DONGMUN GREENTEC PTY LTD (Migration)

DONGMUN GREENTEC PTY LTD (Migration) [2017] AATA 856 (9 June 2017)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  DONGMUN GREENTEC PTY LTD
CASE NUMBER:  1509952
DIBP REFERENCE(S):  BCC2015/494836
MEMBER:Brook Hely
DATE:9 June 2017
PLACE OF DECISION:  Melbourne
DECISION:The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.

Statement made on 09 June 2017 at 1:49pm

CATCHWORDS
Migration – Nomination – Direct Entry Nomination stream – 2 years full time – Accountant – Bilingual requirement – Expanding company – Financial capacity – Genuine need
LEGISLATION
Migration Act 1958, s.245AR(1)
Migration Regulations 1994, r 1.13A, r 1.13B, r 5.19
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 Immigration on 6 July 2015 to reject the applicant’s application for approval of the nomination of a position in Australia under r.5.19 of the Migration Regulations 1994 (the Regulations).
The applicant applied for approval on 13 February 2015. The requirements for the approval of the nomination of a position in Australia are found in r.5.19 of the Regulations which contains two alternative streams: a Temporary Residence Transition nomination (r.5.19(3)) stream and a Direct Entry nomination (r.5.19(4)) stream. If the application is made in accordance with r.5.19(2) and meets the requirements of either stream, then the application must be approved. If any of the requirements are not met then the application must be refused: r.5.19(5).
In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in Direct Entry Nomination stream.
The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19(4)(a)(ii) of the Regulations because the delegate was not satisfied that the applicant had demonstrated a need to employ a paid employee in the nominated position. The delegate also refused the application on the basis the applicant’s nomination did not satisfy r.5.19(4)(d)(i) of the Regulations because the delegate was not satisfied that the applicant had demonstrated sufficient financial capacity to meet the nominee’s salary for at least 2 years.
The applicant appeared before the Tribunal on 10 March 2017 to give evidence and present arguments, with Mr Yong Soo Kim giving oral evidence on the applicant’s behalf. The Tribunal also received oral evidence from Mr Yongsik Park, the nominee. The Tribunal hearing was conducted with the assistance of an interpreter in the Korean and English languages.
The applicant was represented in relation to the review by its registered migration agent. The representative attended the Tribunal hearing.
For the following reasons, the Tribunal has decided to set aside the decision under review and substitute a decision approving the nomination.
CONSIDERATION OF CLAIMS AND EVIDENCE
The issue in this case is whether the applicant meets the requirements for approval of the nomination under the Direct Entry nomination stream set out in r.5.19(4), which is extracted in the attachment to this decision. For the nomination to be approved, all the requirements must be met.
The application is compliant: r.5.19(4)(a)
Regulation 5.19(4)(a) requires that the application for approval must be in the approved form, must be accompanied by the prescribed fee, and, where applicable, must include the required written certification relating to conduct that contravenes s.245AR(1). The application must also identify a need for the nominator to employ a paid employee to work in the position under their direct control.
The nomination was made on the approved form and there is no fee payable for this application. As the application was made prior to 14 December 2015, the requirement to provide written certification relating to conduct that contravenes s.245AR(1) does not arise.
As noted above, the delegate refused the application on the basis that the applicant had not demonstrated a need to employ a paid employee to work in the nominated position of accountant. Specifically, the delegate was concerned that the applicant ran a relatively small business and already employed full-time staff in the accounts section.
In written submissions to the Tribunal, it was explained by the applicant’s CEO that the applicant was in the business of constructing ethanol production plants in regional areas. The nominated position related to its current project being carried out in Deniliquin. This project was still in its initial stages, as preparatory works are carried out and the necessary regulatory approvals obtained. However, the company had recently obtained final approval to commence construction of the ethanol processing plant, which was due to commence in early to mid 2017. A copy of a newspaper article, dated 9 December 2016, was provided which reported on the background and progress of the project.
At the hearing, Mr Kim explained that the project began in 2012, although met with several delays in obtaining necessary approvals. These approvals were finally obtained in around July 2016 and the company has since been undertaking the necessary preparations to organise construction, which was due to commence in April 2017. The Tribunal noted its concern that, based on the organisational chart submitted, it appeared that the company was still very small and arguably had no need for a dedicated accountant. He said that the company was currently in the process of hiring more than 20 positions to enable the construction phase to be undertaken and he anticipated that its workforce would quickly rise to at least 50 people. Mr Kim explained that the company required someone to be employed as a full-time accountant to deal with payroll and taxation requirements for its rapidly expanding workforce, as well as to undertake the various accounting tasks of the company itself, such as preparing financial statements and meeting its tax office requirements. He also emphasised that the company required an accountant who spoke Korean, as the company was a subsidiary of a Korean company and most of its funding was from Korean investors. As such, the necessary paperwork for the position would be in either English or Korean. Mr Kim also emphasised that the ethanol plant, once operational, will be a $70 million enterprise and will have a variety of complex accounting requirements. When asked why the company could not simply outsource its accounting needs to an external accountant, he said that it preferred to keep its financial information in-house as much as possible to protect the confidentiality of commercially sensitive information. He also indicated that the company would continue to engage an external accountant for more complex issues, but required an internal accountant to deal with day-to-day accounting matters and to prepare financial reports and statements that may be supplied to an external accountant when required. Mr Kim also noted the unique need in this position for an accountant who can review, interpret and prepare documents in either English or Korean, which was difficult to outsource and would be expensive. He also explained that the company previously employed an accounting manager. However, this person had recently resigned, which had made the need for the recruitment of an accountant even more pressing. The applicant subsequently provided documents after the hearing in relation to this resignation.
The Tribunal is mindful that the present scale of the applicant’s workforce is relatively small. The Tribunal is also mindful that the accounting needs of the organisation have to date been met by external accountants, as well as its engagement of an accounting manager. However, the Tribunal accepts that the accounting manager has recently resigned and that there is currently a pressing need for someone to perform accounting functions within the organisation. The Tribunal also accepts that the company is expanding as construction of the ethanol plant draws closer, which will lead to a significant increase in the workforce and accounting needs of the organisation. The Tribunal also accepts that there is a specific need within the organisation for someone with accounting expertise who is bilingual in English and Korean, which is difficult to supplement through reliance on external accountants alone. Overall, the Tribunal is satisfied that the applicant has demonstrated a need to employ a person full-time in the nominated position under the nominator’s direct control.
Accordingly, the requirement in r.5.19(4)(a) is met.
Nominator is actively and lawfully operating a business in Australia: r.5.19(4)(b)
Regulation 5.19(4)(b) requires that applicant is actively, lawfully and directly operating a business in Australia.
In response to the Tribunal’s s.359(2) letter requesting evidence to show that it meets all the requirements of r.5.19(4), the applicant has provided several documents to show that the applicant is actively, lawfully and directly operating the relevant business in Australia. The Tribunal has also had regard to the original documents submitted to the Department as part of the application. Relevantly, the applicant has provided an ASIC Certificate of Registration and Australian Business Register certificate. It has also provided recent Business Activity Statements, financial statements for the 2014/15 and 2015/16 financial years, loan agreement between the applicant and its parent company and media article, dated 9 December 2016, in relation to its operations. The Tribunal also received oral evidence at the hearing regarding the ongoing operations of business. The Tribunal is satisfied from this evidence that the requirement in r.5.19(4)(b) is met.
Position is not labour-hire: r.5.19(4)(c)
Regulation 5.19(4)(c) applies to nominators whose business activities include those relating to labour hire to an unrelated business. In these cases, the nominated position must be within the business activities of the nominator.
In the present case the nominator’s business activities do not include labour hire. Accordingly, the requirement in r.5.19(4)(c) does not apply.
Term of employment of the visa holder: r.5.19(4)(d)
Regulation 5.19(4)(d) requires the nominee to be employed in the nominated position for at least 2 years full time, and the terms and conditions of that employment do not expressly exclude the possibility of an extension.
The applicant has provided a copy of the relevant employment contract which states explicitly that the position is a full-time position and will be available for at least 3 years after the permanent visa is granted. The Tribunal is satisfied from this document that the nominated position will remain open to the nominated worker for at least two years full-time without any express exclusion of the possibility of an extension thereafter.
The Tribunal has also considered the financial capacity of the applicant to ensure its ability to meet this commitment to providing two years of full-time employment to the nominated worker. As noted earlier, the delegate was not satisfied that the applicant had demonstrated a financial capacity to employ the nominee for at least two years, noting that the business had been operating at significant losses in the 2013 and 2014 financial years and continued to record zero sales in its most recent Business Activity Statements. The Tribunal notes that the applicant’s financial losses increased in the 2016 financial year and it is still yet to generate any income.
At the hearing, Mr Kim gave evidence that the applicant has attracted significant investors and has the financial support of its parent company until the ethanol plant is operational and financially self-sufficient. He referred to the copy of the loan agreement between the applicant and its parents company to support this. The Tribunal noted its concern that under the terms of this loan agreement, under which the applicant was provided an ongoing loan of $1 million each year until the commencement of sales, was only scheduled to continue until 30 June 2017. Mr Kim explained that they are intending to extend this agreement if they were unable to secure sufficient funding from external investors. However, negotiations with these investors were close to completion so is not anticipated that they would require additional funding by the parent company. Following the hearing, the applicant’s agent provided a letter of intent signed by the director of the applicant’s parent company, confirming its intention to continue its loan agreement with the applicant under the existing terms and conditions until external investment was secured. A copy of a draft agreement to this effect was also attached. The Tribunal notes its concern with these documents, given that the agreement was in draft and the letter was expressly stated to be not an official agreement. Nevertheless, viewing the history of financial support provided by the parent company to the applicant over the past six years, the Tribunal is prepared to accept that this ongoing financial support will continue to be available to the applicant at least to the extent necessary to employ the nominee for at least two years.
Having regard to these matters, the Tribunal is prepared to accept that the applicant possesses sufficient financial capacity to provide two years of full-time employment to the nominated worker in accordance with the proposed terms and conditions of employment. Accordingly, the requirement in r.5.19(4)(d) is met.
No less favourable terms and condition of employment: r.5.19(4)(e)
Regulation 5.19(4)(e) requires that the terms and conditions of employment applicable to the nominated position will be no less favourable than those that are, or would be, provided to an Australian citizen or permanent resident performing equivalent work in the same workplace at the same location.
There is not currently an Australian citizen or permanent resident performing equivalent work in the same workplace at the same location. However, the terms and conditions in the employment contract for the nominated worker are consistent with the National Employment Standards and the Tribunal accepts from the material submitted by the applicant to the Department that the proposed base salary of $60.225 is consistent with general market rates.
Having regard to the above, the Tribunal is satisfied that the terms and conditions of the nominated position will be no less favourable than those that are, or would be, provided to an Australian citizen or permanent resident performing equivalent work in the same workplace at the same location.
The Tribunal is satisfied from the above that the requirements of r.5.19(4)(e) are met.
No adverse information known to Immigration: r.5.19(4)(f)
Regulation 5.19(4)(f) requires that there is no adverse information known to Immigration about the nominator or person associated with the nominator; or it is reasonable to disregard any such information. For these purposes, ‘adverse information’ and ‘associated with’ have the meaning given in rr.1.13A and 1.13B.
There is nothing before the Tribunal to show any adverse information known about the relevant business or anyone associated with it. The Tribunal also received oral evidence from Mr Kim confirming that neither the nominator nor any person associated with it has ever been the subject of any warnings, sanctions, investigations or any other problems with the Department or any other government agency, either in relation to this application or for any other reason.
The Tribunal is satisfied from the above that the requirements of r.5.19(4)(f) are met.
Satisfactory compliance with workplace relations laws: r.5.19(4)(g)
Regulation 5.19(4)(g) requires that the applicant has a satisfactory record of compliance with the laws of the Commonwealth, and of each State or Territory in which the applicant operates a business and employs employees in the business, relating to workplace relations.
There is nothing before the Tribunal to indicate that the applicant does not have a satisfactory record of compliance with laws relating to industrial relations. The Tribunal also received oral evidence from Mr Kim confirming that the applicant had never been the subject of any warnings, sanctions, investigations or any other problems with any State, Territory or Commonwealth government agency involved with workplace relations. He also confirmed that the applicant has never had legal proceedings brought or threatened against it by any of its employees.
The Tribunal is satisfied from the above that the requirements of r.5.19(4)(g) are met.
Tasks of the position genuine need for the position and training benchmarks r.5.19(4)(h)
Regulation 5.19(4)(h) contains a number of alternative requirements. In the case of regional nominations, the Tribunal must be satisfied that the position and nominator’s business is located in regional Australia, there is a genuine need for the paid position under the nominator’s direct control which cannot be filled by a locally resident Australian citizen or permanent resident, the tasks of the position correspond to those of an occupation at the ANZSCO skill level 1, 2 or 3; and that a regional certifying body has advised the Minister about certain matters relating to the position.
Business and position is located in regional Australia
The Tribunal accepts from the documents submitted that the head office for the applicant’s business is located in Warrion (postcode 3249) and that the nominated position will be located in Deniliquin (postcode 2710), both of which are classified in the relevant instrument as regional Australia. The Tribunal is therefore satisfied that the requirements of r.5.19(4)(h)(ii)(A) and (E) are met.
Genuine need for the paid position under the nominator’s direct control
For the reasons set out earlier, the Tribunal is satisfied from the evidence before it that there is a genuine need for the nominator to employ a paid employee to work in the position under the nominator’s direct control.
The Tribunal is therefore satisfied that the requirements of r.5.19(4)(h)(ii)(B) are met.
Position cannot be filled by a locally resident Australian citizen or permanent resident
The Tribunal accepts the evidence of Mr Lim at the hearing that the applicant advertised for the nominated position but was unable to recruit a suitably qualified Australian citizen or permanent resident living locally, particularly due to the specific bilingual requirements of the position combined with its remote location. The Tribunal also accepts from the evidence of Mr Lim, which was consistent with the evidence given by Mr Park, that the nominee was recruited for the position after he responded to the applicant’s job advertisement posted on Seek. The Tribunal accepts that this recruitment of the nominee was an arms length commercial transaction that was not influenced by any pre-existing relationship between the nominee (or his family) and anyone connected with the applicant. The Tribunal is satisfied from this evidence that the position cannot be filled by an Australian citizen or permanent resident who was living in the same local area to where the position is located. The Tribunal is therefore satisfied that the requirements of r.5.19(4)(h)(ii)(C) are met.
Tasks of the position correspond to those of an occupation at the ANZSCO skill level 1, 2 or 3
The nominated position is an accountant (ANZSCO 221111 ), which is an ANZSCO skill level 1 occupation. At the hearing, the Tribunal explored with Mr Kim whether the proposed duties of the position would in fact be commensurate with a lower skilled position, such as an accounting clerk, given that the applicant had to date employed an accounting manager and engaged external accountants. The Tribunal was satisfied from this discussion, in combination with the position description provided and the other evidence before it in relation to the scale and operation of the business and its accounting requirements going forward, that the tasks of the position correspond to those of an occupation at the ANZSCO skill level 1.

The Tribunal is therefore satisfied that the requirements of r.5.19(4)(h)(ii)(D) are met.
Regional certifying body
The Tribunal accepts from the certification document submitted with the application (Department file, folio 141 - 142) that a relevant certifying body has advised the Minister about the matters mentioned in paragraph (e) and sub-subparagraphs (B) and (C). The Tribunal is therefore satisfied that the requirements of r.5.19(4)(h)(ii)(F) are met.
Having regard to the above, the Tribunal is satisfied that the requirements of r.5.19(4)(h) are met.
Based on the findings above, the Tribunal is satisfied that the applicant meets the requirements of r.5.19 for approval of the nomination of the position in Australia.
DECISION
The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.
Brook Hely
Member

ATTACHMENT - EXTRACTS FROM THE MIGRATION REGULATIONS 1994
5.19Approval of nominated positions (employer nomination)
…
(2)The application must:
(a)be made in accordance with approved form 1395…; and
(b)be accompanied by the fee mentioned in regulation 5.37.
…
Direct Entry nomination
(4)The Minister must, in writing, approve a nomination if:
(a)the application for approval:
(i)     is made in accordance with subregulation (2); and
(ii)    identifies a need for the nominator to employ a paid employee to work in the position under the nominator’s direct control; and
(b)the nominator:
(i)     is actively and lawfully operating a business in Australia; and
(ii)    directly operates the business; and
(c)for a nominator whose business activities include activities relating to the hiring of labour to other unrelated businesses — the position is within the business activities of the nominator and not for hire to other unrelated businesses; and
(d)both of the following apply:
(i)     the employee will be employed on a full-time basis in the position for at least 2 years;
(ii)    the terms and conditions of the employee’s employment will not include an express exclusion of the possibility of extending the period of employment; and
(e)the terms and conditions of employment applicable to the position will be no less favourable than the terms and conditions that:
(i)     are provided; or
(ii)    would be provided;
to an Australian citizen or an Australian permanent resident for performing equivalent work in the same workplace at the same location; and
(f)either:
(i)     there is no adverse information known to Immigration about the nominator or a person associated with the nominator; or
(ii)    it is reasonable to disregard any adverse information known to Immigration about the nominator or a person associated with the nominator; and
(g)the nominator has a satisfactory record of compliance with the laws of the Commonwealth, and of each State or Territory in which the applicant operates a business and employs employees in the business, relating to workplace relations; and
(h)either:
(i)     both of the following apply:
(A)the tasks to be performed in the position will be performed in Australia and correspond to the tasks of an occupation specified by the Minister in an instrument in writing for this sub-subparagraph;
(B)either:
(I)the nominator’s business has operated for at least 12 months, and the nominator meets the requirements for the training of Australian citizens and Australian permanent residents that are specified by the Minister in an instrument in writing for this sub-sub-subparagraph; or
(II)the nominator’s business has operated for less than 12 months, and the nominator has an auditable plan for meeting the requirements specified in the instrument mentioned in sub-sub-subparagraph (I); or
(ii)    all of the following apply:
(A)the position is located in regional Australia;
(B)there is a genuine need for the nominator to employ a paid employee to work in the position under the nominator’s direct control;
(C)the position cannot be filled by an Australian citizen or an Australian permanent resident who is living in the same local area as that place;
(D)the tasks to be performed in the position correspond to the tasks of an occupation at a skill level of ANZSCO skill level 1, 2 or 3;
(E)the business operated by the nominator is located at that place;
(F)a body that is:
(I)specified by the Minister in an instrument in writing for this sub-subparagraph; and
(II)located in the same State or Territory as the location of the position;
has advised the Minister about the matters mentioned in paragraph (e) and sub-subparagraphs (B) and (C).

[2017] AATA 856

9 June 2017

Key Legal Topics

Areas of Law

Immigration

Administrative Law

Legal Concepts

Judicial Review

Statutory Construction

Jurisdiction

Procedural Fairness