Martin Brothers Contracting Pty Ltd (Migration)

Martin Brothers Contracting Pty Ltd (Migration) [2023] AATA 1677 (7 June 2023)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  Martin Brothers Contracting Pty Ltd
CASE NUMBER:  2003740
HOME AFFAIRS REFERENCE(S):          OPF2019/9765
MEMBER:Bridget Cullen
DATE:7 June 2023
PLACE OF DECISION:  Brisbane
DECISION:The Tribunal varies the decision under review by:
reducing the period of the bar under subsection 140M(1)(c) to 3-years, to bar the Applicant from sponsoring more people under the terms of the approved temporary activities sponsorship until 13 February 2023(a) ; and
(b) reducing the period of the bar under subsection 140M(2) to 3-years, to bar the Applicant from making applications for approval as a standard business sponsor until 13 February 2023.

Statement made on 7 June 2023 at 3.21pm

CATCHWORDS
MIGRATION – sponsorship cancellation or bar – ensuring equivalent terms and conditions of employment – provided false or misleading pay records – nominees working unreasonably excess hours – full time salaried employees with reasonable overtime – employees correctly advised of conditions – power disparity for sponsored visa holders – adverse information about a sponsor – decision under review varied
LEGISLATION
Migration Act 1958, ss 140, 362, 376, 506
Migration Regulations 1994, rr 1.13, 2.79, 2.89-2.94, 5.20
Privacy Act 1988
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 (Cth) (the Act) in relation to the Applicant’s sponsorship.
The Applicant operates in the horticulture sector. At the relevant points in time, the Applicant was operating Martin Brothers Contracting Pty Ltd, from Fortitude Valley, Brisbane. The public website for Martin Brothers describes the business as specialising in “landscape construction and maintenance services across the residential, commercial and industrial sectors in South-East Queensland”.
The Applicant was approved as a standard business sponsor on 15 May 2018.
On 13 February 2020, under s 140M Migration Act, the delegate decided to:
(1) bar the Applicant until 15 May 2023 from sponsoring more people under the terms of the approved standard business sponsorship (a sponsorship bar of approximately 39-months) (s.140M(1)(c)); and
(2) bar the Applicant until 13 February 2025 from making applications for approval as a standard business sponsor and temporary activities sponsor (a sponsorship bar of 5-years) (s.140M(1)(d)).
The delegate’s decision was based on a finding that the Applicant had failed to satisfy a sponsorship obligation (to ensure equivalent terms and conditions and employment), and a finding that the Applicant had provided false or misleading information in its response to the Notice of Intention to Take Action (NOITTA). These decisions, made under s 140M of the Act are reviewable by the Tribunal.
The delegate also issued the Applicant with an infringement notice for $12,600.00 in relation to the failure to ensure equivalent terms and conditions of employment. The infringement notice was issued under s506A of the Act and reg. 5.20A, and is not a Part 5 reviewable decision by the Tribunal.
Relevantly, the Applicant sponsored Harry Ens and Gary Fairweather, as Landscape Gardeners (ANZSCO 362213). Neither Mr Ens nor Mr Fairweather gave evidence in the Tribunal, and both have left their employment with the Applicant.
The delegate found that Mr Ens and Mr Fairweather consistently worked hours far in excess of those set out in their approved nomination applications, which were based on a 38-hour work week. The delegate found that the additional hours worked were not reasonable.
The delegate also noted that the Applicant had not provided a direct response in relation to the alleged breach for provision of false or misleading information. The information that the delegate considered to be false or misleading consisted of pay records that indicated that sponsored workers were paid for 38-hours per week; however timesheets indicated that the sponsored workers worked well in excess of the hours reflected on the pay records.
On 20 February 2023, the applicant appeared in-person before the Tribunal, through Director, William Martin (Mr Martin). Mr Martin gave evidence and made submissions on the Applicant’s behalf.
The applicant was represented in relation to the review. The representative did not attend the Tribunal hearing.
For the following reasons, the Tribunal has decided to vary the decision under review by:
·reducing the period of the bar under subsection 140M(1)(c) to 3-years, to bar the Applicant from sponsoring more people under the terms of the approved temporary activities sponsorship until 13 February 2023; and
·reducing the period of the bar under subsection 140M(2) to 3-years, to bar the Applicant from making applications for approval as a standard business sponsor until 13 February 2023.
Non-Disclosure Certificate, s. 376
The Tribunal informed Mr Martin at the commencement of the hearing about the existence of a s.376 Non-Disclosure Certificate dated 6 March 2020 (the s.376 Certificate), and gave him a copy of the s. 376 Certificate. The effect of a s.376 Certificate is that the Tribunal has a discretion to disclose the gist of the information the subject of the certificate to the Applicant in circumstances where it is satisfied that disclosure would not be contrary to either s.362A of the Act or the Privacy Act 1988. Having considered the information the subject of the s.376 Certificate and details regarding the delegate who signed the Certificate, the Tribunal is satisfied that it is a valid certificate.
The Department issued the s.376 Certificate regarding information that had been given in confidence to the Department, as well as information that, if revealed, would be likely to prejudice the ongoing effectiveness of lawful methods for preventing, detecting and investigating breachers or evasions of the law. The gist of the information may give rise to concerns regarding the number of hours worked by sponsored employees working for the Applicant. The Applicant told the Tribunal that he understood, after clarifying that the information related to matters that had been considered by the delegate in the course of making the decision now under review.
Summary of information available to the Tribunal
The Applicant submitted the following information to the Department in response to a notice requesting records and information:
·     A document titled ‘Visa Documentation information from points 1-8’ containing information about the business and its employees
·     Acknowledgement that the business was registered on the Australian Business Register dated 1 March 2016
·     ABN Lookup dated 5 September 2019
·     Annual Company Statement dated 21 June 2017
·     ASIC extract dated 5 September 2019
·     Queensland Building and Construction Commission Certificate for Structural Landscaping (Trade) dated 22 February 2017
·     Trust deed for a unit trust naming Martin Brothers Contracting Pty Ltd CAN 169 289 678 as trustee of The MBC Trust
·     Current business organisational chart
·     Martin Brothers Contracting Pty Ltd business profile
·     8 photos of the business address, office, workshop and yard
·     Passport of Harry Ens issued 21 November 2018
·     Construction white card for Harry Ens issued 15 August 2017
·     Job description for Harry Ens, landscape gardener
·     Employment contract for Harry Ens dated 20 February 2018
·     PAYG summary for Harr Ens dated 3 September 2019
·     Payroll Activity Details for Harry Ens from 1 December 2018 - 1 June 2019
·     Payroll Activity Summary for Harry Ens from 1 December 2018 – 1 June 2019
·     Leave transactions for Harry Ens from 1 December 2018 – 1 June 2019
·     Records of hours worked for Harry Ens from 12 January 2018 – 6 January 2019
·     Work report example for Harr Ens dated 21 August 2019
·     Certificate III in Landscape Construction for Harry Ens dated 29 December 2017
·     30-page collection of photos titled ‘Harry Landscaping’
·     Employment contract for Gary Fairweather dated 19 November 2018
·     PAYG summary for Gary Fairweather dated 3 September 2019
·     Payroll Activity Details for Gary Fairweather from 1 December 2018 to 1 June 2019
·     Payroll Activity Summary for Gary Fairweather from 1 December 2018 to 1 June 2019
·     Record of hours worked for Gary Fairweather from 12 January 2018 to 6 January 2019
·     Leave transactions for Gary Fairweather from 1 December 2018 to 1 June 2019
·     Invoice for 457 application assistance for Gary Fairweather dated 3 May 2018
·     Invoice for 457 nomination assistance for Gary Fairweather dated 12 March 2018
·     Employment contract for Hidde Versloot dated 30 May 2019
·     Payroll Activity Summary for Hidde Versloot from 1 December 2018 to 1 June 2019
·     Payroll Activity Details for Hidde Versloot from 1 December 2018 to 1 June 2019
·     Employment contract for Julian Schlort dated 29 August 2018
·     Payroll Activity Summary for Julian Schlort from 1 December 2018 to 1 June 2019
·     Payroll Activity Details for Julian Schlort from 1 December 2018 to 1 June 2019
·     27 payroll reports from 1 December 2018 to 1 June 2019
·     Seek advertisement by Applicant for Experienced Gardener dated 20 February 2018
·     4 tax invoices from Seek dated 24 September 2017, 9 November 2017, 11 May 2018, and 19 October 2018
·     Seek advertising record dated 19 February 2018
·     4 Seek job advertisements for various positions by the Applicant dated 13 August 2019 – 05 September 2019
·     4 Jora job advertisements for various positions by the Applicant dated 5 September 2019
·     Undated signed statement by Company Director Will Martin sent on 6 September 2019
In response to the Department’s Notice of Intention to Take Action, the Applicant submitted:
·An email which submitted that the Notice of Intention to Take Action viewed Gary Fairweather and Harry Ens as hourly rate workers when in fact they were full time salaried employees at Martin Brothers, and that their salaries reflected the overtime they performed.
·An extract of clause 9.2 from the Applicant’s standard employment contract which stated that “(y)ou will be required to work 38 hours per week plus any additional hours which are reasonably necessary to fulfil the requirements of your duties, or as reasonably required by Martin Brothers’.
The Applicant submitted the following to the Tribunal:
·Submissions from its representative
·Payslip for Gary Fairweather for the period 17 December 2018 – 23 December 2018
·Employment contract for Gary Fairweather dated 19 November 2018
·Salary calculation for Gary Fairweather
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.
Background
The ABF commenced monitoring of the Applicant’s compliance with sponsorship obligations on 16 August 2019. As part of this process, the ABF made requests for information related to the Applicant’s employees, including wage records, timesheets, and other documentary evidence relating to employment of staff. The period monitored was from 1 December 2018 to 1 June 2019. Information was provided by the applicant directly and through its accountants over an extended period.
By letter dated 8 November 2019, headed Notice of Intention to Take Action (NOITTA), an officer of the ABF particularised a number of concerns in relation to the Applicant’s compliance with its sponsorship obligations. The notice outlined concerns that the applicant may have failed to satisfy sponsorship obligations in regulations 2.89 and 2.90. The particulars provided related to two sponsored employees, being Harry Ens and Gary Fairweather. According to the NOITTA, the investigator had concerns that the applicant had significantly underpaid each of these workers.
The NOITTA identified, based upon the 26-week monitoring period, concerns in relation to the number of hours actually worked by each sponsored employee, as compared to the hours recorded on payslips.
Sponsored employee, Mr Ens, was approved on 9 June 2018 in the position of Landscape Gardener, for 38 hours work per week, on a salary of $62,000 per annum. The records provided by the Applicant revealed:
·Hours recorded on payslips: 26 pay weeks x 38 hours per week = 988 hours
·Hours recorded on timesheets over 26 pay weeks = 1265 hours
Therefore, the delegate concluded that Mr Ens had not been paid for a total of 277 hours (1265 hours as recorded on timesheets less 988 hours as recorded on payslips).
Sponsored employee, Mr Fairweather, was approved on 27 September 2018 in the position of Landscape Gardener, for 38 hours work per week, on a salary of $58,500 per annum. Subsequently, a contract dated 19 November 2018 increased Mr Fairweather’s salary to $70,000 per annum. The records provided by the Applicant revealed:
·Hours recorded on payslips: 24 pay weeks x 38 hours per week = 912 hours
·Hours recorded on timesheets over 24 pay weeks = 1092.33 hours
Therefore, the delegate concluded that Mr Fairweather had not been paid for a total of 180.33 hours (1092.33 hours as recorded on timesheets less 912 hours as recorded on payslips).
The NOITTA further stated that “the exact monetary value of these unpaid hours cannot be calculated, as applicable overtime rates would need to be considered as part of the calculation.” Based on this information, the delegate concluded that the sponsored employees were not receiving equivalent terms and conditions of employment, as they were not remunerated for all of the hours they worked.
Does a circumstance for the taking of an action exist?
In the present case, the delegate found that the Applicant failed to satisfy a sponsorship obligation, being the obligation to ensure equivalent terms and conditions of employment, and also that the Applicant had provided false or misleading information.
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 identified breach of the sponsorship obligations for purposes of Regulation 2.89 was Regulation 2.79 – Obligation to ensure equivalent terms and conditions of employment.
The delegate found that the sponsored employees were subjected to terms and conditions of employment that fell well short of the those provided to Australian citizens or permanent residents with respect to reasonable hours worked over and above their ordinary hours. The delegate noted that the employees were, on average, whilst at work, required to work 38% more hours each week than those approved at the time of nomination.
The Applicant raises several arguments in response to the delegate’s finding. The submissions provided by the Applicant have been framed in a manner consistent with an appeal, where the focus would be on whether an error had made by the decision make below – in this case, the delegate. However, the focus of the Tribunal is not whether the delegate was “in error” or “failed to take into account” a factor. Rather, this is review of a de novo administrative nature, which requires that the Tribunal make a fresh decision.
The substance of the arguments raised by the Applicant is as follows:
·The sponsored employees were paid on a full-time (not hourly) basis in an amount calculated on approximately a 50-hour working week being standard in the construction industry. The assumption that sponsored employees were only required to work a 38-hour week was incorrect. It was made clear to the sponsored employees before they commenced employment that they would be working approximately 50 hours per week and their salary was calculated accordingly.
·If the sponsored employees were paid the award wage for a 38-hour week and then 12 hours of overtime, they would have been paid the same as or less than their fixed salary (in other words, the Applicant says this arrangement left them better off).
·The sponsored employees were employed on a full-time basis on exactly the same terms as any Australian citizen or permanent resident who worked for the Applicant. Therefore, it is not correct to say that the sponsored employees were subjected to terms and conditions of employment that fell well short of those provided to an Australian citizen.
At the hearing, Mr Martin took issue with the description of Mr Ens and Mr Fairweather, contained in the NOITTA, as being “hourly workers”. They were not hourly workers, but rather were, “full-time, salaried workers”. He told the Tribunal that they used an off-the-shelf standard contract, based off 38-hours plus reasonable overtime.
While Mr Martin asserts that the sponsored employees accepted and were advised of the need to work “construction hours,” the s.376 certificated information suggests that this is disputed, and that there were concerns about the requirement to work additional hours beyond 38 hours per week. Neither Mr Ens nor Mr Fairweather gave evidence to the Tribunal. As this communication or agreement in relation to the number of hours required is disputed, the Tribunal is not prepared to accept, as a matter of fact, that the employees were so advised.
The Applicant argues that the sponsored employees were not exploited, and were not vulnerable. The Applicant says that the hours of work were explained before the sponsored employees commenced work, and they were paid accordingly.
In determining whether there was a breach of reg 2.79, the sponsorship obligation is not only that the sponsor is required to ensure that the terms and conditions of employment provided to the primary sponsored person are no less favourable than those based on which the nomination was approved; but also that the terms and conditions of employment provided to the primary sponsored person are no less favourable than the terms and conditions of employment that the sponsor provides, or would provide, to an Australian citizen or an Australian permanent resident to perform equivalent work in the person’s workplace at the same location.
The Tribunal accepts that Mr Martin holds a genuine belief that the sponsored workers understood that they would be required to work more than 38-hours per week. Yet, it is difficult to understand what the purpose of the contracts entered into with both Mr Ens and Mr Fairweather was for, if not for the purpose of setting out the terms and conditions of their employment. There is no suggestion that the contracts were not valid – they were prepared and signed on behalf of the Applicant.

In an immigration context, it is of fundamental importance that sponsors, like the Applicant, provide information to the Department that represents the actual state of affairs. The Department would have assessed the contracts provided, which clearly indicate that both Mr Ens and Mr Fairweather were being paid the contractual amounts for a working week of 38-hours. On this basis, the Tribunal finds that both Mr Ens and Mr Fairweather were remunerated in a less favourable manner than required by the contracts on which their nominations were approved. The contracts provided by the Applicant to the Department for approval required work of 38-hours per week, and plainly each of Mr Ens and Mr Fairweather worked more than the hours required on the face of the contracts.
Although the Applicant assets that “reasonable overtime” was called for under the contracts, the Tribunal finds that the sheer number of hours of overtime worked for Mr Ens (270) and Mr Fairweather (180.33) over a 6-month period, was not reasonable.
However, the Tribunal also finds that both Mr Ens and Mr Fairweather were remunerated in a way that was no less favourable than the terms and conditions of employment that an Australian citizen or resident doing equivalent work for the Applicant would be paid.
The reference point for this finding is the remuneration that would be received by a “Landscape Gardener”. The Tribunal has consulted “PayScale”[1] which lists the Average hourly rate for a Landscape Gardener in Australia to be $25.72 an hour, with an annualised wage between $42,000.00 and $70,000.00. The Gardening and Landscaping Services Award 2020 (Cth) provides for full-time employees to be engaged to work an average of 38-hours per week, with rates of pay between $812.60 and $970.40 per week.
[1] Landscape Gardener Hourly Pay in Australia | PayScale; accessed on 1 June 2023.
Mr Martin says that in determining whether the workers are being paid underpaid, “the only thing to base this off is off the awards – they need to work construction hours”. He says that the Applicant has done extensive analysis and in both of Mr Ens and Mr Fairweather’s scenarios, they are overpaid; above the Award. Mr Martin provided the Tribunal with modelling based upon a 45-hour week, that indicates Mr Fairweather’s pay if he was paid in accordance with the Award as a “leading hand”. He says that this indicates that, on an annual basis, Mr Fairweather was paid $8,486 more than what he would have received if he’d been paid in accordance with the Award. The information provided to the Tribunal, albeit in electronic form, was difficult to read as the font size was miniscule. Mr Martin conceded this was an issue at the hearing.
The Tribunal has done its best to interpret the information provided by enlarging it 800 percent, and thinks it is persuasive in relation to the Applicant’s argument that the terms and conditions of employment provided to Mr Ens and Mr Fairweather were no less favourable than the terms and conditions of employment that the Applicant provides, or would provide, to an Australian citizen or an Australian permanent resident to perform equivalent work for the Applicant at the same location.
The Tribunal has, like the delegate, has faced a challenge in calculating the precise wages either Mr Ens or Mr Fairweather would have received if paid in accordance with the Award. A rough measure though indicates that if paid for the hours actually reflected on the timesheets, on the standard, average national hourly rate of $25.72 per hour, the nominees should have received at least:
·Mr Ens (1265 hours x $25.72) = $32,535.80 over 6-month monitoring period
·Mr Fairweather (1092.33 x $25.72) = $28,094.73 over 6-month monitoring period
This translates to an annualised wage of at least $65,071.60 for Mr Ens and $56,189.45 for Mr Fairweather. Mr Ens was receiving an annual salary of $62,000.00 and Mr Fairweather an annual salary of $70,000.00. Allowing for overtime, the Tribunal finds that Mr Fairweather was paid in excess of the average national wage for a Landscape Gardener.
Although Mr Ens, on an hourly basis, was possibly receiving a bit less than the national average according to PayScale, if the Tribunal recalculates using the $21.00 per hour figure that represents the low end of the National average hourly bracket rate, Mr Ens would receive (1265 x $21.00) = $26,565, annualised to $53,130.00. Allowing for overtime, the Tribunal finds that Mr Ens was paid within the expected national wage bracket for a Landscape Gardener.
In summary, as the Tribunal finds that both nominees were remunerated in a less favourable manner than required by the contracts on which their nominations were approved, the Tribunal finds that r.2.79 was breached. It follows that the Tribunal is satisfied that the prescribed circumstance in reg 2.89 exists for the purpose of s 140M of the Act.
False or misleading information: reg 2.90
One or more of the actions in s 140M may be taken if the sponsor has provided false or misleading information to Immigration or the Tribunal: reg 2.90(2).
During the monitoring period of 1 December 2018 to 1 June 2019, the Applicant provided weekly pay records for Harry Ens and Gary Fairweather. The pay records state the employees were paid for 38 hours per week, yet the timesheets provided showed that both employees worked well in excess of 38 hours per week. For the pay records provided (excluding those for paid annual leave), 25 pay records for Harry Ens and 22 for Gary Fairweather did not accurately reflect the hours worked by the employees.
The delegate noted in their decision that the Applicant had not provided a direct response in relation to the alleged breach for provision of false or misleading information.
The delegate also noted that the sponsor relied on a clause in its employment contract that employees are required to work additional hours that are reasonably necessary and in excess of their ordinary 38-hour week, and that the employees’ salaries were reflective of the hours that they are required to work.
The Tribunal had the opportunity to discuss with Mr Martin the evidence before it. It is reasonably apparent to the Tribunal that Mr Martin does not, himself, have a solid understanding of the sponsorship framework. That said, he did endeavour to get some employment law advice about contracts, and some migration advice in relation to the sponsorship applications he made. This is an area of significant technicality. This was the Applicant’s first foray into the world of sponsorship of overseas workers.
In the Tribunal’s view, a finding that an applicant has provided false or misleading information requires more than that the information is simply incorrect. Although the payslips made reference to a 38-hour working week, and this was strictly not correct, it must be viewed in conjunction with the Applicant’s provision to the Department of the timesheets. Had he intended to create the overall impression that the workers were, in fact, only working 38-hours per week, he would not have provided their timesheets.
The Tribunal observes that the Applicant was fairly rigid and inflexible in his views that he had done nothing wrong in relation to the Applicant’s sponsorship obligations. The Tribunal endeavoured to discuss with Mr Martin the concept that persons who have a visa status that is linked to their employment are in a position of less power vis-à-vis the employer and are therefore less likely to raise concerns about things like expectations to work significant overtime. The Tribunal thinks that Mr Martin’s insistence on this front may have resulted in the delegate ultimately taking the view that he was endeavouring to create the impression that the workers were not working in excess of 38-hours per week.
Although the Tribunal thinks the Applicant’s payslips and employment contracts are problematic in this context, the Tribunal also observes that Mr Martin was entirely straightforward with both the Department and the Tribunal about the fact that the nominees were working in excess of 38-hours. The timesheets reflect this reality.
The Applicant has now removed the reference to “38 hours” from its payslips, to avoid any future confusion.
The Tribunal finds that the information provided by the Applicant was inconsistent, but not false or misleading as contemplated by reg 2.90. Accordingly, the Tribunal is not satisfied that the prescribed circumstance in reg 2.90 exists for the purpose of s 140M of the Act.
Action to be taken
For the reasons outlined above, the Tribunal is satisfied that the Applicant breached regulation 2.79 in respect of Mr Ens and Mr Fairweather, in that they were paid in in way that was less favourable than the terms and conditions contained in the employment contracts that formed the basis of the Applicant’s nomination approvals. As such, the Tribunal is satisfied that a relevant circumstance for s 140L(1)(a) exists. Accordingly, it is necessary to consider whether one or more of the actions mentioned in s 140M should be taken.
In considering what action to take, the Tribunal has had regard to the prescribed criteria, as extracted in the attachment to this decision.
There is no evidence that the Applicant has previously breached any other sponsorship obligations or that it has failed to cooperate with Immigration or otherwise provided false or misleading information to the Department. It is also relevant to note that although the Applicant had only been a sponsor for a short period of time prior to the monitoring, there had been no previous concerns. The concerns identified arose during the Applicant’s first period of monitoring.
There is evidence that the Applicant has cooperated with Immigration, both during and after the monitoring period, and it has taken some minor steps to address the issues identified by the ABF. For instance, the Applicant has now modified its payroll records to avoid the misperception that workers are paid for a 38-hour week. Although a minor adjustment, this does indicate that the Applicant understands that wage records need to be fastidiously accurate. This is in the Applicant’s favour.
The Applicant argues that the sponsored employees were not exploited, and were not vulnerable. The Applicant says that the hours of work were explained before the sponsored employees commenced work, and they were paid accordingly.
There is, however, evidence that the Applicant has failed to satisfy the sponsorship obligations under regulation 2.79 in relation to both sponsored employees, the subject of the monitoring. These breaches occurred over the full monitoring period. The Tribunal has found that Mr Ens and Mr Fairweather were not paid in accordance with the terms of their contracts. However, the Tribunal has also found that they were paid the expected national wage bracket for the role of Landscape Gardener. On a contractual basis, both Mr Ens and Mr Fairweather worked significant hours over and above those that they were remunerated for. The terms of their contracts required that they work “reasonable” overtime only, and the Tribunal has found that the sheer quantum of hours each worked above 38-hours per week was not reasonable.
In the Tribunal’s view, after hearing from Mr Martin, the Applicant still does not appreciate that a sponsored visa holder is in a position where they are likely to feel that they cannot decline to work hours over and above those contained in their contract. There is an obvious power disparity between the Applicant and a sponsored visa holder. As explained above, the s.376 Certificate material very strongly suggests that while the Applicant was satisfied with the “construction hours” arrangement as described by Mr Martin, the sponsored workers were not.
While it is not possible to assess the precise nature of any contractual underpayment for the reasons traversed above, it is possible that it is significant. There is no information before the Tribunal indicating that Mr Ens and Mr Fairweather have been remunerated for the hours that they worked above 38-hours per week. The Tribunal is therefore not satisfied that the breach of regulation 2.79 has been adequately rectified.
The Tribunal is required to consider is whether the Applicant has implemented processes to ensure future compliance with sponsorship obligations. Based on the evidence of Mr Martin, together with the Applicant’s submissions, the Tribunal is not satisfied that the Applicant clearly understood its obligations, particularly in relation to pay and recordkeeping. It is obvious that the Applicant did not understand the significance that the contracts provided to the Department in conjunction with the applications to sponsor Mr Ens and Mr Fairweather actually have. The workers, and the Department, were entitled to expect that pay would be in accordance with the contract as provided, irrespective of any oral discussions to the contrary.
These breaches have had a direct financial impact upon the sponsored employees because they were required to work a significant number of hours beyond those that they were contractual obliged to work, and for which they were not remunerated.
Although the Applicant has modified its pay statements, there is no evidence about the processes that it has implemented to ensure future compliance with sponsorship obligations. Likely this is because the Applicant has taken the view that it was, in fact, compliant in all respects.
The Tribunal accepts that the breaches were not intentional or reckless, but arose from a genuine misunderstanding of the Applicant’s sponsorship obligations. The failure of the Applicant to understand these obligations is concerning, but the Tribunal observes that this was the Applicant’s first venture into sponsorship. The Applicant did have the assistance of both a Registered Migration Agent. Migration sponsorship can be technical, and the Tribunal has no ability to assess whether the advice the Applicant obtained was based upon a fulsome understanding of the Applicant’s industrial practices.
As observed by Senior Member Skaros in Catsbeauty Pty Ltd (Migration) [2022] AATA 3461 at [104], the onus is on the approved standard business sponsor (here, the Applicant) to obtain professional advice and be informed about the sponsorship obligations with which it must comply. This includes the obligations to pay sponsored employees on terms that are no less favourable than those based on which the nomination was approved (here, the contracts supplied to the Department for Mr Ens and Mr Fairweather).
Compliance with sponsorship obligations is critical to the integrity and proper operation of Australia’s migration program. Neither Mr Ens or Mr Fairweather continues to work for the Applicant, and the Tribunal does not know whether either individual has been able to secure another sponsorship.
The Applicant has been barred until 15 May 2023 from sponsoring more people under the terms of its approved temporary activities sponsorship. The applicant has also been barred from making applications for approval as a standard business sponsor for a five-year period, the maximum penalty period, until 13 February 2025. By the time of decision, the Applicant will have served the entirety of the first bar, and more than three years of the second bar.
The utility in reducing a bar where it was no longer in effect (as is the case here), was considered in Catsbeauty. There, the Tribunal took the view that as the sponsorship bar had expired, there was no utility in varying or reducing the period. However, the Tribunal also noted that the decision to bar the Applicant would be considered ‘adverse information’ as defined in regulation 1.13A for the purposes of considering any pending or future sponsorship or nomination applications made by the applicant. As such, were the Applicant to make any future applications for sponsorship or nomination approvals, the Department will consider any previous action taken under s 140M, and will need to decide whether it is reasonable to disregard the ‘adverse information’.
The Tribunal has concluded that the Applicant breached regulation 2.89 by consistently requiring sponsored workers to work hours far in excess of the contractually obligated 38 hours approved at the time of nomination. However, the Tribunal was not satisfied that there has also been a breach of regulation 2.90 by the Applicant in this case. The Tribunal has not found the breaches by the Applicant to be as serious as those found to have been established by the delegate This must be considered in relation to any penalty to be imposed.
Given the Tribunal’s findings, set out above, in relation to the prescribed circumstances and considering the totality of the evidence, the Tribunal is satisfied that action should be taken under subsections 140M(1)(c) and (2) of the Act. The Tribunal considers that the most appropriate action is to vary the bars by reducing each to a period of 3-years. This means that both bars will expire on 13 February 2023.
The Tribunal considers it appropriate for action to be taken barring the Applicant for a period from sponsoring foreign workers given that the breaches of the Applicant’s sponsorship obligations were serious and disadvantageous to the sponsored employees.
Having regard to the information provided by the Applicant, including Mr Martin’s evidence, which does not acknowledge any lack of compliance, the Tribunal cannot be confident that the Applicant presently has systems in place to ensure compliance with any future sponsorship obligations. However, the Applicant is not currently sponsoring any workers, as both Mr Ens and Mr Fairweather have left. The Applicant has previously obtained both legal and migration advice, and is represented in these proceedings. This demonstrates the Applicant to be receptive to obtaining professional advice, and the Tribunal considers it likely, having been through the regulatory action process, that the Applicant would do so in future in order to ensure that it complies with its sponsorship obligations.
DECISION
The Tribunal varies the decision under review by:
(a) reducing the period of the bar under subsection 140M(1)(c) to 3-years, to bar the Applicant from sponsoring more people under the terms of the approved temporary activities sponsorship until 13 February 2023; and
(b) reducing the period of the bar under subsection 140M(2) to 3-years, to bar the Applicant from making applications for approval as a standard business sponsor until 13 February 2023.
Bridget Cullen
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.
…
2.90   Provision of false or misleading information
…
(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 purpose for which the information was provided; and
(b)    the past and present conduct of the person in relation to Immigration; and
(c)     the nature of the information; and
(d)    whether, and the extent to which, the provision of false or misleading information has had a direct or indirect impact on another person; and
(e)     whether the information was provided in good faith; and
(f)     whether the person notified Immigration immediately upon discovering that the information was false or misleading; and
(g)     any other relevant factors.
…

[2023] AATA 1677

7 June 2023

Key Legal Topics

Areas of Law

Immigration

Administrative Law

Legal Concepts

Judicial Review

Procedural Fairness

Statutory Construction

Remedies

Appeal