FORCE FIELD ELECTRICAL PTY LTD (Migration)

FORCE FIELD ELECTRICAL PTY LTD (Migration) [2018] AATA 1791 (8 May 2018)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  FORCE FIELD ELECTRICAL PTY LTD
CASE NUMBER:  1718619
DIBP REFERENCE(S):  BCC2017/1194800
MEMBER:Karen McNamara
DATE:8 May 2018
PLACE OF DECISION:  Sydney
DECISION:The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.

Statement made on 08 May 2018 at 3:23pm
CATCHWORDS
Migration – Approval of Nominated positions (employer nomination) – Business financial capacity – Need to employ paid employee – Financial information – Regular payment of salary – Task of the role – Training requirements – Decision under review set aside
LEGISLATION
Migration Act 1958, ss 245AR, 359
Migration Regulations 1994, 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 1 August 2017 to reject the application by Force Field Electrical Pty Ltd ( the applicant) 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 28 March 2017. 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 the Direct Entry Nomination stream.
The delegate 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 nominee would be employed on a full-time basis in the position of Electrician for at least two years.
Background
The applicant lodged an application on the 28 March 2017, for an employer nomination approval for the position of Electrician (General) – ANZSCO 341111 under the Direct Entry stream. The proposed salary is $65,000 per annum.
When considering the application, the delegate took into account the following issues:
·The business is trading as Force Field Electrical Pty Ltd and was registered on 7 January 2016.
·The applicant provided information to the department i.e.
oNomination application
oTraining receipt
oAdvertisements/Promotional material
oABR/ASIC Documentation
oFinancial Statements
oSupport Letter
oPhotographs
oEmployment Contract
oIndustrial Award
Based on these considerations and the evidence provided by the applicant, the delegate was not satisfied that the applicant had demonstrated the businesses financial capacity to employ the nominee on a full time basis in the position for at least two years and therefore did not meet the criteria specified under Reg. 5.19(4)(d)(i) and refused the application.
Information to the Tribunal
On the 20 February 2018, the Tribunal wrote to the applicant pursuant to section 359(2) of the Act (dispatched by email to the authorised recipient), requesting the applicant to provide updated and current information that would assist to determine whether the criteria in r. 5.19(2) & (4) of the Regulations were met.
On the 6 March 2018 by email the applicant’s authorised representative provided further information to the Tribunal i.e.
·Business Plan 2016
·Bank Statements January 2016 to December 2017
·Submission by Mr Miklos Rakos Star Migration dated 5 March 2018
·References in support of Mr Tamas Molnar
·Job Outlook –Electricians
·Electrical, Electronic & Communications Contracting Award 2010
·Fair Work Ombudsman Electrical Worker Grade 5 Pay rates summary dated 5 March 2018
·ASIC Extract
·Statement of Attainment and licences – Mr Tamas Molnar
·Tax Invoices and Purchase orders for services rendered
·Business Activity Statements:
oOct 2017 to Dec 2017
oJul 2017 to Sep 2017
oApr 2017 to Jun 2017
oApr 2017 to Jun 2017 – Amended*
oJan 2017 to Mar 2017
oJan 2017 to Mar 2017 – Amended*
oOct 2016 to Dec 2016 –
oOct 2016 to Dec 2016 – Amended*
oJul 2016 to Sep 2016 -
oJul 2016 to Sep 2016 – Amended*
oApr 2016 to Jun 2016
oJan 2016 to Mar 2016
* At the hearing Mr Kovach advised the Tribunal that amended BAS were submitted to correct an accounting anomaly regarding wage expenditure.
·Financial Statements 1 July 2017 to 23 February 2018
1 July 2016 to 30 June 2017
1 January 2016 to 30 June 2016
·Company Tax Return 2017
·Company Tax Return 2016
·Letter of support - Complete Accounting & Tax Solutions dated 29/11/2017
·Receipts for Training courses
·PAYG Summary Mr Tamas Molnar 30 June 2017
·Letter of engagement and employment contract dated 1 March 2018
·At time of hearing the applicant provided Financial Statements (1 July 2017 to 17^th April 2018)
Mr Peter Kovach appeared before the Tribunal on 20^th April 2018 to give evidence and present arguments on behalf of the applicant. The Tribunal also received oral evidence from Mr. Tamas Molnar, the nominee who provided evidence of his employment with the applicant.
The applicant was represented in relation to the review by its registered migration agent Mr. Miklos Rakos.
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)(i) 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 (r.5.19(4)(a)(ii)).
Based on the material in the Department’s file, the Tribunal is satisfied that the application was made on the approved form and was accompanied by the prescribed fee. The application form also included disclosure by the applicant to the effect that the applicant had not engaged in any conduct in relation to this nomination that constituted a contravention of s.245AR(1) of the Act. Accordingly the requirements of r.5.19(4)(a)(i) are met.
In considering whether the application for approval identifies a need for the nominator to employ a paid employee to work in the position under the nominator’s direct control, the Tribunal had regard to the evidence before it, including written submissions and the oral evidence received at the hearing by Mr Kovach and Mr Molnar.
The Tribunal accepts on the evidence before it that the nominator operates an electrical installation, maintenance and repair business in the Sydney metropolitan area. Mr Kovach advised the Tribunal that the business also services other regions such as Newcastle with the potential for work in Canberra. The business’s annual turnover for the 2016/17 financial year was $118,451 and it employs two people i.e. Mr Kovach and Mr Molnar.
Mr Kovach advised that he does not draw a wage from the business as his main source of income is derived from his other business interests including directorships in education and Migration companies - Bridge Blue Global Migration Pty Ltd and Bridge Blue Pty Ltd.
Mr Kovach gave evidence at the hearing that he established the business in early 2016 in response to discussions he had with his friend Mr Molnar. Mr Kovach described himself as a businessman looking for an opportunity to establish a business in the growing building and construction industry. Mr. Molnar had been working with a company by the name of Forgacs as an Electrician until he was made redundant in February 2016. Mr Kovach advised the Tribunal that he saw an opportunity to start a business and employ someone he knew and trusted, particularly as Mr Molnar was seeking work.
Mr Kovach told the Tribunal whilst he wanted to employ Mr Molnar he still advertised for an Electrician. In response to the Tribunal questioning his motive in doing so after he had identified he wanted to employ Mr. Molnar. Mr Kovach told the tribunal that he wanted to test the market to see the availability of Electricians looking for work. He admitted that he already wanted to employ Mr Molnar but advertised, as in the future he would like to expand his business and employ more Electricians. Mr Molnar told the Tribunal that approximately 80% of the people who responded to his advertisements were overseas and only a couple of applicants held a licence. He advised that it was not easy to find a licenced Electrician to work for his business.
Mr Kovach advised that he was responsible for sourcing work for the business and that his company provided sub contract work to larger companies. Presently he was refusing some work, as he did not want to commit to additional work whilst uncertain about Mr Molnar’s visa application.
Mr Kovach gave evidence that the position of Electrician is critical to the success of the business’s operations and viability in that Mr Molnar is the only qualified Electrician employed by the business. Mr Kovach advised the Tribunal that he requires a qualified and licenced Electrician in order to trade. The business cannot operate without a licensed Electrician.
The Tribunal also had the opportunity to discuss with Mr Kovach the nature of the positon and tasks involved and had regard to the evidence of Mr Molnar and other supporting material.
On the totality of evidence before it, the Tribunal is satisfied that the application has identified a need for the nominator to employ a paid employee to work in the position under the nominator’s direct control. Accordingly, the requirements of r.5.19(4)(a)(ii) are met.
As the criteria in both r.5.19(4)(a)(i) & (ii) are satisfied, accordingly, the requirements in r.5.19(4)(a) are 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.
On the basis of the material before the Tribunal, including the applicant’s bank statements, Financial statements, current and historical details for ACN 609958358 being details for Force Field Electrical Pty Ltd, the Tribunal is satisfied that the applicant is actively, lawfully and directly operating a business in Australia. The available evidence indicates that Force Field Electrical Pty Ltd was registered as a company on 22 December 2015 and commenced trading April 2016 and operates an electrical services business providing electrical installation, maintenance and repair services.
Accordingly, 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.
There is no indication that the nominator’s activities include any labour hire activities.
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 Tribunal notes the delegate was not satisfied that this subparagraph was met as applicant had not demonstrated the business’s financial capacity to employ the nominee on a full time basis in the position for at least two years.
The Tribunal has had the benefit of more detailed and updated financial information, plus receiving oral evidence form Mr Kovach and Mr Molnar at the hearing.
Based on this evidence, the Tribunal notes the applicant commenced trading 1 April 2016 and that Mr Molnar has been receiving regular payment of wages from the applicant since 13 April 2016. At time of decision, complete two financial year’s trading data is not available for comparative analysis. The Tribunal notes from the financial information available, the applicant has kept cost of salary and wages static through regular payment of wages to Mr. Molnar. Financial information including submitted BAS returns since January 2016 to December 2017 indicate payment of salary reflecting $65,000 p.a. Bank Statements April 2016 to December 2017 indicate regular payment of wages $980 per week from the business to Mr Molnar as well as superannuation contributions.
At the Hearing the nominator was asked to supply evidence of the Company Tax Returns for 2016 and 2017 being submitted with the Australian Tax Office and Mr Molnar was requested to provide his Notice of Assessment for Tax returns for 2016 and 2017 financial years.
The Tribunal examined the financial information submitted by the applicant. The financial documentation confirmed for the 2017 financial year total salary and wage expense of $65,000 and a net profit of $11,914. BAS returns for the corresponding period confirm salary and wage expenses of $65,000. Mr Molnar’s 2017 Notice of Assessment confirmed a taxable income commensurate with $65,000 p.a.
2018 Financial statements i.e. 1 July 2017 to 17 April 2018 indicate a net profit to date of $4,120 and a salary expense of $51,250 (approx. 9 month period).
The Tribunal notes the company is operating on marginal profit however, the Tribunal has given weight to the approximate two-year history of regular payment of salary to Mr Molnar of $65,000 p.a. as stated on the nomination application.
The Tribunal is satisfied the business can afford to pay a salary of $65,000 per annum to the nominee as outlined above, and is satisfied that the nominee will be employed on a full-time basis in the position for at least 2 years. Accordingly, the requirement in r.5.19(4)(d)(i) is met.
The Tribunal has had regard to the employment contract between the nominee and applicant dated 1 March 2018, which sets out the terms and conditions of the nominee’s employment. The contract indicates that it is for full-time, ongoing permanent employment and will take effect from the date the subclass 186 visa is granted to the nominee. There is no clause that excludes the possibility of an extension. Accordingly, the requirement in r.5.19(4)(d)(ii) is met.
As the criteria in both r.5.19(4)(d)(i) & (ii) are satisfied, accordingly, the requirements in r.5.19(4)(d) are 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.
The applicant does not employ any Australian Citizens or permanent residents to perform equivalent work as the nominated worker. The terms and conditions in the employment contract for the nominated worker are consistent with National Employment Standards
The applicant provided a copy of the Electrical, Electronic and Communications Contracting Award 2010 as well as statistical data from Payscale and Job Outlook and Fair Work Ombudsman Electrical Worker Grade 5 Pay rates summary dated 5 March 2018. The Tribunal is satisfied the salary amount and the terms and conditions paid to the nominee are no less favourable than those that would be provided to an Australian citizen or permanent resident performing the same work in the same place in NSW.
Accordingly 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 no evidence before the Tribunal to indicate that there is adverse information known to the Department about the applicant or an associated person.
Accordingly 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 no evidence before the Tribunal that suggests the applicant does not have a satisfactory record of compliance with workplace relations of the Commonwealth and the State of NSW.
Accordingly the requirements of r.5.19(4)(g) are met.
Tasks of the position genuine need for the position and training requirements r.5.19(4)(h)
Regulation 5.19(4)(h) contains a number of alternative requirements. These are set out in detail in the attachment to the decision but can be briefly summarised as requiring either that:
·the tasks to be performed in the position will be performed in Australia and correspond to those of an occupation specified by the Minister (see legislative instrument IMMI 16/059), there is a genuine need for the nominator to employ the person identified, the occupation is applicable to the proposed employee in accordance with any specifications made in that instrument, and specified training requirements are met; or
·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 specified in the relevant legislative instrument, the occupation is applicable to the proposed employee in accordance with the specification of the occupation and that a regional certifying body has advised the Minister about certain matters relating to the position.
The tribunal determines as follows:
In the nomination application, the applicant specified that the position and the nominator’s business were located at Bondi Junction (metropolitan Sydney) , which is not classified as ‘regional Australia’ for the purposes of r.5.19(4)(h) accordingly the Tribunal must be satisfied that the requirements of r.5.19(4)(h)(i) are met.
The Tribunal accepts on the evidence before it that the applicant is the sole Director and owner of an electrical installation, maintenance and repair business in the Sydney metropolitan area. The Tribunal is also satisfied that the tasks of the position to be performed correspond to the tasks of an occupation specified by the Minister in an instrument in writing for this sub-subparagraph. IMMI 16/059 provides that Electrician (General) is a specified occupation for the purposes of r.5.19(4)(h)(i)(A). Electrician (General) with ANZSCO code 341111 is found in Schedule 1 of this Instrument. The Tribunal is further satisfied that the tasks will be carried out in Australia. Accordingly the requirements of r.5.19(4)(h)(i)(A) are met.

Mr Kovach gave evidence that the position of Electrician is critical to the success of the business’s operations and viability in that Mr Molnar is the only qualified Electrician employed by the business. Mr Kovach advised the Tribunal that he requires a qualified and licenced Electrician in order to trade. The business cannot operate without a licensed Electrician.
Information before the Tribunal supports the employment of Mr Molnar in the position of Electrician with the applicant, since April 2016. Mr Molnar holds trade licences relevant to carrying out electrical work as issued by the applicable NSW Statutory Authorities. References from companies that have engaged the services of Force Field Electrical Pty Ltd support the tasks being conducted by Mr Molnar in accordance with the occupation of Electrician.
The Tribunal is satisfied that there is a genuine need for a paid employee to work in the position of Electrician under the nominator’s direct control and that the occupation is applicable to the person identified under subparagraph r.5.19(4)(a)(ii) in accordance with the specification of the occupation. Accordingly the requirements of r.5.19(4)(h)(i)(AA) and (AAA) are met.
As the applicant’s business has been operating for more than 12 months, the applicant must meet the requirements for the training of Australian citizens and permanent residents specified by the Minister for the purposes of r.5.19(4)(h)(i)(B)(I). The relevant written instrument, IMMI 13/030, specifies in Schedule A that the training benchmarks for an established business are:
(A)recent expenditure, by the business, to the equivalent of at least 2% of the payroll of the business, in payments allocated to an industry training fund that operates in the same industry as the business; or
(B)recent expenditure, by the business, to the equivalent of at least 1% of the payroll of the business, in the provision of training to employees of the business.
The applicant has sought to meet training benchmark (A), through payment of at least 2% of its payroll in payments allocated to an industry-training fund that operates in the same industry as the business.
Information before the Tribunal, provided by the applicant shows payment of $800 receipted by McKKR’s Pty Ltd on 29 March 2017 for training attended by Ferenc Zayzon on 3 April 2017. The relationship of this person to the applicant, is not known to the Tribunal at time of decision. For the purpose of consideration as to whether the applicant met their obligations under r 5.19(4)(h)(i)(B)(I) the Tribunal considered it reasonable to look at the applicant’s 2017/18 financial year training expenditure.
The applicant’s accountant has provided evidence that its payroll expenditure for the 2016/17 financial period was approximately $71,175, 2% of which is approximately $1,423. The applicant also provided evidence of having paid TAFE NSW –Sydney Institute: Electrical Scholarship Fund $1,450, receipted on 5 March 2018. As this amount exceeds 2% of the known payroll expenses of the applicant’s business, the Tribunal is satisfied that r.5.19(4)(h)(i)(B)(I) is met.
Accordingly 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.
Karen McNamara
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
(aa) include a written certification by the nominator stating whether or not the nominator has engaged in conduct, in relation to the nomination, that constitutes a contravention of subsection 245AR(1) of the Act; 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;
(AAA)the occupation is applicable to the person identified under subparagraph (a)(ii) in accordance with the specification of the occupation;
(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;
(DA)the occupation is applicable to the person identified under subparagraph (a)(ii) in accordance with the specification of the occupation;
(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).

[2018] AATA 1791

8 May 2018

Key Legal Topics

Areas of Law

Immigration

Administrative Law

Legal Concepts

Judicial Review

Procedural Fairness

Statutory Construction

Jurisdiction

Remedies