Golden Jade Palace Pty Ltd (Migration)

[2023] AATA 3897

Golden Jade Palace Pty Ltd (Migration) [2023] AATA 3897 (18 July 2023)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Golden Jade Palace Pty Ltd

REPRESENTATIVE:  Ms Yi Luo (MARN: 1802013)

CASE NUMBER:  1927534

HOME AFFAIRS REFERENCE(S):          BCC2018/857775

MEMBER:Terrence Baxter

DATE:18 July 2023

PLACE OF DECISION:  Brisbane

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

Statement made on 18 July 2023 at 11:19am

CATCHWORDS
MIGRATION – Employer Nomination – approval of nominated position – Direct Entry Nomination – Café or Restaurant Manager – term of employment – financial capacity to pay the full-time salary – failure to provide additional financial information – decision under review affirmed

LEGISLATION
Migration Act 1958 (Cth), ss 360, 363
Migration Regulations 1994 (Cth), r 5.19

CASES
MIBP v Jayshree Enterprises Pty Ltd [2017] FCA 264

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 Home Affairs on 11 September 2019 to reject the applicant’s application for approval of the nomination of a position in Australia under reg 5.19 of the Migration Regulations 1994 (Cth) (the Regulations).

2. The applicant, Golden Jade Palace Pty Ltd, applied for approval on 22 February 2018. The applicant nominated Mr Zhongda Xu (the nominee) in the position of Café or Restaurant Manager.

3. The requirements for the approval of the nomination of a position in Australia are found in reg 5.19 of the Regulations which contains two alternative streams: a Temporary Residence Transition nomination stream (reg 5.19(3)) and a Direct Entry nomination stream (reg 5.19(4)). If the application is made in accordance with reg 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: reg 5.19(5).

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

5. The delegate refused the application on the basis that the applicant’s nomination did not satisfy reg 5.19(4)(d)(i) of the Regulations because the delegate found that the applicant had not demonstrated the financial capacity to pay the full-time salary for the nominated position for at least two years and that accordingly the applicant had not demonstrated that the appointment would provide the nominee with full-time employment for at least two years.

6. The applicant lodged an application for review of the delegate’s decision with the Tribunal on 30 September 2019.

7. On 3 May 2023, the Tribunal wrote to the applicant advising that it had considered the material before it but was unable to make a favourable decision on that information alone. The Tribunal invited the applicant to appear before the Tribunal by video conference to give evidence and present arguments relating to the issues at a hearing scheduled for 23 May 2023.

8. The applicant was represented in relation to the review by its registered migration agent Ms Yi Luo.

9. On 8 May 2023, the applicant’s representative provided to the Tribunal a completed response to the hearing invitation indicating that the applicant would not participate in the hearing and consented to the Tribunal making a decision on the papers without taking further steps to allow the applicant to appear.

10. The Tribunal is satisfied that the applicant has consented to the Tribunal making a decision without taking further steps to allow the applicant to appear. The matter has therefore been determined on the documentary evidence pursuant to s 360(2)(b) of the Migration Act 1958 (Cth) (the Act).

11. Although the applicant did not request this, the Tribunal considered whether it would be appropriate to adjourn the application for review under s 363(1)(b) of the Act to allow the applicant additional time in which to provide further evidence to support its application for review. The Tribunal decided to allow the applicant additional time to provide evidence that the applicant met the requirements of reg 5.19(4) of the Regulations. On 29 June 2023, the Tribunal wrote to the applicant inviting it to provide information to support the application. That invitation requested that the further information be provided in writing by 13 July 2023. The applicant did not respond to that invitation or provide further documents to the Tribunal.

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

    CONSIDERATION OF CLAIMS AND EVIDENCE

13. 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 reg 5.19(4), which is extracted in the attachment to this decision. For the nomination to be approved, all the requirements must be met.

    Evidence presented to the Department

14. The applicant produced to the Department of Home Affairs (the Department) the following documents:

    a.ASIC evidence of registration of the business name Yum Cha Cuisine Toowoomba.

    b.Bank statements of the applicant for the period from October 2017 to February 2018.

    c.Market salary evidence.

    d.An ABN Lookup report in respect of the applicant’s ABN.

    e.Business activity statements for the months from July 2017 to December 2017.

    f.An ASIC Certificate of Registration on Change of Name in respect of the applicant.

    g.A licence agreement and lessor’s consent in respect of the applicant’s business premises.

    h.An employment agreement dated 20 February 2018.

    i.Menus of the applicant.

    j.An organisational chart.

    k.A Form 1404 and Assessment Statement issued by the Regional Certifying Body, the Chamber of Commerce and Industry Queensland (Toowoomba) dated 9 March 2018.

    l.A job advertisement and recruitment report in respect of attempts to fill the position.

    m.Undated submissions from the applicant submitted on 18 March 2018 and 31 October 2019.

    n.PAYG payment summaries of the nominee for the 2018 and 2019 financial years.

    o.Financial statements for the 2018 and 2019 financial years.

    p.Australian Taxation Office (ATO) activity statements (001 and 002) of the applicant for the period from 7 August 2017 to 30 June 2019.

    q.Various payslips of the nominee.

    r.A submission from the applicant’s accountant dated 9 August 2019.

15. The applicant produced to the Tribunal the following documents:

    a.A copy of the delegate’s decision.

    b.A submission from the applicant’s accountant dated 1 December 2022.

    c.A position description.

    d.A payroll summary of the applicant for the 2022 financial year.

    e.ASIC evidence in respect of the registration of a related company Green Forest Ocean Pty Ltd.

    f.ASIC evidence of registration of the business name Koon Hong Chinese Take Away, owned by Golden Jade Feast Pty Ltd.

    g.Current ASIC evidence in respect of the business name Yum Cha Cuisine Toowoomba owned by the applicant.

    h.A financial statement for the 2021 financial year.

    i.A current ASIC statement in respect of the applicant.

    j.A business activity statement of the applicant for the quarter from July 2022 to September 2022.

    Term of employment of the visa holder: reg 5.19(4)(d)

16. Regulation 5.19(4)(d)(i) requires the nominee to be employed in the position for at least two years full time. Regulation 5.19(4)(d)(ii) requires that the terms and conditions of that employment do not expressly exclude the possibility of an extension.

17. The employment agreement dated 20 February 2018 provides that the nominee’s employment is to commence on the date of the grant of his Subclass 187 visa and that the employment is full time. The nominee’s employment is permanent and ongoing and is to continue for a period of at least two years. The agreement does not exclude the possibility of extension of the term of employment.

18. However, it is also open to the Tribunal to consider whether the applicant’s business has the financial resources to meet the wages costs for the nominee over the employment period (MIBP v Jayshree Enterprises Pty Ltd [2017] FCA 264).

19. The employment agreement provides that the salary payable to the nominee will be $50,000 per annum plus superannuation. Based on the current superannuation guarantee rate of 11% of ordinary earnings, the package has a value of $55,500 per annum.

20. Based on the information provided to the Department, the delegate was not satisfied that this requirement had been met. The most recent financial statement provided to the Department was for the 2019 financial year. That statement disclosed that the applicant had sustained a trading loss of $47,039 in that year and had accumulated losses of $56,977 as at 30 June 2019.

21. On 18 November 2022, the Tribunal wrote to the applicant pursuant to s.359(2) of the Act inviting it to provide current information addressing the relevant criteria under reg5.19(2) and (4) of the Regulations. The invitation invited the applicant to provide lodged tax returns for the last two full financial years, business activity statements that have been lodged with the ATO for the last 24 months prepared in accordance with Australian accounting standards, including profit and loss statements and balance sheets for the most recent two financial years.

22. In response to that invitation, the applicant provided only a financial statement for the 2021 financial year and a business activity statement for the quarter from July 2022 to September 2022. In its submission dated 1 December 2022, the applicant’s accountant stated that it was currently processing accounting and tax compliance returns for the 2022 financial year and that those documents should be available by mid-February 2023. The accountant advised that the applicant’s tax return was not required to be lodged until 15 May 2023.

23. As recorded in paragraph 11 above, after the applicant notified the Tribunal that it would not participate in the hearing scheduled for 23 May 2023, the Tribunal wrote to the applicant on 29 June 2023 requesting it to provide the following information:

    ·     The applicant’s financial statements for the 2022 financial year.

    ·     The applicant’s business activity statements for the periods from July 2021 to June 2022 and from October 2022 to March 2023.

    ·     Payroll summaries of the applicant for the 2021 financial year and the 2023

    financial year.

    ·A current organisational chart.

    ·Copies of the applicant's Australian Taxation Office Integrated Client Account and Income Tax Account for the period from 1 July 2021 to 26 June 2023.

24. The applicant did not respond to that invitation or provide further documents to the Tribunal.

25. The applicant’s financial statement for the 2021 financial year, which included comparative figures for the 2020 financial year, reveals the following trading figures:

Year	2020	2021
Sales	$561,444.64	$785,384.04
Net profit/(loss) before tax	($68,565.10)	$201,711.98
Wages	$128,472	$82,280

1. According to the balance sheet contained in the financial statement, the applicant’s accumulated losses as at 30 June 2020 amounted to $43,673.73.

2. According to the 2021 profit and loss statement, the applicant recorded a substantial turnaround in its trading performance in that year, transforming a loss of $68,565.10 in the previous year to a pre-tax profit of $201,711.98. However, that information is now over two years old. It was for that reason that the Tribunal requested the applicant to provide its 2022 financial statement and business activity statements for the second and third quarters of the 2023 financial year. (The applicant had earlier provided a business activity statement for the first quarter of that year.)

3. Further, the applicant has failed to produce an organisational chart to establish whether the nominee has been employed recently. The applicant paid wages of $128,472 in the 2021 financial year. That figure reduced to $82,280 in the 2021 financial year. The applicant’s payroll summary for the 2022 financial year discloses that wages expenditure reduced further to $62,352 in that year, of which $43,456 was paid to Mr Kai Huang, the sole director and shareholder of the applicant. According to that payroll summary, the nominee was not employed during the 2022 financial year. The applicant was requested to provide payroll summaries for the 2021 and 2023 financial years but has declined to do so.

4. The only financial document that has been provided by the applicant more recent than 30 June 2021 is the business activity statement for the quarter from July 2022 to September 2022. That statement does show that the applicant recorded substantial sales of $203,013 in the quarter. However, the only expenditure disclosed by the activity statement is the payment of wages of $25,248 for the quarter. In the absence of any other information regarding expenses incurred by the applicant, the Tribunal places little weight on the business activity statement in determining the applicant’s financial capacity to pay the salary package payable to the nominee under the employment agreement.

5. Although the 2021 profit and loss statement did disclose a substantial trading profit, that information is now over two years old. The applicant has had the opportunity to provide contemporary evidence to the Tribunal of its current trading status but has failed to do so.

6. Having regard to the lack of contemporary evidence before the Tribunal, bearing in mind that the applicant has failed to provide the additional financial information requested by the Tribunal, the Tribunal is not satisfied that at the time of this decision the applicant has the financial capacity to pay the nominee’s full-time salary package for at least two years and that the nominee will be employed on a full-time basis in the position for at least two years. The Tribunal finds that the applicant does not satisfy the requirements of reg 5.19(4)(d)(i).

7. Accordingly, the requirement in reg 5.19(4)(d) is not met.

8. For the above reasons the Tribunal is not satisfied that the applicant meets the requirements of reg 5.19(4). The applicant has not sought to satisfy the criteria in the Temporary Residence Transition nomination stream, and as such has not met the requirements in reg 5.19(3). Accordingly, the nomination of the position cannot be approved. Therefore, the Tribunal must affirm the decision under review.

   DECISION

9. The Tribunal affirms the decision under review to refuse the nomination.

   Terrence Baxter
   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 an identified person, as  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)       all 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;

   (AA)there is a genuine need for the nominator to employ the person identified under subparagraph (a)(ii), as a paid employee, to work in the position under the nominator’s direct control;

   (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 the person identified under subparagraph (a)(ii), as 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).