Himalayan Nepalese Pty Ltd ATF The Sanu Family Trust Client (Migration)

[2019] AATA 6519

Himalayan Nepalese Pty Ltd ATF The Sanu Family Trust Client (Migration) [2019] AATA 6519 (20 November 2019)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Himalayan Nepalese Pty Ltd ATF The Sanu Family Trust Client

CASE NUMBER:  1726416

DIBP REFERENCE(S):  OPF2017/2110

MEMBER:Kate Millar

DATE:20 November 2019

PLACE OF DECISION:  Adelaide

DECISION:The Tribunal affirms the decision under review.

Statement made on 20 November 2019 at 5:29pm

CATCHWORDS

MIGRATION – standard business sponsorship bar – providing false or misleading information – alleged breaches of sponsorship obligations – less favourable terms and conditions – deficiencies in recording wages – recall to work during unpaid leave – withholding wages from visa holders – performing duties of a different occupation – change of accounting software – salary deduction not authorised in writing – staff cannot apply for permanent residency – decision under review affirmed  

LEGISLATION

Fair Work Act 2009, s 324
Migration Act 1958, s 140
Migration Regulations 1994, rr 2.79, 2.82, 2.83, 2.86, 2.89, 2.90

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1. Himalayan Nepalese Pty Ltd (Himalayan Nepalese) operates a Nepalese restaurant in Victoria Park.  It has associated restaurants owned by separate entities at Inglewood and Mossman Park.  It was first approved as a standard business sponsor under the name Himalayan Nepalese on 14 August 2014.  

2. In April 2017, the Department of Home Affairs commenced monitoring Himalayan Nepalese for compliance with its obligations as a standard business sponsor.

3. Himalayan Nepalese has sponsored seven 457 visa holders, and at the time the Department commenced monitoring, it employed five sponsored 457 visa holders: Mr Subas Bhattarai, Mr Dipak Dhakal, Mr Gaurab Thapa Khapangi, Mr Suraj Sapkota and Mr Narayan Sapkota. 

4. After Himalayan Nepalese provided documentation in response to the monitoring request and a site visit was conducted, a delegate of the Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs issued a notice of intention to take action, detailing alleged breaches of a number of sponsorship obligations, as well as the provision of false or misleading information.

5. On 9 October 2017, the delegate decided to bar Himalayan Nepalese under s.140M of the Migration Act 1958 (the Act) from making an application for approval as a standard business sponsor for four years on the basis that it had breached its obligations as a sponsor, and had provided false or misleading information.  Himalayan Nepalese has sought review of this decision.

6. Mr Bhairab Dhakal (Mr Dhakal), a director of Himalayan Nepalese, appeared before the Tribunal on 26 June 2019 to give evidence and present arguments. The applicant was represented in relation to the review by its registered migration agent.

7. In issue in this matter is whether Himalayan Nepalese has breached its obligations as a sponsor and/or provided false and misleading information, and if so what if any action should be taken, having regard to prescribed factors.

8. For the following reasons, the Tribunal has decided to affirm the decision under review.

   THE BUSINESS

9. Himalayan Nepalese operates a Nepalese Café and Restaurant in Victoria Park.  The business commenced operating in 2010, with Mr Dhakal as a sole trader. He said it struggled for the first year but after that became very busy.  Himalayan Nepalese was incorporated in 2014 and has operated the business from this time. 

10. There are three businesses in the Himalayan Nepalese group, each operated by a separate company which in turn are each the trustee of separate family trusts. Mr Dhakal gave evidence about the other entities as follows.

11. The first is the applicant in this case, Himalayan Nepalese Pty Ltd (Himalayan Nepalese), which is the trustee of the Sanu Family Trust. It runs the Himalayan Nepalese Restaurant and Café at Victoria Park. This business is open seven days a week for lunch and dinner.

12. The second if the Himalayan Nepalese Restaurant and Café at Inglewood is operated by Sanu Family Pty Ltd, which is the Trustee of the Sanu Family Trust No. 2.

13. The third entity, Dhakal Family Pty Ltd, runs the business Himalayan Nepalese Restaurant and Café Mossman Park. It is the trustee of Sanu Family Trust No.3.

14. Mr Dhakal said Sanu Family Trust No.2 and Sanu Family Trust No.3 are in his wife’s name.

    FACTUAL BACKGROUND

15. A number of matters were raised by the delegate in the notice of intention to take action.  The central factual matters that led to decision of the delegate to impose a bar and the contentions of Himalayan Nepalese in response are:

    ·The delegate found that one of the sponsored visa holders, Mr Suraj Sapkota, was not paid for the pay periods ending 20 November 2016 and 27 November 2016.  Himalayan Nepalese acknowledges Mr Sapkota was not paid for these pay periods at the time.  Mr Dhakal states Mr Sapkota was granted unpaid leave for two weeks but was called back into work. Mr Dhakal said the bookkeeper was not advised Mr Sapkota had worked those two weeks, which resulted in him not being paid for that period, but that he was paid when this was raised.

    ·The delegate found that two of the visa holders, Mr Suraj Sapkota and Mr Dipak Dhakal, had not been paid for certain periods of time. Himalayan Nepalese acknowledges this was the case, however state that salary was withheld at the request of the visa holders because they wanted save money for the application fee for a permanent visa.  It is stated the withheld amounts have since been paid. 

    ·Following a site visit to the restaurant, the delegate found that Mr Gaurab Thapa Khapangi was not working in his nominated occupation of café or restaurant manager, and instead the duties of his position were more closely aligned with the duties of a waiter. Himalayan Nepalese state Mr Khapangi was working in the nominated occupation.  It is submitted that the site visit was conducted during the day when the demand for staff is lower, and at these times the manager performs tasks to prepare for the evening service.  It says the visa holder was nervous at the time of the interview and did not fully convey the nature of his position.

    ·The delegate found that bank statements show salary payments were made to employees one to three months after the date specified in the payslips. Himalayan Nepalese state this was a result of changing from an Excel sheet to MYOB to QuickBooks accounting software and the delay was due to data entry.  Mr Dhakal said payments were made the week after the period worked or two weeks after the period worked if there was a delay in entering the data. 

    ·The delegate found that Himalayan Nepalese had provided false and misleading information, as it provided payslips that did not have the correct date of payment of the wages.  The delegate found that Himalayan Nepalese had provided an explanation for this as occurring due to the visa holder’s request for salary to be withheld, and that it had acknowledged payslip errors had occurred. 

    ·One visa holder, Mr Subas Bhattarai, did not have payslips provided for the period 9 November 2016 to 4 December 2016, however the delegate was satisfied he had been paid in this period.  The delegate was satisfied the payslips were subsequently provided to Mr Bhattarai.  Mr Dhakal said that Mr Bhattarai was paid for this first two weeks of work, however the book keeper did not record this in the payroll.  When this error was discovered it was put in the payroll and Mr Bhattarai was paid. 

    INFORMATION PUT UNDER S.359AA OF THE ACT

16. In the course of the hearing, information that would be the reason or part of the reasons for affirming the decision under review was put to Mr Dhakal under s.359AA of the Act. 

17. The information is contained in an internal form for the site visit and interview and includes an allegation of payment for visas.  This quotes one anonymous informant as stating:

    I went looking for a job as I completed my hospitality training and wanted to work and eventually apply for residency.  The owner said he will not employ me but sponsor my visa.  I was told it would cost $40,000 for his services.  He said he has sponsored many people like me before from his 3 restaurants

18. Another anonymous source is quoted as stating:

    I have heard from the owner of the restaurant he is taking around 50k to sponsor his chef

19. Mr Dhakal was advised of this information and that, in combination with other information, if it relied on this information this would result in the Tribunal finding, subject to his comments, that there was a breach of the sponsorship obligations and that this would be the reason or part of the reason for affirming the decision under review.

20. It was explained to Mr Dhakal that this was in the context with concerns raised with him in the hearing about the deficiencies in recording wages paid to visa holders and the withholding of wages at the request of the visa holder, and that the combination of these circumstances may lead the Tribunal to a conclusion that Himalayan Nepalese had breached its obligation as a sponsor. 

21. Mr Dhakal was advised he could comment on or respond to the information at the hearing or seek more time to comment on or respond to the hearing.  Mr Dhakal sought and was granted further time to comment on or respond to the information. 

22. A statutory declaration from Mr Dhakal provided after the hearing declares he has not requested or received any monetary or other benefit from anyone in order to sponsor them for a visa in any of his restaurants.  He states he prides himself as being an honest and upright member of the Australian community who would never engage in such conduct.  He declares he came to Australia from Nepal many years ago and knows first-hand that Nepalese students/workers who come to Australia are usually from humble families and he would never take advantage of them by demanding money in order to sponsor them for visas.

23. While of itself, the Tribunal would not place great weight on information provided by an anonymous source, the particular combination of factors in this case being that:

    ·Himalayan Nepalese concedes it withheld wages from employees, and states this was at the request of the visa holders, or due to a mistake in the case of Mr Sapkota being recalled to work in a period of unpaid leave;

    ·Bank records of payments made by Himalayan Nepalese show wages being paid many months after the period worked by the visa holder, with no clear explanation put forward by Himalayan Nepalese for this occurring; and

    ·Payslips being provided to the Department that were not accurate;

    Result in the Tribunal placing some, but limited, weight on this information and finding, as detailed further below, that there has been a breach of the obligation to ensure the terms and conditions of employment of the visa holders are equivalent to the terms and conditions to an Australian citizen or permanent resident.

    CONSIDERATION OF CLAIMS AND EVIDENCE

24. Under s.140M of the Act, if prescribed circumstances exist, the Minister (and the Tribunal on review) may take one or more of the following actions:

    ·Cancel the sponsorship approval in relation to a class to which the sponsor belongs;

    ·Cancel the sponsorship approval for all classes to which the sponsor belongs;

    ·Bar the sponsor for a specified period from sponsoring more people under the terms of any existing approval; and

    ·Bar the sponsor for a specified period from making future applications for sponsorship approval in relation to one or more classes of sponsor.

25. The circumstances are prescribed in r.2.89 - r.2.94B of the Migration Regulations 1994 (the Regulations) and, as they apply in this case, include failing to satisfy a sponsorship obligation and the provision of false or misleading information.

26. 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 apply to the circumstances of this case are set out in the attachment to this decision.

27. It follows that the issues are:

    ·Does a circumstances for the taking of an action exist;

    ·If so, what criteria need to be taken into account; and

    ·What action should be taken.

28. The Tribunal has considered each of these in turn.

    Does a circumstance for the taking of an action exist?

29. The delegate found that Himalayan Nepalese had failed to satisfy its sponsorship obligations and had provided false or misleading information. If established, each of these may result in the Minister, and the Tribunal in the place of the Minister, deciding to take one of the actions in s.140M of the Act (r.2.89 and 2.90 respectively).

    Failure to satisfy a sponsorship obligation: r.2.89

30. 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). There are a number of sponsorship obligations, and a breach of any one of these obligations can result in actions being taken under s.140M of the Act.

31. The delegate states Himalayan Nepalese has breached four sponsorship obligations, and the Tribunal has considered each of the obligations specified.

    (i) Obligation to ensure equivalent terms and conditions

32. Under r.2.79, a person who is or was a standard business sponsor of 457 visa holders must ensure the terms and conditions of employment offered to the primary sponsored person are no less favourable than the terms and conditions that would be provided to an Australian citizen or permanent resident to perform equivalent work in the person’s workplace at the same location (r.2.79(1) and (2)). 

33. In addition, the sponsor must ensure the terms and condition provided to the primary sponsored person are no less favourable than the terms and conditions that the Minister was satisfied under r.2.72(10)(c) that are or would be provided to an Australian citizen or permanent resident (r.2.79(3)(a)).  

34. Regulation 2.72(10)(c) requires that the terms and conditions of employment of the nominee will be no less favourable than those that are, or would be, provided to an Australian citizen or permanent resident performing equivalent work at the same location.  

35. Under r.2.57(3A) a set of terms and conditions is less favourable than another set of terms and conditions if the earnings of the first set is less than the earnings provided to the second set and there is no substantial evidence to the contrary that the first set is not less favourable than the other set.

36. Under r.2.57A(1) a person’s earnings include the person’s wages, any amounts applied or dealt with in any way on the person’s behalf or as the person directs and the agreed money value of non-monetary benefits. Earnings do not include payments the amount of which cannot be determined in advance, reimbursements, and contributions to a superannuation fund.

37. There are several distinct incidences of alleged non-payment or late payment of wages. These are:

    ·Non-payment of wages for the pay period 20 and 27 November 2016 to Mr Suraj Sapkota.

    ·Non-payment of wages on an ongoing basis to Mr Suraj Sapkota and Mr Dipak Dhakal.

    ·Delays of one to three months in paying all the visa holders their salary.

38. The Tribunal has considered each of these.

    Non-payment of Mr Sapkota – pay periods ending 20 and 27 November 2016

39. In the notice of intention to take action, it stated that Mr Suraj Sapkota was not paid for the pay periods ending 20 November 2016 and 27 November 2016, an amount of $2,080 gross ($1,686 net).  This can be seen in the Westpac Bank payment detail statements provided by Himalayan Nepalese, with no entry for Mr Sapkota for these periods. 

40. In the response to the notice of intention to take action it is stated that the missed payments for Mr Sapkota were due to unpaid leave which was approved but then not taken as Mr Sapkota was called back into work when he was to be on leave. It is stated the bookkeeper was not advised he had worked these two weeks and his salary was not paid.

41. In this case Mr Sapkota’s earnings for the periods ending 20 and 27 November 2016 was $0 for work that is stated in his contract to be 38 hours per week.  It follows that his earnings for that period are less than would be earned by an Australian citizen or permanent resident performing equivalent work in the same location. 

42. The Tribunal must consider whether there is any substantial evidence to the contrary.  In this case, Mr Dhakal stated at hearing that Mr Sapkota was paid his wages for the weeks of 20 and 27 September 2016 when he requested his pay.  

43. Mr Dhakal did not bring records to the hearing to show Mr Sapkota had been paid for these periods nor had this information been provided to the Department.  The failure to provide records to show he had been paid was raised in the decision record of the delegate.  Mr Dhakal was provided a further opportunity after the hearing to show that Mr Sapkota was paid for this period. 

44. After the hearing, Mr Dhakal provided a Westpac payment summary showing a payment to Mr Sapkota for “two weeks holiday” with a payment date of 24 July 2017.  This was accompanied by a submission that this was the withheld salary for anticipated fees associated with a permanent visa application.  This was a separate issue.  Given the annotation to the payment was “two weeks holiday” the Tribunal considers this was to show unpaid wages had been paid.

45. The payment date is 24 July 2017, approximately eight months after Mr Sapkota had worked the two week period and the same day the notice of intention to take action was issued. 

46. The Tribunal does not consider payment approximately eight months after the time Mr Sapkota worked is substantial evidence that his terms and conditions were no less favourable than the terms and conditions that would be provided to an Australian citizen or permanent resident due to the amount of time between the dates he worked and the payment of his wages for this period.

47. It follows that the Tribunal finds that Himalayan Nepalese has breached its obligations under r.2.79 in respect of payment to Mr Suraj Sapkota for the pay periods 20 and 27 November 2016.

    Non-payment or partial payment of wages – Mr Suraj Sapkota and Mr Dipak Dhakal

48. There are also significantly late payments, or non-payment, of Mr Suraj Sapkota, and Mr Dipak Dhakal.  This was explained by Himalayan Nepalese as being in response to requests from these visa holders to withhold part of their salary to save money for the application fee for a permanent visa. 

49. Himalayan Nepalese provided a letter from Mr Dipak Dhakal dated 7 August 2017 stating that he requested a week or two of his salary be withheld every month for the $12,000 visa application and migration agent fee.   The written submission from Himalayan Nepalese dated 7 August 2017 states that Mr Dipak Dhakal requested his salary be withheld for 12 weeks.   It is noted in the decision record Himalayan Nepalese said this was paid at the end of April 2017.  The statement from Mr Dipak Dhakal of 7 August 2017 reports it was paid on 19 June 2017. 

50. Himalayan Nepalese had not provided evidence of the payment of wages withheld from Mr Dipak Dhakal, and was asked to provide documents supporting this payment at the hearing.  After the hearing it provided a Westpac Bank transfer record showing a payment of $10,116 to Mr Dipak Dhakal on 19 June 2017.  The description of the payment is “wages 27/03-18/06”.  This payment was made on the same date the notice to take action was issued to Himalayan Nepalese.  The statement from Mr Dipak Dhakal that he requested deductions from his wages is dated made 7 August 2017, after the period where money was withheld from his wages and after the withheld wages were repaid to him. 

1. As it applies in this case, s.324 of the Fair Work Act 2009 states deductions can only be made from an amount payable to an employee if the deduction is authorised in writing by the employee and is principally for the employee’s benefit.   In this case the deduction was not authorised in writing before the deductions commenced.  There is insufficient information before the Tribunal to determine if the deductions were principally for the employee’s benefit. 

2. In this case, Mr Dipak Dhakal was not paid the earnings specified for a period of 12 weeks.  This means that by virtue of his earnings being less than those that would be paid to an Australian citizen or permanent resident performing equivalent work in the workplace at the same location, his terms and conditions were less favourable than those of an Australian citizen or permanent resident performing equivalent work in the same location. 

3. Withholding wages is a serious matter.  The Tribunal places little weight on an endorsement of this practice from a sponsored worker after the deductions, in circumstances where the worker is reliant on the sponsor for continued sponsorship and employment.  In the absence of an arrangement that complies with the Fair Work Act 2009 evidenced by an agreement in writing that predates the deductions, the Tribunal finds that the letter provided after the deductions were made and after action was taken in regard to the approval of Himalayan Nepalese as a standard business sponsor does not amount to substantial evidence that his terms and conditions were equivalent to those of an Australian citizen or permanent resident performing equivalent work in the same location.  

4. It follows that the Tribunal finds that in not paying wages one or two weeks every month to Mr Dipak Dhakal, Himalayan Nepalese did not ensure the terms and conditions of employment of Mr Dipak Dhakal were equivalent to the terms and conditions of an Australian citizen or permanent resident performing equivalent work in the same location.

5. In regard to Mr Suraj Sapkota, a letter that is also dated 7 August 2017 was provided stating that he had asked for his salary to be withheld a week or two in every month to save, in light of the visa application fee for a permanent visa. Himalayan Nepalese, in its response to the notice of intention to take action stated wages had been withheld from Mr Suraj Sapkota at his request but did not state the period over which this occurred.  Bank payroll statements with annotations on the period for which the person was paid do not show payments for Mr Sapkota for the period 5 February 2017 to 2 April 2017, which fell within the monitoring period. 

6. Despite it being recorded in the decision of the delegate that there was a lack of evidence to show the visa holders had been paid, Mr Dhakal did not provide any information to show the visa holders had been paid prior to the hearing, nor did he bring any documents to show they had been paid to the hearing.  Mr Dhakal was provided time after the hearing to provide bank transfers showing payment of all wages withheld from the visa holders. 

7. Himalayan Nepalese was asked to provide evidence that Mr Sapkota had been paid any salary owing to him.  Himalayan Nepalese provided the bank transfer mentioned above showing the payment of two weeks of holiday pay.  It did not provide bank transfers showing any other earnings had been paid to Mr Sapkota.

8. As this was raised both in the decision record of the delegate and by the Tribunal, and Himalayan Nepalese has failed to provide evidence of repayment of wages other than the two weeks’ holiday pay, despite being asked to provide this to the Tribunal and being granted an adjournment to do so, the Tribunal is not satisfied Mr Sapkota has been paid the amounts withheld from his wages.

9. The Tribunal finds Himalayan Nepalese has failed to ensure the terms and conditions of Mr Sapkota’s employment were no less favourable than the terms and conditions that would be provided to an Australian citizen or permanent resident to perform equivalent work in the person’s workplace at the same location.

   Delay of one to three months in payment

10. In its response to the request for information from the Department that independently verifiable information was provided of the wages paid to the sponsored visa holders, Himalayan Nepalese provided payment details for its sponsored employees.  This was in the form of a Westpac pay summary for a particular pay date.

11. The pay date references for the sponsored visa holders are significantly later than the dates for which the wages are paid.  Examples from the bank statements are extracted below, with the annotation in the bank statement appearing in the body of the table.  This is not all of the bank transfer statements provided by Himalayan Nepalese, and the Tribunal has considered all of the bank statements provided.  The five named employees are the sponsored visa holders.  The remaining employees are grouped under “other employees” and the number of other employee noted.  

Payment date
1 May 2017	27 April 2017	17 April 2017	10 April 2017	27 March 2017
Dipak Dhakal	Wages 30/01-05/02	-	Wages 23/2- 29/01	Wages 16/01-22/01	-
Suraj Sapkota	Wages 30/01-05/02	Wages  12/01-29/01	Wages 16/01-22/01	Wages  09/01 –15/01	-
Subas Bhattarai	Wages 27/02-05/03	Wages  20/02-26/02	Wages 13/02-19/02	Wages 06/02-12/02	Wages   23/1-29/01
Gaurab  Thapa	Wages 13/02-19/02	Wages  06/02-12/01	Wages 30/03-05/02	Wages 23/01-29/01	Wages   16/1-22/1
Narayan Sapkota	Wages 20/02-26/02	-	Wages 13/02-19/02	Wages 06/02-12/02	Wages      23-29/01
Other employees	5 employees Wages 27/02-05/03	6 employees Wages  20/02-26/02	6 employees Wages 13/02-19/02	7 employees Wages 06/02-12/02	7 employees Wages    30/1-5/02

1. Some individual payment records were also provided, for example a payment made to Mr Subas Bhattarai dated 16 March 2017 with the description “wages 23/01-29/01”.

2. An individual payment record also appears for Mr Suraj Sapkota and Mr Dipak Dhakal dated 3 April 2017 for wages from 9 January to 15 January 2017. 

3. A further individual payment for Mr Narayan Sapkota is dated 4 April 2017 and is recorded to be wages from 30 January 2017 to 5 February 2017. 

4. The pattern of the payment of wages shows the sponsored visa holders are paid one to three months after the dates they worked, and that the payments to the sponsored workers are later than for other employees in some, but not all, cases.  The sponsored workers who appear to generally be paid much later than other employees are Mr Suraj Sapkota and Mr Dipak Dhakal. 

5. In taking the example of wages for Mr Sapkota for the period 30 January to 5 February January being paid on 1 May 2017, Mr Dhakal was asked to explain why the wages were paid several months after the dates worked. In response, he said the records from his bank account match the payroll.  While this is the case, as the date of payment on the payroll records matches the date of the withdrawal of the amount of the payroll on the bank account statements, it does not explain why the wages for the sponsored employees are paid a considerable period after the stated period they worked, or why they are often different to the periods for employees who are not sponsored workers. 

6. On again being asked how this explains wages from January being paid in May, Mr Dhakal said he would need to check and this was his bookkeeper’s error.

7. Mr Dhakal then said this was their mistake.  He said they had previously issued payslips from Excel and changed accounting software to MYOB which automatically generates a date.  He said there was a delay of two to three months in entering data from the Excel spreadsheet into MYOB.  As MYOB generates the date when it is entered, the payment date in the payslip was different. 

8. On being asked how the employees were paid in the period there was a two to three month delay entering data in MYOB, Mr Dhakal said they paid from the timecard into Excel and then into the bank.  On being asked if the delay entering the data into MYOB resulted in employees not being paid, Mr Dhakal said maybe there was one to two weeks’ delay if the pay is due at the end of the month.  This does not explain delays of three months.   

9. Mr Dhakal said in the period the pay was changed from Excel to MYOB, some people were paid for periods they had worked some time in the past.  He said this was because of employees requesting payments to be held. 

10. Mr Dhakal was given several opportunities to explain why the bank records showed employees being paid a lengthy period after the dates annotated as being worked.  The Tribunal did not find his explanation about transferring the payment system from Excel to MYOB convincing.  It does not explain why some employees were recorded as being paid for dates worked that are more recent than others.  His explanation that he was withholding wages at the request of the visa holders was also not convincing as there were delays in payment for sponsored workers who did not provide a statement that they had requested payments be withheld, for example, Mr Thapa and Mr Narayan Sapkota.

11. The Tribunal finds Mr Dhakal has failed to explain why the sponsored workers were paid much later for periods worked.  It does not accept this was due to a change in accounting software or occurred at the request of the sponsored visa holders.

12. As  the sponsored employees were not paid at the time they worked, this shows that in the past they have not been paid for the period worked.  This can be contrasted with the employees who are not sponsored workers, who are paid closer to the dates worked.

13. The Tribunal finds that this means that the earnings of the sponsored employees have been less than those of local employees.  It further finds this amounts to the sponsored workers having less favourable terms and conditions than those that would be provided to Australian citizens or permanent residents performing equivalent work in the person’s workplace at the same location. 

14. It follows the Tribunal finds this was a further breach of the obligation in r.2.79, however that there is some overlap with the failure to pay where wages were withheld from Mr Suraj Sapkota and Mr Dipak Dhakal. 

    (ii) Obligation to keep records

15. Regulation 2.82 applies to a person who was or is an approved sponsor. It requires the sponsor to keep records of a specified kind in a reproducible format and for a particular period.

16. The records must be kept in a manner that is capable of being verified by an independent person (r. 2.82(2)(c)(ii)).

17. Records must be kept of (among other things):

    ·The money paid to the primary sponsored person (r.2.82(3)(e)(i)); and

    ·The money paid applied or dealt with in any way on the primary sponsored person’s behalf or as the primary sponsored person directed (r.2.82(3)(e)(ii).

18. In this case, money is stated to have been withheld from Mr Suraj Sapkota and Mr Dipak Dhakal.  Himalayan Nepalese have not provided records of money withheld.  After the hearing the Tribunal was provided with records of money paid to each of these visa holders, but does not have information to show how much was withheld from each visa holder. 

19. It has provided letters from each of these visa holders stating they requested money to be withheld.  These letters are dated after wages were withheld and after a notice of intention to take action was issued by the Department

20. Particular records must be kept of money paid to a primary sponsored person (r.2.82(3)(e)) or applies or dealt with in any way on the primary sponsored person’s behalf.  These records have not been kept, and Himalayan Nepalese is in breach of this obligation.

    (iii) Obligation to provide records and information to the Minister

21. Regulation 2.83 requires an approved sponsor to provide records and information to the Minister. If the Minister provides a written notice in the manner specified in r.2.82(3), and the records are those required to be kept under a law of this Commonwealth or State or Territory or are records the person is required to keep under r.2.82 the records must be provided in the manner and within the timeframe requested by the Minister.

22. In this case, Himalayan Nepalese was sent a written request on 21 April 2017. While it responded, the bank details provided did not meet the requirements in the letter from the Minister.  A reminder was sent to Himalayan Nepalese to provide the information required on 1 June 2017, and these were provided on 2 June 2017.  

23. Mr Dhakal conceded that not all information was provided within the required timeframe. He said he understood he had to provide bank statements saying that individual employees received their salaries, and the total amount of any salary. He acknowledged that the documents he provided didn’t state the name of the employee. He said the first time he sent documents the attachments were not included. In the end he took these documents to the Department himself.

24. While there is a breach of the obligation to provide records to the Minster, as the documents were provided the day after they were again requested, and a great deal of information was provided within the time it was requested, the Tribunal does not view this as a serious breach and has not had further regard to this breach. 

    (iv) Obligation to ensure sponsored person works in the nominated occupation

25. Regulation 2.86 includes an obligation that an approved sponsor does not work in an occupation unless this occupation was nominated and the nomination was approved.

26. At the site visit, an interview was held with Gaurab Thapa Khapangi, who said his duties include opening the restaurant, checking tables and chairs, stock and premises checking, and some cleaning. He said he is the only front of house person in the mornings during the week to attend to telephones and any customers. He said if it is busy he will call other staff into work.

27. As a result of the site visit, the delegate found Mr Khapangi’s tasks were more like those of wait staff than restaurant manager, and found that Himalayan Nepalese had failed to ensure that he worked in the nominated position of cafe or restaurant manager. 

28. In its response to the notice of intention to take action, Himalayan Nepalese states Mr Thapa is the restaurant manager and has been performing the duties listed in his contract.  It is stated that during quiet periods Mr Thapa may be the only staff members rostered on and will take orders and serve customers at these times. It is stated he will also draw up rosters, check safety and hygiene, stock take and order supplies and ensure all transactions are recorded in the computer system.  On busy days he ensures there are sufficient staff for the customers, supervises staff and ensures the operation of the restaurant is managed.  It is acknowledged he does spend some time on waiting duties on less busy days, and it is estimated he spends 20% of his time on waiting duties and 80% as a restaurant manager. 

29. At hearing Mr Dhakal said the interview was awkward for Mr Khapangi who was nervous, and in fact he was looking after the whole restaurant including training staff, rostering, and special menus for functions. He said that the lunch period is quiet and the manager does tasks for the evening sitting. He said Mr Khapangi does whatever tasks he gives him to do, and that he runs the whole restaurant.

30. The Tribunal accepts the restaurant at Victoria Park requires a manager.  Mr Dhakal has three businesses that he runs.  There is no evidence anyone other than Mr Khapangi was undertaking this role. In the absence of other information to show that either the position is not necessary or that another person is undertaking this role, the Tribunal is not satisfied Mr Khapangi was not working in the nominated position.

    False or misleading information: r.2.90

31. One or more of the actions in s.140M may be taken if the sponsor has provided false or misleading information to Immigration or the Tribunal: r.2.90(2).

32. In this case the sponsor provided payslips to the Department that were not accurate as they did not reflect what was paid to the employees.  Specifically, payslips were provided showing payment of wages on dates that the wages were not, in fact paid to Mr Suraj Sapkota and Mr Dipak Dhakal.  Wage payments were made significantly later than the dates shown on the payslips. 

33. The Tribunal finds the payslips provided to the Department contain false information. 

34. Accordingly, the Tribunal is satisfied that the prescribed circumstance in r.2.90 exists for the purpose of s.140M of the Act.

    Action to be taken

35. For these reasons, the Tribunal is satisfied that a relevant circumstance for s.140L(1)(a) exists. Accordingly, it is necessary to consider whether one or more of the actions mentioned in s.140M should be taken.

36. In considering what action to take, the Tribunal has had regard to the prescribed criteria.  It first considered the prescribed criteria for the breach of a sponsorship obligation and then the prescribed criteria for providing false information.

    Prescribed criteria – breach of a sponsorship obligation

37. The prescribed criteria to be consider in deciding what action to take for the breach of a sponsorship obligation is set out in r.2.89

    (a)  The past and present conduct of the person in relation to Immigration

38. Mr Dhakal said he has had no previous or current problems with Immigration, and has been subject to a number of monitoring requirements.  He said Inglewood and Mossman Park were monitored in 2014.  The Tribunal does not have records of monitoring of the entities which run Inglewood or Mossman Park, and places little weight on Mr Dhakal’s oral evidence about previous monitoring.

39. The decision of the delegate records that Himalayan Nepalese was monitored on one previous occasion with a satisfactory outcome.  The Tribunal considers this shows that in the past Himalayan Nepalese has been compliant with its obligations, and that it previously understood its obligations as a sponsor. 

    (b) The number of occasions on which the person has failed to satisfy the sponsorship obligation

40. Himalayan Nepalese failed to pay Mr Suraj Sapkota for two pay periods, and Mr Dipak Dhakal for three months.  It further failed to pay Mr Suraj Sapkota for an undisclosed period. 

41. The specific number of instances in which it failed to pay Mr Dipak Dhakal and Mr Suraj Sapkota has not been disclosed.  Himalayan Nepalese has conceded it did not pay Mr Suraj Sapkota on two occasions and provided a submission in response to the notice of intention to take action and a letter from Mr Sapkota stating wages were withheld on other occasions, but does not specify a date range or specific dates. 

42. The payment of some visa holders has occurred one to three months after the work is done, unlike other staff members employed by it. 

43. The delegate found that Himalayan Nepalese had failed to keep records on seven occasions

44. The Tribunal is not satisfied it can determine with precision  the number of occasions that Himalayan Nepalese has contravened its sponsorship obligations, as it was not evident the number of occasions salary was not paid to Mr Dipak Dhakal and Mr Suraj Sapkota.  The Tribunal considers that Himalayan Nepalese has failed to comply on a number of occasions, being each time it did not pay the sponsored workers or withheld salary, each time it did not keep accurate records, and when it failed to provide records to the Department. 

45. Himalayan Nepalese has failed to comply with its obligations as a sponsor on a number of occasions, however this cannot be determined precisely, and this factor weighs significantly in favour of taking action against it. 

    (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

46. The Tribunal considers withholding salary from a visa holder a very serious matter.  A purpose of having the earnings of a visa holder established in the approval of the nomination of a position is so that sponsored visa holders are able to financially support themselves in the community. 

1. Two of the sponsored visa holders have provided letters stating they authorised the withholding of wages after the monitoring commenced and after a notice of intention to take action was issued.  The letters are dated a substantial time after wages were withheld.  The information that wages were withheld was not volunteered by Himalayan Nepalese, and the payslips issued by it indicated that the employees had been paid when they had not.  In circumstances where the visa holders rely on the sponsor continuing to sponsor them and remaining approved as a standard business sponsor, the Tribunal considers little weight can be put on letters from the sponsored visa holders after the wages were withheld and after monitoring of sponsorship obligations had commenced.   

2. Sponsored visa holders are in a highly vulnerable position.  If there are sanctions against their sponsor such as a bar on applying to be a sponsor or sponsoring workers in particular categories, they will in turn be unlikely to be sponsored for a further visa.  The Tribunla finds it cannot place significant weight on the written statements of the visa holders in these circumstances.  Where there is to be such an arrangement, the Tribunal would expect that it comply with the obligations in the Fair Work Act 2009 and be in place before any deductions are made.

3. The salary withheld from Mr Suraj Sapkota due to being recalled from leave was paid to him on 24 July 2017, eight months after Himalayan Nepalese failed to pay him.   

4. There is a delay of several months in some cases before the sponsored visa holders were paid; this also affects their ability to financially support themselves.

5. The Tribunal considers withholding wages over time and the non-payment of wages for a period of eight months in the case of Mr Sapkota warrants significant action against Himalayan Nepalese to reflect the severity of the breaches and the period of time over which they occurred. 

   (d) The period of time over which the person has been an approved sponsor

6. Himalayan Nepalese was first approved as a standard business sponsor under the name Himalayan Nepalese on 14 August 2014.  Before this date the business was operated by Mr Bhairab Dhakal as a sole trader, and was approved as a standard business sponsor on 24 May 2011. 

7. As Mr Dhakal now operates Himalayan Nepalese, the Tribunal is satisfied that the business has effectively been approved as a standard business sponsor since 24 May 2011.  This is a lengthy period of time, and weighs against the imposition of a significant action against it. 

   (e)  Whether, and the extent to which, the failure to satisfy the sponsorship obligation has had a direct or indirect impact on another person

8. Himalayan Nepalese has withheld wages from employees and failed to pay an employee recalled to work while on unpaid leave.  It has failed to provide payslips to an employee and the payslips it provided were not accurate.  This has affected the ability of the Department to monitor compliance with its obligations and has an indirect impact on the visa holders as the safeguards for monitoring their terms and conditions have not been in place. 

9. This also has a direct impact on the visa holders who have not received the wages at the correct time and have experienced delayed payments.  There is no direct information before the Tribunal about the impact on these visa holders.

10. This factor weighs in favour of taking action against Himalayan Nepalese. 

    (f)  Whether, and the extent to which, the failure to satisfy the sponsorship obligation was intentional, reckless or inadvertent

11. Himalayan Nepalese argues in its response of 7 August 2017 that it has not been sufficiently vigilant in ensuring payslips were accurate and that the errors were not done deliberately or with fraudulent intent. 

12. The Tribunal does not accept Mr Dhakal’s explanation for the delay in paying the sponsored visa holders and failing to keep records.  The Tribunal finds that, at the least, the breaches were reckless.  It also finds there is some evidence that the breaches were intentional, as Himalayan Nepalese would have known that wages were not paid to the sponsored visa holders in a timely manner, and that wages were withheld, yet provided payslips that did not show this was the case.  Information to show that the visa holders requested withholding of wages was only prepared after a notice of intention to take action had been issued, and this issue had been raised. 

13. This factor weighs in favour of taking significant action against Himalayan Nepalese. 

    (g) Whether, and the extent to which, the person has cooperated with Immigration, including whether the person informed Immigration of the failure

14. In this case, Himalayan Nepalese did not provide the information about a separate payment agreement, until the non-payment of sponsored visa holders was raised by the Department.  Explanation for the delay in paying staff members was also provided on this being raised by the Department.  Payslips provided indicated two sponsored visa holders had been paid when they had not.

    (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

15. Mr Dhakal said he has not changed his business practices but has changed the accounting system. The new accounts are run through QuickBooks which runs the pay every two weeks.  He said that every week he enters into QuickBooks who has sick leave and annual leave. Mr Dhakal said that now the time cards are collected and entered on a Monday or Tuesday and employees are paid on Thursday. 

16. He said he now requires the manager to report to him every day by filling in the books and sending an email.

17. Mr Sapkota was paid arrears on the same day the notice of intention to take action was issued, and eight months after he was not paid for two weeks’ work.  Mr Dipak Dhakal was paid arrears of $10,116 on 19 June 2017, after the Department advised it was monitoring compliance with sponsorship obligations, and before the notice of intention to take action was issued. 

18. While both Mr Sapkota and Himalayan Nepalese state money was withheld from his wages at his request, no further information has been provided to show whether Mr Sapkota has been paid money withheld from his wages other than payment for two weeks holiday.  No documentary evidence has been provided to show Mr Sapkota has been paid in the period 12 February 2017 to 12 April 2017.  Himalayan Nepalese was specifically asked for this information at the hearing and provided further time after the hearing to show it had paid Mr Sapkota. 

19. The Tribunal is satisfied Himalayan Nepalese has taken action to repay money withheld from Mr Dipak Dhakal’s wages and to pay two weeks’ wages to Mr Suraj Sapkota,  It is not satisfied that it has taken steps to repay any further wages withheld from Mr Suraj Sapkota. 

    (i)   The processes (if any) the person has implemented to ensure future compliance with the sponsorship obligation

20. Mr Dhakal gave convoluted answers to questions asked of him about how the visa holders could be paid a considerable time after they had worked the hours.  He explained that in converting from an Excel spreadsheet to MYOB, there was a delay of either weeks or months in the payment or recording of wages.  He also later said they now use QuickBooks.

21. The Tribunal was provided oral evidence from Mr Dhakal about the new payment system but did not receive any further documentary evidence showing a new system has been implemented.  On balance, it accepts a new payment system has been implemented as it is likely Himalayan Nepalese has taken action in response to the difficulties in which it now finds itself.  This weighs slightly in favour of not taking action, or taking limited action in response to the breach of its sponsorship obligations. 

    (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

22. Himalayan Nepalese has failed to comply with three sponsorship obligations on a number of occasions.  That it has failed to comply with a number of sponsorship obligations on several occasions weighs in favour of taking moderate action against it.

    (k)  Any other relevant factors

23. Mr Dhakal said since the bar had been in place his staff cannot apply for permanent residency and he could not bring other people to Australia. He said he has had the bar in place for a period that is now over two years and it is a very long bar.  He has been able to hire one Australian Nepalese employee, but if he waits another two years he is not sure how he will run his business. He said he needs the bar to cease after two years and he will improve whatever mistakes he has made. He said he cannot get a local cook although he has tried, however earlier he had said he has one Australian Nepalese cook.

24. The Tribunal considers the bar will have a substantial negative affect on Himalayan Nepalese, and this may also extend to other businesses run by Mr Dhakal as it will be adverse information known about a person associated with the other entities.  It does not, however, directly apply to his other business as they are separate entities. 

25. A decision which affects a person’s business and livelihood and also the employment of others is not to be taken lightly.  The Tribunal places weight on the gravity of the consequences for the businesses and its employees in favour of Himalayan Nepalese in deciding what action, if any, should be taken.  The effect on Mr Dhakal’s livelihood is mitigated by the structure of the business, where the other two restaurants are run by separate legal entities.  The sponsored visa holders have worked in the other restaurants, as shown by the site visit, at which time Mr Subas Bhattarai was working at the Mossman Park restaurant.  It follows he may be able to keep these visa holders working for the other entities if he can overcome adverse information known about him in the other businesses or apply for further approval as a standard business sponsor or for the approval of the nomination of a position.

    Prescribed criteria- false or misleading information

26. The provision of false or misleading information has its own matters which must be considered in deciding what, if any, action to take under s.140M. These are set out in r.2.90.

    (a)  The purpose for which the information was provided

27. The payslips were provided in response to monitoring by the Department.  It concealed that wages had not, in fact, been paid as recorded in the payslips.  This weighs in favour of taking action appropriate to the seriousness of this conduct.

    (b) The past and present conduct of the person in relation to Immigration

28. This has been detailed above.

    (c)  The nature of the information

29. The information was contained in payslips showing sponsored visa holders were paid when they had not been paid, and also that they had been paid at a particular time when they had not.   Failing to pay sponsored visa holders is a serious matter, and the action taken should reflect the significance of this information.

    (d) Whether, and the extent to which, the provision of false or misleading information has had a direct or indirect impact on another person

30. The provision of false information has a direct impact on the visa holders, as without the provision of correct information the Department is unable to monitor whether the visa holders are receiving the correct earnings.  In the context of this business, where English is a second language for the sponsored visa holder, and where they may not be aware of their employment entitlements, keeping and proving accurate records assumes a high level of importance. 

31. In this case, approximately $18,000 was paid to visa holders after monitoring commenced.   Himalayan Nepalese has not provided information on wages that were to be repaid to Mr Sapkota other than the two weeks when he was recalled to work from leave.  Given the pay records state he was not paid for a similar period to Mr Dipak Dhakal, it would appear he is also owed approximately $10,000.  As Himalayan Nepalese provided incorrect payslips and incomplete bank records, the Tribunal cannot determine if he has been paid wages withheld to him.  Providing incorrect payslips obscures what has occurred and has a direct impact on sponsored visa holders receiving their correct entitlements. 

32. This factor weighs in favour of taking action against Himalayan Nepalese for a significant period of time. 

    (e)  Whether the information was provided in good faith

33. Himalayan Nepalese states the information was provided in good faith.  The Tribunal does not accept this was the case, as at the time it provided the information, Himalayan Nepalese knew of the arrangements it had made with the sponsored visa holders. 

34. The Tribunal considers that the provision of this information was either an attempt to actively mislead the Department, or at the least that it was indifferent as to whether the payslips were false and/or misleading.  That these payslips concealed withholding wages from sponsored visa holders is a serious matter.  No information on the arrangements with the sponsored visa holders was provided until this was raised by the Department. 

35. This factor weighs heavily in favour of taking significant action against Himalayan Nepalese. 

    (f)  Whether the person notified Immigration immediately upon discovering that the information was false or misleading

36. Himalayan Nepalese did not itself notify that it has provided false information.  It first provided an explanation in response to a notice of intention to take action. 

37. The Tribunal does not consider this shows good faith in the interaction with the Department, and weighs in favour of taking action of some kind against Himalayan Nepalese. 

    (g) Any other relevant factors

38. As discussed above, the imposition of an action against Himalayan Nepalese that means it cannot sponsor more workers could result in the business being unable to operate, which is also a serious matter which weighs against taking action against it. 

    CONCLUSION

39. Himalayan Nepalese has failed to pay sponsored visa holders at the time they worked, and provided false payslips to the Department in response to the commencement of monitoring.  It failed to pay Mr Suraj Sapkota for a period he worked for over seven months.  It has not provided a convincing explanation of why this has occurred, or documentary evidence to show that all money withheld from the wages of its sponsored workers has been paid. 

40. Himalayan Nepalese entered into an arrangement to withhold salary from sponsored visa holders, but did not keep a record of an agreement to do so prior to withholding the wages, nor had it provided adequate records of the money withheld or how it was held for sponsored workers.  The Tribunal does not consider it can place significant weight on later statements by the visa holders that they requested money to be withheld.

41. Against this must be weighed the applicant’s long history as a standard business sponsor, as the current entity and with Mr Dhakal previously operating as a sole trader, and that it has previously been monitored with no adverse outcome.  The imposition of a lengthy bar will mean that the business may not be able to trade, which is a significant factor in its favour, although the presence of other businesses in the group mitigates this hardship to some extent. 

42. The Tribunal has carefully weighed all of the prescribed factors, however it regards the non-payment of sponsored workers and the provision of false information serious matters, and finds that the action mentioned in s.140M(1)(c) should be taken to bar it from making future applications for approval as a standard business for a period of four years.

43. As this is the same conclusion as the delegate, the Tribunal affirms the decision under review.

    DECISION

44. The Tribunal affirms the decision under review.

    Kate Millar
    Senior 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.

    …

    2.90   Provision of false or misleading information

    …

    (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 purpose for which the information was provided; and

    (b)   the past and present conduct of the person in relation to Immigration; and

    (c)   the nature of the information; and

    (d)   whether, and the extent to which, the provision of false or misleading information has had a direct or indirect impact on another person; and

    (e)   whether the information was provided in good faith; and

    (f)    whether the person notified Immigration immediately upon discovering that the information was false or misleading; and

    (g)   any other relevant factors.

    …