L E DIAS ELECTRICAL CONTRACTING PTY LTD (Migration)

[2018] AATA 1778

L E DIAS ELECTRICAL CONTRACTING PTY LTD (Migration) [2018] AATA 1778 (10 May 2018)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  L E Dias Electrical Contracting Pty Ltd

CASE NUMBER:  1706116

DIBP REFERENCE(S):  BCC2016/3152727

MEMBER:Wan Shum

DATE:10 May 2018

PLACE OF DECISION:  Sydney

DECISION:The Tribunal affirms the decision not to approve the nomination.

Statement made on 10 May 2018 at 2:33pm

CATCHWORDS
Migration – Approval of Nominated position (employer nomination) – Duties of the nominated occupation – Organisational chart – Stable business – Reliability of financial statements – Need for the position – Decision under review affirmed

LEGISLATION
Migration Act 1958, ss 140GB, 140GBA
Migration Regulations 1994, rr 2.72, 2.73

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1. This is an application for review of a decision made by a delegate of the Minister for Immigration on 14 March 2017 to refuse to approve a nomination under s.140GB of the Migration Act 1958 (the Act) and r.2.72 of the Migration Regulations 1994 (the Regulations).

2. L E Dias Electrical Contracting Pty Ltd (the nominating business) applied for approval of an Accountant (General) on 22 September 2016. A nomination of an occupation for a Subclass 457 visa is made under s.140GB of the Act and r.2.73 of the Regulations. Regulations 2.72(3) to (12) prescribe the criteria that must be satisfied for the Minister to approve a nomination by a person. For nomination applications made from 23 November 2013, additional criteria are specified in s.140GBA. The person who they identified as the nominee for the Subclass 457 visa was Padam Chhantyal (the related visa applicant).

3. The delegate was not satisfied that the position was that of an Accountant and decided not to approve the nomination, finding that the nominating business did not satisfy r.2.72(10).

4. The nominating business was represented in relation to the review by its registered migration agent.

5. The Tribunal wrote to the nominating business on 16 February 2018, requesting updated information regarding the nomination. A response was received on 16 March 2018. On13 April 2018, the Tribunal wrote to the nominating business advising that it had considered all the material before it relating to the application but it was unable to make a favourable decision on that information alone. The Tribunal invited the nominating business and the related visa applicant to give oral evidence and present arguments at a hearing on 3 May 2018. The representative provided a response indicating that only he would be attending on behalf of the business and the related visa applicant as their agent. On 26 April 2018 the Tribunal advised that this was not possible as an applicant is not entitled to be represented by another person at the hearing (refer s.366A of the Act). The representative responded and advised the Tribunal that the applicant would not be present for the hearing and requested that the Tribunal proceed to make a decision on the review based on the additional documents submitted on 16 March 2018. This matter has therefore been determined on the evidence available to the Tribunal.

6. For the following reasons, the Tribunal has decided to affirm the decision under review to refuse the nomination.

   CONSIDERATION OF CLAIMS AND EVIDENCE

7. The issue in the present case is whether the applicant meets the criteria for approval of the nomination. The Tribunal must approve the nomination if the applicable requirements in r.2.72 and, for nomination applications made from 23 November 2013, s.140GBA have been met: s.140GB(2).

8. The nomination was for the occupation of Accountant (General) (ANZSCO code 221111) and identified Mr Padam Chhantyal, the related visa applicant, as the person who will work in the nominated occupation.

9. As part of the application, it was stated that the business is an electrical contracting company who primarily undertakes electrical supplies and installation works for new developments for major property developers. It was claimed that there was a need for its own accountant to analyse the big picture because the company’s revenue had grown substantially in the last few years. It was stated that the company required its own accountant for strategic tasks such as restructuring, acquisition, efficient financial management, implementation of effective internal control and policies, better compliances, effective tax planning, better profitability. It was also stated that the job description for accountant had been revised and that it perfectly aligns with the goals the company wishes to achieve.

10. The information provided in support of the application included written statements as to the need for the position and a copy of the employment agreement, as well as BAS and financial statements for 2015 and 2016. The nomination included a certification that the tasks of the position included a significant majority of the tasks listed in the ANZSCO description.

11. The delegate who considered the application did not consider that the nominated position was that of an Accountant. Amongst other concerns, the delegate was not satisfied that the related visa applicant would carry out the full breadth of duties of an accountant. The delegate considered that the tasks were more in line with the occupation of an Accounting Clerk and Bookkeepers which is not an occupation specified in the relevant instrument in writing.

12. The Tribunal received additional documents on 16 March 2018 which included a current and historical company extract from ASIC, a copy of the company tax return for 2016, the financial statement for 2017 and BAS for July 2016 to December 2017. In addition, a statement of genuine position set out the current need for the position of accountant. It was stated the nominating business currently outsources the accounting functions to Everest Business Consultant but that it had been decided that these duties could be undertaken by an in-house accountant. It was submitted that this was seen as a better business proposition because of the size of the business and the frequency and urgency with which accounting/financial information is required to be processed and managed. It was stated that the bookkeeping functions would be undertaken by the Administration Assistant and the higher-level duties would be undertaken by the nominated position.

13. The Tribunal has considered these statements, but has concerns as to whether the business does require a full-time Accountant. In reaching its decision, the Tribunal has taken into account the nature of the business, being a supplier of electrical and installation works and the size of the business, which is small[1]. According to the financial statements provided, recent expenditure on accounting and bookkeeping fees is around $23,000. This does not appear to be a significant cost for a business with a turnover of around $2.4 million, such that an internal accountant would be required full-time. The salary offered in the employment contract is almost three times this expense. While it was claimed before the department that the accountant was needed for strategic tasks, no details were provided regarding any planned acquisitions, or restructuring, or any of the other activities listed in the statement over the past 18 months. Given the lack of detail and supporting evidence in respect of these activities, the Tribunal is doubtful that any of these activities have or will occur. According to the recent ASIC records provided, the business has had the same director since 1992. A previous director had been appointed in 1992 but ceased in June 1997, over 20 years ago. It thus appears to be a stable business, with the same 20 positions (filled and vacant) in the organisation chart provided to the Tribunal as compared to the one given to the department. Aside from the nominating business currently having fewer apprentices, there has been little change to the personnel in the past 18 months.

    [1] According to the Australian Taxation Office, a business is small (and eligible for small business tax concessions) for the current income year if the previous year's turnover is less than $10 million. For the 2015-16 financial year, it was $2 million. Refer (accessed 10 May 2018)

14. In terms of the claim that an accountant is required now because of the growth of the nominating business, the Tribunal has some concerns as to the reliability of the financial statements provided for the reasons that follow. This is because the statements provided to Immigration for the financial year ending 30 June 2016 show different amounts for the profit and loss statement when compared to the more recent financial statements provided. The figures appearing in the 30 June 2016 statements show higher income and lower total expenses in the same financial period of 2016. The financial statements given to the department originally show a higher net profit after tax of $302,730 compared to the total of $145,924 in the 2017 statements. The Tribunal has also referred to the copy of the tax return for 2016 provided, which reflects the figures in the 30 June 2017 statements. It thus appears that the profit and income was inflated for the purposes of the nomination, and subsequently reduced for the purposes of the tax return. Given this, the Tribunal has concerns that the same approach has been taken with regard to the 2017 figures given to the Tribunal. The Tribunal also notes that there is an expense for subcontractor fees for 2016 and 2017 in the profit and loss statement given to it. However, there is no subcontractor fee in the 30 June 2016 profit and loss statement given to the department. Therefore, in the absence of the 2017 tax return which, according to the cover letter on 16 March 2018, has not yet been lodged, the Tribunal has concerns as to the accuracy of the 2017 figures given to it. Even if it was prepared to accept that there has been an increase in revenue over the last three years, having regard to the general increase in construction and new developments in Sydney[2], where the business is based, an increase in revenue alone does not substantiate a need for an Accountant for a business of this kind.

    [2] (accessed 10 May 2018)

15. The Tribunal further notes that while a job description lists various tasks that are largely consistent with those undertaken by an accountant, the preamble for the employment agreement between the nominating business and the related visa applicant states that the business “operates predominantly within the accounting and taxation service industry providing professional and accurate services to its clients in timely manner at the best affordable rates”. Given that the organisation chart reflects that the majority of the positions are that of tradesman and apprentices, and there is nothing else to suggest that the business is changing its focus from supplying electrical and installation works, the Tribunal has concerns as to the genuineness of the position.

16. The Tribunal has taken into account all the information provided in support of the application but is not convinced that there is a current need for a full-time accountant who ‘plans and provides systems and services relating to the financial dealings of organisations and individuals, and advises on associated record-keeping and compliance requirements’ (as described in ANZSCO for this occupation). The Tribunal was provided with general statements about the need for an Accountant, but only limited evidence was provided to support these assertions, some of which is not reliable. It does not consider that the business has demonstrated a need for a full-time accountant. On the information before it, the Tribunal is not satisfied that the position associated with the nominated occupation is genuine.

17. For these reasons the requirements of r.2.72(10)(f) are not met.

18. For the reasons given above, the Tribunal is not satisfied that the applicant meets the applicable criteria for the nomination to be approved. Accordingly, the decision under review must be affirmed.

    DECISION

19. The Tribunal affirms the decision not to approve the nomination.

    Wan Shum
    Member