Lee & Choi Pty Ltd ATF Lee & Choi Trust (Migration)

[2018] AATA 5177

Lee & Choi Pty Ltd ATF Lee & Choi Trust (Migration) [2018] AATA 5177 (28 November 2018)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Lee & Choi Pty Ltd ATF Lee & Choi Trust

CASE NUMBER:  1617607

DIBP REFERENCE(S):  OPF2016/1290 OPF2016/5470

MEMBER:Peter Emmerton

DATE:28 November 2018

PLACE OF DECISION:  Adelaide

DECISION:The Tribunal sets aside the decision under review and substitutes a decision not to take one or more of the actions specified in s.140M of the Migration Act 1958.

Statement made on 28 November 2018 at 1:00pm

CATCHWORDS
MIGRATION – cancellation – sponsorship approval – satisfaction of sponsorship obligation – terms and conditions of employment – transactions resembling repayment of wages – work or participation in nominated occupation – Hair or Beauty Salon Manager – decision under review set aside

LEGISLATION
Migration Act 1958 (Cth), ss 140L, 140M
Migration Regulations 1994 (Cth), rr 2.79, 2.86, 2.89

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 to take an action under s.140M of the Migration Act 1958 (the Act) in relation to the applicant’s sponsorship.

2. The applicant was approved as a standard business sponsor on 29 June 2012. On 4 October 2016, the delegate decided to bar the sponsor for 36 months from making future applications for approval as a standard business sponsor under s.140M on the basis that there was a failure to satisfy sponsorship obligation. In relation to Regulation 2.89 the identified failures to satisfy the sponsorship obligations are:

   ·Regulation 2.79 – Obligation to ensure equivalent terms and conditions of employment;

   ·Regulation 2.86 – Obligation to ensure primary sponsored person works or participates in nominated occupation, program or activity.

3. The applicant appeared before the Tribunal on 28 November 2018 to give evidence and present arguments. The Tribunal also received oral evidence from Mr Sangkwon Lee the sponsored visa applicant and Ms Mardi Szantye and Ms Jihye Kim,. both long-term clients of the salon who work in the vicinity.

4. The review was conducted with the assistance of an interpreter fluent in Korean and English language.

5. The applicant was represented in relation to the review by its registered migration agent.

6. For the following reasons, the Tribunal has decided to set aside the decision under review and substitute a decision not to take one or more of the actions specified in s.140M.

7. The Tribunal informed the applicant that there were 2 Certificates on file under Section 357A. The first regarding bank account information was not considered relevant as the applicant had also provided the Tribunal with that information. The second related to operational documents regarding a departmental site visit and subsequent recommendations. The Tribunal stated that they have no material bearing on its’ decision making. The representative informed the Tribunal that they had received copies of both Certificates.

   CONSIDERATION OF CLAIMS AND EVIDENCE

8. Sections 140K, 140L and 140M of the Act provide for the imposition of sanctions on approved sponsors in certain circumstances. 

9. Under s.140M, if prescribed circumstances exist, the Minister (and the tribunal on review) may take one or more of the following actions:

   ·cancelling the sponsorship approval in relation to a class to which the sponsor belongs;

   ·cancelling the sponsorship approval for all classes to which the sponsor belongs;

   ·barring the sponsor for a specified period from sponsoring more people under the terms of any existing approval; and

   ·barring the sponsor for a specified period from making future applications for sponsorship approval in relation to one or more classes of sponsor.

10. For these purposes, the circumstances are prescribed in r.2.89 - r.2.94B and include circumstances in which the Minister, or tribunal on review, is satisfied there has been: a failure to satisfy a sponsorship obligation; provision of false or misleading information; sponsorship application or variation criteria no longer met; a contravention of the law; unapproved changes to a program; a failure to pay additional security; a failure to comply with certain terms of an agreement; or a failure to pay medical and hospital expenses.

11. Where a prescribed circumstance has been found to exist, the regulations prescribe criteria that must be taken into account when determining what action, if any, to take: r.2.89 – r.2.94B. These criteria, as they relevantly apply to the circumstances of this case are set out in the attachment to this decision.

    Does a circumstance for the taking of an action exist?

12. In the present case, the delegate found that that there was a failure to satisfy sponsorship obligation. In relation to Regulation 2.89 the identified failures to satisfy the sponsorship obligations are:

    ·Regulation 2.79 – Obligation to ensure equivalent terms and conditions of employment;

    ·Regulation 2.86 – Obligation to ensure primary sponsored person works or participates in nominated occupation, program or activity.

    Failure to satisfy a sponsorship obligation: r.2.89

13. The Minister may take one or more of the actions in s.140M if satisfied the sponsor has failed to satisfy a sponsorship obligation referred to in Division 2.19 of the Regulations: r.2.89(2).

14. In regards to Regulation 2.79 – Obligation to ensure equivalent terms and conditions of employment, the delegate formed the view that the multiple bank transactions, totalling $26,987.90 constituted a repayment of wages. This would have the effect of creating a circumstance where the visa applicant had not received his Guaranteed Annual Earnings, (GAE) and consequently breaching the requirements of regulation 2.79 because the obligation to ensure equivalent terms and conditions of employment had not been met.

15. The tribunal has been presented with substantially more information regarding these transactions than was given to the Department. The tribunal also notes that the transactions took place between the private bank accounts of the parties not a business account as original asserted by the delegate.

16. Evidence was presented to the Tribunal prior to the hearing and substantiated at the hearing, that demonstrated the transaction history. Bank statements were provided by all parties, a Statutory Declaration was provided by the business owner Ms Sun Choi and an explanatory document detailing the money transfer history between accounts was provided as an Annexure to the Statutory Declaration. In addition a substantial number of receipts demonstrating the purchases made and supporting the assertion that they were linked to the money transfers were provided. The Tribunal notes that many demonstrate exact amounts which correlate with the bank statement records.

17. The Tribunal notes that it is reasonable to accept that close family members, as in this case, sisters, will borrow money and purchase items without resorting to formal agreements or paperwork of any kind, as is the assertion made in this case. The tribunal also notes that when money was borrowed or items were purchased, evidence was provided supporting the assertion that the funds were paid back in relatively short periods of times. The money in question was moved between private bank accounts not back into the business account from where the wages were paid. This in the Tribunal’s view is unlikely to be the case if a repayment of wages was in fact taking place. Whilst it would have been wiser to have a formal payment and receipt trail for all transactions, as this is the first time that the sponsor has participated in immigration processes, it is not unreasonable to accept that there was a lack of understanding of the need for robust transactional evidence.

18. The Tribunal is satisfied that these transactions are not repayment of wages by the nominee.

19. The Tribunal is satisfied that Regulation 2.79 – Obligation to ensure equivalent terms and conditions of employment has been met.

20. In regards to Regulation 2.86 – Obligation to ensure primary sponsored person works or participates in nominated occupation, program or activity, the delegate formed the view the sponsor had not demonstrated that the significant majority of the duties performed by the visa holder, Mr Sangkwon Lee, are equivalent to that of a Hair or Beauty Salon Manager as presented in the nomination occupation. The Tribunal has formed a different view based upon evidence present both prior to the hearing and at the hearing.

21. Upon reviewing the ANZSCO description for Hair or Beauty Salon Manager the Tribunal has formed a view that there is a substantial correlation between the duties performed by Mr Lee and the ANZSCO description. It must be acknowledged that as a direct result of the salon being modest in size, the Salon Manager also performs the duties associated with hair dressing tasks from time to time. This does not in the Tribunal’s view preclude him from being the Salon Manager. This is the circumstance the tribunal has observed in other small hair salons.

22. Mr Lee supervises staff, mentors them, corrects their mistakes, hires and terminates staff employment. In addition whilst he does not do all of the product ordering he does most of it, as he is well credentialed, unlike the salon owner and he is able to communicate with the Korean supply chain. He is the person who interfaces with suppliers on a regular basis. Any ordering of supplies done locally is done at his behest via the owner on a quarterly basis or by himself at the time a sales representative visits the salon. Evidence was tendered supporting this assertion both prior to the hearing and at the hearing. Evidence was provided demonstrating his local marketing and sales promotional campaign and associated materials developed by him. The Tribunal accepts that these are all tasks performed by a Salon Manager.

23. In contrast the owner in fact appears to act more as a Managing Director than a Manager, having minimal day to day interaction with the business. Corroborated evidence shows that she has a 20 hours per week role in the disability sector and spends 3-4 hours per week in the salon in order to confer with the manager and observe the business. This is in line with the expectations the Tribunal has of an unqualified industry participant who has purchased a business for income and does not work in the business on a daily management basis. This makes the owner reliant upon a Salon Manager in order to keep the business running as she is incapable of running the salon herself.

24. It has been made clear in the reference provided by the salon’s Bank Manager that he perceives Mr Lee as the Manager and their business transactions are conducted on that basis. The Tribunal has noted a number of submissions made by long term customers, suppliers and an associated petition, all of which refer to Mr Lee as the Salon Manager of many years standing.

25. The 2 witnesses, Ms Szantye and Ms Kim, both testified that they believe Mr Lee is the Salon Manager. Both are long-term clients and they both work in the “China Town” business district which provides them with substantial opportunity to observe the salon’s operation. Ms Kim is also a long-term business associate with a neighbouring business and was able to demonstrate through her testimony her understanding of the business structure and the fact that Ms Choi acts as a business owner not a Manager.

26. The Tribunal notes that this organisation had a nomination for this same position approved on 29 June 2012. It is also noted that the same visa applicant was approved for a 457 Visa for the same position on 30 June 2012, attached to the fore mentioned nomination.

27. The Tribunal also acknowledges Mr Lee’s substantial Resume’ demonstrating his work history as a well-qualified and highly experienced Salon Manager. The claim that he advises on and trains staff  on the current styling trends associated with Korea, which are popular with the salon’s substantial Asian clientele further suggest the activity of a salon Manager rather than a hairdresser. Mr Lee showed some emotional responses which indicate to the Tribunal that it was a long term decision making process weighing up the pros and cons of leaving a substantial career, and a comfortable prosperous life in a modern city, to resettle in Adelaide.

28. The cumulative evidence presented to the Tribunal leads it to the conclusion that it has been demonstrated that the significant majority of the duties performed by the visa holder, Mr Sangkwon Lee, are equivalent to that of a Hair or Beauty Salon Manager as presented in the nomination occupation.

29. The Tribunal is satisfied that Regulation 2.86 - Obligation to ensure primary sponsored person works or participates in nominated occupation, program or activity has been met.

30. Accordingly, the Tribunal is not satisfied that the prescribed circumstance in r.2.89 exists for the purpose of s.140M of the Act.

    Action to be taken

31. As the Tribunal finds that none of the circumstances for s.140L(1)(a) exist, it follows that the power to take an action under s.140M does not arise.

    DECISION

32. The Tribunal sets aside the decision under review and substitutes a decision not to take one or more of the actions specified in s.140M of the Migration Act 1958.

    Peter Emmerton
    Member

    
    

    ATTACHMENT – Extract from the Migration Regulations 1994

    2.89   Failure to satisfy sponsorship obligation

    …

    (3) For paragraph 140L(1)(b) of the Act, the criteria that the Minister must take into account in determining what action (if any) to take under section 140M of the Act in relation to the circumstance mentioned in subregulation (2) are:

    (a)     the past and present conduct of the person in relation to Immigration; and
    (b)    the number of occasions on which the person has failed to satisfy the sponsorship obligation; and

    (c)     the nature and severity of the circumstances relating to the failure to satisfy the sponsorship obligation, including the period of time over which the failure has occurred; and

    (d)    the period of time over which the person has been an approved sponsor; and

    (e)     whether, and the extent to which, the failure to satisfy the sponsorship obligation has had a direct or indirect impact on another person; and

    (f)     whether, and the extent to which, the failure to satisfy the sponsorship obligation was intentional, reckless or inadvertent; and

    (g)    whether, and the extent to which, the person has cooperated with Immigration, including whether the person informed Immigration of the failure; and

    (h)    the steps (if any) the person has taken to rectify the failure to satisfy the sponsorship obligation, including whether the steps were taken at the request of Immigration or otherwise; and

    (i)    the processes (if any) the person has implemented to ensure future compliance with the sponsorship obligation; and

    (j)    the number of other sponsorship obligations that the person has failed to satisfy, and the number of occasions on which the person has failed to satisfy other sponsorship obligations; and

    (k)     any other relevant factors.

    …