HUBKEY IMPORT AND EXPORT PTY LTD (Migration)

HUBKEY IMPORT AND EXPORT PTY LTD (Migration) [2018] AATA 1209 (17 April 2018)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  HUBKEY IMPORT AND EXPORT PTY LTD
CASE NUMBER:  1713510
DIBP REFERENCE(S):  BCC2016/2788887
MEMBER:Hugh Sanderson
DATE:17 April 2018
PLACE OF DECISION:  Sydney
DECISION:The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.
Statement made on 17 April 2018 at 10:48am

CATCHWORDS
Migration – Approval of nominated positions – Temporary Residence Transition nomination stream –– Standard business sponsor – Nominee employed full time –Financial viability and capacity to provide full-time employment – Documentation provided – Expanding start up business – Meets training requirements – Complies with workplace relations
LEGISLATION
Migration Act 1958 s 245AR
Migration Regulations 1994 rr 1.13A, 1.13B, 1.20DA, 2.59, 2.68, 5.19 Schedule 2 cl.457.223

STATEMENT OF DECISION AND REASONS
APPLICATION FOR REVIEW

This is an application for review of a decision made by a delegate of the Minister for Immigration on 5 June 2017 to reject the applicant’s application for approval of the nomination of a position in Australia under r.5.19 of the Migration Regulations 1994 (the Regulations).
The applicant applied for approval on 23 August 2016. The requirements for the approval of the nomination of a position in Australia are found in r.5.19 of the Regulations which contains two alternative streams: a Temporary Residence Transition nomination (r.5.19(3)) stream and a Direct Entry nomination (r.5.19(4)) stream. If the application is made in accordance with r.5.19(2) and meets the requirements of either stream, then the application must be approved. If any of the requirements are not met then the application must be refused: r.5.19(5).
In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in the Temporary Residence Transition nomination stream.
The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19(3)(d) of the Regulations because the delegate was not satisfied that the applicant will employ the visa applicant on a full-time basis in the position for at least two years.
Background
The applicant is a registered company. The directors of the company are Peng Gao and Pang Liu, both of whom hold one share in the company each. The applicant applied for approval as a Standard Business Sponsor (SBS) for the purpose of sponsoring one of the directors of the company, Pang Liu, for a subclass 186 Employer Nomination Scheme visa for the position of an Importer or Exporter. The applicant had previously been approved as an SBS for the period from 19 May 2014 to 19 May 2015 for the purpose of sponsoring the visa applicant for a subclass 457 visa.
The applicant claimed to be involved in the business of exporting Australian wine and brandy to China. The applicant provided various documents in support of the application. This included the following:
·Financial report for the year ending 30 June 2016;
·Business Activity Statements;
·Employment agreement with the visa applicant with the visa applicant to be paid a base salary of $54,000 with 9.5% ($5,130) superannuation contribution; and
·Receipts for Training Benchmark A from TAFE NSW.
The delegate who considered the application noted the following issues:
·The total sales for the period from 1 July 2015 to 30 June 2016 was less than the base salary and superannuation to be paid to the visa applicant;
·The applicant reported a net operating loss of $44,029 for the year ending June 2015 and a net profit of less than $10,000 for the year ending June 2016;
·The net equity in the business as at June 2016 was a deficit of $36,578;
·The information in the BAS statements as to sales was inconsistent with the information in the financial report;
·There is no information that the other director of the company or any other employee of the company is receiving any income; and
·The applicant did not provide an adequate explanation as to the inconsistencies in the information provided.
Taking these matters into account, the delegate was not satisfied that the applicant had the financial viability and capacity to provide full-time employment to the visa applicant for a period of at least two years. Accordingly, the delegate found that the applicant did not meet the criteria in r.5.19(3)(d) and refused the application.
Information to the Tribunal
The applicant provided further information to the Tribunal including the following:
·Financial report for the year ending June 2017 disclosing net earnings of $45,509 and net assets of $8,931;
·BAS for the periods 1 July 2015 to 31 March 2018;
·Company tax return for the year ending June 2017;
·Organisational chart for the business disclosing three employees, a director, the export manager (being the visa applicant) and a full-time administrative manager being an Australian citizen;
·Various documents associated with the export of wine by the applicant; and
·License to export wine, brandy and grape spirit dated 12 September 2017 valid until 12 September 2018.
Mr Gao, on behalf of the applicant, appeared before the Tribunal on 13 April 2018 to give evidence and present arguments. The Tribunal also received oral evidence from the visa applicant and the applicant’s accountant. The applicant was represented in relation to the review by its registered migration agent who attended the hearing.
Mr Gao gave evidence as to the development of business and its future plans for expansion. He provided details of contracts that had recently been reached with customers in China which would lead to significant sales in the market. He said that an administrative manager had been employed in the business since about September 2017 due to the increasing workload of the business and its increased profitability. He said that one of the difficulties in the business has been receiving payment for goods supplied. This often would mean there would be delays of over two months from when an invoice was sent to its payment.
The visa applicant provided consistent information to that provided by Mr Gao as to the history of the business, is current status and its future development.
The applicant’s accountant gave evidence. He explained that the difference in the BAS and the financial statements was because the quarterly BAS uses a cash basis for reporting sales while the financial report uses an accrual basis. This means that if the applicant has sent an invoice to a customer it would be included in the financial statement but would only be included in the BAS once the customer had paid that invoice. It was noted that in the balance sheet for the year ending 30 June 2016 trade debtors were recorded at $90,000 which explained the difference in the total sales recorded in the financial statement compared to the total sales disclosed in the BAS. For the financial year ending 30 June 2017 the financial statement disclosed accounts receivable of $96,000 which indicated the $90,000 trade debtors have now been paid but there was $96,000 outstanding from other accounts sent. This explained why the BAS and the financial statements total income in the year ending 30 June 2017 were comparable and there remained approximately $90,000 difference of the BAS and financial statements for the two years ending June 2016 and June 2017.
For the following reasons, the Tribunal has decided to set aside the decision under review and substitute a decision approving the nomination.
CONSIDERATION OF CLAIMS AND EVIDENCE
The issue in this case is whether the applicant meets the requirements for approval of the nomination under the Temporary Residence Transition nomination stream set out in r.5.19(3), which is extracted in the attachment to this decision. For the nomination to be approved, all the requirements must be met.
The application must be compliant: r.5.19(3)(a)
Regulation 5.19(3)(a) requires that the application for approval must be in the approved form, must be accompanied by the prescribed fee and, where applicable, must include the required written certification relating to conduct that contravenes s.245AR(1). The application must also identify a relevant person and occupation.
On the basis of the information in the Department’s file, the Tribunal is satisfied that the application was made on the relevant form and was accompanied by the prescribed fee. The relevant s.245AR(1) certification was provided in the application form.
The application for approval identifies Pang Liu who, according to Departmental records, has held a Subclass 457 visa since July 2014 that was granted on the basis of satisfying cl.457.223(4) of schedule 2.
The occupation identified in the application is importer or exporter (ANZSCO 133311). The Tribunal is satisfied based on the employment documents for Mr Liu that the occupation identified is the same occupation as that carried out by the nominee as the holder of a Subclass 457 visa. The Tribunal is accordingly satisfied that this occupation carries the same four digit code (1333) as the occupation carried out by the nominee whilst he held a Subclass 457 visa.
Given the above findings, the requirement in r.5.19(3)(a) is met.
Status of the nominator: r.5.19(3)(b)
Regulation 5.19(3)(b) requires the nominator to be or have been the relevant standard business sponsor who is actively and lawfully operating a business in Australia. In addition, the nominator, as that standard business sponsor, must not have met certain criteria relating to the operation of a business overseas, in the most recent sponsorship approval.
Departmental records confirmed that the applicant was the standard business sponsor who last identified Mr Liu in a nomination made under s.140GB of the Act. The applicant was not granted the most recent business sponsorship on the basis of meeting either r.1.20DA, r.2.59(h) or r.2.68(i).
The Tribunal is satisfied on the basis of the material before it, including the businesses registration documents, license to export wine, brandy and grape spirit, business activity statements, payroll activity information and other information provided in respect of the business activities of the applicant that the applicant is actively and lawfully operating a wine exporting business.
Given the above, the requirement in r.5.19(3)(b) is met.
Previous employment of the nominee: r.5.19(3)(c)
Broadly speaking, to meet the requirement in r.5.19(3)(c), either:
· the nominee must have been employed full time in Australia in the position for which he or she holds a Subclass 457 visa for at least 2 of the 3 years preceding the nomination application; or
· the nominee holds a Subclass 457 visa on the basis that s/he was identified in a nomination of a specified occupation for that visa, the nominator nominated the occupation, and the nominee has been employed in that occupation for at least 2 years in the 3 years immediately before the application.
The nomination application was lodged on 23 August 2016. The nominee was granted the Subclass 457 visa to work in the nominated occupation on 11 July 2014. The Tribunal has had regard to the PAYG payment summaries for the nominee. The Tribunal is satisfied that the nominee has been employed full time by the applicant in the position in Australia as the holder of a Subclass 457 visa for at least two years in the three-year period immediately before this nomination application was made.
Given the above findings, the requirement in r.5.19(3)(c) is met.
Future employment of the visa holder: r.5.19(3)(d)
Regulation 5.19(3)(d) only applies to certain nominees (those described in r.5.19(3)(c)(i)). For this class of person, the regulations require that the nominee will be employed on a full time basis for at least 2 years on terms that do not expressly preclude the possibility of an extension.
The primary concern expressed by the delegate in the Department’s decision was that the financial position of the applicant was such that it was not likely that the nominee would be employed on a full-time basis for at least two years on the stated terms of employment. The applicant has provided further information to the Tribunal in support of the application and the current financial position of the business. The Tribunal has had the advantage speaking directly to the director of the business and the applicant’s accountant as well as the visa applicant.
The Tribunal accepts the explanation provided by the applicant’s accountant as to the difference in the disclosed sales in the financial statements to that provided in the BAS. The $90,000 difference in the figures is accounted for in the financial statement for the year ending June 2016 in the trade debtors.
The business is a relatively new start up. The business has been developing since its initial start-up and now has several significant contracts to supply Australian wine to the Chinese market. The business is showing an increased profit. The director of the business has confidence in the continuing development of the business in light of the increased sales and reputation of the wine that the business has been supplying to the Chinese market. The business is now employing a second employee on a full-time basis and has other plans for expansion. On the totality of the evidence before it, the Tribunal finds the applicant has the financial capacity to maintain the nominee’s employment for at least two years in the same manner that they have employed the nominee since 2014.
Given the above findings, the requirement in r.5.19(3)(d) is met.
No less favourable terms and conditions of employment: r.5.19(3)(e)
Regulation 5.19(3)(e) requires that the terms and conditions of employment applicable to the nominated position will be no less favourable than those that are, or would be, provided to an Australian citizen or permanent resident performing equivalent work in the same workplace at the same location.
The employment contract signed by the parties in April 2014 provides that the nominee will be paid $54,000. It has recently been agreed that his income the increased $55,000. The salary paid to the nominee is in line with offers of employment for comparable positions within Sydney. Livesalary.com indicates the medium base salary for an importer/exporter is $54,000 (excluding superannuation).
The Tribunal is satisfied based on the information before it and the declared income of the nominee that the base salary is within the appropriate range of that normally paid to an importer/exporter of comparable experience as the nominee.
Accordingly, the requirement in r.5.19(3)(e) is met.
Training commitments and obligations: r.5.19(3)(f)
Regulation 5.19(3)(f) requires the applicant to have fulfilled any commitments made relating to meeting training requirements, and complied with applicable obligations relating to training requirements, during the period of the applicant’s most recent sponsorship approval. These requirements may be disregarded if it is reasonable to do so.
The applicant has fulfilled the commitments to meeting training requirements by complying with Benchmark A. The applicant has provided the receipts paid to TAFE NSW over the period of the applicant’s most recent sponsorship approval. These payments have been in excess of 2% of the total wages paid by the applicant.
Accordingly, the requirement in r.5.19(3)(f) is met.
No adverse information known to Immigration: r.5.19(3)(g)
Regulation 5.19(3)(g) requires that there is no adverse information known to Immigration about the nominator or person associated with the nominator; or it is reasonable to disregard any such information. For these purposes, ‘adverse information’ and ‘associated with’ have the meaning given in rr.1.13A and 1.13B.
There is no information before the Tribunal to indicate that there is any adverse information known to the Department about the applicant or an associated person. Accordingly, the requirement in r.5.19(3)(g) is met.
Satisfactory compliance with workplace relations laws: r.5.19(3)(h)
Regulation 5.19(3)(h) requires the applicant to have a satisfactory record of compliance with the laws of the Commonwealth, and of each State or Territory in which the applicant operates a business and employs employees in the business, relating to workplace relations.
There is no information before the Tribunal to suggest that the applicant does not have a satisfactory record of compliance with workplace relations laws. Accordingly, the requirement in r.5.19(3)(h) is met.
Conclusion
Based on the findings above, the Tribunal is satisfied that the applicant meets the requirements of r.5.19 for approval of the nomination of the position in Australia.
DECISION
The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.
Hugh Sanderson
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.
Temporary Residence Transition nomination
(3)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 person who holds a Subclass 457 … visa granted on the basis that the person satisfied the criterion in subclause 457.223(4) of Schedule 2; and
(iii)     identifies an occupation, in relation to the position, that:
(A)is listed in ANZSCO; and
(B)has the same 4-digit occupation unit group code as the occupation carried out by the holder of the Subclass 457 … visa; and
(b)the nominator:
(i)     is, or was, the standard business sponsor who last identified the holder of the Subclass 457 … visa in a nomination made under section 140GB of the Act or under regulation 1.20G or 1.20GA as in force immediately before 14 September 2009; and
(ii)    is actively and lawfully operating a business in Australia; and
(iii)     did not, as that standard business sponsor, meet regulation 1.20DA, or paragraph 2.59(h) or 2.68(i), in the most recent approval as a standard business sponsor; and
(c)either:
(i)     both of the following apply:
(A)in the period of 3 years immediately before the nominator made the application, the holder of the Subclass 457 …visa identified in subparagraph (a) (ii) has:
(I)held one or more Subclass 457 visas for a total period of at least 2 years; and
(II)been employed in the position in respect of which the person holds the Subclass 457 … visa for a total period of at least 2 years (not including any period of unpaid leave);
(B)the employment in the position has been full-time, and undertaken in Australia; or
(ii)    all of the following apply:
(A)the person holds the Subclass 457 … visa on the basis that the person was identified in a nomination of an occupation mentioned in sub-subparagraph 2.72(10)(d)(iii)(B) or sub-subparagraph 2.72(10)(e)(iii)(B);
(B)the nominator nominated the occupation;
(C)the person has been employed, in the occupation in respect of which the person holds the Subclass 457 … visa, for a total period of at least 2 years in the period of 3 years immediately before the nominator made the application; and
(d)for a person to whom subparagraph (c)(i) applies:
(i)     the person will be employed on a full-time basis in the position for at least 2 years; and
(ii)    the terms and conditions of the person’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)     the nominator:
(A)fulfilled any commitments the nominator made relating to meeting the nominator’s training requirements during the period of the nominator’s most recent approval as a standard business sponsor; and
(B)complied with the applicable obligations under Division 2.19 relating to the nominator’s training requirements during the period of the nominator’s most recent approval as a standard business sponsor; or
(ii)    it is reasonable to disregard subparagraph (i); and
Note Different training requirements apply depending on whether the application for approval as a standard business sponsor was made before 14 September 2009 or on or after that date.
(g)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
(h)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.

[2018] AATA 1209

17 April 2018

Key Legal Topics

Areas of Law

Immigration

Administrative Law

Legal Concepts

Judicial Review

Statutory Construction

Procedural Fairness