JCL HOLDINGS PTY LTD (Migration)

JCL HOLDINGS PTY LTD (Migration) [2021] AATA 329 (14 January 2021)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  JCL HOLDINGS PTY LTD
CASE NUMBER:  1809052
HOME AFFAIRS REFERENCE(S):          BCC2017/3656594
MEMBER:Mr S Norman
DATE:14 January 2021
PLACE OF DECISION:  Sydney
DECISION:The Tribunal affirms the decision under review to refuse the nomination.

Statement made on 14 January 2021 at 11:00am
CATCHWORDS
MIGRATION – approval of a nomination – Direct Entry Nomination stream – position of Retail Buyer – financial capacity to employ the nominee for at least 2 years – significant drop in profits – terms and conditions of employment – temporary deregistration – state and international border closures – decision under review affirmed
LEGISLATION
Migration Act 1958, s 359
Migration Regulations 1994, r 5.19
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 Home Affairs on 13 March 2018 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 Department delegate’s decision was lodged with the Tribunal.
The applicant applied for approval on 6 October 2017. 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 stream (r.5.19(3)) and a Direct Entry nomination stream (r.5.19(4)). 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 Direct Entry nomination stream. The delegate also noted the nominee was granted a Subclass 457 visa on 15 April 2016, in order to work for the applicant/nominator.
The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19(4)(d)(i) of the Regulations.
The applicant/nominator (represented by Mr Benson TANG) appeared before the Tribunal on 19 November 2020 to give evidence and present arguments. The Tribunal also received oral evidence from the visa applicant/nominee (Ms Susan Yi XU). The applicant was represented in relation to the review by its registered migration agent.
For the following reasons, the Tribunal has decided to affirm the decision under review to refuse 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 Direct Entry nomination stream set out in r.5.19(4), which is extracted in the attachment to this decision. For the nomination to be approved, all the requirements must be met.
On 6 October 2017, the applicant lodged a nomination application in the Direct Entry nomination scheme; the nominated occupation was for a Retail Buyer (ANZSCO: 639211); the visa applicant/nominee was Ms Susan Yi XU (PNG citizen – place of birth China[1]); and the base rate of pay per annum was (then said to be) $54,000.00.[2]
[1] PDF – p.14 (PDF refers to a merged file in the Tribunal CASEMATE database).
[2] PDF – p.12.
Term of employment of the visa holder: r.5.19(4)(d)
Regulation 5.19(4)(d) requires the nominee to be employed in the nominated position for at least 2 years full time, and the terms and conditions of that employment do not expressly exclude the possibility of an extension.
In their decision, the delegate noted the nomination application referred to the applicant business having one Australian employee and one foreign employee (being a Subclass 457 visa holder). In their decision, the delegate noted the organisation chart lodged had referred to a Manager, Shop Manager, Merchandise Planner (currently filled by the applicant), and Shop Assistants.[3]
[3] PDF – p.17.
At hearing, the applicant confirmed that at the time of the nomination application (6 October 2017), the business employed four full time staff members. However, and particularly since the impact of COVID-19, the business now only employed two full time staff members. The business had initially attempted to employ other staff on a part time or causal basis, but that had not continued.
The applicant had also lodged the following with the Department (and/or with the Tribunal in response to the s.359(2) letter dated 18 August 2020[4]):
[4] PDF[2] – from p.48 (PDF[2] refers to a second merged file in the Tribunal CASEMATE database).
·     2017 Company Tax Return – taxable net income was $3,312[5]
[5] PDF – p.38.
·     Business Activity Statement (BAS) for the periods Jan 2017 – Dec 2017
·     Further BAS [6]
[6] PDF[2] – p.111.
·1 July to 30 September 2018 – total sales were $22,026 / total salary wages and other payments were $13,440[7]
[7] PDF[2] – p.64.
·1 October to 31 December 2018 – total sales were $67,022 / total salary wages and other payments were $23,411[8]
[8] PDF[2] – p.74.
·1 January to 31 March 2019 – total sales were $97,860 / total salary wages and other payments were $18,178[9]
[9] PDF[2] – p.90.
·1 April to 30 June 2019 – total sales were $83,873 / total salary wages and other payments were $19,296[10]
[10] PDF[2] – p.86.
·1 July to 30 September 2019 – total sales were $22,164 / total salary wages and other payments were $20,720[11]
[11] PDF[2] – p.94.
·1 October to 31 December 2019 – total sales were $85,494 / total salary wages and other payments were $15,680[12]
[12] PDF[2] – p.82.
·1 January to 31 March 2020 – total sales were $23,182 / total salary wages and other payments were $13,440[13]
·1 April to 30 June 2020 – total sales were $14,901 / total salary wages and other payments were $15,680[14]
·     Financial Statements for Year Ended 30 June 2017
·     Financial Statements for year ending 30 June 2018 – loss before income tax for 2018 was ($22,767.23) / profit before income tax for 2017 was $12,905.30[15]
·     Financial Statements for year ending 30 June 2019 – profit before income tax was $3,679.20
·     Company Tax Return for 2018[16]
·     Company Tax Return for 2019[17]
·     Pay advice for the visa applicant[18]
·     Evidence of a lease agreement[19]
·     Photographs of the premises[20]
[13] PDF[2] – p.70.
[14] PDF[2] – p.78.
[15] PDF[2] – p.101.
[16] PDF[2] – p.129.
[17] PDF[2] – p.120.
[18] PDF – from p.53.
[19] PDF – from p.65.
[20] PDF[2] – from p.32.
The delegate noted that based on the Profit and Loss statement for the year ended 30 June 2017, there appeared to be a ‘significant drop in profit’ (compared to the 2016 financial year).
The delegate then considered the BAS statements provided but did not accept these demonstrated the financial capacity of the business to support the visa applicant. The delegate also noted that BAS were provided for the period Jan 2017 – Dec 2017, however, more weight was given to the information in the 2017 Company Tax Return and Financial Statement (for the year ended 30 June 2017). The delegate accepted the Tax return provided details relating to a sponsoring business’s total income, total operating profit, total net assets and wages. This information provided a more comprehensive overview of the applicant’s financial position.
The delegate also noted the visa applicant/nominee had worked for the applicant as a Subclass 457 visa holder since 15 April 2016, and this had ‘not significantly improved the financial condition of the business’.
The delegate continued that the applicant business did not provide a letter from their accountant attesting to the financial position of the business and its capacity to meet all employment obligations in regards to employing the nominee for a period of at least two years. The business did not provide an explanation of the circumstances which have caused their financial position, or how this position is likely to improve in the future.
On the basis of the evidence before the delegate, they were not satisfied the applicant had demonstrated they had the financial capacity to be able to pay the full-time salary for the nominated position for at least 2 years. Therefore, the nomination application did not meet r.5.19(4)(d)(i); or r.5.19(4). After then considering the evidence, neither was the delegate satisfied the applicant met r.5.19(3). The delegate then refused the nomination application lodged by JCL HOLDINGS PTY LTD.
By statutory declaration dated 18 September 2018,[21] the applicant had said:
[21] PDF[2] – p.36.
As the applicant company is now and continues to be a legal entity, the Tribunal accepts that it may continue to hear the review application.
That being said, in submissions lodged with the Tribunal on 12 November 2020, the applicant provided (principally):
·     A document titled Disclosure statement by the lessor (estimated commencement date of lease was 1 June 2020)
·     Licence Agreement dated 6 July 2020
·     ‘Plan’ of premises
·     Photographs of premises
The applicant also lodged:
·     PAYG payment summary – individual non-business – 2020 – gross payment $58,240
·     Evidence of pay history for the visa applicant 1 July 2019 to 30 June 2020
·     Evidence of pay history for the visa applicant 1 July 2019 to 30 June 2020
·     Invoices
·     Letter of employment dated 12 November 2020
·     Information about the average pay for Merchandiser Planner in Cairns
At hearing, the Tribunal then put the gist of the following to the applicant for comment:
Regarding the impact on the tourist industry (including in far north) Queensland:
Figures from Tourism Research Australia show Queensland's domestic tourism losses to be around $362 million for August, which does not include losses from the international market.
The loss is a fraction of that sustained in April when Queensland's losses peaked at about $1.5 billion — down nearly 90 per cent from its usual number of domestic travellers.[22]
[22] Queensland's tourism operators 'waiting with bated breath' for borders to reopen in hope of bumper Christmas period, 11 November 2020, ABC News, , accessed 19 November 2020.
Regarding international and domestic travel:
Australia's international borders are likely to remain closed until late 2021, a timeframe which would see the Government's contentious travel ban stretching to an unprecedented 18 months.[23]
[23] ustralia's international travel ban likely to remain until late 2021, 9 October 2020, Executive traveller, accessed 19 November 2020.
and:
Queensland has announced they too will be closing off the border to parts of South Australia from midnight tonight.[24]
[24] Australian borders: More states close to South Australia as outbreak explodes, 16 November 2020, News.com.au, , accessed 19 November 2020.
Regarding unemployment in Queensland:
… The Sunshine State’s unemployment rate was the highest in Australia at 8.8 per cent in July – a 19-year high. And 144,500 jobs were lost between February and July as international and state border closures impacted tourism.
…..
Of the 20 regions with the highest unemployment rates in the land, Queensland had the highest representation with nine in July. … Queensland is highly dependent on interstate and international tourism.[25]
[25] Double-digit regional unemployment rates, 21 August 2020, Adviser Voice, , accessed 19 November 2020.
and:
In Cairns all the job losses this year (down 5,500) have been in the full-time sector. This may come as a surprise when we consider the impact of the slow-down in the tourism market which is heavy with part-time work. However, we believe that JobKeeper has had a major distorting effect in this sector with many employees still counting as employed even with little or no tourism work on offer. The changes to eligibility of JobKeeper 2.0 which cut in at the end of Sept may result in some additional unemployed from the tourism industry; so we may see part-time employment fall further in coming months.[26]
Regarding job keeper and job seeker payments:
The Coronavirus Supplement is extending until 31 March 2021.
The supplement will be $250 per fortnight until 31 December 2020.
From 1 January 2021, it’ll be extended at $150 per fortnight until 31 March 2021.[27]
and:
The supplement was due to end on January 1, 2021, but has been extended by three months to the end of March. … But, from December, the supplement will be reduced by $100.[28]
[26] Trend unemployment rates fall across the QLD regions, 24 September 2020, Conus – Business consultancy services, , accessed 19 November 2020.
[27] Important information about your income support payments, 10 November 2020, Australian Government Services Australia, , accessed 19 November 2020.
[28] JobSeeker supplement changes at a glance: How much you will get after reductions to the coronavirus payment kick in, 11 November 2020, ABC News, , accessed 19 November 2020.
The Tribunal notes that since the hearing, the current and relevant economic information about COVID-19, is materially consistent with that information set out above.[29]
[29] Including but not limited to, Brisbane lockdown to be lifted at 6:00pm but some restrictions to remain, ABC News, 11 January 2021, Brisbane lockdown to be lifted at 6:00pm but some restrictions to remain - ABC News, accessed 11 January 2021; Coronavirus Australia live news: COVID-19 social distancing will remain for 'the next few months' even with vaccinations, Paul Kelly warns, ABC News, 10 January 2021, accessed 11 January 2021; What border restrictions are in place in each state and territory for NSW and Victorian travellers, ABC News, 31 December 2021, accessed 11 January 2021.
When discussed at the hearing, the applicant conceded their business had ‘slowed’, particularly as a result of the impact of the COVID-19 pandemic. However, he believed the business was viable and capable of ensuring the visa applicant was paid the nominated full time salary for (at least) the next two years.
The applicant explained the business ‘specialised in boys and girls formal wear, christening gowns and accessories’. He said the business is not dependent on the tourist trade and should not be substantially impacted by COVID-19; and that formal occasions, including religious and school occasions, were continuing (though social distancing is ongoing). The Tribunal noted that there was none the less high rates of unemployment, including in far north Queensland (which may continue to be exacerbated by the downturn in the tourism business). The Tribunal was therefore concerned inter alia about the flow on effect of this level of unemployment, or the flow on effect of more limited spending, particularly if job keeper/seeker was further limited or ceased; and that this may have an adverse impact on the financial capacity of the clients the applicant relied upon for his business.
The applicant then referred to investment in infrastructure in and around Cairns (where the business was located). When asked to explain, he referred to a major road project and other construction work in and around Cairns.
The agent also referred to an Accountant letter dated 17 November 2020, that was lodged with the Tribunal on 19 November 2020 (while the hearing was taking place). That letter referred to the business turnover in the 2016/2017 & 2017/2018 & 2018/2019 financial years as increasing (though the applicant business registered a loss in 2017/2018); and that the visa applicant had been employed ‘throughout these periods’. However, it was conceded that:
However, the applicant also said that two full time staff were released by the business, along with the cessation of part time or casual staff (apparently principally due to the impact of COVID-19 and due to the contraction of the business), and this is one reason that ultimately satisfied the Tribunal the applicant business would not be capable of paying for the full time nominated position, for at least two years.
Also, and as noted at hearing, the profitability of the business appeared to be modest if not volatile in recent years. Further, the fact the Activity statement of 1 April to 30 June 2020 (during COVID-19), indicated that in that quarter, the total salary wages and other payments exceeded the total sales,[30] was another reason the Tribunal was not ultimately satisfied the applicant business was capable of paying for the full time nominated position, for at least two years.
[30] PDF[2] – p.78.
Next, at hearing it was said (words to the effect) that unemployment in far north Queensland was not substantial. However, the Tribunal said that independent reports it had seen did not support this view (see above). The agent said he would seek further information about this to be lodged post hearing. In post hearing submissions, the applicant provided a RCB letter (referred to below) which supported the agent’s claim. However, the RCB advice was also not consistent with the alternate evidence cited above by the Tribunal; and the Tribunal has preferred to evidence it has been able to independently source.
Be that as it may, even if the Tribunal accepts the unemployment rate in far north Queensland was not substantial (though this did not appear to be supported by the evidence), then the drop in sales in the April-June 2020 quarter, still suggests the business may not be capable of employing the visa applicant full time in the nominated position for the next two years – particularly if the adverse impact of COVID-19 on the Queensland economy, continues.
The visa applicant had also advised the Tribunal that her husband owned a successful business in Papua New Guinea and the family (then in Cairns, though the visa applicant was in PNG), were not reliant on her income earned as a Retail Buyer for the applicant business. However, the Tribunal must still have regard to the terms and conditions of the visa applicant’s employment, and the capacity of the applicant business to meet those terms and conditions, at least for the next two years.
Next, the Tribunal provided further time to lodge evidence and submissions post hearing (due 18 December 2020). On 17/18 December 2020, the applicant lodged:
·Undated Organisation Chart – referring to the associated visa applicant as a Merchandise Planner PLUS Directors, Shop Manager, Shop Assistants (one casual and one part time)
·Regional Sponsored Migration Scheme – Regional Certifying Body advice dated 4 December 2020, from the Cairns Chamber of Commerce, stating the applicant met relevant criteria
·Letter dated 17 December 2020, from the Cairns Chamber of Commerce. That stated (in part):
The Chamber also confirms the business’ claims that there is a large and growing Papua New Guinean population in Cairns, as well as a long-term and growing Torres Strait Islander community, that comprise a substantial part of their customer base.
…..
The Chamber accepts, from the information provided by the business and by their accountant, that the business has maintained steady growth and continues to do so, despite a brief setback in early 2020 due to Covid-19. The Chamber also notes that the business has continued to employ the nominee full-time since 2016, a further indication of their viability.
…..
The Chamber understands that much of the product is manufactured outside Australia and that there is a need for an ongoing full-time role in planning, liaising and engaging with the designers and manufacturers, to meet the demands of the customer base.
…..
The Chamber is also cognisant that local regional labour market conditions, with an often transient and itinerant population, present challenges for businesses to locate, recruit and retain suitably qualified and experienced local workers in skilled and even semi-skilled positions.
The Chamber also notes that the nominee is a Chinese-born Papua New Guinean national who is likely to have both language and cultural experience relating to the business’ clientele, that would assist in the role. The Chamber is satisfied that the position of Merchandise Planner is difficult to fill from the local or Australian labour market, even with COVID-19-related unemployment, as the nominee’s skills, qualifications, experience and language skills are not readily acquired.
·An undated document titled ‘Summary of domestic recruitment efforts by JCL Holdings Pty Ltd’ – referring to four applicants for the position of Merchandise Planner
·Business Activity Statement – 01 July to 30 September 2020 – total sales $50,712 / total salary wages and other payments $14,628 (the base salary for the visa applicant per annum was initially said to be $54,000.00 – though comparative salary advice dated 27 November 2020 (and 20 November 2020), indicated that Merchandise Planners may now be paid around $53,000 to $116,000 per annum – average $77,571)
·Accountant letter dated 15 December 2020. That stated (in part):
Benfan [the applicant business trading name] is currently operating a local retail clothing business in Cairns and has been experiencing increases to its yearly turnover for each of the previous three financial years. As many other businesses have, in the 2019-2020 financial year Benfan’s turnover has declined since the start of the COVID-19 pandemic. The decline in turnover was due to Benfan’s export sales with an international company ceasing due to COVID-19 restrictions.
Despite the decline in turnover, Benfan has maintained the employment of Susan Yi Xu in the position of merchandise planner on a full time basis throughout this period and since we acted as tax agent for this company.
Recently, Susan has been carrying out the duties of the position internationally as she has not been given permission to enter Australia due to the border restrictions
·Contract of employment dated 21 November 2020 – salary $65,000 per annum
·Business references / Purchase Order dated 3 May 2019

However, based on the evidence before it, and as noted above, the Tribunal was satisfied the profitability of the business appeared to be modest if not volatile in recent years. Further, and notwithstanding the claim the applicant business continued to employ the visa applicant full time since 2016, along with at least one other full time staff, this did not appear to be supported by the BAS for the period 1 July to 30 September 2020, which stated inter alia that salary wages and other payments for the same period were $14,628 (being $58,512 for one year). This does not support the claim the applicant business employed two full time staff, and did not support the evidence in the most recent contract of employment for the visa applicant which indicated they were to be paid $65,000 per annum.
After then considering the ongoing adverse impact of COVID-19 on the Queensland economy, which includes high levels of unemployment, severe restrictions on international and domestic travel (which impacts tourism and unemployment in the region); given that notwithstanding the Accountant letter referred to an increase in turnover for the business prior to COVID-19, that the business had posted modest profits and losses, and that the business profitability would continue to be adversely impacted by COVID-19; the Tribunal is not satisfied the applicant has the capacity to employ the nominee in the nominated position for at least 2 years full time.
Accordingly, the requirement in r.5.19(4)(d)(i); and r.5.19(4) are not met.
For the above reasons the Tribunal is not satisfied that the applicant meets the requirements of r.5.19(4). The applicant has not sought to satisfy the criteria in Temporary Residence Transition Nomination stream, and as such has not met the requirements in r.5.19(3). Accordingly, the nomination of the position cannot be approved. Therefore, the Tribunal must affirm the decision under review.
DECISION
The Tribunal affirms the decision under review to refuse the nomination.
Mr S Norman
Member

ATTACHMENT - Extracts from the Migration Regulations 1994
5.19Approval of nominated positions (employer nomination)
…
(2)The application must:
(a)be made in accordance with approved form 1395…; and
(aa) include a written certification by the nominator stating whether or not the nominator has engaged in conduct, in relation to the nomination, that constitutes a contravention of subsection 245AR(1) of the Act; and
(b)be accompanied by the fee mentioned in regulation 5.37.
…
Direct Entry nomination
(4)The Minister must, in writing, approve a nomination if:
(a)the application for approval:
(i)      is made in accordance with subregulation (2); and
(ii)     identifies a need for the nominator to employ a paid employee to work in the position under the nominator’s direct control; and
(b)the nominator:
(i)      is actively and lawfully operating a business in Australia; and
(ii)     directly operates the business; and
(c)for a nominator whose business activities include activities relating to the hiring of labour to other unrelated businesses — the position is within the business activities of the nominator and not for hire to other unrelated businesses; and
(d)both of the following apply:
(i)      the employee will be employed on a full-time basis in the position for at least 2 years;
(ii)     the terms and conditions of the employee’s employment will not include an express exclusion of the possibility of extending the period of employment; and
(e)the terms and conditions of employment applicable to the position will be no less favourable than the terms and conditions that:
(i)      are provided; or
(ii)     would be provided;
to an Australian citizen or an Australian permanent resident for performing equivalent work in the same workplace at the same location; and
(f)either:
(i)      there is no adverse information known to Immigration about the nominator or a person associated with the nominator; or
(ii)     it is reasonable to disregard any adverse information known to Immigration about the nominator or a person associated with the nominator; and
(g)the nominator has a satisfactory record of compliance with the laws of the Commonwealth, and of each State or Territory in which the applicant operates a business and employs employees in the business, relating to workplace relations; and
(h)either:
(i)      all of the following apply:
(A)the tasks to be performed in the position will be performed in Australia and correspond to the tasks of an occupation specified by the Minister in an instrument in writing for this sub-subparagraph;
(AA)there is a genuine need for the nominator to employ the person identified under subparagraph (a)(ii), as a paid employee, to work in the position under the nominator’s direct control;
(AAA)the occupation is applicable to the person identified under subparagraph (a)(ii) in accordance with the specification of the occupation;
(B)either:
(I)the nominator’s business has operated for at least 12 months, and the nominator meets the requirements for the training of Australian citizens and Australian permanent residents that are specified by the Minister in an instrument in writing for this sub-sub-subparagraph; or
(II)the nominator’s business has operated for less than 12 months, and the nominator has an auditable plan for meeting the requirements specified in the instrument mentioned in sub-sub-subparagraph (I); or
(ii)     all of the following apply:
(A)the position is located in regional Australia;
(B)there is a genuine need for the nominator to employ the person identified under subparagraph (a)(ii), as a paid employee, to work in the position under the nominator’s direct control;
(C)the position cannot be filled by an Australian citizen or an Australian permanent resident who is living in the same local area as that place;
(D)the tasks to be performed in the position correspond to the tasks of an occupation specified by the Minister in an instrument in writing for this sub-subparagraph;
(DA)the occupation is applicable to the person identified under subparagraph (a)(ii) in accordance with the specification of the occupation;
(E)the business operated by the nominator is located at that place;
(F)a body that is:
(I)specified by the Minister in an instrument in writing for this sub-subparagraph; and
(II)located in the same State or Territory as the location of the position;
has advised the Minister about the matters mentioned in paragraph (e) and sub-subparagraphs (B) and (C).

[2021] AATA 329

14 January 2021

Key Legal Topics

Areas of Law

Immigration

Administrative Law

Legal Concepts

Judicial Review

Procedural Fairness

Statutory Construction

Jurisdiction