K & L Endo Medical Pty Ltd (Migration)

K & L Endo Medical Pty Ltd (Migration) [2022] AATA 2989 (11 July 2022)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  K & L Endo Medical Pty Ltd
REPRESENTATIVE:  Mr Hwa Jong Yoon (MARN: 0741968)
CASE NUMBER:  1908289
HOME AFFAIRS REFERENCE(S):          BCC2018/703582
MEMBER:Terrence Baxter
DATE:11 July 2022
PLACE OF DECISION:  Brisbane
DECISION:The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.

Statement made on 11 July 2022 at 9:32am
CATCHWORDS
MIGRATION–nomination – Temporary Residence Transition nomination stream – Health Manager – applicant had not fulfilled the commitments made in relation to meeting the training requirements –genuine need to employ a paid employee to work in the position under the nominator’s direct control – no adverse information –no less favourable terms and condition of employment –applicant lawfully operating a business in Australia– decision under review set aside
LEGISLATION
Migration Act 1958, ss 65, 140GB, 245AR
Migration Regulations 1994, rr 1.13, 5.19
CASES
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) [1979] AATA 179
Vishnumolakala v Minister for Immigration [2006] FMCA 1209
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 28 March 2019 to reject the applicant’s application for approval of the nomination of a position in Australia under reg 5.19 of the Migration Regulations 1994 (Cth) (the Regulations).
The applicant, K & L Endo Medical Pty Ltd, applied for approval on 11 February 2018. The applicant nominated Ms Siew Ching Fong (the nominee) in the position of Health Manager. The applicant operates a specialist medical practice in Sunnybank, Queensland. The company began operating in 2010 on a relatively small basis with the two company directors providing specialist services. The company has grown to the extent that a third doctor is now managed by the practice and seven other doctors provide medical services through the clinic operated by the applicant. The nominee has been employed by the applicant on a full-time basis since 2015.
The requirements for the approval of the nomination of a position in Australia are found in reg 5.19 of the Regulations which contains two alternative streams: a Temporary Residence Transition nomination stream (reg 5.19(3)) and a Direct Entry nomination stream (reg 5.19(4)). If the application is made in accordance with reg 5.19(2) and meets the requirements of either stream, then the application must be approved. If any of the requirements are not met, then the application must be refused: reg 5.19(5).
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 that the applicant’s nomination did not satisfy reg 5.19(3)(f)(i)(A) of the Regulations because the delegate found that the applicant had not fulfilled the commitments made in relation to meeting the training requirements during the period of the applicant’s most recent approval as a standard business sponsor.
The applicant lodged an application for review of the delegate’s decision with the Tribunal on 4 April 2019.
Dr Yee Kim Ku and Dr Linus Chang, directors of the applicant, appeared before the Tribunal by video conference on 10 May 2022 to give evidence and present arguments. The hearing was a joint hearing with the application for review of a decision to refuse the visa application of the nominee. The Tribunal also received oral evidence from the nominee by video conference. Drs Ku and Chang appeared before the Tribunal by video conference a second time on 28 June 2022 to give evidence and present arguments.
The Tribunal exercised its discretion to hold the hearings by video conference. The hearings were held during the COVID-19 pandemic. The Tribunal determined it was reasonable to hold the hearings by video conference, having regard to the nature of this matter and the individual circumstances of the applicant. The Tribunal also had regard to the Tribunal’s objective of providing a mechanism of review that is fair, just, economical and quick, and the delay to the matter if the hearings were not to be conducted by video conference.
The applicant was represented in relation to the review by its registered migration agent Mr Hwa Jong Yoon of Global Legal Consulting Pty Ltd. The representative attended the Tribunal hearings by video conference.
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 reg 5.19(3), which is extracted in the attachment to this decision. For the nomination to be approved, all the requirements must be met.
Evidence presented prior to the hearing
The applicant produced to the Department of Immigration and Border Protection (now the Department of Home Affairs) (the Department) the following documents:
a.An ASIC company details extract of the applicant.
b.A financial report for the 2018 financial year.
c.An activity statement lodgement confirmation for the period from July to September 2018, and activity statements for the period from October 2017 to June 2018.
d.Bank statements of the nominee from the 2015 to 2018 calendar years.
e.Company tax returns for the 2017 and 2018 financial years.
f.A receipt issued by TAFE NSW dated 19 June 2018.
g.An undated submission regarding genuine need for the nominee.
h.A payslip of the nominee for the period from 29 December 2018 to 10 January 2019.
i.PAYG payment summaries of the nominee for the 2016 to 2018 financial years.
j.A position description.
k.Transaction summaries of the nominee’s superannuation account for the 2016 to 2018 financial years.
l.An employment contract of the nominee dated 18 July 2015.
m.An organisational chart.
The applicant produced to the Tribunal the following documents:
a.A copy of the delegate’s decision.
b.Financial reports for the 2015 to 2021 financial years.
c.Receipts issued by TAFE NSW on 21 June 2016, 27 June 2017, 19 June 2018, 20 November 2019 and 24 June 2020.
d.A receipt issued by TAFE Queensland dated 23 June 2021.
e.An undated submission from the applicant’s accountant regarding training contributions.
f.Notification of the applicant’s approval as a standard business sponsor for the period from 8 July 2015 to 8 July 2020.
g.Summaries of training contribution payments made prepared by the applicant for the 2018 to 2020 financial years.
h.An ASIC company summary extract of the applicant.
i.An ASIC current and historical company extract of the applicant.
j.A current and historical ABN Lookup form of the applicant.
k.An ASIC business name details extract for the business name K & L Endo.
l.Company tax returns for the 2020 and 2021 financial years.
m.An organisational chart.
n.A job description.
o.A photo of the nominee at work accompanied by a description of her duties in the position.
p.Evidence of the tasks performed by the nominee in the position.
q.An employment contract of the nominee dated 14 March 2022.
r.Market salary research.
s.An employment contract of the nominee dated 28 July 2015.
t.Income statements of the nominee for the 2020 to 2021 financial years, and 2022 financial year to date.
u.PAYG payment summaries of the nominee for the 2016 to 2019 financial years.
v.Notices of taxation assessment of the nominee for the 2016 to 2021 financial years.
w.A copy of the notification of the applicant’s approval as a standard business sponsor provided to the Department.
x.A submission prepared by the applicant regarding Training Benchmark A payment history.
Evidence presented at the hearings regarding the applicant’s operations
Drs Ku and Chang both gave evidence regarding the applicant’s medical practice. They said that the practice was small when it was established, but that it had evolved and grown, particularly after the nominee was appointed as Health Manager. They said that the nominee was integral in the opening of the applicant’s clinic in 2018. They described the range of tasks performed by the nominee in her position.
The doctors provided evidence of the effect of the COVID-19 pandemic on the applicant’s business. They said that patients were concerned during the early stages of the pandemic regarding the risks of infection and that elective surgery rates had dropped. They said that the applicant had sustained a reduction in income as a result of lockdowns associated with the pandemic but that the applicant’s finances had now recovered.
The nominee gave evidence of her employment in the position and the tasks performed by her.
Evidence presented after the hearings
After the first hearing, the applicant produced to the Tribunal the following documents:
a.Activity statements for the period from July 2019 to December 2021.
b.An undated submission from the representative.
c.A copy of the decision record in Triple One Group Australia Pty Ltd (Migration) [2022] AATA 895 (31 March 2022).
d.A receipt issued by TAFE NSW dated 19 June 2015.
e.An extract from the Department’s policy contained in its Procedures Advice Manual (PAM3) regarding reg 5.19(3)(f).
f.A copy of IMMI 17/074.
After the second hearing, the applicant produced to the Tribunal the following documents:
a.A further undated submission from the representative.
b.A further extract from PAM3 in relation to relevant aspects of the nomination.
c.A submission from Drs Chang and Ku dated 30 June 2022.
The application must be compliant: reg 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 and identify a need for the nominator to employ that person, as a paid employee, to work in the position under the nominator’s direct control.
Having regard to the information provided by the Department, the Tribunal is satisfied that the application for approval was made on the approved form, was accompanied by the prescribed fee and included a written certification stating whether the applicant had engaged in conduct in relation to the nomination that contravenes s 245AR(1). The requirements of reg 5.19(2) and consequently of reg 5.19(3)(a)(i) are met.
Regulation 5.19(3)(a)(ii) requires that the application for approval identifies a person who holds a Subclass 457 (Temporary Work (Skilled)) visa granted on the basis that the person satisfied the criterion in cl 457.223(4) of Schedule 2 to the Regulations. The person identified in the application is the nominee, Siew Ching Fong. Department records reveal that the nominee was granted a Subclass 457 visa on 20 August 2015, which was valid until 20 August 2019. Accordingly, the nominee held the required subclass of visa on the date of the application, 11 February 2018. The Tribunal is satisfied that the requirements of reg 5.19(3)(a)(ii) are met.
Regulation 5.19(3)(a)(iii) requires that the application identifies an occupation, in relation to the position, that is listed in the Australian and New Zealand Standard Classification of Occupations (ANZSCO) and has the same 4-digit occupation unit code as the occupation carried out by the holder of the Subclass 457 (Temporary Work (Skilled)) visa. The application identifies the position as Health Manager and the occupation (ANZSCO) as Health Information Manager. The Tribunal finds that ANZSCO lists the occupation, Health Information Manager with Unit Group code 2242. The nominee’s 2015 employment contract describes her position as Health Information Manager. At the hearing, Drs Ku and Chang gave evidence of the tasks performed by the nominee in the position. Having regard to the evidence as to the duties being performed by the nominee, the Tribunal is satisfied that the nominee has carried on the occupation of Health Information Manager listed in ANZSCO. Accordingly, the Tribunal is satisfied that the requirements of reg 5.19(3)(a)(iii) are met.
Regulation 5.19(3)(a)(iv) requires that the application identifies a need for the applicant to employ the nominee as a paid employee to work in the position under the applicant’s direct control. The Tribunal takes the view that reg 5.19(3)(a) as a whole is directed towards requirements for the application form/process of an administrative nature, such that reg 5.19(3)(a)(iv) could be met by a simple statement or certification of need. Support for this view can be found in the contrast between the wording of reg 5.19(3)(a)(iv) and, for example, reg 5.19(3)(i), which requires that there be a genuine need for the nominator to employ the nominee to work in the position under the nominator’s direct control – clearly requiring a qualitative assessment, and reg 5.19(3)(d)(i), which requires satisfaction that the employee will be employed on a full-time basis in the position for at least two years. Given the requirement in relation to this application to satisfy reg 5.19(3)(i), the Tribunal considers that this issue is more appropriately considered under reg 5.19(3)(i) later in these Reasons.
The Tribunal considers that reg 5.19(3)(a)(iv) is more directed to the administrative process, consistent with the requirements of reg 5.19(3) as a whole. The nomination application, on page 3 of that document, identifies that the position to be filled is that of Health Manager. The Tribunal is therefore satisfied that the application for approval identifies a need to employ the nominee in the position of Health Manager under the applicant’s direct control such that reg 5.19(3)(a)(iv) is met. The Tribunal will consider later in these Reasons whether the applicant has established a genuine need for the applicant to employ the nominee to work in the position under the nominator’s direct control for the purposes of reg 5.19(3)(i).
Given the above findings that the requirements in regs 5.19(3)(a)(i), (ii), (iii) and (iv) are met, the requirement in reg 5.19(3)(a) is met.
Status of the nominator: reg 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.
The applicant is or was the standard business sponsor who last identified the nominee in a nomination – reg 5.19(3)(b)(i)
The Department’s records confirm the applicant was approved as a standard business sponsor from 8 July 2015 for five years and was the standard business sponsor who last identified the nominee in a nomination under s 140GB of the Act. The requirement in reg 5.19(3)(b)(i) is therefore met.
The applicant is actively and lawfully operating a business in Australia – reg 5.19(3)(b)(ii)
This regulation requires that the applicant is actively and lawfully operating a business in Australia. The applicant produced various documents to the Tribunal including evidence regarding the applicant’s ABN, taxation returns, ASIC evidence in respect of the applicant’s registered business name, activity statements and financial statements. Drs Ku and Chang gave evidence of the business activities of the applicant. The applicant’s financial statements for the 2020 and 2021 financial years show that the applicant recorded gross income of $1,115,973 and $1,283,668 in those years respectively.
Having regard to the evidence presented to the Tribunal, the Tribunal is satisfied that the applicant is actively and lawfully operating a business in Australia, namely a medical practice. The requirement in reg 5.19(3)(b)(ii) is therefore met.
The applicant did not, as a standard business sponsor, meet reg 1.20DA, or reg 2.59(h) or reg 2.68(i), in the most recent approval as a standard business sponsor – reg 5.19(3)(b)(iii)
Department records confirm that the applicant was not granted its most recent standard business sponsorship on the basis of meeting reg 1.20DA, reg 2.59(h) or reg 2.68(i) of the Regulations. Accordingly, the requirement in reg 5.19(3)(b)(iii) is met.
Given the above findings that the requirements in regs 5.19(3)(b)(i), (ii) and (iii) are met, the requirement in reg 5.19(3)(b) is met.
Previous employment of the nominee: reg 5.19(3)(c)
Broadly speaking, to meet the requirement in reg 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 two of the three 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 two years in the three years immediately before the application.
The applicant has provided PAYG payment summaries for the nominee for the 2016 to 2018 financial years. These documents confirm her employment by the applicant from July 2015 to the date of the application. Dr Chang gave evidence that the nominee had been employed full-time as a Health Manager throughout her employment by the applicant and gave evidence regarding the tasks performed by her during that period. As stated previously, the nominee was granted a Subclass 457 visa on 20 August 2015, which was valid for four years.
The Tribunal is accordingly satisfied that the nominee held a Subclass 457 visa and has been employed full-time in Australia in the position for which she held that 457 visa for at least two of the three years immediately before the nomination application on 11 February 2018. Accordingly, the requirement in reg 5.19(3)(c)(i) is met.
Given the above findings, the requirement in reg 5.19(3)(c) is met.
Future employment of the visa holder: reg 5.19(3)(d)
Regulation 5.19(3)(d) only applies to certain nominees (those described in reg 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 two years on terms that do not expressly preclude the possibility of an extension.
The nominee is a person to whom reg 5.19(3)(c)(i) applies (see paragraph 34 above) and is therefore required to meet this requirement.
The Tribunal has had regard to the terms and conditions of the nominee’s employment as set out in the employment contract dated 14 March 2022. The contract provides that the nominee’s employment is permanent, ongoing and full-time, from the grant of the nominee’s Subclass 186 or Subclass 187 visa. The contract does not specifically state that employment will be available for a period of two years. The Tribunal notes that Departmental policy provides that there is no requirement that the contract specifically refer to employment for two years and that a contract that provides that the position is permanent and ongoing is sufficient to satisfy the requirement. The Tribunal is satisfied that the contract provides for employment on a full-time basis for at least two years. Accordingly, the requirement in reg 5.19(3)(d)(ii) is met.

However, it is also open to the Tribunal to consider whether the applicant’s business has the financial resources to meet the wages costs for the nominee over the employment period (MIBP v Jayshree Enterprises Pty Ltd [2017] FCA 264). The applicant’s financial statements disclose that the applicant recorded profits before tax of $26,780 and $62,488 in the 2020 and 2021 financial years respectively. Dr Chang stated that the applicant’s income and net profit were reduced in the 2020 financial year as a result of the COVID-19 pandemic. The activity statements produced by the applicant confirm that the applicant’s income in the first two quarters of the 2022 financial year was substantially in excess of its income in the corresponding period in the 2020 financial year. The applicant had a substantial excess of assets over liabilities according to the 2021 balance sheet.
The salary payable to the nominee under the 2022 employment contract is $87,000 per annum. The applicant has provided evidence that the nominee has been in full-time employment since July 2015 and has been paid a salary exceeding $60,000 in the 2020 and 2021 financial years. The salary payable under the recent employment contract exceeds this figure, but the Tribunal is satisfied that the applicant has the financial capacity to employ the nominee in the position of Health Manager in accordance with the employment contract and that the nominee will be employed on a full-time basis in that position for at least two years. Accordingly, the requirement in reg 5.19(3)(d)(i) is met.
Given the above findings, the requirement in reg 5.19(3)(d) is met.
No less favourable terms and conditions of employment: reg 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 applicant produced evidence from the platform PayScale that the average salary for a Health Information Manager in Australia ranges between $61,000 and $122,000 per annum, with an average salary of $82,231 per annum. The salary to be paid to the nominee exceeds this average figure.
Based on the evidence available, the Tribunal is satisfied that the terms of employment applicable to the nominee are no less favourable than the terms and conditions which would be provided to an Australian citizen or Australian permanent resident for performing such work in that workplace at that location.
Accordingly, the requirement in reg 5.19(3)(e) is met.
Training commitments and obligations: reg 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 delegate found that the applicant had provided evidence of payment of training contributions in June 2017 and June 2018, but that no evidence had been provided that any training contribution was paid in the sponsorship year which ended in July 2016. Accordingly, the delegate found that the applicant had failed to demonstrate that it had complied with the relevant obligations under Division 2.19 of the Regulations.
Regulation 5.19(3)(f)(i)(B) requires that the applicant has complied with the applicable obligations under Division 2.19 of the Regulations relating to the applicant’s training requirements during the period of its most recent approval as a standard business sponsor.
What are the training requirements for this application?
In relation to the Subclass 457 visa scheme, a person who was a standard business sponsor of at least one primary sponsored person was required by reg 2.87B to comply with requirements relating to training, specified by the Minister in an instrument in writing for that regulation, in each year they sponsored a Subclass 457 visa holder.
The nominee was employed by the applicant as a Subclass 457 visa holder from July 2015. Her visa was effective from 20 August 2015 to 20 August 2019. The applicant’s most recent standard business sponsorship approval was for five years from 8 July 2015.
It is necessary to determine the periods of time, if any, in respect of which the applicant was or is required to comply with the training benchmarks. The relevant regulation, being reg 2.87B of the Regulations, was repealed by the Migration Amendment (Skilling Australians Fund) Regulations 2018 (Cth). A transitional provision introduced by those Regulations provides that a person is not required to comply with reg 2.87B(2) or (3) in relation to a period of 12 months ending on or after the commencement day (12 August 2018). As the only annual periods of the applicant’s most recent sponsorship which ended prior to 12 August 2018 were the years that ended on 8 July 2016, 8 July 2017 and 8 July 2018, the Tribunal finds that the applicant is required to comply with the training obligations in respect of those periods only.
What is the relevant instrument?
In the decision under review, the delegate referred to the instrument in force at the time of the decision, being IMMI 17/045. In a submission to the Tribunal, the representative relied on IMMI 17/074.
IMMI 17/045 commenced on 1 July 2017. Clause 7 of that instrument provides that it applies to nominations or standard business approvals lodged on or after the date of commencement. Although the nomination application in this matter was lodged after 1 July 2017, the applicant’s standard business approval and the applicant’s obligations associated with that approval pre-dated the commencement of IMMI 17/045. As Greenwood J noted in the matter of Pexbury Pty Ltd v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2022] FCA 660 – ‘IMMI 17/045 was not seeking to, in effect, go back in time and apply a new set of training benchmarks and definitional terms to the earlier periods.’ The instrument that applied at the time of the applicant’s standard business approval was IMMI 13/030.
IMMI 17/074 is made under reg 5.19(4)(h)(i)(B)(I) which relates to the Direct Entry nomination stream and is not relevant to this application.
The Tribunal finds that the relevant instrument is IMMI 13/030.
What were the applicant’s training obligations under Division 2.19?
As specified in instrument IMMI 13/030 the business is required to show that the training that has been, and continues to be, provided to employees who are Australian citizens and Australian permanent residents is related to the purpose of the business. The training benchmarks for an established business are:
(A) recent expenditure, by the business, to the equivalent of at least 2% of the payroll of the business, in payments allocated to an industry training fund that operates in the same industry as the business; or
(B) recent expenditure, by the business, to the equivalent of at least 1% of the payroll of the business, in the provision of training to employees of the business.
There is no evidence before the Tribunal of any expenditure by the business during the sponsorship period in payments for the provision of training to employees of the business to meet Benchmark B.
In order to meet Benchmark A, the applicant is required to establish that it has incurred expenditure to an industry training fund equivalent to at least 2% of the payroll of the business in the relevant period. It is necessary to consider the meaning of ‘the payroll of the business’ for this requirement. The Department’s policy contained in PAM3 states that for this requirement, payroll expenditure includes any wages, remuneration, salary, commission, bonuses, allowances, superannuation contributions or eligible termination payments, defined as wages in the Act relating to payroll tax in the relevant State/Territory, that the applicant has paid to their employees during the relevant 12-month period.
The Tribunal is not bound by the policy but the Tribunal notes the finding of Brennan J in Re Drake and Minister for Immigration and Ethnic Affairs (No 2) [1979] AATA 179 that the Tribunal should adopt the following practice: ‘When the Tribunal is reviewing the exercise of a discretionary power reposed in a Minister, and the Minister has adopted a general policy to guide him in the exercise of the power, the Tribunal will ordinarily apply that policy in reviewing the decision, unless the policy is unlawful or unless its application tends to produce an unjust decision in the circumstances of the particular case.’
The Tribunal notes the comments of the Court in Vishnumolakala v Minister for Immigration [2006] FMCA 1209 at [27] that the policy is no more than an advisory administrative guide to delegates in relation to their application of the legislation and that, as a matter of law, it could have no higher status. The Tribunal finds that the same rule applies to the Tribunal’s consideration of the policy. However, the Tribunal agrees that the amounts to be included in the calculation of an applicant’s payroll as set out in the policy are appropriate and considers that it is reasonably open to the Tribunal to determine the amount of the payroll on that basis. Accordingly, the Tribunal finds that the term ‘payroll’ in the instrument for any period includes wages and superannuation paid for that period.
Has the applicant complied with the training obligations?
The applicant submitted an undated letter from its accountant regarding training contributions. That letter contained a calculation of the applicant’s payroll, including superannuation for the 2015, 2016 and 2017 financial years. The applicant later submitted a document titled ‘Training Benchmark “A” Payment History’ for the 2015 to 2020 financial years inclusive. The applicant did not submit any direct evidence regarding the amount of its payroll in the three relevant sponsorship periods ending on 8 July in the years 2016, 2017 and 2018. At the first hearing, Dr Chang agreed that the payroll figures for the 2016, 2017 and 2018 financial years be adopted to establish the applicant’s payroll in the corresponding sponsorship periods. The letter from the accountant and the submission regarding training contributions were calculated on that basis.
The applicant’s payroll and the amount of the Benchmark A contribution for each sponsorship period as submitted by the applicant are as follows:

Sponsorship period

Ending 8 July 2016

Ending 8 July 2017

Ending 8 July 2018

Wages

$51,283

$62,316

$64,292

Superannuation

$4,121

$5,700

$5,309

Total payroll

$55,404

$68,016

$69,601

Benchmark A amount (2%)

$1,108

$1,360

$1,392

The applicant paid the following contributions to training funds:
a.In respect of the first sponsorship period – $1,150 on 27 June 2017.
b.In respect of the second sponsorship period – $1,360.34 on 19 June 2018.
c.In respect of the third sponsorship period – $3,231.63 on 20 November 2019.
Although the training contributions were paid retrospectively, that is, after the end of each of the three sponsorship periods, the Tribunal accepts that these payments can count towards the Benchmark A amounts for the three relevant periods.
However, the applicant’s calculation of its payroll in the three sponsorship periods includes only wages and superannuation paid to administrative staff. The applicant’s financial statements disclose that the applicant paid wages and superannuation to Dr Ku and Dr Chang in each of those periods. Those amounts, according to the 2016, 2017 and 2018 financial statements were as follows:

Sponsorship period

Ending 8 July 2016

Ending 8 July 2017

Ending 8 July 2018

Wages

$84,000

$84,000

$84,000

Superannuation

$7,980

$48,668

$7,980

Total

$91,980

$132,668

$91,980

If the wages and superannuation paid to Dr Ku and Dr Chang were to be included in the applicant’s payroll for the sponsorship periods, the total payroll and the corresponding Benchmark A amounts would then be as follows:

Sponsorship period

Ending 8 July 2016

Ending 8 July 2017

Ending 8 July 2018

Payroll

$147,384

$200,684

$162,900

Benchmark A amount (2%)

$2,948

$4,014

$3,258

Based on the applicant’s calculation of its payroll in the three sponsorship periods, the training contributions listed in paragraph 63 above would have been sufficient to meet the Benchmark A payments required for each sponsorship period. However, if the wages and superannuation paid to Drs Ku and Chang are included in the calculation of the applicant’s payroll, the training contributions fall well short for the periods ending 8 July 2016 and 8 July 2017 and slightly short for the third sponsorship period.
The Tribunal advised Dr Ku and Dr Chang at the hearing of its concern regarding the method of calculation of the applicant’s payroll for the purpose of calculating the relevant Benchmark A amounts. They gave evidence and made written submissions regarding the calculation of the applicant’s payroll. Essentially, they claimed that they had relied on accountancy advice to calculate the amount of the training contributions required and that the applicant had always acted in good faith in relation to the payment of training contributions. Dr Chang suggested at the hearing that the wages paid to himself and Dr Ku should be treated as being equivalent to locum fees.
The representative referred to the policy of the Department in relation to the definition of payroll. He referred to the policy in relation to businesses without payroll expenditure. The Tribunal finds that these submissions are not relevant in the present case where the applicant clearly does have payroll expenditure.
The applicant paid wages to and superannuation contributions in respect of Dr Ku and Dr Chang during the three sponsorship periods. The Tribunal finds that the amount of those wages and superannuation contributions should be included in the applicant’s payroll for those sponsorship periods. Accordingly, the training contributions which were required for those periods are as detailed in paragraph 66 above. The training contributions actually paid by the applicant are as listed in paragraph 63 above and fall short of the required level of contributions in each sponsorship period.
The Tribunal finds that the applicant has failed to establish that it incurred expenditure equivalent to at least 2% of the payroll of the business to an industry training fund or equivalent to at least 1% of the payroll of the business in the provision of training to employees of the business during each year of the sponsorship period. Accordingly, the applicant has failed to establish that it has complied with the applicable obligations under Division 2.19 of the Regulations relating to the applicant’s training requirements during the period of its most recent approval as a standard business sponsor and the requirement in reg 5.19(3)(f)(i)(B) and consequently in reg 5.19(3)(f)(i) is not met.
Should the non-compliance be disregarded?
The Tribunal then needs to consider whether it is reasonable, under reg 5.19(3)(f)(ii), to disregard reg 5.19(3)(f)(i). The Tribunal notes the Department’s policy, which states that ‘delegates should not apply r.5.19(3)(f)(ii) inflexibly but must always consider the merits of a particular case’. The policy in relation to disregarding reg 5.19(3)(f)(i) provides that disregarding this regulation should only be considered if the decision maker is satisfied the applicant has not, at any stage of the most recently approved standard business sponsorship, failed to maintain their commitment to the ongoing training of Australian citizens and permanent residents in their industry, as specified within the training benchmarks.
For example, decision makers may form the view that it is reasonable to disregard reg 5.19(3)(f)(i) if:
·the applicant has demonstrated meeting a combination of both Training Benchmark A and B in a required year during the term of the most recently approved sponsorship (for example, an amount equal to 1.5% of payroll was placed in an industry training fund and an amount equal to 0.5% of payroll spent on internal training to make up 2% of payroll spent on training); or
·the applicant has an aggregate expenditure on training over the term of their most recently approved sponsorship commensurate with the total training commitment for that period.
Conversely, a decision maker may form the view that it is not reasonable to disregard reg 5.19(3)(f)(i) if the applicant has failed to demonstrate they have met either Training Benchmark A or B (or a combination of both), in full in each relevant year of their most recently approved standard business sponsorship.
The same considerations regarding the application of the policy set out in paragraphs 59 and 60 above apply in the Tribunal’s consideration of reg 5.19(3)(f)(ii).
The first scenario referred to in the policy does not apply in the case of this applicant because there is no evidence of any payment by the applicant to an industry training fund during the sponsorship period. Therefore, there can be no aggregation of payments of expenditure to meet both Benchmarks A and B in a required year of the sponsorship.
The second scenario also does not apply because the aggregate expenditure for the three sponsorship periods was less than the total training commitment for those periods.
However, the Tribunal has considered several other aspects of the applicant’s commitment to meet the training obligations. The Tribunal accepts that the applicant relied on accountancy advice to calculate the amount of the required contributions, and that it paid training contributions in accordance with those calculations.
The Tribunal has also considered the nature of the payments to Dr Ku and Dr Chang, which are described as wages and superannuation in the applicant’s financial statements. It is clear that these amounts are not determined by any fixed formula and that they are arbitrary in nature. This is demonstrated by the fact that in the profit and loss account forming part of the 2016 financial statements the total superannuation paid to the two doctors is shown as $7,980 and locum fees are shown as $451,401.90. In the 2017 financial statements, total superannuation paid to the two doctors in the preceding 2016 year is shown as $50,053.86 and locum fees are shown as $409,328.04. The total amount of the superannuation and locum fees is the same in each set of accounts, but the individual components of the total have been varied. Similarly, the Tribunal notes that the total wages and superannuation paid to the two doctors in the 2019 financial year was $91,980, whereas the corresponding amount in the 2020 financial year was $323,859. The wages and superannuation paid to and in respect of the doctors are clearly calculated in a completely different manner to the wages and superannuation paid to and in respect of administrative staff.
Although the Tribunal has found that the wages and superannuation paid to Drs Ku and Chang during the sponsorship period should be included in the definition of the applicant’s payroll, having regard to all of the evidence, and particularly to the applicant’s record of paying training contributions during the sponsorship period, the Tribunal considers that it is appropriate to disregard reg 5.19(3)(f)(i).
Accordingly, the requirement in reg 5.19(3)(f) is met.
No adverse information known to Immigration: reg 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 regs 1.13A and 1.13B.

There is no evidence before the Tribunal that there is any adverse information of the type described in the relevant definitions known to the Department about the applicant or any associated person.
Accordingly, the requirement in reg 5.19(3)(g) is met.
Satisfactory compliance with workplace relations laws: reg 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 evidence before the Tribunal to suggest that the applicant has an unsatisfactory record of compliance with workplace relations laws of the Commonwealth or any State or Territory in which the applicant operates a business. The Tribunal is satisfied that the applicant does have a satisfactory record of compliance.
Accordingly, the requirement in reg 5.19(3)(h) is met.
Genuine need to employ nominee: reg 5.19(3)(i)
Regulation 5.19(3)(i) requires that there is a genuine need for the nominator to employ the person, as a paid employee, to work in the position under the nominator’s direct control.
Dr Chang stated at the hearing that the nominee was a key employee of the applicant and integral to the successful operation of the applicant’s practice. He stated that the nominee had been employed by the applicant for more than seven years and that she was almost irreplaceable. He referred to the IT requirements of the applicant for which the nominee was personally responsible. He gave evidence of the heavy workloads upon himself and Dr Ku. He also gave evidence of the various tasks performed by the nominee in the position.
The nominee, not having been present when the evidence of Drs Chang and Ku was given, gave evidence of her employment in the position and the tasks performed by her in that position.
The Tribunal notes that the nominee has been employed full-time as Health Manager by the applicant since 2015 and that she is well qualified for the position. The Tribunal accepts that Dr Ku and Dr Chang are both busy professionals and that they rely heavily on the nominee in the management of the practice. The Tribunal is satisfied that there is a genuine need for the applicant to employ the nominee to work in the position under the nominator’s direct control.
Accordingly, the requirement in reg 5.19(3)(i) is met.
Based on the findings above, the Tribunal is satisfied that the applicant meets the requirements of reg 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.
Terrence Baxter
Member

ATTACHMENT – Extracts from the Migration Regulations 1994
5.19Approval of nominated positions (employer nomination)
…
(2)The application must:
(a)be made in accordance with approved form 1395…; and
(aa) include a written certification by the nominator stating whether or not the nominator has engaged in conduct, in relation to the nomination, that constitutes a contravention of subsection 245AR(1) of the Act; and
(b)be accompanied by the fee mentioned in regulation 5.37.
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
(iv)    identifies a need for the nominator to employ the person, as a paid employee, to work in the position under the nominator’s direct control; 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; and
(i)there is a genuine need for the nominator to employ the person, as a paid employee, to work in the position under the nominator’s direct control.

[2022] AATA 2989

11 July 2022

Key Legal Topics

Areas of Law

Immigration

Administrative Law

Legal Concepts

Judicial Review

Procedural Fairness

Statutory Construction

Jurisdiction

Natural Justice

Appeal

Sponsorship period	Ending 8 July 2016	Ending 8 July 2017	Ending 8 July 2018
Wages	$51,283	$62,316	$64,292
Superannuation	$4,121	$5,700	$5,309
Total payroll	$55,404	$68,016	$69,601
Benchmark A amount (2%)	$1,108	$1,360	$1,392