Globo Hydro Power Australia Pty Ltd (Migration)

Globo Hydro Power Australia Pty Ltd (Migration) [2017] AATA 657 (28 April 2017)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  Globo Hydro Power Australia Pty Ltd
CASE NUMBER:  1506393
DIBP REFERENCE(S):  OPF2014/912
MEMBER:D. Dimitriadis
DATE:28 April 2017
PLACE OF DECISION:  Sydney
DECISION:The Tribunal affirms the decision under review.
Statement made on 28 April 2017 at 3:11pm

CATCHWORDS
Migration – Standard business sponsor – Sponsorship bar – Sponsorship obligations not satisfied – Obligation to ensure equivalent terms and conditions of employment – Obligation to keep records – Obligation to provide information to Immigration when certain events occur

LEGISLATION
Migration Act 1958, ss 140M, 375A
Migration Regulations 1994 r 2.79, r 2.82, r 2.84, r 2.89

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 and Border Protection to take an action under s.140M of the Migration Act 1958 (the Act) in relation to the applicant’s sponsorship.

The applicant was approved as a standard business sponsor on 5 May 2012. On 21 April 2015, the delegate decided to bar the sponsor under s.140M(1)(c) until 5 May 2015 from sponsoring more people for Temporary Work (Skilled) (Subclass 457 ) visas. The delegate also decided to bar the sponsor under s.140M(1)(d) for 23 months from making future applications for approval as a standard business sponsor.
The applicant appeared before the Tribunal on 21 March 2017 to give evidence and present arguments and was represented by a director, Mr William Matar, who was authorised to speak on behalf of the applicant.
The applicant was represented in relation to the review by its registered migration agent.
5.For the following reasons, the Tribunal has decided to affirm the decision under review.
CONSIDERATION OF CLAIMS AND EVIDENCE
The applicant was approved as a standard business sponsor on 5 May 2012. The applicant sponsored four Subclass 457 visa holders:
·Mr Farrukh Zia, whose nomination was approved on 5 June 2012 as a Market Research Analyst, with a nominated salary of $57,500 per annum;
·Mr Alejandro Suarez Barlongo, whose nomination was approved on 13 January 2014 as a Diesel Motor Mechanic with a nominated salary of $57,200 per annum;
·Mr Danilo Gregorio Biscante, whose nomination was approved on 13 January 2014 as a Diesel Motor Mechanic with a nominated salary of $57,200 per annum;
·Mr Roberto Correa Dela Cruz, whose nomination was approved on 13 January 2014 as a Diesel Motor Mechanic with a nominated salary of $57,200 per annum.
7.In a letter dated 2 June 2014, the Department of Immigration and Border Protection (the Department) informed the applicant that it had been identified for monitoring as part of the Department’s activities to ensure sponsors are complying with sponsorship obligations. A site visit was conducted by Departmental Inspectors on 2 June 2014.
8.On 16 July 2014 the Department sent to the applicant a Notice requesting records and information and requested bank and wage records.
9.On 24 July 2014 the Department received a number of documents from the applicant including bank statements in the name of Mr F Zia from 21 January 2014 to 21 May 2014, payslips and money transfer of wages. The applicant stated that these payments were part payments as requested by the visa holders and their full wages comprised bank EFT payments, cash payments and deductions against loans advanced to them to travel home in December 2013 for airline and travel costs, cash for their children’s school/university fees and other requirements. The applicant stated that these loans are now settled and full payments were made prior to the visa holders leaving the applicant’s employment.
10.On 24 October 2014 the Department issued to the applicant a Notice of Intention to take action (NOITTA) under s.140M of the Act. The NOITTA invited the applicant to provide a written response to the notice. The NOITTA stated that the delegate has reason to believe that the sponsor has failed to satisfy one or more of the sponsorship obligations as stipulated in Division 2.19 of the Part 2A of the Regulations (r.2.89). The sponsorship obligations included:
·obligation to ensure equivalent terms and conditions of employment (r.2.79);
·obligation to keep records (r.2.82);
·obligation to provide information to Immigration when certain events occur (r.2.84).
On 28 October 2014 the Department received a response from the applicant who admitted that they had made a mistake in payments of wages to Farrukh Zia of $4,599.84 during a two year period. The applicant stated that this underpayment has since been rectified and the employee has been paid the right amount of money of $57,500 per annum. Their accountant has been instructed to lodge an amendment with the Australian Taxation Office (ATO) PAYG tax instalments and they confirmed that Mr Zia’s yearly income of $57,500 and $888 net per week is paid via EFT (electronic funds transfer) directly to his nominated bank account.
The applicant also stated that they had asked the three sponsored employees about having bank accounts and were informed that they would rather be paid in cash. Now that the applicant has a better understanding of the regulations which require all wages to be done via bank transfer only, the applicant has set up the payroll accounts to pay by EFT to all employees. In the past, the three mechanics had borrowed money in advance against their wages because when they arrived at the applicant to commence appointment, a long time had passed without them earing any income and they were in serious need of funds to pay their respective loans in the Philippines and the applicant started deducting money for weekly wages to recover the debt. In December 2013 they requested time for leave to travel home to visit their families and this required the applicant to advance them money for the airline tickets and spending money. This is the reason the applicant deducted money from their wages.
The applicant acknowledged not informing the Department of the change of address and will make sure to inform the Department of any changes or other events concerning the company. Regarding the statement that the delegate has reason to believe that the sponsor provided false or misleading information to the Department because payslips from 1 July 2013 to 3 June 2014 were provided and these reveal that Farrukh Zia was remunerated his wages through cheque and direct debit, the applicant stated that they assure the Department that they never mislead and have not given false information. Rather they provided him with the information but it was indicated to the applicant that according to the agreement, this was wrong and therefore they have instructed their accountant to lodge an amendment with the ATO for the shortfall. The applicant stated that they have never been creative or otherwise with payslips.
The applicant acknowledged that they made mistakes but they never intended to do anything wrong. They were ignorant of the regulations. The main thing was to run their business and look after the well-being of the employees. The applicant thought that by sending them the money and helping them with their problems, it would make for a harmonious working condition. The applicant hopes that they are given the opportunity to rectify their mistakes and will take this responsibility more seriously.
On 21 April 2015 the delegate made a decision to bar the sponsor under s.140M(1)(c) until 5 May 2015 from sponsoring more people for Temporary Work (Skilled) (Subclass 457 ) visas and to bar the sponsor under s.140M(1)(d) for 23 months from making future applications for approval as a standard business sponsor. The commencement of the bar was effective from the date of the notice, being 21 April 2015.
The delegate stated that the sponsor (the applicant) admits that they made a mistake and had underpaid Farrukh Zia $4,599.84 but the sponsor has not provided evidence to show that Farrukh Zia has been repaid the underpayment of $4,599.84. The delegate stated that the sponsor failed the obligation to keep records four times for four 457 visa holders for the monitoring period from 1 June 2013 to 1 June 2014. The delegate accepted that the sponsor kept records for Mr Zia for the period 28 January 2014 to 21 May 2014 but not for the full monitoring period. The delegate was satisfied that no records were kept for the other three visa holders during the monitoring period. The delegate also stated that the sponsor stated in reply to the NOITTA that they have a better understanding of the obligation to keep records and they have set up their payroll to pay the visa holders by EFT, but no information was provided showing this.
The delegate was also satisfied that the sponsor failed the obligation to provide information to Immigration when certain events occur because they moved their address from St Peters to Strathfield South and the Department was not notified. The sponsor admitted his failure in his reply to the NOITTA for not notifying the Department of the change of premises address.
The delegate considered the sponsor’s failure to satisfy the obligation to ensure equivalent terms and conditions of appointment to be a significant failure because it occurred for at least two years. Although the sponsor states that they have rectified this failure, no evidence has been provided to support this. The delegate also stated that the sponsor’s failure to satisfy the obligation to keep records that are capable of being verified by independent persons for a period of 12 months for four 457 visa holders is considered serious as the failure has impacted on the ability of the Department to ensure the sponsor is complying with the obligation to provide equivalent terms and conditions of employment. The sponsor’s failure to satisfy the obligation to provide information to Immigration when certain events occur is considered a minor failure but did hinder the Department’s monitoring as there were issues in locating the sponsor to conduct a site visit and issue the monitoring commencement letter.
The delegate stated that, as the sponsor has been using the 457 program for three years and has sponsored four 457 visa holders in this time, it is expected that the sponsor is aware of what is required to meet the obligations.
The delegate stated that the sponsor has cooperated with Immigration but did not notify the Department of any failures of the sponsorship obligations and the failures were only found once monitoring had commenced. The delegate stated that the sponsor has not provided any further evidence to prove that he is now paying the visa holders in a manner that is verifiable by an independent third party. The delegate stated that there is no evidence that any new processes have been implemented to ensure future compliance with sponsorship obligations. The delegate stated that she is not considering that r.2.90 (False and misleading Information) has been contravened.
The application for review
21.At the time of lodging the application for review on 11 May 2015, the applicant provided a copy of the Notice of Decision dated 21 April 2015.
22.On 2 December 2016 the Tribunal wrote to the applicant and invited the applicant to attend a hearing on 24 January 2007. The Tribunal requested that any additional information or documents that the applicant may wish to rely on during the hearing be provided to the Tribunal by 17 January 2017.
23.On 23 January 2017 the Tribunal received from the representative a request for a postponement. The Tribunal carefully considered the request and agreed to postpone the hearing. The Tribunal wrote to the applicant on 23 January 2017 and invited the applicant to a hearing 21 March 2017.
The Tribunal hearing
The Tribunal brought to the applicant's attention that, other than the delegate’s decision record, the applicant has not provided any evidence to the Tribunal. The Tribunal informed the applicant that the applicant has been barred until 5 May 2015 from sponsoring more people for Subclass 457 visas and was barred for 23 months from making future applications for approval as a standard business sponsor. The Tribunal informed the applicant that the decision was dated 21 April 2015.
The applicant wished to proceed with the case. The Tribunal informed the applicant that it was found to have failed to satisfy the sponsorship obligations and the bar was imposed for the following reasons: failure to ensure equivalent terms and conditions of employment (r.2.79); failure to keep records (r.2.82); and failure to provide information to Immigration when certain events occur (r.2.84). The Tribunal also informed the applicant that there is a s.375A certificate on the Department’s file.
The applicant stated that its business is providing transport for school children. The applicant does not deny the Department’s findings and admits that they were not compliant in their record keeping where they failed to inform the Department when one of the employees changed addresses. Also they did not inform the Department when the applicant moved address. They have taken steps to rectify these issues and have employed more staff to handle administrative issues in the business. They did not intend to not inform and it was an honest and simple mistake. They are introducing more measures to ensure that more recording is done regularly. Manual recording and electronic recording of the records, including the wage records, are being done at the same time.
The applicant stated that the Department stated in their report that when the applicant paid wages they did not manually record the wages. Now they employ an accounts department where all wages are recorded and they are also done electronically. They use MYOB and employ an outside company, Waddle, which handles the applicant’s accounts. They also employ an HR person and an accounts person to make sure all records are kept on a regular basis and all information that has to be supplied to the Department is kept in the records.
The applicant stated that they admit that it was a mistake but it was not intentional and they have taken steps to make sure mistakes do not happen again. The Tribunal brought to the applicant's attention that the company was found to have breached three separate obligations. One related to the change of address. The Tribunal informed the applicant that it is an obligation to provide information to the Department when certain events occur. The Tribunal informed the applicant that they did not inform the Department when the business moved from St Peters to Strathfield South. The applicant stated that the business moved on 1 September 2013.
The Tribunal informed the applicant that the company was also found not to meet the obligation under r.2.79 and this is the obligation to ensure equivalent terms and conditions of employment. The Tribunal informed the applicant that the delegate found that the company had failed this obligation over a two year period and the finding was that there was an underpayment to Farrukh Zia over two years totalling $4,599.84 and it covered financial years ending 30 June 2013 and 30 June 2014. The applicant confirmed that there was an underpayment and stated that this shortfall has been rectified. It was a mistake from their accounts department. The applicant stated that Mr Zia was employed on a salary of $57,500 per annum and the lady who did the accounts in Mr Matar’s office mistakenly entered his salary into the system as $55,500. There was a shortfall of $2,000 per annum. The applicant stated that this shortfall was rectified, Mr Zia was paid $4,599.84 and the ATO was notified and they submitted an amended tax return. The applicant stated that the full amount of the shortfall was repaid to Mr Zia.
30.The applicant stated that they had to amend their payroll system because they paid Mr Zia further funds. Mr Zia had to amend his tax because he was paid the shortfall. The Tribunal brought to the applicant's attention that the delegate stated that the applicant had admitted the mistake and that the shortfall was being rectified, however the applicant did not provide any evidence that the visa holder was repaid the underpayment. The applicant stated that they supplied this evidence to the agent and the applicant assumed that the agent had supplied it.
31.The applicant stated that they sent copies of the payroll system and the tax papers supplied for Mr Zia to the Department after they fixed the problem. The Tribunal informed the applicant that it does not recall seeing these documents on the Department’s file. Mr Matar stated that he was not aware that the lady had entered the wrong amount into the system for Mr Zia’s wages. It was the case officer that brought this to his attention. Mr Zia never raised any issue with the applicant.
32.The Tribunal informed the applicant that one of the matters that has arisen in the delegate’s decision and other documents is that there was no way of independently verifying the amounts that had been paid because the applicant was sometimes paying in cash. The applicant stated that they were also paying by EFT into the bank. The applicant stated that, after this, they started a system where all payments are electronically recorded and if payments are paid by cash, then a receipt is signed by the employee. The Tribunal informed the applicant that this may not show that wages have been paid in accordance with the obligations. The applicant stated that they only occasionally pay cash where a staff member needs payment of cash in a hurry. Every other employee is paid by electronic funds transfer into an employee’s bank account. Their bank records would show that money has been going into people’s bank accounts. Mr Matar stated that he provided evidence to the agent and assumed he forwarded it to the Department. The Tribunal brought to the applicant's attention that the decision record indicates that there is no evidence of this provided to the Department. Mr Matar stated that he showed the case officer evidence that a lot of times they paid by direct transfer into a nominated bank account. Sometimes they paid by cash but the majority were paid by electronic funds transfer into a nominated bank account. Mr Matar stated that he showed the case officer the bank statements. The applicant stated that he did not have signed cash receipts from the employees for those dates.
The Tribunal informed the applicant that it was also found not to satisfy the obligation to keep records and the delegate stated that the applicant had failed this obligation four times for four visa holders for the monitoring period from 1 June 2013 to 1 June 2014. The applicant stated this is correct and they made the same error with the same applicants. They were the only four visa holders. They did the same mistakes with the visa holders as with the other employees. It was not intentional. It was an error. They lacked the experience. They have improved their systems in the office where they have employed more staff for record keeping and administrative work to ensure that record keeping is regularly updated.
The applicant stated that Mr Zia is currently working part-time for the applicant but the other three visa holders no longer work with the applicant. Mr Matar informed the Department that the other three employees went back to the Philippines. Mr Zia works in accounts. This is the same position and he has always been the company accountant. Mr Zia looks after the company accounts, invoices coming in, and he reports to the ATO. He was not involved in the wage payments. He handles the tax issues and is still the registered contact with the ATO for the company.
35.The Tribunal brought to the applicant's attention that Mr Zia was employed as a Market Research Analyst according to the records. The applicant agreed and stated that it is a small company and they use him for marketing purposes but they also utilised him as the contact for the ATO and to do accounts. Mostly he drove between schools, visited schools and did research about obtaining further business. The provide transport for charters or excursions.
36.The Tribunal informed the applicant that, in relation to Mr Zia, the delegate accepted that records were kept for period 28 January 2014 to 21 May 2014 but not for the full monitoring period from 1 June 2013 to 1 June 2014, but no records were kept for the other three visa holders. The applicant stated that they accept this because there was a failure in their system which they have worked on and improved to make sure it does not happen again.
37.The Tribunal informed the applicant that the delegate did not accept the payslips because they could not be verified. The applicant stated “correct”. The applicant stated that three visa holders had asked to be paid in cash. However they initially paid them by electronic funds transfer, but then they asked to be paid in cash. The applicant stated that they take full responsibility because they decided to pay them in cash but failed to keep records of the receipts for payment.
38.The Tribunal informed the applicant that the delegate stated that the applicant has stated that they have a better understanding of their obligations and have set up their payroll to pay their visa holders by electronic funds transfer, but no evidence was provided showing this. The applicant stated that the visa holders left their employ shortly after the delegate’s visit and Mr Matar informed the delegate of this. They were having difficulties with these three visa holders. They left in 2014/2015, most likely in 2014. Mr Zia was paid by EFT after the visit by the Department and the case officer informed the applicant that cash payments are not acceptable. This was after the site visit.
39.The Tribunal informed the applicant that it appears that, for a period of 12 months during the monitoring period, from 1 June 2013 to 1 June 2014, there were not records that were capable of being verified for the four Subclass 457 visa holders. The applicant stated that this is correct and this was the period during which they failed to keep records. The Tribunal informed the applicant that it may find that this is a serious breach of the obligations. The applicant stated that it admits this and that it is a serious breach. Mr Matar came to the hearing to let the Department know that they are taking it seriously and they are taking steps to ensure that it does not happen again.

Regarding the past and present conduct of the sponsor in relation to Immigration, the applicant stated that the past conduct is questionable and they made mistakes. The future is different and they have taken steps to ensure that it does not happen again. They look forward to proving it to the Department, if necessary. They have evidence that they are using an outside company, Waddle. They also use MYOB system in the office and the staff are trained in using this system for the payroll. There are three accounts staff: Mr Matar, Mr Michael Redford, who works in the administration department, and Mr Charles Saliba, who works in the operations department. They are in the accounts section. Mr Matar has taken over the role of looking after the payroll to ensure that payments are done through MYOB.
41.The applicant confirmed that the first time it was monitored was during the monitoring period (from 1 June 2013 to 1 June 2014). The Tribunal informed the applicant that during the monitoring period the delegate found that there were three sponsorship obligations with which the applicant did not comply. Regarding the number of occasions on which the person has failed to satisfy the sponsorship obligation, Mr Matar stated that moment the case officer brought the non-compliance to his attention, Mr Matar took steps to rectify those issues straight away. Basically they did not have the right staff in the office.
42.The Tribunal asked the applicant if they were aware of the sponsorship obligations. Mr Matar stated that he takes full responsibility for this and he should have studied them more carefully and maybe had them explained to him in detail. They should have been paying the wages by electronic funds transfer into a bank account. He was aware of the obligations but maybe did not understand them completely.
43.Regarding 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, the applicant stated that he understands it was severe. However, the speed at which they took action should be taken into account. Being the first time, it was a learning curve. They did not fully understand the obligations and this played a major role in their making these mistakes.
The Tribunal brought to the applicant's attention that they have referred several times to rectifying the errors as soon as they found out that the company had breached its obligations, however there has been no evidence provided of this. The applicant stated that they expected the Department to have this evidence as it was supplied to the agent who was the contact with the Tribunal but he did not provide it.
The applicant stated that he provided information in response to the NOITTA. The Tribunal informed the applicant that it appears that they have not provided relevant evidence about rectification. The applicant stated that, after the visit, everything was put into place to rectify the problem and Mr Matar sent the case officer that information. The decision was made on the non-compliance in the 12 months period prior to his visit.
The applicant confirmed that the sponsorship was approved on 5 May 2012. The Tribunal informed the applicant that one year and one month later it appeared that the applicant was not complying with sponsorship obligations. The applicant stated that there was shift in the staff and that was one of the reasons. Mr Matar became a director in 2014. Before that he was an employee. He was changing procedures in the office from early 2014 after he became a director.
47.The Tribunal asked the applicant if they wished to say anything about the circumstances of whether, and the extent to which, the failure to satisfy the sponsorship obligation has had a direct or indirect impact on another person. The applicant stated that regarding the underpayment to Mr Zia, they immediately rectified the underpayment. Mr Matar stated that he supplied the agent with information and he thought the agent provided the information to the Department. He can provide the information again. It is registered with the ATO as well. The Tribunal informed the applicant that there may have been impact on the other three visa holders because there were no records kept. The applicant stated that the other three employees were only employed for a short period of time. They let them go soon after Mr Matar became a director. The applicant sponsored them from another company. They moved from Perth to Sydney. They applied in response to advertisements for mechanics. The applicant only found out that they were on Subclass 457 visas after the applicant told them that they were happy for them to commence work. The applicant applied to nominate them.
Mr Matar stated that he believes that he was open with the case officer. If the case officer asked for information, Mr Matar provided the information and did not hold information back. The applicant stated that that Immigration has opened their eyes. They did not think they were doing anything wrong. When the Department informed the applicant that the wages had to be paid by electronic funds transfer and that there had to be record keeping, they started doing that. Even though they had files kept in a folder, they also now have electronic files with their names, details, addresses, telephone numbers, wages and bank details. They record hours of work and start and finish times. They introduced signing on by employees, for mechanics, after the site visit. They have always had it for the drivers. All the mechanics now are Australian citizens or permanent residents. The applicant stated that they would offer Mr Zia permanent work if he gets his visa approved. Mr Zia has work rights.
49.Regarding the processes (if any) the person has implemented to ensure future compliance with the sponsorship obligation, the applicant stated that there is record keeping, payroll system and supplying the Department within 14 days of changes that take place. They have also employed more staff to ensure that there is record keeping and it is updated regularly.
The applicant stated that the only obligations that the applicant did not comply with are the obligations the delegate found were not complied with. They were obligations of record keeping, notification and ensuring that staff are paid the correct amount.
The applicant stated that they agree with the findings of the case officer but it was not intentional and they have taken steps to rectify the issues. They are apologetic and will not make those mistakes again. The applicant stated that they did not understand their obligations correctly. Now they understand. They take this very seriously and will not make these mistakes again. The Tribunal informed the applicant that if it affirms the decision under review, the bar ends 23 months after the date of the decision.
The Tribunal informed the applicant that there is information on the Department’s file that an employee was paid wages and then asked to give some of it back to the sponsor. Mr Matar stated that this is not true. He never asked employees to pay money back. He cannot talk about anything that happened before he became a director. The three employees became employees after he became a director. Mr Zia was employed before Mr Matar became a director. The three employees asked to travel to the Philippines shortly after commencing employment and said there was something major with their families. Mr Matar offered to pay for their airline tickets and deduct this from their wages. Mr Matar has the proof of payment for their airline tickets and travel costs. He paid for these costs on the company credit card. The employees said they did not have the money. The applicant sent some bank statements by email to the Department.
After a short adjournment the Tribunal proceeded under s.359AA of the Act. The Tribunal informed the applicant that there is information in the Department’s file that an employee informed the Department that the sponsor will put salary into his account but that the employee will then have to give some of it back to the sponsor. The Tribunal informed the applicant of the relevance of this information and the consequences of the Tribunal relying on this information. The Tribunal invited the applicant to comment or respond to the information. Mr Matar stated that he understood the information and the relevance of the information.
The applicant stated that the information is completely false. They never made such a comment or requested this from an employee. The only time they advanced money was for travel costs. They did not ask for the money to be returned and said that they would deduct the money on a weekly basis from their pay until the advance was recovered. They did not deduct a lump sum. This was the case with all three employees. The applicant paid for all of them to return to the Philippines and to fly back to Australia. One of them rang the applicant from the Philippines and asked Mr Matar to advance money and Mr Matar transferred money through Western Union for one of the mechanics whose daughter needed an operation. All the money were repaid from their wages.
The applicant stated that affirming the decision will leave a mark on the company. They made mistakes but they have fixed these mistakes. The Tribunal informed the applicant that, as it has previously stated, it has not seen evidence that rectification has taken place. The applicant stated that the representative was going to attend with all the information and documentation. The Tribunal informed the applicant that the application for review was lodged in May 2015 and no documentary evidence in support of the review has been provided to the Tribunal. The Tribunal informed the applicant that any information that is provided before a decision is made will be taken into consideration.
FINDINGS AND REASONS
Sections 140K, 140L and 140M of the Act provide for the imposition of sanctions on approved sponsors in certain circumstances.
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.
For these purposes, the circumstances are prescribed in r.2.89 - r.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.
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: r.2.89 – r.2.94B. These criteria, as they relevantly apply to the circumstances of this case are set out in the attachment to this decision.
Does a circumstance for the taking of an action exist?
60.In the present case, the delegate found that the applicant failed to satisfy r.2.89.
Failure to satisfy a sponsorship obligation: r.2.89
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: r.2.89(2).
In the present case the bar was imposed for the following reasons:
·failure to ensure equivalent terms and conditions of employment (r.2.79);
·failure to keep records (r.2.82);
·failure to provide information to Immigration when certain events occur (r.2.84).
Failure to ensure equivalent terms and conditions of employment (r.2.79)
The delegate was satisfied that the applicant failed the sponsorship obligation to ensure equivalent terms and conditions of employment for one visa holder, Mr Farrukh Zia, over a two year period. The delegate was satisfied that there were underpayments to the visa holder by the applicant for the financial year ending 30 June 2013 of $2,299.92 and for the financial year ending 30 June 2014 of $2,299.92. The total underpayment for the two years is $4,599.84.
The delegate stated that the applicant admitted making a mistake and the applicant stated that this shortfall has been rectified. The applicant stated that the visa holder has been paid correctly and that a tax adjustment had been made. However the applicant has not provided documentary evidence that the applicant paid to the visa holder the amount of $4,599.84.
At the hearing the applicant admitted the underpayment to Mr Zia of $4,599.84 and gave evidence that the underpayment has been rectified and Mr Zia has been paid the full amount of $4,599.84. The applicant’s explanation for the shortfall was that while Mr Zia was employed on a salary of $57,500 per annum, the lady who did the accounts at the applicant mistakenly entered his salary into the system as $55,500. The applicant stated that the ATO was notified and they submitted an amended tax return. They had to amend their payroll system because they paid Mr Zia further funds and Mr Zia had to amend his tax because he was paid the shortfall. The applicant stated that they sent copies of the payroll system and the tax papers supplied for Mr Zia to the Department after they fixed the problem. However, no documentary evidence has been provided to verify that the shortfall was rectified.
It is not in dispute that the applicant underpaid one Subclass 457 visa holder employed by it. The applicant gave evidence that the total underpayment was $4,599.84. The Tribunal finds that this is a serious breach of the obligation to ensure equivalent terms and conditions of employment. Accordingly, the applicant has not satisfied r.2.79(3).
Failure to keep records (r.2.82)
The delegate found that the sponsor failed its obligation to keep records four times, for four Subclass 457 visa holders, during the monitoring period from 1 June 2013 to 1 June 2014. The delegate accepted that the applicant kept records for Mr Zia for the period 28 January 2014 to 21 May 2014 but not for the full monitoring period. The delegate was satisfied that no records were kept for the other three visa holders during the monitoring period. The delegate did not accept the payslips for any of the four visa holders as correct as all four visa holders, according to the payslips, were either paid by cheque, cash or electronic funds transfer and there is no evidence to support that records have been kept by the sponsor that can be verified by an independent person. The delegate stated that, in reply to the NOITTA, the applicant stated that they asked the three visa holders to open bank accounts but they wanted to be paid in cash. The sponsor stated that they now have a better understanding of the obligation and what is required and have set up the payroll system to pay visa holders by EFT, but no information has been provided showing this.
At the hearing the applicant stated it is correct that they did not keep the records and that the applicant failed this obligation four times for the four visa holders during the monitoring period from 1 June 2013 to 1 June 2014. They did the same mistakes with the visa holders as with the other employees. It was not intentional and it was an error. They lacked the experience. The applicant stated that they have improved their systems and have employed more staff for record keeping and administrative work to ensure that record keeping is regularly updated.
The applicant also stated that they initially paid the three visa holders by electronic funds transfer but then they asked to be paid in cash. The applicant took full responsibility because they decided to pay them in cash but failed to keep records of the receipts for payment. Mr Matar stated that he came to the hearing to let the Department know that they are taking it seriously and are taking steps to ensure that it does not happen again. However, the applicant did not provide documentary evidence to show that the applicant has set up the payroll system to pay visa holders by EFT, that they are using an outside company, Waddle, to handle the company’s accounts and that the applicant has improved the systems and has employed more staff for record keeping and administrative work to ensure that record keeping is regularly updated.
The Tribunal is satisfied that that for a period of 12 months during the monitoring period, from 1 June 2013 to 1 June 2014, the records were not capable of being verified for the four Subclass 457 visa holders. It is not in dispute that the applicant failed its obligation to keep records about the four visa holders for the monitoring period from 1 June 2013 to 1 June 2014. The Tribunal finds that this is a serious breach of the applicant’s obligation to keep records.
Accordingly, the applicant has not satisfied r.2.82.
Failure to provide information to Immigration when certain events occur (r.2.84).
The delegate was satisfied that the applicant failed to provide information to Immigration about their change of address from St Peters to Strathfield South. The applicant admitted in reply to the NOITTA this failure to notify the Department of the change of premises address.
It is not in dispute that the applicant failed to advise the Department of the applicant’s change of address.
Accordingly, the applicant has not satisfied r.2.84.
The Tribunal is satisfied that the prescribed circumstance in r.2.89 exists for the purpose of s.140M of the Act.
Action to be taken
76.For the above reasons, the Tribunal is satisfied that relevant circumstances for s.140L(1)(a) exist. Accordingly, it is necessary to consider whether one or more of the actions mentioned in s.140M should be taken.
77.In considering what action to take, the Tribunal has had regard to the prescribed criteria, as extracted in the attachment to this decision. The criteria to be considered where there is failure to comply with sponsorship obligations, are set out in r.2.89(3).
(a)      the past and present conduct of the person in relation to Immigration
78.Other than the matters which led to the bar being imposed, there is nothing before the Tribunal to indicate that the applicant’s conduct has been unsatisfactory towards the Department. The delegate stated that the applicant has not previously been monitored. The delegate stated that the applicant was co-operative during monitoring and responded to all requests and made themselves available to talk with the Department when requested. The Tribunal brought to the applicant’s attention that documentary evidence had not been provided to show that Mr Farrukh had been paid the shortfall of $4,599.84 and that there were changes to the applicant’s systems to ensure that records were kept to allow for verification of information. Although the applicant attended the hearing and expressed the applicant’s apology and intention to comply with sponsorship obligations, the applicant did not provide supporting evidence to show that the relevant changes had been made.
(b)       the number of occasions on which the person has failed to satisfy the sponsorship obligation
79.The Tribunal finds that the applicant has failed to satisfy r.2.79 in relation to one sponsored person and has failed to satisfy r.2.82 in relation to four sponsored persons.
(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
80.The applicant stated that the speed at which they took action to rectify the breaches should be taken into account and being the first time, it was a learning curve. They did not fully understand the obligations and this played a major role in their making these mistakes.
81.Whilst the applicant has given evidence that the wages shortfall to Mr Farrukh Zia has been rectified and the applicant has improved its record keeping by employing more people to keep and update its records, it has improved its payroll system to pay the employees by EFT and it employs an outside company which handles the company’s accounts, the applicant did not provide documentary evidence to support these claims. This evidence is relevant to assessing whether the applicant met its sponsorship obligations.
82.The applicant has admitted the shortfall of $4,599.84 to Mr Zia. The Tribunal considers it significant that the applicant did not provide independently verifiable records that the money was repaid. As well, the applicant was paying the other three visa holders (Mr Barlongo, Mr Biscante and Mr Dela Cruz) in cash, by cheque and by electronic funds transfer and therefore it was not possible to independently verify that the correct wages had been paid.
83.The Tribunal finds these factors are serious.
(d)       the period of time over which the person has been an approved sponsor
84.The applicant was approved as a standard business sponsor on 5 May 2012 and was monitored for the first time from 1 June 2013 to 1 June 2014. The issues of concern in relation to the four visa holders arose during the monitoring period. Mr Farrukh Zia is still employed by the applicant. The other three visa holders are no longer employed by the applicant.
(e)       whether, and the extent to which, the failure to satisfy the sponsorship obligation has had a direct or indirect impact on another person
85.The Tribunal is satisfied that there has been a direct impact on Mr Farrukh Zia as he was underpaid $4,599.84 over a two year period. As there was not independently verifiable evidence about the payments made to the other three visa holders, the Tribunal finds that there has also been a direct impact on them. The Tribunal finds that there has been a significant direct impact on all four Subclass 457 visa holders. The breaches of r.2.79 and r.2.82 have also had a direct impact on the Department for verification and monitoring purposes.
(f)        whether, and the extent to which, the failure to satisfy the sponsorship obligation was intentional, reckless or inadvertent
86.The applicant gave evidence that it was their lack of experience that led to the breach of the sponsorship obligations. The applicant stated that a lady in the office put the wrong wage for Mr Zia. The records that were kept were not independently verifiable because the applicant was paying the three visa holders, Mr Alejandro Suarez Barlongo, Mr Danilo Gregorio Biscante and Mr Roberto Correa Dela Cruz by cash as well as by cheque and EFT. The Tribunal is satisfied that the failure to satisfy the sponsorship obligations was reckless. The failure to keep verifiable records is a serious issue.
(g)       whether, and the extent to which, the person has cooperated with Immigration, including whether the person informed Immigration of the failure
87.There is no evidence that the applicant has not co-operated with the Department. However, the applicant has not provided documentary evidence to show that it has rectified the failure to comply with sponsorship obligations and that it has improved its systems following the monitoring by the Department. Although Mr Matar stated that there is documentary evidence of the changes and the rectification and he has given the evidence to his representative, none was provided to the Department or the Tribunal. (The Tribunal hearing which took place more than a month ago.)
(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
88.The applicant has given evidence that they have repaid the underpayment of wages to Mr Farrukh Zia after the underpayment was brought to their attention by the Department. Mr Matar stated that the moment the Department brought the non-compliance to his attention, Mr Matar took steps to rectify those issues straight away. The applicant stated that they pay staff by electronic funds transfer now and if they ask for cash in certain circumstances, the applicant requires a receipt record of this. However, no documentary evidence of the rectification has been provided. As well, although the applicant gave evidence of improvement in their record keeping and employment of more staff dealing with payroll and record keeping and the employment of an outside company to deal with the company accounts, no documentary evidence of this was provided.
(i)        the processes (if any) the person has implemented to ensure future compliance with the sponsorship obligation

The applicant has appointed an outside company, Waddle, to handle the company’s accounts. The applicant uses MYOB and has employed more staff to deal with the payroll and record keeping. The staff are trained in using this system for the payroll.
(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
90.The Tribunal accepts that the applicant has not been identified as having breached any sponsorship obligations other than the failure to ensure equivalent terms and conditions of employment (r.2.79); failure to keep records (r.2.82); and failure to provide information to Immigration when certain events occur (r.2.84).
(k)       any other relevant factors.
91.The applicant attended the hearing and admitted the breaches but wished to say that they have made changes and all the breaches were unintentional and have been rectified. Mr Matar was aware of the obligations but did not understand them completely.
92.Considering the totality of the circumstances, and having regard to the prescribed criteria, the Tribunal finds that the decision to bar the sponsor under s.140M(1)(c) until 5 May 2015 from sponsoring more people for Temporary Work (Skilled) (Subclass 457 ) visas and to bar the sponsor under s.140M(1)(d) from 21 April 2015 for 23 months from making future applications for approval as a standard business sponsor, should be taken. Accordingly, the Tribunal affirms the decision under review.
DECISION
93.The Tribunal affirms the decision under review.
D. Dimitriadis
Member

ATTACHMENT – Extract from the Migration Regulations 1994
2.89   Failure to satisfy sponsorship obligation
…
(3)      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.
…

[2017] AATA 657

28 April 2017

Key Legal Topics

Areas of Law

Immigration

Administrative Law

Legal Concepts

Judicial Review

Procedural Fairness

Breach

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Statutory Construction

Natural Justice