Cathay Global Pty Ltd (Migration)
[2024] AATA 229
•30 January 2024
Cathay Global Pty Ltd (Migration) [2024] AATA 229 (30 January 2024)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT: Cathay Global Pty Ltd
REPRESENTATIVE: Lorraine Li
CASE NUMBERS: 1932455/2313576
HOME AFFAIRS REFERENCE(S): BCC2019/46854022
MEMBER:Andrew McLean Williams
DATE:30 January 2024
PLACE OF DECISION: Brisbane
DECISION:The Tribunal affirms the decision not to approve the nominations.
Statement made on 30 January 2024 at 5:35pm
CATCHWORDS
MIGRATION – approval of a nomination – position of Chief Executive or Managing Director – genuine position – overseas based nominee offered the position to himself – unsuccessful job advertisements – decision under review affirmed
LEGISLATION
Migration Act 1958, s 140
Migration Regulations 1994, r 2.72STATEMENT OF DECISION AND REASONS
APPLICATION FOR REVIEW
This is an application for review of two decisions made by a Delegate of the Minister for Home Affairs on 25 October 2019 (Tribunal file 1932455), and on 14 August 2023 (Tribunal file 2313576), thereby refusing to approve the Applicant’s nominations under s.140GB of the Migration Act 1958 (Cth) (‘the Act’) and regulation 2.72 of the Migration Regulations 1994 (Cth) (‘the Regulations’).
The review hearing in these two matters was conducted as a joint hearing, at the request of the Applicant. In Tribunal file 2313576 the Applicant seeks to review a decision made by a Delegate of the Minister on 14 August 2023, in which the Delegate had refused to approve a nomination made on 14 July 2023 for Mr Wei Liao in the position of ‘Chief Executive or Managing Director’ (ANZSCO 111111), on the basis that the Delegate did not consider the nomination to be genuine in the manner required by regulation 2.72(10)(a). Mr Wei Liao is already a director and company secretary for Cathay Global Pty Ltd, and his family trust is the 100% shareholder of Cathay Global Pty Ltd.
In Tribunal matter 1932455, the Applicant had previously applied for approval, on 18 September 2019, for the position of ‘Accountant (General)’ (ANZSCO 221111), also on behalf of Mr Wei Liao. Mr Wei Liao is a Director of Cathay Global Pty Ltd, and is named as such on the sponsorship application form.
A nomination of an occupation for a Subclass 482 visa is made under s.140GB of the Act and regulation 2.72 of the Regulations. The occupation must be nominated for a Subclass 482 visa in one of three alternative streams: the Short-term stream, the Medium-term visa stream, or the Labour Agreement stream. Regulation 2.72 prescribes general and stream-specific criteria that must be satisfied for the Minister to approve a nomination by a person. These criteria are extracted in the attachment to this decision. Additional criteria are specified in s.140GBA.
As was the case with related matter 2313576, the Delegate decided not to approve the nomination in Tribunal matter 1932455 on the basis that the Applicant did not satisfy the requirements of regulation 2.72(10)(a), again on the basis that the Delegate could not be satisfied that the nominated position was genuine.
The Applicant appeared before the Tribunal on 14 November 2023. The Tribunal hearing was conducted with the assistance of an interpreter in the Mandarin and English languages. Evidence was also received by telephone from a Ms Trudy Bradshaw who is a Brisbane-based employee of the Applicant company, as well as from Mr Wei Liao in his capacity as both Director of the Applicant Company, and as the nominee for both of the nominated positions. Mr Liao appeared before the Tribunal via electronic means, from his home in China.
The Applicant was represented in relation to both reviews by Ms Lorraine Li of Messrs Stephens and Tozer, Solicitors. Ms Li also attended the Tribunal hearing conducted on 14 November 2023.
At the conclusion of the Tribunal hearing, the Applicant was afforded further time, until 17 November 2023, to provide further evidence and submissions. Submissions were not provided by the stipulated deadline. Further evidence and submissions were not provided to the Tribunal until 22 November 2023. Despite the expiration of the deadline for receipt of further evidence and submissions, these materials have still been received by, and taken into consideration, by the Tribunal.
CONSIDERATION OF CLAIMS AND EVIDENCE
The issue in the present case is whether the Applicant meets the criteria for approval of the nomination. The Tribunal must approve the nomination if the Applicant is an approved work sponsor, and meets all of the requirements in regulation 2.72: s.140GB(2).
For the reasons that follow, the Tribunal is not satisfied that the nominated position is genuine (regulation 2.72(10)(a)) such that the Applicant does not meet all of the requirements in regulation 2.72.
Position must be genuine:
Regulation 2.72(10)(a) requires that the position associated with the nominated occupation to be genuine.
On 18 September 2019 Mr Wei Liao was nominated for the position of accountant (general) (ANZSCO 221111) by Cathay Global Pty Ltd. Mr Liao is also a director of Cathay Global Pty Ltd. There is a letter of employment offer in evidence before the Tribunal in which Mr Liao signs the letter of employment offer as both the offeror - the person making the offer of employment on behalf the company - and then also as the offeree – being the person accepting the offer of employment. In effect therefore, Mr Liao has offered a job to himself.
Mr Lia informed the Tribunal that Cathay Global has two employees, other than himself
Ms Trudy Bradshaw’s evidence to the Tribunal was to the effect that she works alone in Brisbane, and her role is confined to practical logistical matters dealing with the reception and dispatch of wholesale building materials by means of road transport, from a warehouse storage facility in which space is sub-leased by Cathay Global. Ms Bradshaw said that there is another employee in Melbourne, who performs a similar role to hers. Ms Bradshaw told the Tribunal that she only deals with Mr Liao by means of telephone and e-mail, and that Mr Liao is based in China. Ms Bradshaw told the Tribunal that she receives her instructions from Mr Liao, but was not able to provide any evidence going to the issue as to the genuineness of the nominated position.
In his evidence before the Tribunal Mr Liao informed that he had originally come to Australia in 2003 for study purposes, and that he had thereafter lived in Australia, variously studying (full-time, accountancy and commerce studies, between 2003 and 2012) or working, up until December 2019 (when he had returned to China), being some 16 years in total.
In terms of work history in Australia, Mr Liao said in his evidence that:
·He had worked for Hong Jiu Bao (Wine) Pty Ltd, as a part-time accountant from 1 March 2011 until 29 June 2012;
·He had worked for Ozcon Industries Pty Ltd from 12 March 2012 to 21 March 2014. This company supplied equipment to the LNG industry and Mr Liao came to work for Ozcon Industries on the basis that the Chinese investor in Hong Jiu Bao (Wine) Pty Ltd, a Mr Ziran Li, had also acquired an ownership interest in Ozcon Industries.
·He had worked for Deluxe Freight Pty Ltd as a marketing manager from 11 August 2014 until 3 July 2017. This Company was associated with Ozcon Industries Pty Ltd, and again Mr Ziran Li had an ownership interest.
·He had worked for Deluxe Global Trading House Pty Ltd from 2014 until about September 2017, as a Project Manager for product procurement. This was a company newly established by the shareholders of Deluxe Freight Pty Ltd, that became a purchaser, procuring and supplying hardware and building products from overseas for Bunnings.
·He had worked for Ontime Management Services Pty Ltd commencing on 25 September 2017. Mr Liao told the Tribunal that Deluxe Freight Pty Ltd had not been trading well and hence its shareholders elected to place Deluxe Freight Pty Ltd into voluntary administration. A new logistics company - Ontime Management Services Pty Ltd - was then established in its place and Mr Liao was appointed to work in the accounting department of the new entity. He remained with Ontime Management until 19 July 2019. Ontime Management was also placed into liquidation due to cashflow difficulties shortly prior to this, in June 2019. At around this time the related company Deluxe Global Trading House Pty Ltd where Mr Liao had previously worked was also facing financial difficulties and was on the verge of liquidation.
·In around June 2019 Mr Liao told the Tribunal that he decided to take over Deluxe Global Trading House Pty Ltd, and commenced the process of buying out all the other shareholders. On 19 July 2019, Mr Liao acquired a 60% shareholding from the wife of Mr Ziran Li. On 16 August 2019 Mr Liao established his own family trust, LC Trade Pty Ltd (as trustee for the LC Family Trust), and he transferred his 60% shareholding into the family trust, and a further 20% shareholding in Deluxe Global Trading House Pty Ltd was acquired at this time. Another 10% of the shares were acquired on 27 April 2020 and the remaining 10% shareholding was acquired on 23 June 2020, thus making the LC Family Trust a 100% shareholder. The name of Deluxe Global House Pty Ltd has also been changed, to Cathay Global Pty Ltd
Mr Liao told the Tribunal that Cathay Global Pty Ltd currently has only two Australian employees, being Ms Bradshaw in Brisbane, and one other employee performing an essentially identical role to Ms Bradshaw, based in Melbourne.
Cathay Global Pty Ltd continues to have only one customer, Bunnings, and supplies building materials to Bunnings all up and down the Australian Eastern seaboard. For the most part, these products are sourced from offshore. However timber products are sourced locally, from Australian suppliers.
Mr Liao says that the turnover of Cathay Global now exceeds $10 million annually. This is borne out by financial records shown to the Tribunal that indicate a turnover in FY 2023 of $10,070,342.14, and a net trading profit of $297,859.85.
Mr Liao and his family returned to China in December 2019 and were not subsequently able to return to Australia, in consequence of travel restrictions created by the response to Covid-19.
Mr Liao’s prior Australian visa has since expired, and he remains in China conducting the business operations of Cathay Global Pty Ltd remotely. Mr Liao was recently refused a visitor (Subclass 600) visa to come to Australia for this Tribunal hearing, and hence was required to attend the Tribunal hearing by electronic means instead.
In a statutory declaration made by Mr Liao on 21 November 2023, he said the following in relation to the recruitment of an accountant:
[30]After taking over Cathay Global on 19 July 2019, my first goal was to make the company survive.
The company needed reforms and effective management from every aspect of the operation including procurement, sales, customer services, finance, accounting, human resources, etc.
My first step was to hire an accountant as our sales volume was huge and we dealt with large clients. I needed a full-time accountant to deal with all accounts payable, accounts receivable, invoices, financial statements, BAS and accounting data entries, etc daily basis while I focus on the overall management and give instructions to the accountant to implement my management decision.
Ideally this accountant should be relatively experienced in imports and exports business, an ideal candidate should also possess Chinese language skills. Being able to communicate in Chinese would be most helpful while I was busy running a huge operation.
We have run advertisements on Career One and Seek between 16/08/2019 and 13/09/2019. We received the 45 applications from Seek and 4 applications from Career One, but none of the applicants was suitable.
Consequently, I had no choice but to take over the Accountant’s responsibilities myself”.
In relation to the hiring of a manager (Tribunal File No 2313576), Mr Liao also said the following in his statutory declaration:
[45]I had been extremely concerned about Cathay’s future seeing the company’s operation remaining stagnant and unable to further advance, I was also concerned that we would lose our contract to our only major client Bunnings for lack of regular relationship building. At the beginning of this year, when assured the epidemic was over, I decided to seek a Managing Director to assist me in managing Cathay Global.
This in mind, I had advertisements run on Seek, Work Force Australia and Career One from 29 April 2023 [until] 3 June 2023 hoping to find someone suitable.
Naturally I would seek a candidate with suitable experience as Cathay has a huge operation with major national clients, it takes outstanding management, marketing and interpersonal skills to create confidence in client that Cathay Global is efficient and competitive and the cooperation could be smooth and successful. Further I would prefer the successful candidate being able to communicate in Chinese, preferably both Mandarin and Cantonese, as we need to step back in international trade dealing with suppliers from China and other Asian countries.
Unfortunately, this attempt again was unsuccessful”.
In his evidence Mr Liao told the Tribunal that he is particularly anxious to return to Australia because he cannot continue to run Cathay Global Pty Ltd from offshore indefinitely, and if he is unable to return to Australia he will need to consider liquidating the company. In particular, he raised the concern that he needs to be onshore in Australia to focus on maintaining the business relationship with Cathay Global Pty Ltd’s sole customer, Bunnings.
The Applicant company claims that none of the candidates applying for either of the advertised roles were suitable and that in these circumstances Mr Liao had no option other than to fulfill both the role of Chief Executive and the role of Accountant, personally. Some evidence of the claimed unsuitability of the other prospective candidates has been provided to the Tribunal, yet this evidence is limited to ‘summary tables’, listing the names of the job advertisement applicants, together with a further ‘one line entry’ as to why their candidacy for the advertised role was rejected. The Tribunal is not satisfied with the adequacy of this evidence, and considers that all the other candidates have been rejected in favour of Cathay Global Pty Ltd selecting Mr Liao by reason of his pre-existing connection with the Company as its controlling mind. The Tribunal notes that Mr Lia is both a Director and Company Secretary of Cathay Global Pty Ltd, and that Cathay Global Pty Ltd is 100% owned by Mr Liao’s Family Trust. This is not an arms-length arrangement.
Genuineness of the position must, in part, be assessed against the intent of the Subclass 482 visa program. The intended purpose of the temporary skill shortage (subclass 482) visa program (‘the program’) is to enable Australian businesses to temporarily fill short to medium term skill shortages with overseas workers when they cannot find a suitably qualified or experienced Australian citizen, or permanent resident to fill the position. The program is not intended to be used for non-citizens to sponsor themselves, or to facilitate a longer-term stay in Australia. The primary reason for the nomination of the position must be to fulfil the need of the business for a skilled worker in circumstances where that need cannot be met by means of the recruitment of a suitably qualified and experienced Australian citizen or permanent resident. On the evidence before it, the Tribunal considers that the primary reason for the nomination has been to afford a means for Mr Liao to obtain a further Australian visa.
For these reasons the requirements of regulation 2.72(10) are not met.
For the reasons given above, the Tribunal is not satisfied that the Applicant meets the applicable criteria for the nomination to be approved. Accordingly, the decision under review must be affirmed.
DECISION
The Tribunal affirms the decision not to approve the nomination.
Andrew McLean Williams
MemberATTACHMENT - EXTRACTS FROM THE MIGRATION REGULATIONS 1994
2.72 Criteria for approval of nomination--Subclass 457 (Temporary Work (Skilled)) visa and Subclass 482 (Temporary Skill Shortage) visa
(1)This regulation applies in relation to a person who:
(a)is any of the following:
(i) a standard business sponsor;
(ii) a person who has applied to be a standard business sponsor;
(iii) …
(iv) …
(b)under paragraph 140GB(1)(b) of the Act, nominates a proposed occupation in relation to any of the following (the nominee):
(i) a holder of a Subclass 457 (Temporary Work (Skilled)) visa;
(ii) a holder of a Subclass 482 (Temporary Skill Shortage) visa;
(iii) an applicant or a proposed applicant for a Subclass 482 (Temporary Skill Shortage) visa.
(2)For the purposes of paragraph 140GB(2)(b) of the Act, the criteria set out in this regulation are prescribed.
Note: In addition, subsection 140GB(2) of the Act requires the person to be an approved work sponsor and to have paid any nomination training contribution charge in relation to the nomination.
(3)The Minister is satisfied that the person made the nomination in accordance with the process set out in regulation 2.73.
(4)The Minister is satisfied that either:
(a)there is no adverse information known to Immigration about the person or a person associated with the person; or
(b)it is reasonable to disregard any adverse information known to Immigration about the person or a person associated with the person.
(5)The Minister is satisfied that:
(a)if the occupation is nominated for a Subclass 482 (Temporary Skill Shortage) visa in the Short-term stream or Medium-term stream—the person is a standard business sponsor; or
(b)…
(5A)The Minister is satisfied that any debt due by the person as mentioned in section 140ZO of the Act (recovery of nomination training contribution charge and late payment penalty) has been paid in full.
(6)If the nominee holds:
(a)a Subclass 457 (Temporary Work (Skilled)) visa; or
(b)a Subclass 482 (Temporary Skill Shortage) visa;
the Minister is satisfied that the person has listed on the nomination each other holder of either of those kinds of visa who was granted the visa on the basis of having the necessary relationship with the nominee as mentioned in clause 457.321 of Schedule 2 (as in force before 18 March 2018) or subclause 482.312(1) of Schedule 2.
(7)However, the Minister may disregard the fact that one or more persons required to be listed on the nomination are not listed, if the Minister is satisfied it is reasonable in the circumstances to do so.
(8)The Minister is satisfied that:
(a)the occupation and its corresponding 6-digit code correspond to an occupation and its corresponding 6-digit code specified in:
(i) if the occupation is nominated for a Subclass 482 (Temporary Skill Shortage) visa in the Short-term stream or Medium-term stream—the instrument made under subregulation (9) in force at the time the nomination is made; or
(ii) …; and
(b)the occupation applies to the nominee in accordance with the instrument or work agreement.
(9)The Minister may, by legislative instrument, specify occupations and, for each occupation:
(a)whether the occupation is:
(i) a short term skilled occupation; or
(ii) a medium and long term strategic skills occupation; and
(b)either:
(i) the 6-digit ANZSCO code for the occupation; or
(ii) if there is no 6-digit ANZSCO code for the occupation—a 6-digit code for the occupation; and
(c)if there is no 6-digit ANZSCO code for the occupation—tasks, qualifications and experience for the occupation; and
(d)any matters for the purpose of determining whether the occupation applies to a nominee, including matters relating to any of the following:
(i) the person who nominated the occupation;
(ii) the nominee;
(iii) the occupation;
(iv) the position in which the nominee is to work;
(v) the circumstances in which the occupation is undertaken;
(vi) the circumstances in which the nominee is to be employed in the position.
(10)The Minister is satisfied that the position associated with the occupation is:
(a)genuine; and
(b)a full-time position.
(10A)However, the Minister may disregard the criterion in paragraph (10)(b) if the Minister is satisfied that it is reasonable in the circumstances to do so.
(11)If:
(a)the occupation is nominated for a Subclass 482 (Temporary Skill Shortage) visa in the Short-term stream or Medium-term stream; and
(b)the person is not an overseas business sponsor; and
(c)the occupation is not an occupation specified by the Minister in an instrument made under subregulation (13);
the Minister is satisfied that:
(d)the nominee will be engaged only as an employee under a written contract of employment by the person or an associated entity of the person (the employer); and
(e)the person will give the Minister a copy of the contract signed by the employer and the nominee.
(12)If:
(a)the occupation is nominated for a Subclass 482 (Temporary Skill Shortage) visa in the Short-term stream or Medium-term stream; and
(b)the person is an overseas business sponsor; and
(c)the occupation is not an occupation specified by the Minister in an instrument made under subregulation (13);
the Minister is satisfied that:
(d)the nominee will be engaged only as an employee under a written contract of employment by the person; and
(e)the person will give the Minister a copy of the contract signed by the person and the nominee.
(13)The Minister may, by legislative instrument, specify occupations for the purposes of paragraphs (11)(c) and (12)(c) …
(14)If:
(a)the occupation is nominated for a Subclass 482 (Temporary Skill Shortage) visa in the Short-term stream or Medium-term stream; and
(b)the nominee holds a Subclass 457 (Temporary Work (Skilled)) visa or a Subclass 482 (Temporary Skill Shortage) visa; and
(c)the Minister requested the person to provide evidence that the nominee satisfies the language test requirements;
the person has provided evidence to the Minister that the nominee satisfies:
(d)if the occupation is nominated for a Subclass 482 (Temporary Skill Shortage) visa in the Short-term stream—any language test requirements specified by the Minister in a legislative instrument for clause 482.223 of Schedule 2 that would apply to the nominee if the nominee were an applicant for a Subclass 482 (Temporary Skill Shortage) visa in the Short-term stream; or
(e)if the occupation is nominated for a Subclass 482 (Temporary Skill Shortage) visa in the Medium-term stream—any language test requirements specified by the Minister in a legislative instrument for clause 482.232 of Schedule 2 that would apply to the nominee if the nominee were an applicant for a Subclass 482 (Temporary Skill Shortage) visa in the Medium-term stream.
(15)Subject to subregulation (16), if:
(a)the occupation is nominated for a Subclass 482 (Temporary Skill Shortage) visa in the Short-term stream or Medium-term stream; and
(b)the Minister is not satisfied that the nominee’s annual earnings in relation to the occupation will be at least the amount specified by the Minister in a legislative instrument made for the purposes of this paragraph;
the Minister is satisfied that:
(c)the annual market salary rate for the occupation has been determined by the person in accordance with the instrument made under subregulation (17); and
(d)the annual market salary rate, excluding any non-monetary benefits, for the occupation (determined by the person in accordance with an instrument made under subregulation (17)) is not less than the temporary skilled migration income threshold specified by the Minister in a legislative instrument made for the purposes of this paragraph; and
(e)the nominee’s annual earnings in relation to the occupation will not be less than the annual market salary rate for the occupation (determined by the person in accordance with an instrument made under subregulation (17)); and
(f)the nominee’s annual earnings, excluding any non-monetary benefits, in relation to the occupation will not be less than the temporary skilled migration income threshold specified by the Minister in a legislative instrument made for the purposes of paragraph (d); and
(g)either:
(i) there is no information known to Immigration that indicates that the annual market salary rate for the occupation (determined by the person in accordance with an instrument made under subregulation (17)) is inconsistent with Australian labour market conditions relevant to the occupation; or
(ii) it is reasonable to disregard any such information.
(16)However:
(a)the Minister may disregard the criterion in paragraph (15)(d) if the Minister is satisfied that:
(i) the annual market salary rate for the occupation (determined by the person in accordance with an instrument made under subregulation (17)) is not less than the temporary skilled migration income threshold specified by the Minister in a legislative instrument made for the purposes of paragraph (15)(d); and
(ii) it is reasonable in the circumstances to do so; and
(aa)the Minister may disregard the criterion in paragraph (15)(e) if:
(i) under subregulation (10A), the Minister disregards the criterion in paragraph (10)(b) in relation to the position associated with the occupation; and
(ii) the Minister is satisfied that it is reasonable in the circumstances to do so; and
(b)the Minister may disregard the criterion in paragraph (15)(f) if the Minister is satisfied that it is reasonable in the circumstances to do so.
(17)The Minister may, by legislative instrument, specify a method for determining the annual market salary rate for an occupation nominated under section 140GB of the Act or an occupation in relation to which a position is nominated under regulation 5.19.
(18)If the occupation is nominated for a Subclass 482 (Temporary Skill Shortage) visa in the Short-term stream or Medium-term stream, the Minister is satisfied that:
(a)either:
(i) there is no information known to Immigration that indicates that the employment conditions (other than in relation to earnings) that will apply to the nominee are less favourable than those that apply, or would apply, to an Australian citizen or an Australian permanent resident performing equivalent work at the same location; or
(ii) it is reasonable to disregard any such information; and
(b)if the person is lawfully operating a business in Australia—the person has not engaged in discriminatory recruitment practices.
(19)…
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