Kataria Enterprises Pty Ltd (Migration)

Kataria Enterprises Pty Ltd (Migration) [2020] AATA 3961 (2 September 2020)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  Kataria Enterprises Pty Ltd
CASE NUMBER:  1803080
HOME AFFAIRS REFERENCE(S):          BCC2017/842398
MEMBER:Peter Emmerton
DATE:2 September 2020
PLACE OF DECISION:  Adelaide
DECISION:The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.

Statement made on 02 September 2020 at 12:06pm
CATCHWORDS
MIGRATION – Employer Nomination – approval of nominated position – Direct Entry nomination stream – Retail Manager (General) – genuine need – size and scope of nominating entity’s business operations – position cannot be filled locally – recruitment process – employment market distortions – task of position – alignment with ANZSCO specifications – decision under review set aside
LEGISLATION
Migration Regulations 1994 (Cth), 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 19 January 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 applicant applied for approval on 3 March 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 refused the application on the basis the applicant’s nomination did not satisfy r.5.19(4)(h)(ii)(D) as they were not satisfied that the tasks to be performed in the position correspond to the tasks of an occupation specified in the relevant instrument. Nor 5.19(4)(h)(i) of the Regulations because the nominated tasks do not therefore correspond to the tasks of an occupation specified by the Minister.
The applicant was represented in relation to the review by its’ registered migration agent.
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 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.
The application is compliant: r.5.19(4)(a)
Regulation 5.19(4)(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 need for the nominator to employ a paid employee to work in the position under their direct control.
In determining the applicant’s claims the Tribunal must first make findings of fact on material matters in dispute. This may involve an assessment of credibility and in so doing, the Tribunal is aware of the need and importance of being sensitive to the circumstances and the difficulties applicants often face before the Tribunal in their particular circumstances.
The applicants rely on the evidence given before the Tribunal together with written submissions and supporting evidence provided to the Tribunal and previously to the department.
The nominating entity runs a substantial franchised retail operation comprising 6 Domino’s Pizza restaurants in and around Perth, Western Australia and regional WA. The restaurants are located in Meadow Springs, Mandurah, Geraldton, Bunbury, Applecross and Erskine. The nominator also owns and manages a large unrelated food distribution operation with 13 staff. This application relates to the Erskine Domino’s Pizza site, which is under the management of the visa applicant.
The visa applicant’s substantial responsibilities, previous experience, current management experience, responsibilities, attributes and qualifications, clearly align with the duties associated with a Retail Manager (General), ANZSCO 142111.
The visa applicant possesses a Diploma of Business and a Certificate lll and a Certificate lV in Commercial Cookery, all gained in Australia.
The Tribunal is cognisant of the challenges associated with recruiting and retaining suitably experienced management and staff working in retail businesses with relatively limited opportunities for advancement.
The Tribunal received and accepted evidence from the nominator, of the salary determination and recruitment processes, which included 9 applications, 5 of whom were short listed and the associated proof of advertising in support of their recruitment for the position. It also notes the statement provided by the nominator attesting to their recruitment efforts. In addition, the nominator had earlier provided evidence of a recent recruitment round with an associated restaurant under his control which detailed 13 applicants, and no suitable candidate, as evidence of the challenges associated with recruiting and retaining suitably qualified management level team members. This was in relation to AAT file reference 1800326.
The Tribunal additionally accepts that the employment contract does not include an express exclusion of the possibility of extending the period of employment beyond the initial 2-year minimum period with the provision for extension. The contact dated 17 February 2019 stated the salary was $50,000 based on a 38-hour work week plus incentives and bonuses and the stipulated 9.5% Superannuation Guarantee. This appears to be in the mid quartile of similar role’s remuneration levels.
The Tribunal perused popular employment web sites in order to ascertain the current state of the market in this field. The Tribunal observed a substantial number of related vacancies, in a wide variety of locations and organisations currently under recruitment. The Tribunal is cognisant that many of the observed positions may appear to be equally or more attractive environments to some candidates than the nominated position in this relatively geographically isolated regional WA location which is 76 kilometres from Perth by road.
The Tribunal notes that a ‘Satisfied’, RCB Certificate has been issued by the relevant certifying body. The date of the certificate is 10 February 2017.
The application is compliant: r.5.19(4)(a)
Regulation 5.19(4)(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 need for the nominator to employ a paid employee to work in the position under their direct control.
The Tribunal finds that the application was lodged electronically using the elodgement facility. The nomination was made under the RSMS Direct Entry stream (r.5.19(4)(h)(ii)) and consequently no fee is payable. The Tribunal finds the applicant meets r.5.19(2).
The Tribunal notes from the current Organisation Chart and corroborating payroll documentation, that the retail business is operating on a relatively large staffing ratio of 42 direct reports employed on a full-time, casual or part-time basis, including an Assistant Manager and 4 Supervisors, (Shift Managers) reporting to the nominee. This is in part due to the extended working hours associated with the mandated 7 day per week, 14 hour per day operating schedule coupled with dine-in, take away and home delivery retail streams. The hours of operation, the number of employees and the complexity of tasks associated with a multi-pronged retail operation would, in the experience of the Tribunal strongly suggest the need for a full-time General Manager.
The Tribunal notes that the owner has other substantial business pursuits including 5 additional Pizza outlets and a large food wholesale distribution business and is not working within the business. It would appear logical that regardless of the skilful utilisation of technology, the owner and Managing Director is unable to undertake the daily duties of a General Manager unless he was present for the substantial operating hours. Nor is it likely that the operation could successfully sustain itself, maintain quality outputs or meet its’ legal responsibilities in relation to OH & S and general HR matters without a relatively autonomous, locally employed General Manger. The Tribunal also acknowledges the substantial compliance requirements associated with a franchised retail food service operation.
The Tribunal is conscious of the additional burden placed upon a Management team when many of the staff are relatively young and interfacing with customers late at night, both on-site and off-site with the potential for unacceptable behaviours associated with substance abuse.
The Tribunal is aware that a well-structured scaffolding process usually occurs when a reputable franchise business is purchased. This is to maximise success rates for buyers and reduce the risk of brand damage resulting from failure for the parent company. This structure or template, does not however, in the Tribunal’s view negate the need for a comprehensive general management structure operating at the retail outlet level, if anything this is the pivotal role.
The Tribunal is satisfied that the application has identified a need for a paid employee to work in the position of Retail Manager (General), under direct control of the applicant. The application has included the required written certification relating to conduct that contravenes s.245AR(1) Accordingly, the requirement in r.5.19(4)(a) is met.
Nominator is actively and lawfully operating a business in Australia: r.5.19(4)(b)
Regulation 5.19(4)(b) requires that the applicant is actively, lawfully and directly operating a business in Australia.
The Tribunal has been provided with a range of Business Tax Returns, Profit and Loss Statements including those produced for FY 2018 and FY 2019, and current BAS documentation for FY 2020, all of which correlated. ASIC Registration details were observed by the Tribunal for this business entity. The Tribunal checked the status of the listed ABN and perused the company web site. The Tribunal is satisfied that the applicant is actively, lawfully and directly, operating a business in regional Australia. Accordingly, the requirement in r.5.19(4)(b) is met.
Position is not labour-hire: r.5.19(4)(c)
Regulation 5.19(4)(c) applies to nominators whose business activities include those relating to labour hire to an unrelated business. In these cases, the nominated position must be within the business activities of the nominator. The Tribunal finds that r. 5.19(4)(c) is not relevant to the current nomination.
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.
The Tribunal notes that the business appears to have, substantial revenues and proportionally aligned profit. The stability of the nominating entity in an ever-increasingly competitive market, coupled with evidence of its’ Business Planning further attests to its’ ability to employ the visa applicant. Additional resilience is provided by the business diversification across 6 restaurants with multiple market segments and an unrelated additional business owned by the nominator. The Tribunal is satisfied that the business will be able to sustainably, employ the nominee for the required 2-year minimum period therefore r.5.19(4)(h)(d) is met.
The Tribunal has had regard to the Employment Agreement and position description. It is satisfied that the nominee will be appointed for a period of at least 2 years employment from grant of visa and the terms of employment do not include an express exclusion of the possibility of extending the period of employment.
The Tribunal observes that one of the potential challenges facing the business is retaining the visa applicant and the nominator’s obvious reliance upon their services, particularly in light of the nominator not working in the business but overseeing it at a Managing Director level.
It is aware that the workforce can be transient, the specialist skills associated with this type of operation are highly sought after and readily transferred between competing businesses and related fast food franchise operations. It is also cognisant of competitors cannibalising competing businesses and targeting their key staff in order to obtain a market advantage in this tight margin business.
No less favourable terms and condition of employment: r.5.19(4)(e)
Regulation 5.19(4)(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 Tribunal has been provided with the visa applicant’s employment contract. The Tribunal accepts that the nominee’s current annual salary of $50,000 plus Superannuation, plus bonuses and incentives as appropriate and is reflective of their experience relevant to the nominated position. The Tribunal researched the salaries offered for similar positions and had regard for the salary determination evidence provided by the applicant. It is satisfied that the terms and conditions of employment are equivalent to other employees with the same experience performing equivalent work in the same workplace or a similar workplace. Accordingly, the requirements of r.5.19(4)(e) are met.
No adverse information known to Immigration: r.5.19(4)(f)
Regulation 5.19(4)(f) requires that there is no adverse information known to Immigration about the nominator or person associated with the nominator; or it is reasonable to disregard any such information. For these purposes, ‘adverse information’ and ‘associated with’ have the meaning given in rr.1.13A and 1.13B. There is no evidence before the Tribunal that the applicant has anything but a satisfactory record of compliance with the immigration laws of Australia. Accordingly, the requirements of r.5.19(4)(f) are met.
Satisfactory compliance with workplace relations laws: r.5.19(4)(g)
Regulation 5.19(4)(g) requires that the applicant 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. The Tribunal notes that there is no evidence before the Tribunal that the applicant has anything but a satisfactory record of compliance with workplace relations law in Australia. Accordingly, the requirements of r.5.19(4)(g) are met.
Tasks of the position, genuine need for the position and training requirements r.5.19(4)(h)
Regulation 5.19(4)(h) contains alternative requirements. These are set out in detail in the attachment to the decision. As stated above the nomination was made under the RSMS Direct Entry stream and the Tribunal has proceeded to assess the application against the criteria in r.5.19(4)(h)(ii) which require that:
·the position and nominator’s business are located in regional Australia;
·there is a genuine need for the paid position under the nominator’s direct control which cannot be filled by a Australian citizen or permanent resident;
·the tasks of the position correspond to those of an occupation at the ANZCO skill level 1, 2 or 3; and
·a regional certifying body has advised the Minister about certain matters relating to the position.
The Tribunal has had regard to the size and scope of the nominating entity’s business operations and the extended staffing hours required due to the mandated operating hours of this business and the other 6 business entities owned by the nominator. It is self-evident that the nominator cannot operate this growing combined business entity without a substantial, sophisticated and relatively self-contained general management structure in place.
The Tribunal is satisfied that there is a genuine need for the nominator to employ a paid employee to work in the position under the nominator’s direct control.
Evidence was presented to the Tribunal regarding the recruitment process included the number of applicants, (9), short listed candidates (5) and the subsequent lack of suitably qualified and experienced applicants other than the nominee. Additional evidence was provided demonstrating the failure of a recent recruitment process for a similar role in 1 of their other restaurants. The Tribunal acknowledges that there are a large number and range of retail management roles readily available in Perth, regional Western Australia and throughout Australia. The demands of the job, regional location and hours of this role may not have proven overly attractive to some candidates. The relatively isolated location in regional Western Australia may also provide a negative employment circumstance further limiting the potential candidate pool.
The Tribunal observes that a substantially more comprehensive evidence base was provided to it, than was presented to the delegate at the time of their decision. This is in part due to the 3.5 years which have elapsed since the original application. The Tribunal is also aware of the employment market distortions created by the mining industry cycles in Western Australia which indirectly impacts upon many sectors not directly associated with mining and is satisfied that the position cannot be filled by an Australian citizen or permanent resident. It is also observed by the Tribunal that this role is the only role of the 44 associated with the Erskine business that is not occupied by a citizen or permanent resident of Australia. The Tribunal is satisfied that the nominator’s business is located in regional Australia.
Regulation r.5.19(4)(h)(ii)(D), requires that the tasks to be performed in the position correspond to those at ANZSCO skill level 1, 2 or 3. The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19(4)(h)(ii)(D) as they were not satisfied that the tasks to be performed in the position correspond to the tasks of an occupation specified in the relevant instrument. Nor 5.19(4)(h)(i) of the Regulations because the nominated tasks do not subsequently correspond to the tasks of an occupation specified by the Minister.
The Tribunal has formed a different view. The Tribunal has reviewed both the relevant descriptors supplied in ANZSCO 142111 for Retail Manager (General) and the stated duties of the visa applicant. Once again, it notes that the business owner clearly appears to occupy the role of Managing Director rather than on the floor management and does not work in the business. Additionally, the substantial opening hours of the business coupled with a very substantial number of staff clearly indicates the need for a General Manager to operate and manage the business. This would by necessity most likely lead to a considerable degree of autonomy being associated with the role, as is reasonably expected of a General Manager in an ANZSCO level 2 designated position.
Whilst the visa applicant, would most likely report performance in all KPI areas via established systems and seek input from the Director of the business, this coincides with the Tribunal’s expectations of a Retail Manager (General) directly reporting to the Director of a business. The Tribunal accepts that a franchised operation may not appear to be a particularly sophisticated business. The Tribunal also accepts that some of the autonomous functions may be reduced because of the franchising support and associated systems.

It observes that without skilled General Management and local input into areas such as marketing, staffing deployment, OH&S, training and food safety etc., the potential for business failure is substantial. It is acknowledged, within the corporate sector that franchised businesses are less likely than average to fail in their first 5 years of operation, that fact does not negate the reality that many do and the root cause is commonly a lack of skilled management or insufficient management focus due to limited time and capacity coupled with goal diffusion.
The Tribunal acknowledges this is a substantially sized and complex retail operation with a moderately large annual turnover and modest ROI. It is in no doubt that the visa applicant requires a degree of flexibility performing the many and varied work duties, as you might expect in such a multi-faceted retail operation. The Tribunal has also concluded that a General Manager is required to oversee the retail business and does operate largely in-line with the ANZSCO 142111 specifications in order to meet logistic and work health and safety requirements whilst satisfying customer service and product quality expectations whilst ensuring compliance with franchise agreements.
The Tribunal accepts the written evidence put forward by the nominator attesting to the exceptional performance of the visa applicant. The nominator stated that in the last 2 years he has increased sales by 10% annually, has received 5-star quarterly Audits conducted by the Domino’s Head Office team and similar results every 6 months from the local council Health Inspectors. He was the recipient of the Store Manager of the Year Award in 2019 and has received cash rewards and prizes as a result of achieving targets and exceeding KPI expectations.
The position of Retail Manager (General), ANZSCO 142111, nominated by the applicant is referred to in ANZSCO as a skill level 2 position and the Tribunal is satisfied that the visa applicant is operating at that level.
The Tribunal is satisfied that the applicant meets 5.19(4)(h)(ii).
The Tribunal has had regard to Form 1404 issued by an RCB (WA Department of Training and Workforce Development), dated 10 February 2017 and is satisfied that the applicant has advised the Minister about matters relating to the terms and conditions of employment, the genuine need for the position and that the position cannot be filled locally.
Based on the findings above, the Tribunal is satisfied that the applicant meets the requirements of r.5.19 for approval of the nomination of the position in Australia.
DECISION
The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.
Peter Emmerton

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)       both 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;
(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 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).

[2020] AATA 3961

2 September 2020

Key Legal Topics

Areas of Law

Immigration

Administrative Law

Legal Concepts

Judicial Review

Statutory Construction

Procedural Fairness

Natural Justice

Jurisdiction

Standing