J&L Family Restaurant Pty Ltd (Migration)

[2019] AATA 893

J&L Family Restaurant Pty Ltd (Migration) [2019] AATA 893 (7 February 2019)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  J&L Family Restaurant Pty Ltd

CASE NUMBER:  1612279

HOME AFFAIRS REFERENCE:                OPF2016/1094

MEMBER:Lilly Mojsin

DATE:7 February 2019

PLACE OF DECISION:  Sydney

DECISION:The Tribunal affirms the decision under review.

Statement made on 07 February 2019 at 4:23pm

CATCHWORDS
MIGRATION – cancellation – sponsorship approval – compliance with sponsorship obligations – terms and conditions of employment – keeping records – provide information to Immigration – application criteria not met – company deregistered – decision under review affirmed

LEGISLATION
Migration Act 1958 (Cth), ss 140E, 140L, 140M, 360, 362B
Migration Regulations 1994 (Cth), rr 2.79, 2.82, 2.84, 2.89, 2.91

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1. This is an application for review of a decision made by a delegate of the Minister for Immigration to take an action under s.140M of the Migration Act 1958 (the Act) in relation to the applicant’s sponsorship.

2. The applicant was approved as a standard business sponsor on 22 March 2013. On 3 August 2016, the delegate decided to bar the sponsor for 5 years from making future applications for approval as a standard business sponsor under s.140M on the basis that the sponsor failed to pay at least equivalent terms and conditions as was approved at the time of nomination, failed to keep records, failed to provide information to the Department when certain events occurred and failed to continue to satisfy the application criteria at the time it was approved as a sponsor.

3. The applicant appealed that decision to this Tribunal, annexing a copy of the Department decision to the application for review.

4. The applicant was invited under s.360 of the Migration Act 1958 to appear before the Tribunal on 7 February 2019 at 9.30 am. The invitation stated that if the applicant did not attend the hearing, the Tribunal may dismiss the application for review without any further consideration of the application or the information before it.

5. The applicant did not acknowledge the Tribunal correspondence. The applicant did not attend the scheduled Tribunal hearing on 7 February 2019 at 9.30 am. In addition, the Tribunal finds that the applicant is aware of the issues before the Tribunal, as the issues were set out in the delegate's decision provided by the applicant to the Tribunal, and the applicant has failed to take advantage of the opportunity to attend the hearing and present evidence and arguments in support of the application for review, or provide any other supporting evidence.

6. In these circumstances, pursuant to s.362B of the Act, the Tribunal has decided to make its decision on the review without taking any further action to enable the applicant to appear before it.

   CONSIDERATION OF CLAIMS AND EVIDENCE

7. The issue in the present review is whether a circumstance for the taking of an action under s.140M of the Act exists and, if so, what the appropriate action was to be taken.

8. The delegate found that the applicant failed to satisfy r.2.89 of the Regulations, that is, the applicant failed to satisfy a sponsorship obligation because the applicant had breached the following regulations:

   ·Regulation 2.79(3)- Obligation to pay at least equivalent terms and conditions as was approved at the time of nomination

   ·Regulation 2.82 - Obligation to keep records

   ·Regulation 2.84-Obligation to provide information to Immigration when certain events occur

   ·Regulation 2.91-Application or variation criteria are no longer met

9. The standard business sponsorship was approved on 22 March 2013 and expired on 22 March 2016. On 26 August 2015 the applicant was visited as part of a regional visit, 2 visa holders, Tzu Ping Lai and Lina Yan, were interviewed and full monitoring commenced on 2 March 2016. On 28 June 2016 a Notice of Intention to Take Action [NOITTA] was issued to the applicant and on 20 July 2016 the applicant provided a response.

   REASONS AND FINDINGS

10. Sections 140K, 140L and 140M of the Act provide for the imposition of sanctions on approved sponsors in certain circumstances. 

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

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

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

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

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

12. For these purposes, the circumstances are prescribed in r.2.89 - r.2.94B and include circumstances in which the Minister, or Tribunal on review, is satisfied there has been: a failure to satisfy a sponsorship obligation; provision of false or misleading information; sponsorship application or variation criteria no longer met; a contravention of the law; unapproved changes to a program; a failure to pay additional security; a failure to comply with certain terms of an agreement; or a failure to pay medical and hospital expenses.

13. 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.

14. In the present review, the delegate found that the applicant had failed to satisfy sponsorship obligations by breaching the following obligations [r.2.89] whilst it was an approved sponsor.

15. The identified failures to satisfy the sponsorship obligations were:

    Regulation 2.79(3) - Obligation to pay at least equivalent terms and conditions as was approved at the time of nomination.

16. The applicant provided payslips showing that the two visa holders sponsored were underpaid from their nominated salaries. The applicant stated they had repaid an earlier underpayment (with adjusted PAYG summaries), but there was no reference to when these payments related to. Both visa holders’ payslips show underpayments of $860 and $3382 representing underpayments of 1.6% and 5.6% of the nominated salaries respectively. The applicant stated the shortfall was paid as cash. 

17. The Tribunal was unable to explore with the applicant whether the shortfall was paid. As the Tribunal has no evidence before it to suggest that the underpayments were paid the Tribunal finds that r.2.79(3) is not met.

    Regulation 2.82 - Obligation to keep records

18. The Tribunal was unable to explore with the applicant the records provided by the applicant to the Department.  The applicant provided a number of documents to the Department regarding payment of salaries. The bank statements did not accord with the payslips. The records provided were not able to be cross referenced. This indicated that the two visa holders were being paid in a manner that could not be verified by an independent person for the whole of the monitoring period. Therefore the Tribunal is satisfied that the records did not meet the obligation to keep records in a manner that is capable of being verified by an independent person.

19. Therefore the Tribunal finds that r. 2.82 is not met.

    Regulation 2.84-Obligation to provide information to Immigration when certain events occur

20. Information obtained from Australian Securities and Investments Commission [ASIC]   indicated ASIC commenced procedures for deregistration of the company on 2 September 2014 by Notice pursuant to s.601AB of the Corporations Act. Further the Australian Business Register indicated that the applicant’s ABN 36 158 816 276 was cancelled from 19 October 2015. The applicant advised the Department that deregistration was caused by the applicant’s accountant failing to register a change of business address resulting in the annual fee renewal not being paid. The Tribunal, without further information from the applicant, is unable to accept, as plausible, that an accountant would not be aware of when a client’s ASIC renewal was due and payable or that an accountant would forget to register a change of address. The Tribunal is satisfied that the applicant has breached subr.2.84(3)(k)(vii).

21. Therefore the Tribunal finds that r. 2.84 is not met.

22. Based on the information provided in the Department file, the Tribunal finds that the applicant has failed to satisfy its sponsorship obligation as it has failed to pay at least equivalent terms and conditions as was approved at the time of nomination, failed to keep records, and failed in its obligation to provide information to Immigration when certain events occurred.

23. Accordingly, the Tribunal is satisfied that the prescribed circumstance in r.2.89 of the Regulations exists for the purpose of s.140L(1) of the Act.

    Regulation 2.91-Application or variation criteria are no longer met

24. The applicant was registered on 29 July 2016 and its ABN status became active on that date. As the applicant was deregistered on 19 October 2015, during the monitoring period, commencing on 2 March 2016, the business was no longer operating lawfully. Therefore the applicant did not satisfy the criteria prescribed under section 140E of the Act and could not meet subr.2.91(2)(a).

25. Therefore the Tribunal finds that r. 2.91 is not met.

26. Accordingly, it is necessary to consider whether actions mentioned in s.140M(2) of the Act should be taken.

27. Where one or more prescribed circumstances have 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 of the Regulations. As a preliminary matter, the Tribunal has considered the delegate's decision to bar the Company under s.140M(1)(c) the Act at a time when the Company's sponsorship approval had already ceased.

28. The Tribunal considers the following prescribed criteria:

    The past and present conduct of the person in relation to Immigration.

29. The Tribunal finds that the applicant’s conduct in relation to its dealings with the Department was unacceptable. The applicant has not provided evidence of payment of shortfall of salary to the visa holders.

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

30. The Tribunal has no information before it to suggest that the applicant has failed to satisfy sponsorship obligations previously.

    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

31. The applicant failed to meet the sponsorship obligations during the monitoring period. The Tribunal is not satisfied that the applicant has rectified the failures in relation to payment of salary to the visa holders. Furthermore the applicant failed to meet the application criteria at the time it was approved as a sponsor as required by r.2.91 because the company was deregistered since 2 November 2014 and had its ABN cancelled on 19 October 2015. This was prior to commencement of the monitoring period. The failures are serious in nature and were within the control of the applicant.

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

32. The nomination was approved on 22 March 2013 and expired on 22 March 2016.

    Whether, and the extent to which, the failure to satisfy the sponsorship obligation or the criteria for approval has had a direct or indirect impact on another person

33. The failure by the applicant to remain registered as a company had a direct impact on the visa holders whose immigration status is dependent on not ceasing employment for more than 90 consecutive days for their approved sponsor.

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

34. The applicant did not appear before the Tribunal and the Tribunal has been unable to explore with the applicant the reasons for its failure to satisfy the sponsorship obligations.

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

35. The applicant co-operated with immigration once monitoring commenced, but did not inform immigration regarding deregistration of the company

    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

36. There is no evidence that the applicant has rectified its failures regarding record keeping and payment of salaries. The company is now registered. It became registered after being advised by immigration that it was not registered

    The processes (if any) the person has implemented to ensure future compliance with the sponsorship obligation or steps the person has taken to ensure that the person will satisfy the applicable criteria

37. The applicant was re-registered after the Department notified the applicant. There is no evidence before the Tribunal to suggest that the applicant has implemented any processes for future compliance with sponsorship obligations.

    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

38. The Tribunal has not found that the Company has breached any other sponsorship obligations.

39. In regard to r.2.91 additional criteria is:

    the nature of the applicable sponsorship criteria that the person no longer meets

40. The applicant failed to meet the application criteria at the time it was approved as a sponsor as required by r.2.91 because the company was deregistered since 2 November 2014 and had its ABN cancelled on 19 October 2015. This was prior to commencement of the monitoring period

    The reason why the person no longer satisfies the applicable sponsorship criteria and whether it is within the person’s control 

41. The applicant was deregistered. This failure is serious in nature and was within the control of the applicant.

    Any other relevant factors

42. The Tribunal is not aware of any other factors.

43. In considering what action to take, the Tribunal has had regard to the prescribed criteria set out above and extracted in the Attachment to this decision. In particular, the Tribunal notes the concerns expressed about the implications of any decision by the Tribunal to take action under s.140M of the Act on possible future applications for employer initiated temporary or permanent visas.

44. Considering the totality of the circumstances, and having regard to the prescribed criteria, the Tribunal considers that the failure by the Company as a former approved sponsor is serious and warrants sanction.

45. The Tribunal finds that the action outlined in s.140M(2) of the Act should be taken.

    DECISION

46. The Tribunal affirms the decision under review.

    Lilly Mojsin
    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.

    …

    2.91   Application or variation criteria no longer met

    …

    (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 nature of the applicable sponsorship criteria that the person no longer meets; and

    (b)    whether, and the extent to which, the failure to continue to satisfy the criteria for approval as a sponsor, or to continue to satisfy the criteria for approval of a variation, has had a direct or indirect impact on another person; and

    (c)     the reason why the person no longer satisfies the applicable sponsorship criteria, including whether the failure to satisfy the criteria is within the person’s control; and

    (d)    the steps (if any) the person has taken to ensure that the person will satisfy the applicable criteria in the future; and

    (e)     any other relevant factors.

    …