Kerry's Traditional Chinese Massage Center Pty Ltd (Migration)

Kerry's Traditional Chinese Massage Center Pty Ltd (Migration) [2018] AATA 3810 (30 July 2018)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  Kerry's Traditional Chinese Massage Centre Pty Ltd
CASE NUMBER:  1610905
DIBP REFERENCE(S):  BCC2015/3267447
MEMBER:Karen McNamara
DATE:30 July 2018
PLACE OF DECISION:  Sydney
DECISION:The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.

Statement made on 30 July 2018 at 9:07am
CATCHWORDS
Migration – Nomination refusal – Direct Entry Nomination stream – Retail Manager – Financial capacity to employ the nominee on a full time basis in the position for at least two years – Genuine need for the nominator to employ a paid employee – The position cannot be filled locally – Decision under review set aside
LEGISLATION
Migration Act 1958, s 245AR
Migration Regulations 1994, rr 1.13, 5.19, 5.37
STATEMENT OF DECISION AND REASONS
APPLICATION FOR REVIEW

This is an application for review of a decision made by a delegate of the Minister for Immigration on 29 June 2016 to reject the application by Kerry’s Traditional Chinese Massage Centre Pty Ltd (the applicant) 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 6 November 2015. The requirements for the approval of the nomination of a position in Australia are found in r.5.19 of the Regulations which contains two alternative streams: a Temporary Residence Transition nomination (r.5.19(3)) stream and a Direct Entry nomination (r.5.19(4)) stream. If the application is made in accordance with r.5.19(2) and meets the requirements of either stream, then the application must be approved. If any of the requirements are not met then the application must be refused: r.5.19(5).
In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in the Direct Entry Nomination stream.
The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19(4)(d)(i) of the Regulations because the delegate was not satisfied that the applicant demonstrated financial capacity to employ the nominee Mr Yuhan Li on a full time basis in the position for at least two years.
Mrs Pei Zhao Director and owner of the business appeared before the Tribunal by video conference on 17 May 2018 to give evidence and present arguments. The Tribunal also received oral evidence from Mr Yuhan Li, the nominee. The Tribunal hearing was conducted with the assistance of an interpreter in the Mandarin and English languages.
The applicant’s registered migration agent did not attend the hearing.
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.
Based on the material in the Department’s file, the Tribunal is satisfied that the application was made on the approved form. As the position is located in regional Australia, no fee is payable (r5.37(2)(a)). Whilst the application was made before 14 December 2015, the applicant has also included written certification relating to conduct that contravenes s.245AR(1) of the Act. Accordingly the requirements of r.5.19(4)(a)(i) are met.
In considering whether the application for approval identifies a need for the nominator to employ a paid employee to work in the position under the nominator’s direct control, the Tribunal has had regard to the evidence before it, including written submissions and the oral evidence received at the hearing by Mrs Pei Zhao and Mr Yuhan Li.
The Tribunal accepts on the evidence before it that the nominator operates five massage centres under the name Kerry’s Traditional Chinese Massage Centre Pty Ltd, located in various metropolitan areas of Darwin in the Northern Territory. Based on the financial information provided by the applicant to the Tribunal, the business recorded in its 2017 BAS returns lodged via the ATO portal, sales of $1,779,933. At hearing, the Tribunal was advised the business employs three full time employees and 27 casual staff. BAS lodgements for the financial year 2017 show a salary expense of $316,896.
ASIC records provided by the applicant to the Tribunal, show Kerry’s Traditional Chinese Massage Centre Pty Ltd was registered on 8 November 2012. The company has two directors, Ms Zhao and her husband Mr Graham Pettican.
Ms Zhao gave evidence at the hearing that she established business a year after coming to Darwin in 2009. Over the last nine years, she has expanded the business and now operates five premises. Ms Zhao and her husband have been overseeing the management of the shops but now due to her husband’s ill health and her desire to concentrate more on the training of new techniques from China and introduce more Chinese therapies and medicines into the business, the business is seeking to employ two Retail Managers of which Mr Li is one.
The Tribunal was told that Mr Li has been working in the position of Retail Manager since 2016. Ms Zhao told the Tribunal that Mr Li had been recommended to her by her Migration Agent Mr Stanley Chan in response to a discussion she had with Mr Chan in trying to recruit a suitably qualified person to assist her with the management of her business. Ms Zhao told the Tribunal when asked what is Mr Li’s contribution to her business, that she is reliant on Mr Li to assist her in the management of three of the shops and that without him she would not be able to manage all five shops on her own, partly due to the travelling distance of at least 45 minutes between the locations. Ms Zhao advised that the business structure and operations require that Mr Li reports directly to her.
On the totality of evidence before it, the Tribunal is satisfied that the applicant has identified a need for the nominator to employ a paid employee to work in the position of Retail Manager under the nominator’s direct control. Accordingly, the requirements in r.5.19(4) (a)(ii) are met
As the criteria in both r.19(4) (a) (i) and (ii) are satisfied, accordingly the requirements in r.5.19(4)(a) are met.
Nominator is actively and lawfully operating a business in Australia: r.5.19(4)(b)
Regulation 5.19(4)(b) requires that applicant is actively, lawfully and directly operating a business in Australia.
Based on the material provided to the Tribunal, including, financial statements, Business Activity Statements, ASIC Company details, business insurance policy details and evidence from Ms Zhao, the Tribunal is satisfied the applicant is actively and lawfully operating a massage business in Australia and directly operates that business.
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.
There is no evidence before the Tribunal to suggest that the applicant’s business is involved in labour hire.
Accordingly, the requirement in r.5.19(4)(c) does not apply
Term of employment of the visa holder: r.5.19(4)(d)
The Tribunal notes the delegate was not satisfied that this subparagraph was met, as the applicant had not demonstrated the business’ financial capacity to employ the nominee on a full time basis in the position for at least two years.
The Tribunal has had the benefit of updated financial information plus receiving oral evidence from Ms Zhao.
The Tribunal examined the financial information submitted by the applicant prior to and following the hearing. Examination by the Tribunal of the business’s financial information identified the unaudited financial statements for 2017 financial year show a total of $713,900 of wages (excluding superannuation). Quarterly BAS returns as lodged via the ATO portal for the period July 2016 to June 2017 show a total of $316,896 of salary, wages and other payments made in the 2017 financial year. In the absence of explanation by the applicant as to the variation, the Tribunal gives little weight to the statements as supporting evidence and has considered the business’s lodged BAS returns as evidence of financial capacity
According to the 2017 BAS returns, the total amount in sales was $1,933,217. BAS returns provided by the applicant for the nine-month period July 2017 to March 2018 show sales recorded as $1,756,304. For the same period in 2017, sales were recorded as $1,430,266 which represents in 2018, a 10% increase in sales over the comparable period.
The Tribunal notes the delegate in their decision of 29 June 2016 noted inconsistency in the company’s financial statements and BAS lodgements. However, the Tribunal has in this instance placed weighting on payroll documentation, transaction history for Mr Li’s bank account and Mr Li’s 2016 Notice of Assessment in considering sustainable income payments to the nominated position.
The Tribunal was provided evidence of salary being paid to Mr Li including information showing regular salary payments into Mr Li’s bank account for the period 17 May 2017 to 16 May 2018, Mr Li’s ATO notice of assessment for 2016 and the business’s payroll summary showing payments to Mr Li for the period 1 July 2017 to 16 May 2018. Two payslips were also provided to the Tribunal for the periods 29/05/2017 to 11/06/2017 and 30/04/2018 to 16/05/2018.
This information confirmed regular payment of a fortnightly net salary of $1,707.98 deposited into Mr Li’s bank account for the period 17 May 2017 to 2 May 2018. Payroll information shows payment of salary commensurate with the part time employment of Mr Li for the 2017 financial year. This is also supported by the amount noted as taxable income on Mr Li’s 2017 ATO notice of assessment, which corresponds to the salary payments shown on the payroll information.
Having considered the financial evidence before it, particularly the history of salary payments to date to Mr Li, the Tribunal is satisfied the applicant can afford to pay a salary of $55,000 per annum to the nominee and is satisfied that the nominee will be employed on a full time basis in the position for at least 2 years. Accordingly, the requirement in r.5.19(4)(d)(i) is met.
The Tribunal has had regard to the signed Contract of Employment dated 4 July 2016, which sets out the terms and conditions of the nominee’s employment. The contract stipulates that the position is full time for a minimum initial period of two years which can be renegotiated and /or renewed by either party. Accordingly, the requirement in r.5.19(4)(d)(ii) is met.
As the criteria in both r.5.19(4)(d)(i) and (ii) are satisfied, accordingly the requirements in r.5.19(4)(d) are met.
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 contract of employment dated 4 July 2016 is $55,000 per annum plus superannuation of 9.5%. The Tribunal has received a copy of Mr Li’s bank account transactional summary, confirming that the nominee is being paid in accordance with the terms of employment.
The Tribunal has also received information from the applicant advising that they determined the applicable salary of $55,000 by reference to market salary data from Joboutlook.gov.au. which indicates that the average salary is $47,840 p.a. plus superannuation. The applicant also provided a copy of the General Retail Industry Award 2010. Mr Li’s contract of employment refers to his salary as being $55,000 in accordance with the Award as per Retail Employee Level 6 rate of pay.
The Tribunal also notes that on Form 1404 dated 10/8/2016, the relevant Regional Certifying Body, Department of Trade, Business and Innovation (Northern Territory), has indicated they are satisfied that the terms and conditions of employment are no less favourable.
The Tribunal is satisfied on the totality of the evidence before it that the terms and condition applicable to the position will be no less favourable than those that would be provided to an Australian citizen or permanent resident performing equivalent work in the same workplace at the same location.
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 to indicate that there is adverse information known to the Department about the applicant or an associated person.
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.
There is no evidence before the Tribunal that indicates the applicant does not have a satisfactory record of compliance with the relevant Commonwealth and Territory workplace relations laws.
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 a number of alternative requirements. These are set out in detail in the attachment to the decision but can be briefly summarised as requiring either that:
·the tasks to be performed in the position will be performed in Australia and correspond to those of an occupation specified by the Minister, the occupation is applicable to the proposed employee in accordance with any specifications made in that instrument, and specified training requirements are met; or
·the position and nominator’s business is 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 locally resident Australian citizen or permanent resident, the tasks of the position correspond to those of an occupation specified in the relevant legislative instrument, the occupation is applicable to the proposed employee in accordance with the specification of the occupation and that a regional certifying body has advised the Minister about certain matters relating to the position.
The evidence before the Tribunal indicates that the applicant’s business, which is operated by the applicant, and the position are located in Palmerston postcode 0830 and Coolalinga postcode 0839 in the Northern Territory which are postcodes specified in the relevant instrument as being in regional Australia, accordingly r.5.19(4)(h)(ii)(A) and (E) are met.
The Tribunal next considered whether there is a genuine need for the applicant to employ a Retail Manager and for the tasks of that position. The evidence before the Tribunal indicates the applicant is the owner of five massage centres located in the Darwin region in the Northern Territory. Ms Zhao gave evidence at the hearing of the duties and tasks performed by the Retail Manager and that the position of Retail Manager is required by the business as the business has expanded from one shop to five and that due to ill health, the applicant’s husband can no longer assist her in the management of her shops. The applicant also told the Tribunal that she wishes to concentrate on introducing new therapies and training plus she’s getting older and can no longer physically manage all five shops.
The nominee, Mr Li has been receiving full time remuneration in the position of Retail Manager since May 2017 and remains to present in this position. Mr Li’s relevant formal qualifications include a Bachelor of Accounting attained in 2013 from Central Queensland University, Diploma in Commerce from Sydney Institute of Business and Technology High School attained in 2019. At hearing Mr Li told the Tribunal, he has been a Retail Manager in the applicant’s business for over two years with previous experience having worked as a supervisor at Allphones Sydney and as a supervisor with Wowcow yoghurt shop Sydney.
The Tribunal is satisfied that there is a genuine need for a paid employee to work in the position of Retail Manager under the nominator’s control. The Tribunal is also satisfied that the tasks of the position to be performed correspond to the tasks of an occupation specified by the Minister in an instrument in writing for this sub-subparagraph. IMMI 17/058 provides that Retail Manager (General) is a specified occupation for the purposes of r.5.19(4)(h)(ii)(D). Retail Manager (General) with ANZSCO code 142111 is found in Schedule 1 of this Instrument. Furthermore the Tribunal is satisfied the occupation is applicable to the person identified under subparagraph (a)(ii) in accordance with the specification of the occupation. Accordingly the requirements of r.5.19 (4)(h)(ii) (B) and (D) and (DA) are met.
The Tribunal is satisfied on the information before it that the applicant made efforts to fill the position locally but had difficulty in doing so. The applicant advised the Tribunal she had unsuccessfully advertised the position on Facebook and Seek which attracted applicants from overseas. Ms Zhao told the Tribunal that the remoteness of Darwin made it difficult to find staff as many people seeking jobs were backpackers and now that she was facing increased competition from other massage centres opening in Darwin the employment market of suitably experienced persons could not meet demand. Ms Zhao advised the Tribunal it was her Migration Agent Mr Stanley Chan who advised her that he had someone suitable for the position after she had told him she was having problems recruiting for the role.
The Tribunal also gives weight to the RCB’s advice that the position cannot be filled locally.
On the evidence before it, the Tribunal is satisfied that the position cannot be filled by an Australian citizen/permanent resident living in the same local area. Accordingly, the requirements of r.5.19(4)(h)(ii)(C) are met.
The Tribunal has received the completed Form 1404 dated 9 February 2016 from the relevant RCB, Department of Trade, Business and Innovation (Northern Territory), indicating that they are satisfied regarding the matters specified in paragraph r.5.19(4)(e) and r.5.19(4)(h)(ii)(B) & (C)).On this basis, the Tribunal is satisfied that r.5.19(4)(h)(ii)(F) is met.
Given the above, the Tribunal finds that the requirements of r.5.19(4)(h)(ii) are met and accordingly r.5.19(4)(h) is met as a whole.
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.
Karen McNamara
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
(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).

[2018] AATA 3810

30 July 2018

Key Legal Topics

Areas of Law

Immigration

Administrative Law

Legal Concepts

Judicial Review

Statutory Construction

Procedural Fairness

Jurisdiction