Do Investment (SA) Pty Ltd (Migration)

Do Investment (SA) Pty Ltd (Migration) [2019] AATA 891 (4 February 2019)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  Do Investment (SA) Pty Ltd
CASE NUMBER:  1619294
DIBP REFERENCE(S):  OPF2016/1440 OPF2016/7116
MEMBER:Kate Millar
DATE:4 February 2019
PLACE OF DECISION:  Adelaide
DECISION:The Tribunal varies the decision under review by varying the period for which Do Investment (SA) Pty Ltd is barred from sponsoring non-citizens for temporary work visas for a period of three months from 31 October 2016.
Statement made on 04 February 2019 at 11:01am

CATCHWORDS
MIGRATION – cancellation – sponsorship approval – compliance with sponsorship obligations – terms and conditions of employment – clerical error – keeping records – provide records and information to the Minister – decision under review varied

LEGISLATION
Migration Act 1958 (Cth), ss 140L, 140M, 360, 362B
Migration Regulations 1994 (Cth), rr 2.79, 2.82, 2.83, 2.89

STATEMENT OF DECISION AND REASONS
APPLICATION FOR REVIEW

Do Investment (SA) Pty Ltd (Do) runs an Indian restaurant in Millicent, South Australia and was a standard business sponsor. Do was monitored by the Department of Home Affairs for compliance with its sponsorship obligations. As a result of this monitoring, on 31 October 2016 a delegate of the Minister found that it had breached three sponsorship obligations and barred it from sponsoring more people for Temporary Work (Skilled) visas for a period of three years.
Do has applied for a review of the decision. Mr Sukhchain Singh appeared before the Tribunal on 23 January 2019. Mr Singh was a previous director, secretary and shareholder of Do. According to an ASIC extract he ceased in these roles on 1 July 2017 and was replaced by Ms Kamaljit Kaur. Mr Singh said Ms Kaur is his wife, and her address is the same as his address on the ASIC registration. The Tribunal contacted Ms Kaur by telephone during the hearing and she confirmed Mr Singh was authorised to represent the company.
For the following reasons, the Tribunal has decided to vary the decision under review by reducing the period of the bar to three months.
SECTION 376 CERTIFICATE
The file provided by the Department initially had a certificate issued under s.375A on it, which prevents the Tribunal disclosing information or documents the subject of the certificate. The Tribunal invited the delegate to reconsider this certificate, which was then revoked and replaced with a certificate issued under s.376 of the Act. This certificate allows the Tribunal the discretion to provide the information or documents after considering the advice given about the significance of the information. Mr Singh was advised of the existence and effect of this certificate, and that he could provide submissions on the validity of the certificate.
ADVERSE INFORMATION
Information recorded on the Department file given by a third party alleging that Do was paid to sponsor people was put to Mr Singh under s.359AA of the Act. The specific information put to Mr Singh was that a third party alleged:
·     Current and former non-citizens were paying $15,000 to $30,000 for sponsorship or assistance with obtaining visas through the business.
·     Employees were being paid in cash and working a lot of unpaid hours with the promise of sponsorship
·     Money was withheld that was paid for sponsorship that did not eventuate.
·     Do was underpaying workers
·     Ms Kaur paid $30,000
·     Another staff member paid $15,000 for sponsorship. The staff member ultimately left the country and Mr Singh was charging the person to hold his property.
Mr Singh said this information was not true and he has not taken money from employees. The Tribunal examined the company bank accounts. The majority of deposits to the company bank account are merchant settlement, and where there are cash deposits it would be difficult to establish that these were not in the course of the business. The Tribunal does not have any other personal bank accounts of Mr or Mrs Singh before it. Other than the allegation being made, there is little else to support these allegations. In the absence of other information to substantiate these allegations, the Tribunal had no further regard to these allegations.
Mr Singh was also advised the Tribunal had before it a previous decision of this Tribunal dated 30 June 2017 in which the Tribunal found that amounts paid for wages in the Business Activity Statements from 2014 and 2015 appeared inconsistent with the salary proposed for the nominee and the number of employees, even part-time or casual employees. It further found a wages bill of $20,000 too low to support five staff or to indicate it is a business requiring a full time manager.
Mr Singh stated the restaurant operates in a country town and it is always difficult to hire Indian chefs. He said they have a number of staff for the restaurant, and at the time they wanted to hire staff for a new restaurant in Mt Gambier which he was going to manager. When the nomination was refused for a manager for the Millicent restaurant, he had to return to work in Millicent and close the restaurant in Mt Gambier, resulting in approximately $100,000 of debt.
While the previous findings of the Tribunal may add to a concern about whether staff are adequately paid, again there is nothing further before the Tribunal to establish this is the case. Mr Singh provided payslips and payment summaries for the 457 visa holder and her husband and the bank accounts of the business to the Department in response to the request for information. The Tribunal does not have further financial information before it to examine whether this support either the allegation about payments for sponsorship or the allegation that there was underpayment of wages other than those outlined below.
CONSIDERATION OF CLAIMS AND EVIDENCE
This is an application for review of a decision made by a delegate of the Minister for Immigration to take an action under s.140M of the Migration Act 1958 (the Act) in relation to Do’s sponsorship.
Do was approved as a standard business sponsor on 21 October 2014, and sponsored Ms Sandeep Kaur on a subclass 457 visa. On 31 October 2016, the delegate decided to take action against Do under s.140M on the basis that Do had breached its sponsorship obligations.
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 prescribed classes.
For these purposes, the circumstances are prescribed in r.2.89 - r.2.94B and include circumstances in which the Minister, or the Tribunal on review, is satisfied there has been a failure to satisfy a sponsorship obligation.
Where a prescribed circumstance has been found to exist, r.2.89 – r.2.94B prescribe criteria that must be taken into account when determining what action, if any, to take. These criteria, as they apply to the circumstances of this case are set out in the attachment to this decision.
Does a circumstance for the taking of an action exist?
In the present case, the delegate found that Do had failed to comply with its obligations as a sponsor, specifically the obligation to provide the 457 visa holder with terms and conditions that are equivalent to the terms and conditions that would apply to an Australian citizen or permanent resident, the obligation to keep independently verifiable records of the 457 visa holder’s pay and a failure to provide records and information to the Minister.
Equivalent terms and conditions (r.2.79)
The sponsorship obligation in r.2.79 applies to a person who is or was a standard business sponsor if the primary sponsored person holds a subclass 457 visa, or the last substantive visa held by the primary sponsored person was a subclass 457 visa (r.2.79(1)).
A primary sponsored person is defined in r.2.57 as a person who holds a specified visa and who (among other things) was last identified in an approved nomination by the sponsor, or a person who is in the migration zone and does not hold a substantive visa but who last held a specified type of visa and was identified in an approved nomination by the sponsor.
In this case, Do employed Ms Sandeep Kaur who was a 457 visa holder. The delegate found that wages were not being paid to Ms Kaur for 21 pay periods as the record from Do’s bank account stated “payment Manjit Singh”.
Mr Singh submits that this was a clerical error. He said Mr Manjit Singh, Ms Kaur’s husband, had worked for the restaurant, and Ms Kaur provided the same bank account details as it was a joint account. AS a result he description in their accounts remained payment for Manjit Singh when these were Ms Kaur’s wages.
Mr Singh also said that for a period wages for Manjit Singh and Sandeep Kaur were aggregated to one payment to their joint account.
Do provided payslips for Ms Kaur and her husband Mr Singh. These payslips match the amounts paid to their joint account. On being interviewed by the Department, Ms Singh said these amounts were her wages and were paid to the joint account. She said she did not know why the payments were described as wages Manjit Singh and that this was her salary.
Given payslips and payment summaries have been provided that match payments to Mr Singh and Ms Kaur’s account, and at interview Ms Kaur identified these amounts as her wages, there is insufficient evidence to establish that Ms Kaur was not paid her wages. As a result, I am not satisfied that there has been a breach of the obligation to ensure equivalent terms and conditions of employment.
Obligation to keep records (r.2.82)
A standard business sponsor must keep specified records in a reproducible format and in a manner that is capable of being verified by an independent person.
As it applies to Do, these records include a record of the money paid to the primary sponsored person.
In this case, for a period of time, all wages paid by Do appear in their bank account statements as a single lump sum transaction in a pay period. As a result, wages paid to each staff member cannot be identified. Mr Singh acknowledges that the bank records themselves do not show payment of wages to Ms Kaur, but relies on the payslips and payment summaries. Mr Singh also said that for a period the wages for Manjit Singh and Sandeep Kaur were aggregated to one payment which does not allow the wages of each person to be independently verified by records of payments form Do’s bank account.
In this case, the records kept by Do were not themselves capable of being verified by an independent person because the bank statements did not reflect individual payments made. The combination of payslips and bank account statements are required to independently verify the money paid to the primary sponsored person.
As these records were not kept, Do has breached this sponsorship obligation.
Providing records and information to the Minister (r.2.83)
Under r.2.83 a person who is an approved sponsor must provide certain records or information to the Minister if a notice is given using the correct method. These applies if the records are those the sponsor is required to keep under a law of the Commonwealth, or a state or territory, or are records the sponsor is required to keep under r.2.82 of the Regulations. The information or records must be provided within the specified timeframe.
As the Tribunal has found Do failed to keep records required of it, it follows that it has not provided them to the Minister within the required timeframe.
For these reasons, the Tribunal is satisfied that a relevant circumstance for s.140L(1)(a) exists. Accordingly, it is necessary to consider whether one or more of the actions mentioned in s.140M should be taken.
Action to be taken
In considering what action to take, the Tribunal has had regard to each of the prescribed criteria.
The past and present conduct in relation to Immigration
Do was found to have an unlawful non-citizen working at the restaurant at the time of the site visit. Do was issued with a warning about having an unlawful non-citizen working there and provide advice on how to check the immigration status of people who work for it.
Mr Singh said he had relied on the employee telling him he had a bridging visa, and that it was a mistake not to check himself the immigration status of the person. He said he now knows how to check whether an employee or potential employee has the appropriate visa.
The period of time over which the person has been an approved sponsor
Do was approved as a standard business sponsor for the first time on 21 October 2014, and in its first monitoring report was found not to have complied with its obligations. This is not a case where a business has a long history of otherwise complying, and this factor does not weigh in Do’s favour.
Whether, and the extent to which, the failure to satisfy the sponsorship obligation has had a direct or indirect impact on another person
The sponsorship obligation Do breached relates to keeping records. This has an effect on the Department’s ability to monitor compliance with immigration law and may also hamper any examination by Fair Work Australia on compliance with state and Commonwealth laws. This has an indirect effect on other employees.
Whether, and the extent to which, the failure to satisfy the sponsorship obligation was intentional, reckless or inadvertent
The Tribunal has carefully considered whether the breach was intentional, reckless or inadvertent in light of the allegation that Do was paid for sponsoring the visa holder and other visa applicants. As there is insufficient information to show this was the case, there is insufficient information to show the breach was intentional. However it is the responsibility of sponsors to be aware of its sponsorship requirements, and a failure to know how records should be kept or keeping those records required was reckless.
Whether, and the extent to which, the person has cooperated with Immigration, including whether the person informed Immigration of the failure
Do, and its officers cooperated with Immigration during the site visit. It did not information Immigration of the failure to comply with its obligations.
The steps (if any) the person has taken to rectify the failure to satisfy the sponsorship obligation, including whether the steps were taken at the request of Immigration or otherwise
It was reported that Do has put systems in place where records can be accurately kept of who is paid and so that payments that may be directed to the same account can be recorded under the name of the person who is paid. Mr Singh said he went to an interview with a Department officer and he is now also aware of what he can do to check whether a person has the right to work in Australia.
The processes (if any) the person has implemented to ensure future compliance with the sponsorship obligation
Mr Singh said the book keeper has now rectified the recording of salary paid to employees so that more than one person can be named as the payee where two employees are paid to the same account.
The number of other sponsorship obligations that the person has failed to satisfy, and the number of occasions on which the person has failed to satisfy other sponsorship obligations
Do has breached two sponsorship obligations. The records Do held showed payments to Manjit Singh and not Sandeep Kaur on 21 occasions in the monitoring period. Do failed to comply with the obligation to keep records, and as a result could not provide these records to the Minister on request. As such the failures are linked to the same event.
CONCLUSION
While I was not satisfied on this occasion that there had been a failure to apply equivalent terms and conditions, Do has failed to keep adequate records and provide formation. This warrants a short period of being barred. Many of the consequences of the bar have already been experienced by Mr Singh and the current director Ms Kaur as they say the result of the bar was the failure of a new business in Mt Gambier.
Considering the totality of the circumstances, and having regard to the prescribed criteria the Tribunal finds that the action mentioned in s.140M(1)(c) should be taken.
An appropriate period to bar Do from sponsoring non-citizens for a temporary work visa is three months from the date of the delegate’s decision on 31 October 2016. This means the bar expired on 31 January 2017.
DECISION
The Tribunal varies the decision under review by varying the period for which Do Investment (SA) Pty Ltd is barred from sponsoring non-citizens for temporary work visas for a period of three months from 31 October 2016
Kate Millar
Member

ATTACHMENT – Extract from the Migration Regulations 1994
2.89   Failure to satisfy sponsorship obligation
…
(3) For paragraph 140L(1)(b) of the Act, the criteria that the Minister must take into account in determining what action (if any) to take under section 140M of the Act in relation to the circumstance mentioned in subregulation (2) are:
(a)     the past and present conduct of the person in relation to Immigration; and
(b)    the number of occasions on which the person has failed to satisfy the sponsorship obligation; and
(c)     the nature and severity of the circumstances relating to the failure to satisfy the sponsorship obligation, including the period of time over which the failure has occurred; and
(d)    the period of time over which the person has been an approved sponsor; and
(e)     whether, and the extent to which, the failure to satisfy the sponsorship obligation has had a direct or indirect impact on another person; and
(f)     whether, and the extent to which, the failure to satisfy the sponsorship obligation was intentional, reckless or inadvertent; and
(g)    whether, and the extent to which, the person has cooperated with Immigration, including whether the person informed Immigration of the failure; and
(h)    the steps (if any) the person has taken to rectify the failure to satisfy the sponsorship obligation, including whether the steps were taken at the request of Immigration or otherwise; and
(i)    the processes (if any) the person has implemented to ensure future compliance with the sponsorship obligation; and
(j)    the number of other sponsorship obligations that the person has failed to satisfy, and the number of occasions on which the person has failed to satisfy other sponsorship obligations; and
(k)     any other relevant factors.
…

[2019] AATA 891

4 February 2019

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Immigration

Administrative Law

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Judicial Review

Procedural Fairness

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