LJSY Natural Therapy Pty Ltd (Migration)

LJSY Natural Therapy Pty Ltd (Migration) [2021] AATA 4014 (1 October 2021)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  LJSY Natural Therapy Pty Ltd
CASE NUMBER:  1905128
HOME AFFAIRS REFERENCE(S):          OPF2018/9158
MEMBER:R. Skaros
DATE:1 October 2021
PLACE OF DECISION:  Sydney
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 01 October 2021 at 2:07pm
CATCHWORDS
MIGRATION – cancellation of the sponsorship –primary sponsored person does not work in the nominated occupation – visa holder was on roster day off on the day of the site visit – evidence of Mr Ye’s employment provided – nominated person did work in the nominated occupation of Massage Therapist – it’s reasonable to disregard the ‘adverse information’ – employed a lawful non-citizen in breach of a work-related condition – decision under review set aside
LEGISLATION
Migration Act 1958, ss 140M, 375A
Migration Regulations 1994, rr 1.13, 2.59, 2.86,2.89, 2.91
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 to take an action under s 140M of the Migration Act 1958 (the Act) in relation to the applicant’s sponsorship.
The applicant was initially approved as a standard business sponsor on 2 July 2014 for a period of 12 months. On 26 August 2015 the applicant was approved for a further period of five years. On 21 February 2019, the delegate decided to cancel the applicant’s approval as a standard business sponsor and barred the applicant for a period of 12 months from making applications for approval as a standard business sponsor and temporary activities sponsor under s 140M.
The applicant’s Director, Mr Junjie Ding, appeared before the Tribunal on 17 August 2021 to give evidence and present arguments.
The applicant was represented in relation to the review by its registered migration agent. The representative attended the hearing.
The Department’s file includes documents that are covered by a non-disclosure certificate issued under s.375A of the Act. The s.375A certificate provides that disclosure of the documents specified, which included a Recommendation Report, would be contrary to public interest because it contains internal processes relevant to the conduct of an audit which would be detrimental to the Department if disclosed.
The Tribunal sent a copy of the s.375A certificate to the applicant prior to the hearing and they were invited to comment on its validity. In response, the applicant’s representative wrote to the Tribunal stating that the applicant does not know whether the Tribunal will rely upon folios 11-24 and to whom the detriment would be caused, and as such they are not in a position to comment on its validity.
At the hearing the Tribunal discussed with the applicant the issues relating to the validity of the certificate and relevance of the information covered by the certificate. The Tribunal informed the applicant that the Recommendation Report contains information that is relevant to the issues in the review and that the Tribunal has had regard to that information. The Tribunal further noted that the information in the Recommendation Report, in as far as it was relevant to the issues in the review, has been disclosed to the applicant in the Notice of Intention to Take Action (NOITTA) and that the applicant has had an opportunity to the respond to the information. The representative submitted that if the applicant has been informed of the information then there is nothing further to say about the certificate.
The Tribunal is satisfied that the s 375A certificate is valid as it appears to provide a valid public interest reason for the non-disclosure. In any case, the Tribunal is also satisfied that the information relevant to the issues in the review have been disclosed to the applicant by the Department.
The Tribunal has had regard to all the evidence before and, for the following reasons, it 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.
CONSIDERATION OF CLAIMS AND EVIDENCE
Sections 140K, 140L and 140M of the Act provide for the imposition of sanctions on approved sponsors in certain circumstances.
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.
For these purposes, the circumstances are prescribed in regs 2.89–2.94B 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.
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: regs 2.89–2.94B. 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?
In the present case, the delegate found that the applicant had failed to satisfy the sponsorship obligation in reg 2.86 of the Regulations to ensure that the primary sponsored person works only in the nominated occupation. The delegate also found that the applicant no longer satisfies the prescribed criteria for approval or variation of the terms of the sponsorship: reg 2.91(2).
The Tribunal has considered the evidence relevant to each of the circumstances as follows.
Failure to satisfy a sponsorship obligation: reg 2.89
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: reg 2.89(2).
The applicant in this case operates a massage therapy business in Rhodes NSW. The applicant was most recently approved as a standard business sponsor on 26 August 2015 for a period of 5 years. During that approval the applicant nominated Mr Heng Kang Ye in the occupation of Massage Therapist. The nomination in relation to Mr Ye was approved on 5 February 2016 and Mr Ye was granted a Subclass 457 visa on 5 October 2016 for a period of four years.
The Department commenced monitoring of the applicant and decided to conduct an unannounced site visit of the business’ premises in Rhodes on Tuesday 18 September 2018. During the site visit Australian Border Force (ABF) officers obtained unfavourable information relevant to whether the circumstances in Regs 2.89 and 2.91 existed.
In relation to the circumstance in r.2.89, the information led the delegate to form the view that the applicant had failed to ensure that Mr Ye worked for the applicant in the nominated occupation of Massage Therapist.
The information was set out in the NOITTA as follows:
Regulation 2.86 Obligation to ensure primary sponsored person works or participates in nominated occupation, program or activity
On 18 September 2018, an unannounced site visit was conducted to the sponsor's nominated address at … Rhodes.
At the front of the shop there is a reception area, the lady called Vicki stated that she works full time taking bookings and money. She stated that the sponsor was away in China.
She was not able to say where the visa holder was or when he was last seen at the shop. A photograph of the visa holder was shown to her.
There were no rosters at the shop, she stated that her boss has them.
At the time of the site visit there were five other massage therapists working at the shop, none of them were able to identify the photograph of the visa holder.
Australian Border Forcer Officer from the Sponsor Monitoring Unit telephoned the visa holder on the telephone number listed on departmental records - a man answered the call and said he was Hengkang Ye, when asked where he was he stated he was at work at the massage shop, Officer [ L ] asked where the shop was and he said Rhodes Shopping Centre, when told that Australian Border Force Officers were at the Rhodes Shopping Centre shop and he wasn't there, he terminated the call.
Officers were unable to contact him later.
In response to the NOITTA, the Department received documents which relevantly included a submission from the representative, a statutory declaration from Mr Ding dated 13 December 2018 and the store’s roster for the period between 3 September 2018 and 16 December 2018. The Department also received statutory declarations from Mengjie (Vicky) Yan, Hengkang Ye, Chinfeng Guo and Xiaofang Feng. The applicant also provided PAYG for statements for Mr Ye for the 2017 and 2018 financial years, together with the associated tax assessment notices.
In his statutory declaration, Mr Ding stated that he is responsible for managing the operations of the massage therapy business, including employment of staff, arranging the roster, payroll and other matters. He stated that two full time massage therapists, including Mr Ye, and seven casual staff were employed in the business. He was not at the shop on the day of the site visit as he had to urgently travel to China the previous day as his grandmother was in intensive care and his mother called him and asked him to go to China. Mr Ding provided evidence of his travel which confirmed that he departed Australia on 17 September 2018 and returned on 27 September 2018.
In relation to the employment of Mr Ye, Mr Ding stated that Mr Ye has worked for the business and that his working hours were according to the roster. The roster for the week commencing Monday 17 September 2018 indicates that Mr Ye was not scheduled to work on Tuesday 18 September 2018, being the day of the site visit, and that he had been scheduled to work from Wednesday to Sunday of that week.
In his statutory declaration, Mr Ye stated that on 18 September 2018, which was his roster day off, he had received a call during which he was asked to confirm his identify and where he was working, to which he responded the massage shop in Rhodes. He stated that the person informed him that they were at the shop and did not see him. When he tried to explain himself, he was asked why he had earlier indicated he was at the shop. He stated that the tone of the conversation became aggressive and that without an interpreter he felt that he may not be able to explain himself properly and decided to terminate the call.
In her statutory declaration, Mengie (Vicky) Yan, stated that the she has worked as a part time receptionist in the business since July 2017, she works one to two days a week and that she can vouch that Mr Ye is a full time employee of the business. She stated that she sees him every one or two weeks.
Chunfeng Guo and Xiaofang Feng, who worked as part time massage therapists in the business, both indicated that Mr Ye works in the store. Chunfeng Guo stated that when Departmental officers attended the store, she did not understand what they were saying and was shaking her hand her head to convey that she did not understand English. Xiaofang Feng also stated that when Departmental officers attended the store she showed them her identification but could not communicate with them in English.
In relation to the PAYG statements for Mr Ye, while the Tribunal acknowledges the delegate’s concern that they were handwritten, the associated tax assessment notices for the same period indicate that Mr Ye did have a taxable income for the 2016/2017 and 2017/2018 financial years, and while the amounts do not perfectly correspond, this can be explained by Mr Ye claiming various deductions.
At the hearing the Tribunal discussed with Mr Ding the information set out in the notice which suggests that Mr Ye had not been working as a massage therapist in the business. In response, Mr Ding stated that Vicky, who normally works on reception one day a week, had to take over quite quickly as he had to urgently travel to China. He stated that there was no proper handover. The Tribunal noted that this does not explain why Vicky could not tell the officers when Mr Ye was last seen at the shop or his whereabouts or explain why the other staff onsite indicated they did not know Mr Ye when shown his photograph. In response, Mr Ding stated that the staff, other than Vicky, do not speak any English and he understands that two of the staff who know Mr Ye had told the officers they know him. Mr Ding stated that he was told that the person in the photo had glasses, whereas Mr Ye normally wears contact lenses when he is working in the store and has a different hairstyle.
The Tribunal noted that, according to the decision record, the staff had access to an interpreter. Mr Ding stated that to his understanding this was not the case. The Tribunal expressed its doubt that the staff, who would have some basic level of English to communicate with customers, would not have sufficient English to at least indicate that they knew Mr Ye. In response, Mr Ding stated that two of the staff know him well and have worked with him and that maybe they were not sure because the photo was so different. He stated that he was not at the store and cannot be sure of what was said, but he understands that some of the staff did indicate they know him.
The Tribunal expressed its concern that there was limited independent evidence before it that Mr Ye was in fact employed by the business as a massage therapist, to which Mr Ding responded by stating that Mr Ye has been working for the business since 2015 and is a fully qualified massage therapist. He stated that Mr Ye commenced working full time since he was granted the visa in 2016, that Mr Ye is paid his wages through bank transfer and has been paid his superannuation entitlements. Mr Ding also stated that Mr Ye was not in the store on 18 September 2018 because it was his day off.
In response to the Tribunal’s queries about the existence of other independent evidence, Mr Ding informed the Tribunal that Mr Ye had been approved as a provider of remedial massages by health funds and that he had been issued with a provider number. Mr Ding also confirmed that the business had a Health Industry Claims and Payment Services (HICAPS) facility for clients and that there would be a record of any massage services provided by Mr Ye for which payments would have been claimed via HICAPS. Mr Ding undertook to provide these records, together with evidence of the wages paid to Mr Ye, for the period from October 2016 to October 2018, to the Tribunal.
After the hearing, the Tribunal received a large volume of HICAPS receipts for the period between October 2016 to September 2018 indicating massage services provided, which were claimed through various health funds, by provider number A021371J. The Tribunal has since confirmed, through the HICAPS Register and Medibank records, that this is the provider number issued to Mr Ye in May 2016. The HICAPS receipts also confirm that the services were provided at the applicant’s massage store in Rhodes.
The Tribunal has also received payslips, ATO Notice of Assessments, superannuation documents for Mr Ye and bank account statements for the applicant indicating that Mr Ye has been in receipt of a regular wage and superannuation from the applicant in the two years prior to Department’s site visit.
The Tribunal has carefully considered all the evidence before it, and while the evidence obtained during the site visit raised some concerns about Mr Ye’s employment, it is plausible, in light of other evidence now before the Tribunal, that the workers at the store at the time of the site visit were not able to effectively communicate with the Departmental officers due to their limited language proficiency. While the decision record indicates that interpreter services were provided, there is no evidence on the Department’s file to indicate that any of the workers gave evidence through an interpreter. The hand-written notes of the site visit do not record the dialogue between the officer and the workers, including what questions were asked and the workers’ responses to those questions.
It is also plausible that Mr Ye was on his roster day off on the day of the site visit and that he may not have properly communicated this during the phone call with the Departmental officer. The Tribunal also considers that if Mr Ding, as the proprietor, was at the store or could be contacted on the day of the site visit, he would have been able to provide a copy of the roster and provide other contemporaneous evidence to the Departmental officers, which has since been provided to the Tribunal, which would have alleviated their concerns about Mr Ye’s employment.
The evidence that is now before the Tribunal, including HICAPS receipts, Medibank and HICAPS records, is contemporaneous and probative evidence of Mr Ye’s employment as a massage therapist for the applicant for the period from October 2016 up to the date of the site visit. On this basis, the Tribunal is satisfied that the nominated person, Mr Ye, did work in the nominated occupation of Massage Therapist for the applicant.
Accordingly, the Tribunal is not satisfied that the prescribed circumstance in reg 2.89 exists for the purpose of s 140M of the Act.
Criteria no longer met: reg 2.91
The Minister may take one or more of the actions in s 140M if the sponsor no longer satisfies the prescribed criteria for approval of the sponsorship or for variation of the terms of the sponsorship: reg 2.91(2).
One of the requirements for approval as a standard business sponsor is that there is no adverse information known to Immigration about the applicant or a person associated with the applicant or it is reasonable to disregard that information: r.2.59(g). Relevantly, adverse information is defined in r.1.13A and includes, in relation to an approved sponsor, information that they have been the subject of administrative action (including being issued with a warning) for a possible contravention of such a law by a Department or regulatory authority that administers or enforces the law.
In this case, the applicant was issued with an Illegal Worker Warning Notice (IWWN) by the Department following the site visit conducted by ABF on 18 September 2018. During the site visit ABF officers conducted checks of the visa status and work rights for persons working in the shop. The officers identified Ms Hongjiun Yin who was an unlawful non-citizen. Ms Yin was detained and transferred to Immigration detention.
The Tribunal has had regard to Mr Ding’s explanation about the circumstances in which the unlawful non-citizen came to be in the shop at the time of the site visit, which is discussed further below, and it has also considered the representative’s submission about the applicant’s objection to the issuing of the notice. However, as explained to Mr Ding at the hearing, the Tribunal cannot change the fact that the IWWN has been issued by the Department. There is no provision in the Act which permits the Tribunal to revoke or cancel such a notice.
By being issued with the IWWN by the Department, the applicant, who was an approved sponsor, became the subject of administrative action for a possible contravention of a law by the relevant regulatory authority. Accordingly, adverse information became known to Immigration about the applicant. In the circumstances, the Tribunal finds that the applicant has failed to continue to satisfy the requirement for approval in reg 2.59(g)(i).

Regulation 2.59(g)(ii) requires consideration of whether it is reasonable to disregard the adverse information. In his statutory declaration of 13 December 2018, Mr Ding stated that he is responsible for all aspects of the massage therapy business, including employment of staff, and that before employing anyone he normally conduct two interviews, the first being a skills test by an experienced therapist, and the second being a final interview by him where he conducts all the required checks and discusses the conditions of employment.
Mr Ding stated that on Sunday 16 September 2018 he did not attend the shop and the receptionist who normally works weekends, Ami, sent him a message about a lady who came into the shop to enquire about a job. The lady presented a copy of a Chinese passport and Medicare card in the name of Zhihong Xu, copies of which were sent by text message to Mr Ding, and she told Ami that she is a permanent resident. Extracts of the text messages between Mr Ding and Ami were provided to the Department.
Mr Ding stated that he had to travel urgently to China and did not get an opportunity to meet Ms Xu. He asked Vicky to arrange for one of the experienced therapists to test Ms Xu’s skills. Ms Xu attended the shop and was given a uniform to wear to distinguish her from the clients. Mr Ding stated that when the officers came to the shop Ms Xu had not been employed and was not working for the shop. He believed that Ms Xu’s passport and Medicare were legitimate and would have checked them when he interviewed her after she passed the skills test.
At the hearing Mr Ding gave a slightly different version of the events about how the unlawful non-citizen came to be at the business’ premises. He stated that he had advertised for casual staff and Ms Xu responded to the advertisement. He asked her to come in for an interview, but she did not show up at the shop until 18 September 2018 and he did not get a chance to check her visa status. He did not personally meet her and did not conduct an interview.
When the inconsistency in the evidence was discussed with Mr Ding, he explained that it was three years ago and he knows the lady should have come on 17 September 2018 for the trial but she showed up at the shop the following day. The Tribunal put to Mr Ding that given the extracts of the text messages, which were contemporaneous, it was inclined to accept the version of events as described in his statutory declaration. The Tribunal noted that, according to the text messages and his statutory declaration, Ami had sent Mr Ding a copy of the lady’s Chinese passport and Medical card. When asked if he had checked the visa status of this person before agreeing to her attending the shop for a skills test or work trial, Mr Ding stated that he had not done this as he normally conducts checks after the person has passed the skills test. He also stated that this person had a green Medicare card and he understands that this means she is a citizen or permanent resident.
The delegate’s decision record indicates that the applicant is not a registered user of the Visa Entitlement Verification Online (VEVO) System. When this was discussed with Mr Ding, he stated that he does not need to be registered and he has had no issue going online and checking an employee’s visa status. He stated that he regularly does this and does not need any registration. It is possible that Mr Ding has been conducting visa status checks as an individual and not through the applicant, who would have to register as an organisation for the purpose of conducting visa status checks. In any case, this does not change the fact that Mr Ding, despite having a passport for the person who claimed to be Zhihong Xu, did not undertake checks of her visa status and work rights before agreeing for her to attend the shop for a trial. When this concern was put to Mr Ding at the hearing, he asked the Tribunal to consider the circumstances at the time: he had to urgently travel to China, his employee had informed him that the lady indicated she was a permanent resident, had been in Australia for 10 years and was married to an foreigner (Anglo Australian) whose name appeared on the Medicare card. He stated that he had no reason to suspect that the lady was not telling the truth or that she had provided fraudulent documents to them about her identity. The Tribunal noted that if checks had been conducted on the identity of the passport sent to him by Ami then he would have realised that Zhihong Xu was the holder of a visitor visa with no permission to work. In response, Mr Ding stated that he did not get a chance to meet the lady or interview her and that he would have conducted all the necessary checks before employing her.
The Tribunal has carefully considered the evidence before it regarding the circumstances which led to the applicant being issued with the IWWN. While the Tribunal considers it somewhat reckless of Mr Ding not have checked the work and visa status of Zhihong Xu, which would have revealed that she did not have permission to work, it is also relevant that Mr Ding did not have an opportunity to meet or interview the person who claimed to be Zhihong Xu. The Tribunal has also had regard to the fact that Mr Ding had to depart Australia urgently for family reasons and is satisfied that this had contributed to him not being able to conduct the relevant checks and interviews, part of which had been delegated to his staff. The text messages between Ami and Mr Ding, which the Tribunal considers to be reliable contemporaneous evidence, indicate that the person who claimed to be Zhihong Xu had informed the receptionist that she is a permanent resident and had provided identity documents which were non-genuine. It is understandable in the circumstances that the applicant’s staff may not have been alerted to the fact that the person (prospective employee) was an unlawful non-citizen.
In considering the circumstances which gave rise to the existence of adverse information, the Tribunal is satisfied on the totality of the evidence before it that it is reasonable in the circumstances of this case to disregard the adverse information. It follows that the applicant did not cease to satisfy the requirement in r.2.59(g) for approval as a standard business sponsor.
Given the above, the Tribunal is not satisfied that the prescribed circumstance in reg 2.91 exists for the purpose of s 140M of the Act.
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
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.
R. Skaros
Senior 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.
…
2.91   Application or variation criteria no longer met
…
(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 nature of the applicable sponsorship criteria that the person no longer meets; and
(b)    whether, and the extent to which, the failure to continue to satisfy the criteria for approval as a work sponsor or family sponsor, or to continue to satisfy the criteria for approval of a variation, has had a direct or indirect impact on another person; and
(c)     the reason why the person no longer satisfies the applicable sponsorship criteria, including whether the failure to satisfy the criteria is within the person’s control; and
(d)    the steps (if any) the person has taken to ensure that the person will satisfy the applicable criteria in the future; and
(e)     any other relevant factors.
…

[2021] AATA 4014

1 October 2021

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