Flash Gordon Trust (Migration)

Flash Gordon Trust (Migration) [2017] AATA 385 (9 March 2017)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  Flash Gordon LGT Pty Ltd atf Flash Gordon Trust
CASE NUMBER:  1603056
DIBP REFERENCE(S):  BCC2015/2168394
MEMBER:Stavros Georgiadis
DATE:9 March 2017
PLACE OF DECISION:  Adelaide
DECISION:The Tribunal affirms the decision under review to refuse the nomination.

Statement made on 09 March 2017 at 11:26am

CATCHWORDS
Migration – Nomination – Direct Entry nomination stream – Genuine position – Term of employment not met – Adverse information – Non-payment of superannuation – Repeat transgression
LEGISLATION
Migration Regulations 1994, Schedule 2, 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 18 February 2016 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 29 July 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 as the delegate considered the application for approval has not identified a need for the nominator to employ a paid employee to work in the nominated position under the nominator’s direct control.
Ms Narelle Johns, Director Flash Gordon LGT Pty Ltd, appeared before the Tribunal on 8 March 2017 to give evidence and present arguments on behalf of the applicant. The Tribunal also received oral evidence from the nominee visa applicant, Ms Kim Byrne, in the related matter 1604981 for a Subclass 187 visa. The related matters were heard together on 8 March 2017.
The applicant was represented in relation to the review by its registered migration agent.
For the following reasons, the Tribunal has decided to affirm the decision under review to refuse 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 Tribunal has considered the material previously provided to the Department and the Tribunal and also further documentary and oral evidence before it discussed, including the applicant’s written submissions and additional material made under cover letter of 2 March 2017 and 8 March 2017 and also further material provided after the hearing of 8 March 2017.
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 extension of the employment.
The Tribunal has had regard to the applicant’s contract of employment signed by the visa applicant on 31 July 2015. The contract does not expressly state that the nominee will be employed in the nominated position for at least a period of two years from grant of the visa. The applicant’s submission on this point is that the application form makes a declaration that the applicant will provide full-time employment for the nominee for at least two years. The Tribunal notes the declaration but in the absence of specific reference to such a period in the written contract of employment (which the visa applicant may use to enforce employment rights) the Tribunal is not persuaded that the nominee will be employed in the nominated position for at least 2 years full time.
Accordingly, the requirement in r.5.19(4)(d) is not 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.
The applicant’s business is a corporate trustee of the Flash Gordon Trust. A copy of the Trust Deed was provided to the Tribunal. Ms Johns’ oral evidence is that she is currently sole Director of Flash Gordon LGT Pty Ltd and also sole Director of another company, Andrelle Pty Ltd which is a corporate trustee of a different Trust. Ms Johns told the Tribunal she was formerly the sole proprietor of a hairdressing business in which she employed a number of employees.
When the issue of any known adverse information was raised at the hearing, Ms Johns told the Tribunal that as sole proprietor she was required by the Australian Taxation Office (ATO) to ‘pay twice’ for superannuation payments payable to her employees as she had not paid the superannuation at the time it was due. The Tribunal asked Ms Johns at the hearing to elaborate on this and in response, she told the Tribunal the ATO had raised the underpayment of superannuation with her in respect of six of her employees. She told the Tribunal that the ATO found she had unpaid superannuation to those employees in the aggregate sum of $8,000.
When questioned about paying this sum twice, Ms Johns told the Tribunal this was required of her by the ATO in light of the non-payment of superannuation and that as a sanction, she had to pay the same sum again. She said she did not consider this to be a fine or penalty but that the ATO required her to pay the same amount again in recognition of the breach. The Tribunal accepts the oral evidence from Ms Johns and accepts that this amounts to adverse information known about the nominator or a person associated with the nominator given she is a Director of the nominating entity.
Ms Johns also raised a further matter at the hearing in respect of making a payment plan for a structured (late) payment of taxation in respect of the 2013/14 financial year. At the hearing, she told the Tribunal this would end in October 2017 but subsequently (after the hearing) sent material to the Tribunal which show this arrangement will end in June 2017.
For both ENS and RSMS applications made on or after 2 April 2005 but before 1 July 2012, it is a requirement for approval that nothing adverse is known to Immigration about the business background of the employer or any officer of any of the entities that constitute the employer or any individual who is a member of a partnership that is one of the entitles that constitute the employer.
For post 1 July 2012 applications as is the case here, the requirement is not limited to adverse information about the ‘business background’ of the employer, an officer or partner. It extends to any ‘adverse information’ known to Immigration about the nominator or a person associated with the nominator. For the purpose of this provision, the terms ‘adverse information’ and ‘associated with’ are defined in r.1.13A and r.1.13B, respectively.
Based on the oral evidence discussed above, the Tribunal is satisfied that, in respect of the non-payment of superannuation to employees engaged by Ms Johns, there is adverse information known to Immigration about the nominator or a person associated with the nominator within the meaning under rr.1.13A and 1.13B for this purpose.
Should the adverse information be disregarded?
Unlike the pre 1 July 2012 requirement, the adverse information may be disregarded if it is reasonable to do so. The Explanatory Statement to the regulation introducing this requirement is silent on the intention behind this aspect of the criterion but the Tribunal is guided by the identically worded requirement in r.2.72 for temporary work nominations. The Explanatory Statement to the regulations introducing the then r.2.72(1)(i) (now r.2.72(9)) states that it may be ‘reasonable’ to disregard information if, for example, the person had developed practices and procedures to ensure the relevant conduct was not repeated.
Departmental Guidelines (PAM 3) states that there are no definitive rules as to when it will be reasonable to disregard adverse information about a nominator. The Tribunal has had regard to the guidelines taking care not to elevate these to the equivalent of a legislative instrument. The Tribunal has weighed up and assessed the circumstances taking into account relevant factors discussed in deciding whether it is reasonable to disregard the adverse information.
The Tribunal has considered the nature of the adverse information which relates to past financial obligations of a person associated with the applicant, being Ms Johns as a current Director. In respect of the circumstances of the adverse information, the Tribunal accepts that Ms Johns was subject to administrative action by a competent authority, in this case the ATO, in relation to the non-payment of superannuation for six of her employees in the past. The Tribunal has considered her submissions in respect of disregarding the adverse information.
The Tribunal has taken into account her explanation that this event occurred some time ago in 2009; that it was the first time she had been engaged in business; that she understood (inadvertently) that superannuation was not due until the end of the financial year - all of which acts in her favour as mitigating the breach of not paying superannuation when it was due. On the other hand, she confirmed that she did have accountancy advice available to her at the time and was somewhat evasive in responding to whether this was just a late payment or if it occurred because she could in fact not afford to pay these entitlements to her employees - answering only that she ‘can’t recall’.
The Tribunal has carefully considered whether to disregard the adverse information known and in circumstances where this was the only time underpayment of superannuation had occurred, would be inclined to disregard it as this took place some nine years ago, when the applicant was new to business, and the other circumstances described. However, the oral and documentary evidence discussed by the applicant and the nominee at the hearing establishes that the applicant continues to underpay superannuation in this case, to the nominee.
The Tribunal accepts the oral evidence given at the hearing that the nominee is paid $46,500 base salary per annum with guaranteed annual earnings of $50,801. This is set out in the nomination application form at page 4 of 8 and was confirmed at the hearing by the applicant and the nominee when responding to questions about her remuneration. This figure is consistent with the contract signed by the nominee on 31 July 2015 which refers to the (then) Children’s Services Award rate of $23.53 per hour at 38 hours per week. The oral evidence is that the nominee’s ordinary rate has since been revised upwards by 55 cents per hour.
The Tribunal accepts the applicant’s oral evidence that the nominee was paid the guaranteed annual earnings of $50,801 and that this included leave loading at 17.5% for 4 weeks of her base salary. Ms Johns checked the calculation at the hearing and confirmed in her oral evidence that the figure of $50,801 included $625.96 leave loading. She also confirmed that the balance is made up of superannuation paid to the nominee - being the difference between the guaranteed annual earnings less leave loading ($50,801 - $625.96) and the base salary of $46,500. This equates to $3,675.04. This sum is less than the applicable 9.5% superannuation payable on a base salary of $46,500 which equates to $4,417.50. The applicant and her representative made reference at the hearing to superannuation at the rate of 9.0% at the time but this is incorrect. The ATO Australian Government website confirms that for salary or wage payments made on or after 1 July 2014, the minimum Superannuation Guarantee (SG) contributions rate of 9.5% will need to be applied. [ - accessed 8 March 2017].
The guidelines are not exhaustive and the determination of whether it is reasonable to disregard the information is a question of degree to be weighed up from all the relevant circumstances. In light of all the specific circumstances and the prior incident of non-payment of superannuation by Ms Johns, the Tribunal considers the repeat non-compliance as one that it should not disregard. This is because the Tribunal considers that the applicant has not developed adequate practices and procedures to ensure the relevant conduct was not repeated and to ensure the correct amount of superannuation is paid to her employee.
The Tribunal also considers that the repeat transgression relates to recent events involving a sole Director of the applicant in respect of important and significant matters of financial entitlements to an employee. The Tribunal considers the payment arrangement by the ATO is of less significance and places little weight on this in coming to its decision.
Having regard to the above evidence provided at the hearing and the overall circumstances of the adverse information known, the Tribunal considers on balance, that it is not reasonable to disregard that information.
Accordingly the requirements of r.5.19(4)(f) are not met.
It is also evident that for the same reason of underpayment of superannuation, the applicant does not satisfactorily comply with workplace relations laws under 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.
For the above reasons, the applicant does not meet 5.19(4)(g)
For the above reasons the Tribunal is not satisfied that the applicant meets the requirements of r.5.19(4). The applicant has not sought to satisfy the criteria in Temporary Residence Transition Nomination stream, and as such has not met the requirements in r.5.19(3). Accordingly, the nomination of the position cannot be approved. Therefore, the Tribunal must affirm the decision under review.
DECISION
The Tribunal affirms the decision under review to refuse the nomination.
Stavros Georgiadis
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 specified by the Minister in an instrument in writing for this sub-subparagraph;
(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 385

9 March 2017

Key Legal Topics

Areas of Law

Immigration

Administrative Law

Legal Concepts

Judicial Review

Procedural Fairness

Statutory Construction

Jurisdiction