DOSSA ENTERPRISES PTY LIMITED (Migration)

[2021] AATA 479

DOSSA ENTERPRISES PTY LIMITED (Migration) [2021] AATA 479 (19 January 2021)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  DOSSA ENTERPRISES PTY LIMITED

CASE NUMBER:  1935676

HOME AFFAIRS REFERENCE(S):          OPF2019/10607

MEMBER:Alan McMurran

DATE:19 January 2021

PLACE OF DECISION:  Sydney

DECISION:    

The Tribunal varies the decision under review to bar the applicant from making applications for approval as a Standard Business Sponsor and Temporary Activities Sponsor commencing 17 December 2019 for a period of 1.5 years, concluding on 17 June 2021.

Statement made on 19 January 2021 at 1:50pm

CATCHWORDS

MIGRATION – sponsorship cancellation or bar – equivalent terms and conditions of employment – false or misleading information about work rosters – pay below the minimum Award requirement – rosters served as time records – accounting software interpretation of the Industry Award – applicant disputed employee gradings and entitlements – steps to improve recordkeeping – substantial period of compliance – no substantial trade opportunity lost – applicant barred from applications for approval as Standard Business Sponsor and Temporary Activities Sponsor – decision under review varied           

LEGISLATION

Migration Act 1958, ss 140, 360, 496
Migration Regulations 1994, rr 2.79, 2.89, 2.90, 2.101

CASES

El Jejieh v MHA (No 2) [2019] FCCA 840
Minister for Immigration v Roberts & Anor [2011]FMCA 77
SZVDC v MIBP [2018] FCAFC 16

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1.This is an application lodged 18 December 2019 for review of a decision made by a delegate of the Minister for Home Affairs to take an action under s 140M of the Migration Act 1958 (the Act) in relation to the applicant’s sponsorship.

Background

2.On 27 October 2016 the applicant was approved as a standard business sponsor by agreement, expiring in the ordinary course on 27 October 2021. The applicant carries on business as a licensed restaurant using the trading name “Zaffran” from premises at Darling Harbour in Sydney.

3.On 17 December 2019, the delegate decided to cancel the applicant’s sponsorship agreement under s 140M(1) on the basis that the applicant had failed to satisfy its sponsorship obligation under regulation 2.89, by not ensuring equivalent terms and conditions of employment had been offered to 4 sponsored employees on temporary visas (Notice of Decision).

4.The delegate also found the applicant had provided false or misleading information under regulation 2.90, as work rosters provided by the applicant were not reflective of the information provided by the sponsored employees during interview as to their actual working hours.

5.The delegate determined in addition to cancellation of the sponsorship agreement, to bar the applicant for a period of 2 years from the Notice of Decision from making applications for approval as a standard business sponsor and temporary activities sponsor. The bar expires unless varied or altered on 16 December 2021.

6.On 4 November 2020, the application was constituted to a Member for determination.

7.On 17 November 2020, the Tribunal sent a letter to the applicant’s representative inviting the applicant to provide information to the Tribunal concerning the imposition of the sponsorship bar and setting out the alternative actions the Tribunal may take. The applicant was requested to respond by 24 November 2021. The applicant did not meet the request, did not respond and did not provide any additional information for this review.

8.On 26 November 2020, the applicant was invited to a hearing under section 360 of the Act, to give evidence and present arguments relating to the issues arising.

9.On 14 December 2020, the Tribunal sent a letter to the applicant enclosing a copy of a certificate issued by the Department under section 375A of the Act, inviting the applicant to respond.

10.On 14 December 2020, the applicant’s representative informed the Tribunal that he was no longer acting for the applicant. The Tribunal responded the same day to the applicant (copied to its director) requesting details of the authorised representative now appearing for the applicant. 

11.On 12 January 2021, the applicant by an employee, Vikrant Kapoor, asked the Tribunal to postpone the hearing.

12.On 14 January 2021, the Tribunal declined the postponement request for want of sufficient information and an adequate response and informed the applicant that the hearing would proceed as scheduled on 18 January 2021. The Tribunal also requested that the applicant’s director confirm with whom the Tribunal was to communicate. The director responded that the applicant’s Head Chef was the authorised representative for the applicant, and again asked that the hearing be postponed, without providing any additional information.

13.On 14 January 2021, the Tribunal responded that in the absence of any additional information concerning the postponement request, the hearing will proceed on 18 January 2021 as scheduled. The director of the applicant responded the same day, advising that “as we are unable to attend we would appreciate if a decision is made with the information already provided”.

14.On 15 January 2021, the Tribunal informed the applicant in reply that in light of the director’s response, the Tribunal would proceed to deal with the matter under section 360 (2)(b) of the Act and without a hearing, and the hearing date for 18 January 2021 was cancelled.

15.The applicant was represented in relation to the review by its registered migration agent, up until the agent’s withdrawal recorded by the Tribunal on 15 December 2020.

16.For the following reasons, the Tribunal has decided to vary the decision under review by reducing the period of the sponsorship bar from 2 years to 1.5 years. In all other respects, the decision is affirmed.

CONSIDERATION OF CLAIMS AND EVIDENCE

17.Sections 140K, 140L and 140M of the Act provide for the imposition of sanctions on approved sponsors in certain circumstances. 

18.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.

19.For these purposes, the circumstances are prescribed in regs 2.89–2.94B and include circumstances in which the Minister, or Tribunal on review, is satisfied there has been: a failure to satisfy a sponsorship obligation; provision of false or misleading information; sponsorship application or variation criteria no longer met; a contravention of the law; unapproved changes to a program; a failure to pay additional security; a failure to comply with certain terms of an agreement; or a failure to pay medical and hospital expenses. The prescribed circumstances relied upon by the Department in this instance are the failure to satisfy the sponsorship obligation and the provision of false or misleading information.

20.The applicant, being a person who is or was an approved sponsor, must satisfy the sponsorship obligations prescribed by the regulations.[1] 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. These criteria, as they relevantly apply to the circumstances of this case are set out in the attachment to this decision.[2]

[1] r.140H

[2] relevantly rr.2.89 and 2.90

21.Policy guidelines[3] distinguish between types of failure that fall within the prescribed circumstances as minor failure, significant failure and serious failure. Where the asserted failure has led to a determination that prescribed circumstances exist, in determining whether it is “significant”, policy directs attention to several criteria including a failure that affects the Department’s capacity to monitor the sponsor, and where the failure was due to the sponsor’s negligence or reckless conduct.

[3] PAM 3

22.Where the failure is regarded as “significant”, formal action by the Department is likely and is recommended under policy. In this instance, the Department’s findings indicate that the failures identified by the Department were regarded as significant due to the sponsor’s negligence or reckless conduct, resulting in the cancellation decision and sponsorship bar.

23.Information on the Department file indicates monitoring of the applicant commenced on 29 August 2019, with a combination of desk audit and site visit, conducted on 1 October 2019, when 2 visa holders were interviewed. The Department file also contains information from the applicant provided on 11 October 2019 and 29 November 2019, in response to a Department request and extension of time granted to the applicant for the applicant’s further responses.

24.The Tribunal has had available for consideration the Department’s file, the applicant’s responses to the Department, and the Tribunal’s file. No additional information has been provided to the Tribunal since the Notice of Decision and filing of the application for this review.[4]

Section 375A certificate

[4] par 7 above refers

25.Attached to the Department file is an undated certificate under section 375A of the Act, which certifies information, contained in the Department’s file, as information that would be contrary to the public interest if disclosed. The relevant “public interest” is referred to as information which “may disclose or enable a person to ascertain, the existence or identity of a confidential source of information relating to the enforcement for administration of law of the Commonwealth”[sic].[5] The Tribunal has dealt with the certificate as follows.

[5] DHA file number OPF2019/10607

26.The folios from the Department’s file are identified by reference number OPF 2019/385559. Specifically, a section in those folios referred to as “Allegation (s) received”. Those allegations concern failure to provide equivalent terms and conditions for visa holders, specifically by underpayments, and providing misleading information.

27.The section provides that where there is a valid certificate attached to the file, relevant to certain information provided, the information or documents to which it refers must only be disclosed to the Tribunal.[6] the Tribunal is required to do all things necessary to ensure the documents or information are not disclosed to any person other than a Member of the Tribunal as constituted for the purposes of the review.

[6] s.375A(b)

28.The Tribunal has considered the attached certificate, noting it has not been dated and is not signed with the certifier’s full name.

29.In El Jejieh v MHA (No 2)[7], the Federal Circuit Court held that a section 375A certificate was invalid because s 375A requires a signature (which may be electronic) and a date of the certification. In relation to the date, this is required because a valid delegation in respect of any exercise of power by a delegate under s 496 of the Act, to issue a non-disclosure certificate/notification, requires being able to ascertain whether the particular delegate had the required delegation on the date the certificate/notification was made.

[7] [2019] FCCA 840 at [23]–[25]

30.In this instance, the Tribunal has noted that the certificate was not dated, and the signature refers electronically to a single name which does not appear to be the full name of the delegate. For these reasons, the Tribunal finds that the certificate is not a valid certificate under section 375A of the Act.

31.The Tribunal further notes that the information contained in the relevant folios is not information of which the applicant is unaware, and the details of which were included in the Notice of Intention to Take Action and the Notice of Decision, and where the applicant was made aware of the audit and the site visit and the fact that visa holders were interviewed.

32.The applicant was further made aware by the Department of the express allegations of underpayment and the particulars relating to the individual visa holders, as identified from the applicant’s records and the site visit, the extent of those allegations concerning failure to ensure equivalent terms and conditions, and the allegation of false or misleading information from the staff rosters provided by the applicant. It is those particulars to which the Tribunal has had regard in reaching its decision and does not regard the specified folios in the certificate as in any way adding to or contributing to the reasons set out below.

33.The Tribunal has noted that the applicant responded to the Department[8] and which responses were considered and identified in the reasons given to the applicant with the Notice of Decision. The Tribunal has had regard to those responses. Importantly, no information or responses have been provided to the Tribunal by the applicant concerning the certificate, nor any dispute raised as to its validity or otherwise.

[8] referenced in par 23 above

34.The applicant has expressly declined the Tribunal’s invitation to attend the hearing and is taken to have waived any right it might otherwise have to be informed about the certificate[9].

[9] SZVDC v MIBP [2018] FCAFC 16 at [79]

35.The Tribunal has referred below to its considerations in reaching the determination outlined with these reasons and which does not involve any reliance upon the specified folios covered by the certificate.

Does a circumstance for the taking of an action exist?

36.The applicant is an incorporated entity first registered on 20 May 1998 and trading continuously since that time as a licensed restaurant. There is one current director who is an Australian citizen, and as at the time of monitoring in November 2019, the applicant had nominated 8 visa holders in its employ, 4 of whom were selected for the monitoring audit.

37.In the present case, the delegate found on the available information that the applicant had not met its obligations under regulation 2.79 to ensure equivalent terms and conditions of employment were met in respect of 4 named visa holders being sponsored employees: 3 Chefs and 1 café and restaurant manager.[10]

[10] Full staff names omitted

38.Specifically, the delegate had regard to the employment details of each visa holder, the nominated salary, the specified shift times for the chefs and the manager, as identified in the roster information made available. The delegate had regard to the provisions of the relevant industry Award[11], which included provision for split shifts, rostered days off and relevant duties for the particular grade of tradesperson. The delegate considered pay information provided from the applicant’s salary payslips, as compared with the annualised amounts provided for in the relevant industry Award.

[11] Restaurant Industry Award 2010

39.The delegate found that in each case the named employee had been underpaid below the minimum Award requirement for the position and in respect of the relevant salary, reviewed over a four-month audit and considering every monthly payslip provided.

40.The delegate produced a table of comparable payments showing amounts received against amounts required to be paid for each employee for the relevant period. The delegate’s calculations reflected the nominated salary in each case, as opposed to the Award rate.

41.As a result of the delegate’s findings in respect of the comparable amounts, the delegate found the applicant had failed to provide the 4 employees/visa holders with the equivalent terms and conditions applicable to the positions they each held, and in particular, the appropriate and correct remuneration. The delegate found this was the relevant failure under r. 2.79 (3), which sub-regulation provides that the sponsor must ensure that the terms and conditions of employment provided to the primary sponsored person are no less favourable than the terms and conditions of employment that are provided, or would be provided, to an Australian citizen or an Australian permanent resident and performing the equivalent work in the person’s workplace at the same location.

Failure to satisfy a sponsorship obligation: reg 2.89

42.The Minister may take one or more of the actions in s 140M if satisfied the sponsor has failed to satisfy a sponsorship obligation referred to in Division 2.19 of the Regulations: reg 2.89(2). The Tribunal has summarised each of the allegations from the available information and the Department records in respect of the 4 visa employees as follows.

Chef 1

43.The evidence from the Department file and confirmed by the applicant in respect of this employee, is that he was a Subclass 457 visa holder contracted from March 2016 as demi chef for 38 hours per week on an agreed salary of $57,250. The relevant split shifts for the role were from 10 AM to 3 PM, returning 5:30 PM to 9:30 PM daily; or if rostered for closing shift, from 11 AM to 3 PM, returning 5:30 PM to 10:30 PM. In addition, the role allowed two rostered days off per week.

44.The evidence discloses the industry award and annualised salary for this occupation was $59,390.50 (2018/2019) and $61,171.50 (2019/2020.

45.The applicant was unable to provide a roster, described as “missing” for the period 17 June to 23 June 2019. The rosters produced otherwise failed to include details of hours worked, and although indicating two rostered days off work were provided, the evidence from the employees disclosed only one day per week was in fact allowed. If a second day was taken, it was treated as annual leave or sick leave by the applicant.

46.The Department’s calculations were not contested by the applicant and revealed that in the pay period 1 July 2019 to 31 July 2019, the gross salary as per his produced payslips was $4,770.83 whereas annualised under the Award, the employee should have received $5,251.28 for the same period. A similar calculation for the period 1 August 2019 to 31 August 2019 showed a gross payment of $4,770.83 in lieu of an award requirement of $5,598.08.

47.The calculation demonstrates that this employee was underpaid and below the minimum Award for his position as Chef.

Chef 2

48.This employee commenced employment on 17 December 2017 in the nominated position of Chef.[12] The employee was on an agreed salary of $57,250 from commencement for the nominated position, and the information available from the Department file indicates he was paid a gross salary for 2019 of $50,152.34 and underpaid for each of the pay periods 1 July 2019 to 31 July 2019 and 1 August 2019 to 31 August 2019, as against the Award entitlements.

[12] ANZSCO 351311

49.This employee also worked split shifts on the same basis as the other visa employees engaged as Chefs, with one rostered day off per week (in lieu of 2 days). Payments received calculated in the relevant periods were below the minimum Award amounts for the position.

Chef 3

50.This employee commenced on a subclass 457visa on 15 February 2017 in the nominated position of Chef and on an agreed salary of $57,250 per annum for a 38 hour week.

51.The annualised salary for the position is set out above at paragraph 44. This employee also worked split shifts and on the same basis as the other visa employees, with one rostered Day off per week (in lieu of 2 days). Payments received by the employee and calculated on the available information (and not disputed by the applicant) were below the minimum Award amounts for the position.

Restaurant Manger

52.This employee was engaged under contract from 24 February 2016 as the café or restaurant manager[13] on an agreed salary of $54,000 per annum for a 38 hour week. The equivalent Award provision according to the Department record provides a salary annualised at $57,843.54 for the period 2018/2019, and $59,579 for the period 2019/2020.

[13] ANZSCO 141111

53.Payroll records indicate gross salary for this employee for the year ending 2019 of $56,340.78, and for the weekly pay periods commencing 1 July 2019 to 31 August 2019, gross weekly salary of $1,038.46 in lieu of $1,145.75, indicating an underpayment in each of those periods. A pay record for the period 26 August 2019 to 31 August 2019 was “missing” and not provided.

Applicant’s responses

54.The information and responses provided to the Department by the applicant on 11 October 2019 (following an audit request) and 29 November 2019 (following receipt of the Department Notice dated 13 November 2019), may be summarised as set out below.

55.The applicant co-operated with the Department and provided appropriately copies of the employment contracts for each employee. The applicant provided evidence from a salary website, Pay Scale Australia, to show the “average salary for a chef de partie in Australia” quoted as $53,803.

56.The applicant stated its reliance upon advice from a hospitality specialist recruitment service (“Spectrum”) dated 31 May 2019, setting out recommended market salaries for chefs and restaurant manager. The range for chefs varied from $55,000-$65,000 per annum and for restaurant manager from $65,000-$80,000 per annum.

57.The applicant included a summary of job descriptions, noting that in relation to tasks performed, “we write a short prep list the night before in collaboration with the team, morning briefing or pre-function briefing which ever is required”. The applicant enclosed a copy of its template “Kitchen Weekly Schedule”, which indicated the name of the employee and title, 7 columns for each day of the week and an entry for “off”. There was also a column marked “duties” and which had a generic entry styled “to be confirmed”.

58.In relation to the café or restaurant manager, his duties were included in the applicant’s contract which stated that: “Whilst your primary duty will be that of a managing the restaurant, you will be focused on the operational side of the restaurant. Your prior experience and expertise is noted in assigning this very responsible position to you”. In a later explanation, the applicant says that the restaurant manager was inexperienced, contrary to the description given above, and therefore not paid a premium salary.

59.The applicant also provided a summary of shift timings applying to the rosters for the chefs, indicating split times, as anticipated in the Award, and including breaks of 35-45 minutes. This information indicates the applicant was clearly aware of the timings for the split shifts.

60.The applicant provided as requested and appropriately its records in respect of the gross and net salaries for each employee, stating that in respect of the restaurant manager and 1 chef, they were each paid a “yearly base salary (which) was lower than contractual amount” due in each case to extended leave having been taken by those two employees. Copies of leave requests and days granted were produced, together with PAYG records and payroll advices.

61.The applicant produced a copy of a notice dated 1 July 2019 on its letterhead given to employees including the visa holders, that it had discovered “a typographical error in your employment agreement” and that the superannuation “should be properly recorded as 9.5%” and not 9%.The applicant asserted that appropriate adjustments had been made to reflect the correct amount and the adjustments paid. The applicant further produced copies of its bank statements illustrating EFT salary payments and summary salary records.

62.In reply to the Department’s audit request that the applicant show records “of the hours worked each week by the visa holders for the period 1 May 2019 to 31 August 2019”, the applicant responded that “Please note that our rosters serve as our time records”. No other records were available to show the applicant had accurately recorded hours worked by each employee. The only record was the date and day on which the visa holder had been rostered.

63.In response to the Department’s email sent 13 November 2019 with the Notice of Intention to Take Action, requesting a reply by 27 November 2019, the director states: “We have a problem meeting your deadline of 14 days due to our part-time accountant being unable to collate the figures to reply to all your questions. We have also had a problem with our accounting package which we had referred to MYOB. We would appreciate if you allow us an additional week to respond”. The Department extended time for responses to close of business on 29 November 2019, and which timeframe was met by the applicant.

64.The applicant included with its responses an explanation it had received from Restaurant and Catering New South Wales, MYOB and its interpretation of the Restaurant Industry Award, Wage Table for 2019-2020. Based on this information, the applicant submitted that it had applied the correct employee classifications under the Award for the 4 visa holders, asserting they had been correctly paid and in accordance with their relevant skills and competencies.

65.The director provided a letter of explanation on 29 November 2019, dealing with each of the matters referred to in the Department’s Notice. The director commenced his submission to the Department with the statement that: “Your Email has genuinely concerned us. We have been in the restaurant business for 22 years during which time we have had an excellent record with our employees and all departments monitoring us. Some of our employees have worked for us in excess of 10 years. That however may not be sufficient if we have erred in following the legislation correctly.”

66.In summary, the director submits: –

·     it has attempted to follow industry advice in interpreting the Award;

·     it believes it has correctly graded the employees as per the Award; if not “all corrective actions will be taken expeditiously to set the records right”;

·     that it has always been “well-intentioned”;

·     that the “annualised salaries” are “preloaded with a 25% allowance”;

·     that the scope and size of the business would not allow for multiple chefs at Grade 5 (as graded by the Department);

·     that no shift loading applies for split shifts after 7 PM

·     that two visa holders concerned, were granted additional leave for compassionate reasons, which included leave without pay and that “no employee has been adversely impacted”. The submission concedes that annual leave had been miscalculated and was “a mistake on our part to account for it in the way we have been doing” and “we have since corrected our method of accounting for annual leave”;

·     the “missing roster” for 17-23 June 2019 was “an honest oversight”;

·     concedes that the PAYG record does not match annual salaries and the applicant’s pay records and in respect of which the applicant says it was an MYOB “defect/glitch”;

·     concedes in relation to the rosters, the applicant did not fully appreciate the need for independent time sheets; the director offers an “unreserved apology” and says it has taken appropriate steps “to get it right here on”;

·     as to the provision of incorrect information or misleading information, the applicant says it was necessitated by the absence of one of the chefs who had a serious medical issue. As a consequence, the other chefs were scheduled “to work on a 6-day basis”. The director further says: “it is commonplace in our industry and other workplaces that when faced with extreme and unforeseen circumstances and/or a surge in business (as in a festive period) offs are deferred/accrued and given when more appropriate”. No evidence was provided of compensation or alternative days off provided to the employees in the circumstances outlined by the Department;

·     the director submitted that the café manager commenced on 25 February 2016 on an internship for a food and beverage program, and at the time he had limited experience in a supervisory role prior to his sponsorship on a 457 visa.

·     In conclusion, the director submits “we realise that some of our recordkeeping is dated. We have created templates (attached for your perusal) and put into place practices to record information efficiently. Effective immediately we are endeavouring to be more methodical and systematic in our recordkeeping. If we have stumbled it is most likely that we were ill informed not ill intentioned.”

67.The Tribunal has considered all of the above information and finds it is satisfied that the applicant is in breach of regulation 2.89 as it has not provided equivalent terms and conditions of employment to the 4 visa holders, as would be provided to Australian citizens or permanent residents performing the same work in the same location. The Tribunal is satisfied the 4 visa holders were underpaid for the audited periods.

68.The Tribunal finds it is satisfied the information produced by the applicant corroborates the Department’s summarised information in the Notice, and where the figures for the individual employees, including the calculated underpayments, have not been disputed. Rather, they have been challenged by the applicant only on the basis that the applicant’s version of the employee gradings and entitlements on the applicant’s information is to be preferred to the Department’s conclusions on the same information. The applicant’s director has conceded errors have been made as set out above, and the Tribunal accepts the conclusions drawn by the Department following the audit as the preferred information, demonstrating the regulation has been breached.

69.Accordingly, the Tribunal is satisfied that the prescribed circumstance in reg 2.89 exists for the purpose of s 140M of the Act.

False or misleading information: reg 2.90

70.One or more of the actions in s 140M may be taken if the sponsor has provided false or misleading information to Immigration or the Tribunal: reg 2.90(2).

71.The evidence produced by the applicant illustrates that the applicant’s records of hours worked by the employees were not maintained or recorded. The only records were the weekly rosters, copies of which were provided to the Department, and which show that each employee worked as required 5 daily shifts per week. The evidence from interviews at a site visit with two employees, discloses however that the visa holders regularly worked 6 days per week, with only 1 day off, despite the roster recording otherwise. The applicant concedes that for a period due to illness, chefs were asked to work 6 days, but without evidence to show they were compensated with the equivalent rostered days off for all or any part of that period.

72.The Tribunal finds it is satisfied that the provision of the rosters misrepresents the actual times and hours worked by the employees and cannot be relied upon as a correct record of their working rosters. This must have been known to the applicant at the time the information was provided to the Department, as the director has later conceded that the correct information was not recorded or “maintained” and the actual hours worked by the visa holders were omitted. The director observes this is industry practice, but does not show that any alternative days off were provided in lieu, and the Tribunal is satisfied on the information, that it was a regular practice to have the chefs rostered on 6 days a week, without rostering 2 days off as required under the Award, and by their respective employment agreements for a working week of 38 hours.

73.Accordingly, the Tribunal is satisfied the provision of the incomplete staffing rosters by the applicant for the chefs, and with no accompanying time recording to show start and finish times, demonstrates that the prescribed circumstance in reg 2.90 exists for the purpose of s 140M of the Act.

Action to be taken

74.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.

75.In considering what action to take, the Tribunal has had regard to the prescribed criteria, as extracted in the attachment to this decision.

76.S. 140M provides four alternatives, including barring the sponsor for a specified period from making future applications for approval as a sponsor.[14]

Criteria required to be considered

[14] s.140M (1) (d)

77.In determining what action might be taken, s.140L sets out that the regulations may prescribe the circumstances in which a sponsor may be barred, or the sponsor’s approval cancelled. Where the Tribunal is reasonably satisfied an approved sponsor has failed to satisfy a sponsorship obligation in the manner prescribed, including the provision of false or misleading information, the Minister must take action.[15]

[15] s. 140L (2)

78.Relevantly, matters for consideration are set out in regulation 2.89 (3) and 2.90 (3), as extracted in the attachment to this decision.

79.Having considered all of the information available and provided by both the Department and the applicant, the Tribunal finds as follows:

·The applicant has been the subject of 11 approved sponsorship agreements in the period since 1998; in that time, the applicant has operated a substantial restaurant with currently in excess of 20 employees, approximately half of whom are visa holders and with an annual turnover (at November 2019) of approximately $690,000 per annum. The applicant has been monitored on 6 occasions prior to the present monitoring in 2019. All proved “satisfactory” save for 2003 when the applicant was counselled. No additional monitoring has occurred since July-October 2019. Considering the period of operation over 23 years, the Tribunal finds this record to be reasonable and gives it some weight;

·The applicant has taken some steps to improve its recordkeeping, following the Department decision and intervention; the applicant has sought assistance from the industry body and MYOB. The Tribunal regards this as responsive and also gives it some weight;

·The uncontested findings in relation to underpayments shows these were not minor and were evident over the whole of the audit period (3 months). The Tribunal attaches significant weight to this finding;

·The failure by the applicant to provide appropriate documentation, and in particular the failure to record hours actually worked by the visa holders and by reference only to its incomplete “roster” system, was a substantial misrepresentation to the Department, and the Tribunal attaches some significant weight to this finding;

·The Tribunal notes the underpayments had a direct financial impact on the 4 visa holders. Other than for adjusted superannuation payments from 9% to 9.5%, there is no evidence the applicant has made good the underpayments to the staff concerned. On the available information, it appears none of the 4 staff concerned in the audit remain employed by the applicant. The Tribunal attaches some significant weight to this finding.

·The Tribunal accepts the director’s explanation that the failure to satisfy the obligations of the sponsor, and the misrepresentations by the documents produced, were not “intentional” or “reckless”, but rather were “inadvertent” and notes the applicant has taken some steps as regards its recordkeeping. The Tribunal places some weight on this finding.

·The Tribunal accepts that the applicant has cooperated fully with the Department, responded as requested and been active in its communications both during the audit process and up until the time of the Department’s decision. The Tribunal notes the applicant has been affected by the pandemic in 2020 and accepts the applicant’s submission that it has made the restaurant management more difficult, including in its communications with the Tribunal. The Tribunal attaches some weight to this submission.

·The Tribunal finds the breaches by the applicant of the sponsor’s obligations would not have been discovered if not for the Department audit. The Tribunal notes however that the applicant was of the view it was compliant and had no reason to inform the Department otherwise. The Tribunal places little weight upon this consideration.

·The Tribunal finds it remains concerned as to the actual steps implemented by the applicant to improve its recordkeeping and following the Department’s decision. This could have been addressed by the applicant in information sought by the Tribunal, and which was not provided. The Tribunal places some weight upon this consideration.

·The Tribunal notes the applicant’s submission it will ensure compliance in the future. In light of the overall circumstances concerning the applicant’s responses however, the Tribunal places little weight upon this consideration.

·Overall, the Tribunal finds it is satisfied that the applicant has in large measure and over a substantial period been compliant with its sponsorship obligations. The Tribunal notes that no issues have arisen in the period from 2003 until 2019 and places some considerable weight on this consideration.

·As regards the false or misleading information, the Tribunal finds the applicant made no attempt to record actual hours worked by visa holders. Producing a roster indicating the visa holders receive their entitlement for 2 days off per week, which was clearly incorrect, was significant misinformation. The Tribunal does not accept the applicant’s explanation that the roster was generally accurate, but for the audit period, where absences were recorded due to the exigencies of health issues to staff. The Tribunal prefers the evidence given by the visa holders themselves, to the effect they regularly worked 6 days per week. The Tribunal attaches some significant weight to this consideration.

·The Tribunal finds the applicant has not acknowledged the roster was in any way “false or misleading”. The failure to acknowledge the misleading information as having any impact either on the staff concerned, or to the Department’s ability to correctly interpret compliance issues, is of considerable concern, and the Tribunal attaches some significant weight to this finding.

80.Having regard to these findings and the matters generally as set out above, and considering the totality of the circumstances concerning the prescribed criteria, the Tribunal finds that the action mentioned in s 140M(1)(a) and (d) to cancel the applicant’s approval as a sponsor in relation to standard business sponsorship agreements, and to bar the sponsor for a specified period, should be taken.

Waiving a bar – s. 140O

81.Section 140O provides that in prescribed circumstances, the Minister may make regulations prescribing the circumstances to waive a bar[16].

[16] S.140O (3)

82.Regulation 2.101 prescribes criteria to consider, where the Minister has not previously refused to waive the bar. The first requirement to be met is whether the applicant has made a request for a waiver and in accordance with r.2.102, requiring a request to be in writing and addressed as required by the Minister.

83.In this instance, the applicant has not specifically used the wording of “waiver”, but rather has asked the Department in the director’s letter to provide a “fair and judicious view of the matter”. No specific wording is specified in the regulation to constitute a “waiver”, and it can reasonably be concluded that the director’s letter was written without legal assistance.

84.In considering whether the director’s wording is appropriate, the Tribunal takes a broad view of its obligation on review to act in a manner which is “fair and just”[17]. The Tribunal determines therefore that the director’s submission may be reasonably interpreted as a request for a reasonable outcome and taking into account all options open to the Tribunal, including the exercise of its discretion to waive a bar.

[17] AAT Act 1975 at s.2A(b)

85.The relevant criteria in the regulation for waiving a bar are set out in r. 2.101:

i)  whether the interests of Australia would be significantly affected if the bar were not waived; and

(ii)  whether a substantial trade opportunity would be lost if the bar were not waived; and

(iii)  whether there would be a significant detriment to the Australian community if the bar were not waived; and

(iv)  whether the person’s inability to sponsor a proposed primary sponsored person would significantly damage Australia’s relations with the government of another country; and

(v)  whether significant new evidence or information has come to light which was not available at the time the decision to place the bar was made;

86.There are no guidelines for determining the particular result, other than the facts and circumstances applicable, and the Tribunal’s decision is discretionary, so that “many factors are taken into account in determining the sanction ultimately imposed”.[18]

[18] See Minister for Immigration v Roberts & Anor [2011]FMCA 77 per Riley FM at par 26;

87.The Tribunal notes that no information or specific submissions have been made either at first instance to the Department or subsequently to the Tribunal concerning the prescribed circumstances for waiver consideration set out above.

88.The Tribunal finds on the available information that:

·     it is not aware there are any interests of Australia that would be affected if the bar were not waived;

·      it is not aware a substantial trade opportunity would be lost;

·     the Tribunal further finds that it is not satisfied there is any evidence there would be a significant detriment to the Australian community if the bar were not waived,

·     or that Australia’s relationship with another country might be significantly damaged;

·     the Tribunal finds there is no new evidence or information which has come to light which was not available at the time the decision was made to impose the bar, and taking into account the considerations provided above in these reasons in light of the submissions made in the letter from the applicant’s director.

89.The Tribunal finds the applicant’s submission by its director adds no significant new evidence or information, other than inadvertence conceded by the applicant and a concession that “we may have blundered” in the applicant’s attempt to “accommodate the individual needs of the respective employees” . That concession however is not supported by any evidence detailing what steps have been put in place since the applicant was notified of the decision, and a request from the Tribunal inviting information.[19] The applicant has provided nothing further since the director’s detailed explanations to the Department in November 2019.

Exercise of discretion

[19] r.2.101(v)

90.The Tribunal has had regard to the applicant’s written submission.

91.Considering the totality of the evidence, the specific findings of the Department concerning the underpayments to 4 employees over an extended period, the fact the applicant has provided information which misrepresented the true position concerning the employees and their working hours, and notwithstanding that may have been inadvertent or negligent as opposed to fraudulent or intentional, and the fact the applicant has determined not to provide any further information for this review, the Tribunal is of the view that this is not an appropriate case to waive the imposition of a bar.

Summary

92.The Tribunal is satisfied on the available information that although this is an appropriate case where the decision to cancel the sponsorship agreement and impose a bar should be made, as the breaches of the regulations were significant, it is also satisfied that it is reasonable in the circumstances that the period of the bar should be reduced, this not being in the Tribunal’s view a situation or under Policy, an example of a worst case, and in which circumstance a bar of up to 5 years might be imposed. The Tribunal in particular has had regard to the substantial length of time the applicant has been operating without prior sanction.

93.Accordingly, the Tribunal proposes for the reasons given above [20] that the period be reduced, commencing from the time of the delegate’s decision and continuing until a period of 18 months has elapsed from that date, and which in the Tribunal’s view takes account of the concerns expressed in the reasons set out above and the applicant’s candid concessions and submissions.

[20] At paragraphs 74-80 above

DECISION

94.The Tribunal varies the decision under review to bar the applicant from making applications for approval as a Standard Business Sponsor and Temporary Activities Sponsor commencing 17 December 2019 for a period of 1.5 years, concluding on 17 June 2021.

Alan McMurran
Member

ATTACHMENT – Extract from the Migration Regulations 1994

2.89   Failure to satisfy sponsorship obligation

…

1. 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.

…

2.90   Provision of false or misleading information

…

1. 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 purpose for which the information was provided; and

(b)    the past and present conduct of the person in relation to Immigration; and

(c)     the nature of the information; and

(d)    whether, and the extent to which, the provision of false or misleading information has had a direct or indirect impact on another person; and

(e)     whether the information was provided in good faith; and

(f)     whether the person notified Immigration immediately upon discovering that the information was false or misleading; and

(g)     any other relevant factors.

…