G & G GROUP PTY LTD (Migration)

[2017] AATA 285

G & G GROUP PTY LTD (Migration) [2017] AATA 285 (27 February 2017)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  G & G GROUP PTY LTD

CASE NUMBER:  1601707

DIBP REFERENCE(S):  BCC2015/1877453

MEMBER:Stavros Georgiadis

DATE:27 February 2017

PLACE OF DECISION:  Adelaide

DECISION:The Tribunal affirms the decision under review to refuse the nomination.

Statement made on 27 February 2017 at 5:52pm

CATCHWORDS

Migration – Nomination – Direct Entry Nomination stream – Graphic Pre-press Trades Worker – Full time 2 years – Genuine need not demonstrated – Financial viability – Company unable to sustain employment

LEGISLATION

Migration Regulations 1994, r 5.19

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1. This is an application for review of a decision made by a delegate of the Minister for Immigration on 27 January 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).

2. The applicant applied for approval on 30 June 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).

3. In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in Direct Entry Nomination stream.

4. 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 nominating business will provide full-time employment to the nominee, Saurabh Gupta, in the nominated position of Graphic Pre-press Trades Worker ANZSCO 392211 for a minimum period of at least 2 years.

5. Director, Vishal Chopra, on behalf of the applicant appeared before the Tribunal on 27 February 2017 to give evidence and present arguments. The Tribunal also received oral evidence from the nominee for the position in the related matter 1603430, Saurabh Gupta.  The related matters were all heard together.   

6. The applicant was represented in relation to the review by its registered migration agent.

7. For the following reasons, the Tribunal has decided to affirm the decision under review to refuse the nomination.

   CONSIDERATION OF CLAIMS AND EVIDENCE

8. 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.

9. The Direct Entry nomination stream may be satisfied by a nominator who is lawfully operating a business in Australia and who has identified a need to employ a paid employee in a position for at least two years.[1] The tasks to be performed in the position must correspond to those of a specified occupation and meet relevant training requirements unless the position is located in regional Australia, the business is operated locally and there is a genuine need for the employment which cannot be filled by an Australian living in the same local area.[2]

   [1] See the Explanatory Statement to SLI 2012, No.82 at 30.

   [2] See the Explanatory Statement to SLI2012, No.82 at 30.

   Need for a paid employee r.5.19(4)(a) and term of employment of the visa holder: r.5.19(4)(d)

10. Regulation r.5.19(4)(a) requires that the applicant identifies a need for the nominator to employ a paid employee to work in the position under the nominator’s direct control. 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.

11. The Tribunal notes there are two employment agreements signed by the parties for the nominated role.  One contract is signed 12 June 2015 and sets out that the term of the contract of employment is for two years from grant of the visa with an annual salary $54,000 +9% superannuation. The subsequent contract signed by the parties is dated 28 December 2015 and provides for a minimum of two years of continuous employment until such time as either party provides termination notice, and sets out a base salary of $54,000 per year +9.5% superannuation. At the hearing, the applicant could not explain why two separate contracts were signed.  The Tribunal notes however, that neither of these contracts stipulates that an extension beyond 2 years is expressly excluded.

12. The Tribunal notes the Delegate’s comments that at the time of nomination application there was a total of five staff with a gross payroll expenditure of $188,130 in the 12 months prior to the nomination application.  The Tribunal accepts from the applicant’s oral evidence and Australian Government ABN Lookup records that the business operating as G & G Group Pty Limited (ABN 92121928274) was registered on 26 September 2006 and has continued operations after the applicant purchased the business in 2014.  Mr Vishal Chopra is the sole Director of the company and confirmed in his oral evidence that the operations of the business include Mother’s Kitchen Curry House of which his brother is the Restaurant Manager and employs between two and four casual staff (cook, kitchen hand and front-of house customer service) depending on how busy the business is from time-to-time.  He explained that the business is open for evening meals 7 days per week.  He said the level of staff changes as seasonal factors impact on patronage with wintertime being much busier than in summer.

13. In addition to Mother’s Kitchen Curry House, the business also trades as Shop Locals - Stirling North and Shop Locals - Stirling South.  The applicant’s oral evidence is that Shop Locals - Stirling South has not yet commenced operations. Mr Chopra’s oral evidence is that Shop Locals - Stirling North undertakes preparation of graphic design work for logos, brochures, flyers and associated printing and production of these products.  He submits that for this reason the business has a need of full-time employee, the nominee Mr Saurabh Gupta as Graphic Pre-press Trades Worker.  The applicant’s evidence is that Shop Locals - Stirling North also employs a full-time Customer Services Manager, Mrs Kapatel in that role whom he pays $55,000 per year + superannuation.  These two full-time personnel work together with the Directors spouse who is engaged part-time as a receptionist and on the front desk.  She is not a Director of the company, nor is the applicant’s brother and therefore any takings from the business in respect of those respective roles are attributable to wages for those positions.

14. According to the above oral evidence, the Tribunal accepts that there are at least the equivalent of five full time equivalent (FTE) staff required in the business drawing wages for the business entities operating as Mother’s Kitchen Curry House and Shop Locals Stirling South.  This is in addition to the Director who does not draw a wage from the business.  The Tribunal accepts the oral evidence given by the applicant at the hearing that the nominee Saurabh Gupta commenced working in the business in May 2014 and that Mrs Kapatel had commenced in July 2014. 

15. The Tribunal noted the following Business Activity Statements (BAS) which provided relatively low levels of salary/wages given the number of personal required to work in the business based on the aforementioned oral evidence and documents discussed:

    a.1 April 2014 to 30 June 2015 - Sales of $72,196 and total salaries $12,554

    b.1 June 2015 to 30 September 2015 - Sales of $43,442 and total salaries of $29,323.

16. The Tribunal reflected to the applicant as raised by the Delegate in the decision some doubt as to whether the basis of the projected financial statements and actual earnings of the past will enable the nominating business to sustain the nominee for at least a two-year period from the grant of his visa.  The issue of financial viability for the position was put to the applicant at the hearing.  His responses relating to financial circumstances of the business were often hesitant and at times avoiding the question. He explained, when this was raised with him, that he is not directly involved in the financial aspect of the business and needs to refer to his accountant -.

17. The Tribunal noted that the applicant is the sole Director and has also had regard to the documents submitted on 24 February 2017 in support of the application. The applicant has not provided any financial reports for the financial year ending 30 June 2016 claiming (correctly) these are not yet due to be lodged with the ATO.  He instead provided more recent BAS including for the quarters: September 2016 and December 2016.  The Tribunal has had regard to the letter from the applicant’s accountants Universal Taxation Services dated 20 February 2017 noting some earlier anomalies in the financial records (BAS) lodged with the ATO.  The accountant sets out the ‘true reflection’ of financial statements regarding the 2016 financial year where there were gross sales of $408,196 and total wages of $162,337 for that year.  The accountant explained the anomalies to the earlier figures and provided an opinion as follows: “We are of the opinion that if the current business performance continues in the future, there are no reasons to believe why the business cannot sustain employees.” The Tribunal notes that although the accountant made reference to the financial sales and wages figures for the 2016 financial year there is at the time of this decision no complete record of financial records for Profit and Loss or Balance Sheets provided for the 2016 financial year or for any previous financial years relating to the applicant’s business. 

18. The Tribunal notes the most recent BAS for the  December 2016 quarter is inconsistent with the accountants opinion (based on past sales / wages) which for that quarter amount to $36,376 well short of expected wages for the quarter relating to the personnel described above required for the two different businesses operating under G & G Group Pty Ltd.  It is self-evident that the most recent wages figure of $36,376 (for the most recent BAS quarter lodged) in December 2016 is short of the accountant’s annualised wages figure for the 2016 financial year set out above, adjusting for one quarter.

19. The Tribunal raised at the hearing that the accountant’s opinion is qualified on the stated basis “if the current business performance continues in the future.” The tribunal considers that it is self-evident from the December 2016 quarterly BAS that the projected performance of the business has not continued.  Overall, in the absence of any financial records for the applicant for financial years 2015 or 2016, the Tribunal has no basis other than the most recent BAS statements by which to determine the financial viability of the company’s ability to sustain employment for the nominee for a period of at least two years from approval of the visa.  The provision of at least the most recent financials for the 2015 financial year lodged with the ATO would have not been onerous to provide to the Tribunal before the hearing, given the issue of financial viability was raised as an issue by the delegate and a copy of the delegate’s decision was provided with the application for review.

20. Having regard to the available evidence before it discussed, the Tribunal is not satisfied that the applicant has identified a genuine need to employ a paid employee in the nominated position for at least two years from the grant of the visa, or that the business has the financial viability to sustain the nominee in such employment for a period of at least two years from the grant of the visa.

21. Accordingly, the requirements in r.5.19(4)(a) and r.5.19(4)(d) are not met.

22. 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

23. 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 at a skill level of ANZSCO skill level 1, 2 or 3;

    (E)the business operated by the nominator is located at that place;

    (F)a body that is:

    (I)specified by the Minister in an instrument in writing for this sub-subparagraph; and

    (II)located in the same State or Territory as the location of the position;

    has advised the Minister about the matters mentioned in paragraph (e) and sub-subparagraphs (B) and (C).