singh was undertaking the role of a cook rather than a chef, as contended by the ABF investigation. According to Mr Candelori, Mr Singh always worked as a cook and not as a chef. He did not plan menus, place orders and did not have the required experience in the preparation of desserts, pastry, pizza and main course dishes. He said that there were performance issues with Mr Singh and after the ABF commenced their audit, he was dissatisfied and stressed about whether his permanent visa would be approved.
Mr Candelori also gave evidence about the tasks performed by Ilaria Mariotto and Katarzyna Wanda Jedrzejewska. Ms Mariotto oversaw the operation of the floor staff in the restaurant. He said that Ms Jedrzejewska worked both in the office and from home. She checked all the invoices for the goods supplied and undertook general accounting duties. He said that when the ABF came to conduct the audit between March and April 2021 they came without notice. They gave the applicant a list of the employees that they wanted to speak to and as far as he was aware they spoke to Ms Mariotto and Mr Sandhu. He believed that Mr Singh left the employment of the applicant because he is very concerned about being able to have his visa approved to give him permanent residency.
On balance, I accept Mr and Ms Candelori’s evidence about the issues related to Mr Singh. I accept that, on their face and when viewed in isolation, some of the WhatsApp and text messages may suggest that Ms Candelori was providing Mr Singh with advice about what to say or how to avoid talking to ABF investigators. However, against this, I accept Ms Candelori’s evidence that when these messages are read as a whole, it is clear that she was simply attempting to assist Mr Singh given he was the one who was seeking her advice. Furthermore, the audit papers for the ABF suggest that the applicant gave access to its records and staff when requested.
The determinative issue in the case was whether the applicant had breached its sponsorship obligations under reg 2.89, and relevantly, regulations 2.79 and 2.86. These breaches were disputed by the applicant and remained a contentious issue, notwithstanding evidence provided at the hearings and the provision of detailed written submissions and evidence by the applicant. This is because it was not clear from the documentary evidence provided as to how each employee’s time in lieu that had been accrued was calculated and when and how this amount had been paid. Nor was it clear that Katarzyna Wanda Jedrzejewska was working in her nominated occupation given it was conceded by the applicant in its response to the ABF dated 23 September 2021 (provided by email dated 8 December 2021) that she worked as a host during the monitoring period.
By letter dated 9 September 2022, the applicant provided submissions and evidence about the additional hours worked by each of the four employees during the monitoring period. The contents of the letter, and the annexures attached, can be summarised as follows:
(a)The payroll records provided for Ilaria Mariotto show that as at 5 January 2021 her entitlements year-to-date for time in lieu was 180 hours. According to the payroll record as at 31 January 2021, 57 hours was credited to her time in lieu entitlement, giving Ms Mariotto entitlements of 237 hours year-to-date. The payroll records for 28 February 2021 show that 47 hours was credited to Ms Mariotto’s time in lieu entitlement, bringing her total to 284 hours years to date. The payroll records for 28 March 2021 show 48 hours credited to Ms Mariotto’s time in lieu entitlement, bringing her entitlement to 332 hours. The records for 18 April 2021, show 28 hours credited to her time in lieu entitlements, making a total of 360 hours year-to-date.[2] These records show that a total of 180 hours ‘time in lieu’ was credited to Ms Mariotto’s account over approximately four months (or 16 weeks). This averages at approximately 11.25 hours per week.
(b)The payroll records provided for Gagandeep Singh Sandhu show that as at 5 January 2021 his entitlements year-to-date for time in lieu was 20.50 hours. According to the payroll record as at 31 January 2021, 15.75 hours was credited to his time in lieu entitlement, giving Mr Sandhu entitlements of 36.25 hours year-to-date. The payroll records for 28 February 2021 show that 37.75 hours was credited to Mr Sandhu’s time in lieu entitlement, bringing his total to 74 hours years to date. The payroll records for 28 March 2021 show 36 hours credited to Mr Sandhu’s time in lieu entitlement, bringing his entitlement to 110 hours. The records for 18 April 2021, show 2.25 hours credited to his time in lieu entitlements, making a total of 112.25 hours year-to-date.[3] These records show that a total of 91.75 hours ‘time in lieu’ was credited to Mr Sandhu’s account over approximately four months (or 16 weeks). This averages out at approximately 5.70 hours per week.
(c)The payroll records provided for Sukhwinder Singh show that as at 5 January 2021 his entitlements year-to-date for time in lieu was 107.75 hours. According to the payroll record as at 31 January 2021, 40.50 hours was credited to his time in lieu entitlement, giving Mr Singh entitlements of 148.25 hours year-to-date. The payroll records for 28 February 2021 show that 39.50 hours was credited to Mr Singh’s time in lieu entitlement, bringing his total to 187.75 hours year to date. The payroll records for 28 March 2021 show 35 hours credited to Mr Singh’s time in lieu entitlement, bringing his entitlement to 222.75 hours. The records for 18 April 2021, show 6 hours credited to his time in lieu entitlements, making a total of 228.75 hours year-to-date.[4] These records show that a total of 121 hours ‘time in lieu’ was credited to Mr Singh’s account over approximately four months (or 16 weeks). This averages out at approximately 7.50 hours per week.
(d)The payroll records provided for Katarzyna Wanda Jedrzejewska show that as at 5 January 2021 her entitlements year-to-date for time in lieu was 208.75 hours. According to the payroll record as at 31 January 2021, 61 hours was credited to her time in lieu entitlement, giving Ms Jedrzejewska entitlements of 269.75 hours year-to-date. The payroll records for 28 February 2021 show that 48.50 hours was credited to Ms Jedrzejewska’s time in lieu entitlement, bringing her total to 318.25 hours years to date. The payroll records for 28 March 2021 show 66 hours credited to Ms Jedrzejewska’s time in lieu entitlement, bringing her entitlement to 384.25 hours. The records for 18 April 2021, show 32.75 hours credited to her time in lieu entitlements, making a total of 417 hours year-to-date.[5] These records show that a total of 208.25 hours ‘time in lieu’ was credited to Ms Jedrzejewska’s account over approximately four months (or 16 weeks). This averages out at approximately 13 hours per week.
[2] Refer submissions dated 9 September 2022, annexure 2, being pages 24 to 36 of the paginated submission.
[3] Refer submissions dated 9 September 2022, annexure 3, being pages 37 to 48 of the paginated submission.
[4] Refer submissions dated 9 September 2022, annexure 4, being pages 49 to 61 of the paginated submission.
[5] Refer submissions dated 9 September 2022, annexure 5, being pages 62 to 74 of the paginated submission.
At the hearing on 25 October 2022, Ms Candelori said that the amount recorded for Ms Jedrzejewska of 417 hours was incorrect and it should have been 208.25 hours she believed there was a double counting issue in the payroll records. Ms Candelori was asked when the time in lieu was paid to Ms Jedrzejewska, and she said that Ms Jedrzejewska worked less hours in the period from September to December 2021 and that the time in lieu was therefore paid at this time. She also said that she believed there was a similar double counting issue reflected in the records for a number of the other employees.

Ms Candelori agreed that the time in lieu had not been paid to the employees within the six-month period of the overtime being worked because it was her understanding that they could accrue the leave because of the COVID-19 pandemic restrictions and payments. However, as the applicant did not provide details in relation to the accrual and payments, it was confirmed that further details would be provided after the hearing.
Following the hearing of 25 October 2022, by letters dated 27 October and 2 November 2022, the Tribunal outlined the contentious issues about the calculation and payment of the remuneration for four of the applicant’s employees and requested further submissions and evidence in relation to those matters. Relevantly, the Tribunal requested as follows:
Please provide evidence of the calculation on how each employee’s time-in lieu has been accrued during 01/01/2021 to 21/04/2021 (‘the monitoring period’) and evidence when it was paid out including the amount which was paid out to each employee. Please also provide corroborative evidence showing the amount that was paid out. E.g. Bank records.
In particular, please provide evidence that the time-in-lieu that an employee is entitled to take is equivalent to the overtime payment that would have been made (‘time-in-lieu penalty’). For example, in accordance with the Restaurant Industry Award 2020, an employee who worked 2 overtime hours at the rate of time and a half is entitled to 3 hours’ time off and if an employee worked an additional 2 overtime hours, on top of the first 2 overtime hours, this will be at the rate of double time and they will be entitled to 4 hours’ time off. Please also note that the overtime rates are different according to the day that the employee worked on. Please refer to clause 25 of the Restaurant Industry Award 2020.
The Tribunal also requested submissions and evidence about whether Katarzyna Wanda Jedrzejewska had worked in the approved nomination position of accountant, particularly given the evidence contained in the letter of 23 September 2021 (provided by email dated 8 December 2021), noting that Ms Jedrzejewska had worked as a host for periods.
The Tribunal provided a copy of the redacted sponsor monitoring recommendation report from the ABF and, while noting that it was not clear how the ‘required base salary’ for each of the employees as referred to in that report was calculated, it appeared that the salary nominated by the ABF took into account the submission made by the applicant’s accountants dated 23 September 2021 (adopted by the applicant in its letter attached to an email of 8 December 2021 in response the first NOITTA). In this letter, the applicant nominated the annualised salary for each employee based on a 44-hour working week, applying time and a quarter for the first two hours and time and a half for the following four hours. It was also stated that anything over and above the 44-hour working week was allocated as time in lieu for each of the sponsored employees who were the subject of the audit. In its letter dated 2 November 2022, the Tribunal raised the following:
…it appears that the salary nominated by the ABF is 125% of the minimum weekly rate set out in the Restaurant Industry Award 2020 (MA000119) and the calculations and explanation are set out in pages 3 - 8 of the 2nd NOITTA.
In respect of the excessive hours worked, namely those hours worked over and above what would be incorporated in the annualised salary, we note that it is contended the sponsored employees were each were given time-in lieu-which was paid out.
[As] such the Tribunal seeks any evidence and submissions to assist it to be satisfied, firstly, about whether there has been an underpayment in line of the findings of the delegate, and secondly, whether time-in-lieu has been properly calculated and paid.
The applicant responded by letters dated 16 and 18 November 2022, received on 16 and 23 November 2022.
In response to the query referred to above raised in the letter of 27 October 2022, the applicant responded as follows:
Our response: The way time in lieu has been calculated for the abovementioned employees, during the specified period of monitoring was by payslips generated by the accounting system in place in our restaurants. These payslips record a breakdown of the hours worked and the time in lieu accrued. Please refer to the pay slips attached as ANNEXURE 1.
Bank statements have been attached as ANNEXURE 2 proof that payments were made to each of the employees. Please note that payments are made as a whole, including salary and overtime, as it would be impractical to make different payments or deposit for each item of the payments made.
Annexure 1 comprised of copies of the payslips for Katarzyna Wanda Jedrzejewska (21 September 2021 to 28 November 2021), Sukhwinder Singh (16 November 2021 to 28 December 2021), Gagandeep Singh Sandhu (3 to 9 November 2021) and Ilaria Mariotto (1 November 2021 to 2 January 2022). The key difficulty with this response and the attachments is that the payslips record time in lieu entitlements, but it is unclear whether this time in lieu relates to entitlements for the relevant period and, most critically for this case, how it is calculated. While I accept this may be a complicated calculation given the provisions of the relevant Award, it is an important issue that goes to the heart of the question of whether there has been a breach. The accuracy of these records is also questionable given Gina Candelori’s evidence about the double counting issue, which has not been satisfactorily explained. It is also relevant to note that the question of how the ‘time in lieu’ accrued to the payroll records for each employee was calculated was specifically raised in correspondence by the Tribunal on 27 October and 2 November 2022. The applicant provided further evidence and submissions in response to these queries. However, for the reasons outlined below, the responses and evidence did not adequately address the concerns raised in the Tribunal’s correspondence.
The payroll records provided for Ms Mariotto for the period 9 November 2021 to January 2022 record Ms Mariotto’s time in lieu entitlements as at 9 November 2021 as being 180 hours. According to records provided by the applicant by letter dated 9 September 2022 (referred to above), the entitlement for Ms Mariotto as at 27 April 2021 was 360 hours. How and why the records for time in lieu were reduced to 180 hours in the updated payroll records is not explained. This appears to relate to the ‘double counting’ issue raised by Ms Candelori in the October 2022 hearing. These updated records show that ‘time in lieu’ hours were deducted and paid on 16 November 2021, 23 November 2021, 7 December 2021, 14 December 2021 and 4 January 2022, making a total of 161 hours paid but leaving a balance of 27.25 hours ‘time in lieu’. Notably, many of these payments were made over 9 months after the overtime was worked and the time in lieu was accrued. It is also relevant to note that the payments do not appear to cover all of the time in lieu accrued.
The payroll records provided for Mr Sandhu for the period 3 to 9 November 2021, record Mr Sandhu’s time in lieu entitlements as at 3 November 2021 as being 135.75 hours but this is after the deduction of 121.75 hours for time in lieu, which was also paid on this date. This suggests the year-to-date entitlement as at 3 November 2021 would have been, 257 hours, being the sum of these two amounts. These updated records are confusing because they also show an amount of 115.75 hours credited to the account on 9 November 2021 for time in lieu. According to records for time in lieu provided by the applicant by letter dated 9 September 2022 (referred to above), the entitlement for Mr Sandhu as at 27 April 2021 was 112.25 hours. The difference the between the updated and previous records is not explained. In summary, the records appear to show that the payment for time in lieu accrued between January and February 2021 was paid over 9 months after the overtime was worked.
The payroll records provided for Mr Singh for the period 16 November 2021 to 28 December 2021, record Mr Singh’s time in lieu entitlements as at 23 November 2021 as being 121 hours. According to records for time in lieu provided by the applicant by letter dated 9 September 2022 (referred to above), the entitlement for Mr Singh as at 27 April 2021 was 228.75 hours. The difference the between the updated and previous records is not explained but may be attributable to the double counting issue referred to by Ms Candelori during her evidence. These updated records show that ‘time in lieu’ hours of 99.25 were deducted and paid on 30 November 2021, 7 December 2021, 14 December 2021, 21 December 2021 and 28 December 2021, leaving a balance of 21.75 hours. In summary, the records appear to show that the payment for time in lieu accrued between January and March 2021 was paid over 9 months after the overtime was worked. It is also relevant to note that the payments do not appear to cover all of the time in lieu accrued.
The payroll records provided for Katarzyna Wanda Jedrzejewska for the period 21 September 2021 to 28 November 2021 record Ms Jedrzejewska’s time in lieu entitlements as at 21 September 2021 as being 190.25 hours. According to records provided by the applicant by letter dated 9 September 2022 (referred to above), the entitlement for Ms Jedrzejewska as at 27 April 2021 was 417 hours. How and why the records for time in lieu were reduced to 190.25 hours in the updated payroll records is not explained but this may relate to the ‘double counting’ issue raised by Ms Candelori in the October 2022 hearing. These records show that ‘time in lieu’ hours of 169.25 were deducted and paid on 21 September 2021, 28 September 2021, 5 October 2021, 26 October 2021, 2 November 2021, 16 November 2021, 23 November 2012, 30 November 2021 and 7 January 2022, leaving a balance of 19 hours’ time in lieu unpaid. Many of these payments were made over six months after the overtime was worked and the time in lieu was accrued. They payments do not appear to cover all of the time in lieu accrued.
In response to the issue raised about Katarzyna Wanda Jedrzejewska, the applicant responded that she was nominated for the position of accountant and that her duties and position description were consistent with the duties for an accountant. The issue raised in the letter of 27 October 2022 that Ms Jedrzejewska had worked as a host for significant periods was not addressed in the written submissions.
Finally, the applicant provided a submission on 30 November 2022 advising that the applicant’s nomination for the position of restaurant manager for Ilaria Mariotto had been refused by a delegate of the Department of Home Affairs on 28 November 2022. The decision was attached to the submission. One of the reasons for the refusal was the adverse information relating to the sanction which is the subject of this review. The applicant requested that the review be finalised as soon as possible because it had other outstanding nominations and the sponsorship bar was impacting the applicant’s operations.
FINDINGS ABOUT OVERTIME AND TIME IN LIEU
The payroll records provided to the Tribunal both before and after the October hearing do not explain how the time in lieu entitlements have been calculated and recorded in the payslip records. It is also relevant to note that the payroll records provided by letter dated 9 September 2022 are different from the time in lieu payroll records provided in November 2022 as evidence of the payments made by the applicant. It is not entirely clear, but it seems to be contended that the payroll records provided by letter dated September 2022 evidence the time in lieu entitlements credited to the employee’s payroll records for the monitoring period from January to April 2021. The updated payroll records for November 2021 to January 2022 have been provided as evidence to support the contention that the time in lieu has been paid for all or part of the time accrued. There are differences between the payroll records for the relevant period and the updated records. These unexplained differences and the fact that the applicant has not explained how the time in lieu entitlements have been calculated, despite being requested to do so, raises doubts about the accuracy of these records.
It is also relevant to note that the records of the hours worked for each of the employees for the relevant period, as set out in the findings of the ABF based on business records of the applicant, appears to significantly exceed the time in lieu entitlements recorded in the payroll records. The inconsistencies between these records are summarised as follows:
(a)According to the payroll records provided by the applicant for Ilaria Mariotto, the time in lieu calculation for overtime worked for the relevant period (4 January 2021 to 18 April 2021) was 180 hours. However, the ABF calculations show that Ms Mariotto worked between 38 and 62 hours a week, being an average of 57 hours per week during the period. Ms Mariotto’s contract provided, according to the ABF findings, that her working hours were 40 hours per week with annualised salary to include compensation for all hours worked. If this was the case, it would be expected that the time in lieu accrued (and credited to Ms Mariotto’s account) should be in the vicinity of at least 17 hours a week, making a total of 272 hours over the period. Having regard to the annualised salary based on 44 hours (notably the ABF based its calculations on 40-hour weeks), the overtime would be in the vicinity of 208 hours. Notably, neither calculation takes into account the penalty rates of 150% or 200% of the hourly rate that would be payable on the accrued overtime. As such, I am not satisfied based on the evidence provided that the time in lieu credited for Ms Mariotto is equivalent to her entitlements under the Award.
(b)The applicant contends, based on the payroll records provided, that the time in lieu calculation for Gagandeep Singh Sandhu for the relevant period was 112.5 hours. The ABF calculations for Mr Sandhu show that he worked between 43 hours and over 62 hours a week, being on average, according to ABF, of over 55 hours a week. Mr Sandhu’s contract provided, according to the ABF findings, that his working hours were 40 hours per week with annualised salary to include compensation for all hours worked. If this was the case, it would be expected that the time in lieu accrued (and credited to Mr Sandhu’s account) should be in the vicinity of at least 15 hours a week for the period 4 January 2021 to 18 April 2021, making a total in the vicinity of 240 hours. If the annualised salary based on 44 hours is used, the overtime would be in the vicinity of 176 hours. Neither calculation takes into account the penalty rates that would be payable on the accrued overtime. I am not satisfied, based on the evidence, provided that the time in lieu credited for Mr Sandhu is equivalent to his entitlements under the Award.
(c)The payroll records provided for Sukhwinder Singh show time in lieu entitlements for the relevant period as 107.75 yet the ABF calculations for Mr Singh show that he worked between 42 hours and over 60 hours a week, being on average, according to ABF, of over 54 hours a week. Mr Singh’s contract provided, according to the ABF findings, that his working hours were 40 hours per week with annualised salary to include compensation for all hours worked. If this was the case, it would be expected that the time in lieu accrued (and credited to Mr Singh’s account) should be in the vicinity of at least 14 hours a week for the period 4 January 2021 to 18 April 2021, making a total in the vicinity of 224 hours. If the annualised salary based on 44 hours is used, the overtime would be in the vicinity of 160 hours. Neither calculation takes into account the penalty rates that would be payable on the accrued overtime. I am not satisfied, based on the evidence provided, that the time in lieu credited for Mr Singh is equivalent to his entitlements under the Award.
(d)The applicant contends, based on the payroll records provided, that the time in lieu calculation for Katarzyna Wanda Jedrzejewska for the relevant period was 208.75 yet the ABF calculations for Ms Jedrzejewska show that she worked between 40 hours and over 69 hours a week, being on average, according to ABF, of over 57 hours a week. Ms Jedrzejewska’s contract provided, according to the ABF findings, that her working hours were 40 hours per week with annualised salary to include compensation for all hours worked. If this was the case, it would be expected that the time in lieu accrued (and credited to Ms Jedrzejewska’s account) should be in the vicinity of at least 16 hours a week for the period 4 January 2021 to 18 April 2021, making a total in the vicinity of 256 hours. If the annualised salary based on 44 hours is used, the overtime would be in the vicinity of 200 hours. Neither calculation takes into account the penalty rates that would be payable on the accrued overtime.
Annexures 1 and 2, together with the payroll records provided on 9 September 2022, are said to establish that the four employees in question have not been underpaid. It is left to the Tribunal to investigate these matters and make its own calculations by reference to those records. While the role of the Tribunal can be described as inquisitorial in nature, when an applicant is put on notice of the critical issues for determination and specific issues have been raised about how the time in lieu is calculated and how it was paid, it would be expected that the applicant, and its financial controller, who is said to be responsible for managing these payments and ensuring compliance with industrial laws, would be able to provide particulars of this information to satisfy the Tribunal. Despite this, I have undertaken detailed analysis of the records provided but cannot be satisfied about the accuracy of the time in lieu entitlements recorded in the payroll records and, importantly, how they were calculated.
I accept that Annexure 2 comprises extracts from bank statements for the applicant for the period 21 September 2021 to 18 January 2022 and that these statements show amounts paid to each of the four sponsored employees that appear to reflect the time in lieu reductions and payments referred to in the payroll records. However, I am not satisfied based on the evidence provided, and this is reflected in my findings that follow, that the time in lieu credited for each of the four employees is equivalent to their respective entitlements under the Award. Nor am I satisfied that the sponsored employees have been paid in accordance with their entitlements under the Award. It is unclear whether all of the entitlements, as calculated by the applicant, have been paid but it is nonetheless conceded that they were not paid in accordance with clause 23.5(c) of the Award.
CONSIDERATION AND FINDINGS OF FACT
Having regard to the evidence before the Tribunal, the issues for determination are whether one or more of the prescribed circumstances is established and, if so, what action should be taken.
Does a circumstance for the taking of an action exist?
In the present case, the delegate found that the applicant failed to satisfy several sponsorship obligations. The delegate also found that the sponsor had provided false or misleading information to Immigration. The delegate did not make findings in relation to all of the matters set out in the prescribed circumstances and, as such, my review has focused on the matters in dispute before the delegate, which is consistent with the President’s Direction, Conducting a Migration and Refugee Review at clause 8.2.[6]
[6] President’s Direction, Conducting Migration and Refugee Reviews dated 1 August 2018.

There is evidence that the applicant has failed to satisfy the sponsorship obligations under regulation 2.79 in relation to each of the four sponsored employees, the subject of the monitoring. These breaches were over an extended period and, while it is not possible to assess the precise nature of the underpayment for the reasons I have already outlined, it is possible that the underpayments are significant. At the very least, each of the employees has been disadvantaged by the delays in paying time in lieu in the period required. The applicant was required to pay time in lieu within six months of the overtime worked, the majority of which would have been payable between July and September 2021. Except for Ms Jedrzejewska, who has recompensed for part of her time in lieu in September 2021, none of the other employees were paid their entitlements over this period. All sponsored employees were therefore out of pocket for an extended period and, more concerningly, I am not satisfied that the breaches have been adequately rectified.
The failure to ensure that Ms Jedrzejewska predominantly worked in her nominated occupation over the monitoring period is in breach of regulation 2.86. Ms Candelori explained that this was at Ms Jedrzejewska’s request and that she also worked as an accountant during this period. This somewhat mitigates the seriousness of this breach, but it is nonetheless a breach of the regulation. Regulation 2.86 is an important sponsorship obligation that recognises the importance of sponsored employees being nominated for, and working in, a specified occupation that has been identified by the Minister as filling a skilled shortage need.
One of the matters I need to consider is whether the applicant has implemented processes to ensure future compliance with sponsorship obligations. Based on the evidence of Gina Candelori and the submissions of the applicant about the COVID-19 payments, I am not satisfied that the applicant clearly understood its obligations under the Award. While the Award system can be complex to implement and I acknowledge the difficulties that arose during COVID-19, there is evidence that four of the sponsored employees were significantly disadvantaged by the failure of the applicant to observe the conditions under the Award.
These breaches have had a direct financial impact upon the sponsored employees because they were underpaid and because the payments for time in lieu were substantially delayed outside the terms of the Award.
There is evidence that the applicant has retained Crystal Migration to undertake a review, although there is no evidence about the processes that it has implemented to ensure future compliance with sponsorship obligations. According to the submissions provided on 16 November 2022, the applicant has engaged Crystal Migration to conduct an audit every three months to ensure that the sponsor remains compliant with its sponsorship obligations. While this is a submission and is not corroborated by a statement from the principal of Crystal Migration or from the authorised officers of the applicant, the submission was made by Crystal Migration and I am prepared to accept that the submission would not have been made without the principal being satisfied about the veracity of this claim. I therefore accept that this weighs in the applicant’s favour and provides some confidence that the applicant now appreciates the significance and importance of complying with sponsorship obligations. I also take into account that such an audit process will involve considerable cost and this demonstrates a commitment towards compliance.
I accept that there is no evidence that the breaches were intentional or reckless. However, the failure of the applicant to understand and properly discharge its functions and obligations under the industrial laws about overtime and time in lieu allowances or payments is, at the least, negligent. Those obligations may be complicated and technical but this is no excuse for an applicant that employs a large number of staff and has done so for many years, particularly when that employer seeks to enjoy the benefits of the temporary work sponsorship program to obtain access to overseas workers. In this regard, I agree with the observations made by SM’s Skaros in Catsbeauty Pty Ltd (Migration) [2022] AATA 3461 at [104] to the effect that the onus is on an approved standard business sponsor to obtain professional advice and to be informed about the sponsorship obligations with which it must comply. This includes the obligations to pay sponsored employees on terms that are equivalent to Australian permanent residents and citizens under the various industrial awards.
Complying with the checks and balances provided under the regulations, through compliance with sponsorship obligations, is critical to the overall integrity of the scheme. This is why the nature and extent of the breach of those sponsorship obligations is an important factor in assessing whether an employer should be entitled to continue to access the scheme by being approved as a sponsor. As already noted, I have found those breaches to be serious.
Against this, I also accept the evidence of Mr and Mrs Candelori about the difficulty in finding available skilled workers to work in hospitality, particularly given the current market conditions where skill shortages are well-known and has been the subject of both political and media commentary. I note that the nomination for Ms Mariotto has been refused, which is likely to result in her associated visa application also being refused. Ms Mariotto has worked with the applicant for a number of years, and I accept that there will be significant disadvantage to both the applicant and Ms Mariotto if her visa is refused. Setting aside or varying the decision under review will not, on its own, change these outcomes but I accept that a variation that involves a significant reduction in the bar may lead to an alternative outcome in the event the applicant seeks a review of the nomination refusal.
The applicant has been barred until 25 February 2024 from sponsoring more people under the terms of its approved temporary activities sponsorship. The applicant has also been barred from making applications for approval as a standard business sponsor for two years, namely until 25 February 2024. By the time of my decision, the applicant will have served nearly a year, which is almost half the bars that have been imposed.
The Department has issued little by way of guidance for decision-makers in assessing the action that may be appropriate in cases such as this. The procedural instruction Sponsorship Compliance Framework: Penalties, Sanctions and Enforcement, provides useful commentary on effect of the law and the regulations but does not set out a policy framework to provide guidance to decision-makers about the suitability or appropriateness of particular enforcement action. Notably, a decision-maker may take one or more of the actions specified in s 140M of the Act. This power is discretionary, and any action taken by the decision-maker is likely to serve a regulatory purpose.
A question that arises is whether the action taken is intended to be a sanction, and thereby have a deterrent effect, or whether it is protective in nature, designed to ensure that only those employers who comply with sponsorship obligations are able to sponsor overseas workers. This protective aspect is relevant to concerns that may be raised about the exploitation of foreign workers or the lowering of standards and undermining employment opportunities for local workers. Arguably, both principles are relevant. While neither are specifically referred to in the prescribed circumstances set out in regulation 2.89(3), these principles nonetheless underpinned several of the prescribed circumstances. I also note that the Department refers to these actions as sanctions in its procedural instruction and in other published material, however, I do not consider this to be determinative. As provided in regulation 2.89(3) in respect of breaches of sponsorship obligations and regulation 2.90(3) in respect of false or misleading information, it is the role of the decision-maker to consider the prescribed circumstances in those sub-regulations in order to make a decision about what action, if any, should be taken. When each of these circumstances are analysed, it is apparent that they are directed towards several different underlying policy considerations.
For instance, the criteria relating to the steps taken by the sponsor to rectify the failure to satisfy sponsorship obligations, the processes the sponsor has implemented to ensure full compliance with sponsorship obligations, whether the sponsor has cooperated with Immigration and the past and present conduct of the sponsor in relation to Immigration are directed towards compliance in the future and, thereby, protection. In contrast, the criteria about the number breaches of the sponsorship obligations, the nature and severity of the circumstances leading to the breaches and whether the failure was intentional, reckless or inadvertent direct attention to regulatory action as a sanction.
In undertaking a review of the Register of sanctions imposed on sponsors of skilled foreign workers as at 11 July 2022,[13] it is apparent that there is little commentary or consistency in relation to the ‘sanctions’ imposed. By way of example, a sponsorship bar of three months was imposed in circumstances where the delegate found that there had been nine breaches of regulation 2.79. In contrast, a bar of six months was imposed for two breaches of regulation 2.79. In one case, where regulation 2.86 was found to have been breached, the sponsorship of the applicant was cancelled, and a bar of two years was imposed.
[13] Australian Border Force, Sanctions Imposed On Sponsors Of Skilled Foreign Workers, <
In my view, it would be very helpful if guidelines were published about when and why certain action should be taken. This would not only assist in facilitating consistency in decision-making but would benefit employers and their advisers in giving them guidance about what to expect as a result of the Department’s regular monitoring process.
In the present case, the delegate found multiple breaches of regulation 2.79, specifying that the applicant had failed to satisfy this obligation on 53 occasions during the monitoring period. It is not entirely clear how this figure was arrived at, but it appears to relate to the weekly pay period for each of the four sponsored employees because each invariably worked overtime but were only paid their annualised salary each week. It is therefore alleged that these employees were underpaid on 53 occasions during the monitoring period. Having regard to the contention, which I accept, that these employees were given credit for time in lieu, identifying particular breaches is complicated and requires more detailed analysis than is able to be undertaken based on the evidence and submissions provided by the applicant. While I am not able to make findings about the precise number of breaches of regulation 2.79, I am satisfied that there have been multiple breaches in respect of each of the sponsored employees and that these breaches were over an extended period. This is relevant to the criteria set out in regulation 2.89(3)(j). However, this is only one of the criteria that needs to be considered.
The delegate found that there had been four breaches of regulation 2.83, being the obligation to provide records and information to the Minister, and three breaches of regulation 2.86, being the obligation to ensure the sponsored persons work in their nominated occupation. I have found one breach of regulation 2.86 and no breaches of regulation 2.83.
The delegate found a breach of regulation 2.90 and this is significant because this adds to the seriousness of the non-compliance and requires a decision-maker to further consider the criteria set out in regulation 2.90(3). As already noted, I am not satisfied that there has been a breach of regulation 2.90 in the circumstances of this case.
The delegate took into account that the applicant had responded to most requests and made themselves available to discuss the issues with the ABF when requested. The delegate also took into account that the applicant had undertaken sponsorship compliance training, had been provided with a sponsorship compliance checklist, had engaged Crystal Migration to conduct regular health audits and was willing to undergo another monitoring request if deemed appropriate.
After assessing all of these matters, the delegate made the decision to bar the applicant for a period of two years from 25 February 2022. The effect of the bars is to prohibit the applicant from sponsoring more foreign workers until 25 February 2024, either as a standard business sponsor (because it was barred from making an application for approval even though its sponsorship approval had expired) or as a temporary activity sponsor because of the specific bar under s 140M(1)(c) of the Act. I am not bound by the assessment made by the delegate, and it is my role to consider the matter of afresh. In any event, it is not possible to weigh the various criterion in a manner consistent with the findings of the delegate because the delegate’s process of assessment and weighting of these matters is not apparent from the decision. Suffice to say, I have not found the breaches of the applicant to be as serious as those found to have been established by the delegate. While my findings may result in a different outcome to the ‘sanctions’ imposed by the delegate, those findings do not compel a conclusion that the bar imposed should be reduced.
My role is to consider the prescribed circumstances in regulation 2.89(3), noting that the criteria in regulation 2.90(3) does not apply because I have found no breach, and to make my own assessment of the weighting that should be attributed to each of the criterion. Without lawful policy and guidance about how these assessments should be made and how the various criterion should be weighted, the exercise of the discretion in deciding what the action should be taken, if any, is necessarily subjective in nature.
In Catsbeauty and in Katunga Fresh Trading Pty Ltd Limited (Migration) [2022] AATA 2006, the Tribunal considered the utility in reducing a bar where the bar was no longer in effect or was due to expire as a relevant factor in determining the action to be taken. In Catsbeauty, SM Skaros observed that as the bar had expired, there was no utility in varying or reducing the period but noted that the decision to bar the applicant would be considered ‘adverse information’ as defined in regulation 1.13A for the purposes of considering any pending or future sponsorship or nomination applications made by the applicant. This is undoubtedly correct and any decision taking one of the actions referred to in section 140M, including a decision to bar and applicant from sponsoring workers or applying for sponsorship approval, will have an ongoing impact. Relevantly, in any future applications for sponsorship or nomination approvals, the decision-maker will need to consider any action previously taken under s 140M to decide whether it is reasonable to disregard the ‘adverse information’ which has been the subject of the regulatory action.
I am less inclined to have regard to the utility of the bar in determining the action to be taken where the prescribed circumstances include matters that are relevant to penalty and deterrence. However, I note that this does not apply the present case because the relevant bars will continue to apply until 24 February 2024.
Having regard to my findings in relation to the prescribed circumstances and the totality of the evidence, I am satisfied that action should be taken under subsections 140M(1)(c) and (2) of the Act but I am of the view that the most appropriate action is to vary the bars by reducing them to a period of 18 months. This means that both bars will expire on 25 August 2023.
It is appropriate for action to be taken barring the applicant for a period from sponsoring foreign workers because the breaches of the sponsorship obligations were serious and have had a detrimental impact on the sponsored employees. Furthermore, having regard to the information provided by the applicant, I cannot be confident that it has sufficient systems in place to ensure compliance in the future.
Notwithstanding this, I take into account that efforts have been made by the applicant to engage and comply with its sponsorship obligations, it has retained Crystal Migration to assist, and the non-compliance was potentially exacerbated by the difficult trading circumstances experienced by the applicant during the COVID-19 pandemic. It was clear from evidence given by the applicant and its managers at the hearing that the ABF audit process and the regulatory action taken by the Department has had a significant impact on the applicant and it is likely that this impact will motivate the applicant to ensure it complies with its sponsorship obligations in the future. I also take into account that over the next six or seven months, Crystal Migration would have undertaken further audits of the applicant’s compliance and that any issues arising are likely to have been resolved by this time.
DECISION
The Tribunal varies the decision under review by:
(a)reducing the period of the bar under subsection 140M(1)(c) to 18 months namely the applicant is barred from sponsoring more people under the terms of the approved temporary activities sponsorship until 25 August 2023; and
(b)reducing the period of the bar under subsection 140M(2) to 18 months, namely the applicant is barred from making applications for approval as a standard business sponsor until 25 August 2023.
J.L Redfern PSM
Deputy President

[2023] AATA 8

10 January 2023

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