MEDIQ Accountants (Migration)

MEDIQ Accountants (Migration) [2017] AATA 437 (22 March 2017)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  MEDIQ Accountants Pty Ltd
CASE NUMBER:  1600783
DIBP REFERENCE(S):  BCC2015/3227784
MEMBER:Alison Mercer
DATE:22 March 2017
PLACE OF DECISION:  Melbourne
DECISION:The Tribunal sets aside the decision not to approve the application and substitutes a decision that the applicant is approved as a standard business sponsor.
Statement made on 22 March 2017 at 12:33pm

CATCHWORDS
Migration – Standard business sponsor – Training benchmarks – Previously approved as business sponsor – Evidence provided – Training requirements met
LEGISLATION
Migration Act 1958, s 140E

Migration Regulations 1994, r 1.13, r 2.59(d), r 2.60S, r 2.61, IMMI 13/030
STATEMENT OF DECISION AND REASONS
APPLICATION FOR REVIEW

This is an application for review of a decision made by a delegate of the Minister for Immigration on 14 January 2016 not to approve the applicant as a standard business sponsor.
The applicant, MEDIQ Accountants Pty Ltd, applied for approval as a standard business sponsor under s.140E of the Migration Act 1958 (the Act) and r.2.61 of the Regulations on 3 November 2015. The delegate decided not to approve the application on the basis that the applicant did not satisfy r.2.59(d) of the Migration Regulations 1994 (the Regulations) because the delegate was not satisfied that the applicant met the applicable training benchmarks set out in written instrument IMMI 13/030.
The Tribunal received a review application from the applicant on 24 January 2016, which was signed on its behalf by its director, Mr Ravi Agarwal. He provided updated documents evidencing payments made by the applicant on training its staff in 2015.
On 25 January 2017, the matter was constituted to a Tribunal Member. On 7 February 2017, the Tribunal wrote to Mr Agarwal to invite him to attend a hearing on 7 March 2017 on behalf of the applicant. The Tribunal requested that, prior to the hearing, he provide information demonstrating that the applicant was currently operating a business, that it had recent expenditure that met Training Benchmark A or B as set out in IMMI 13/030 (a copy of which was provided for reference) and (if previously approved as a standard business sponsor) that it had met its previous training undertakings.
The applicant appeared by telephone conference before the Tribunal on 7 March 2017 to give evidence and present arguments. The applicant told the Tribunal that he had sent a number of documents that morning by email to the Tribunal providing recent evidence of the applicant’s expenditure on training its Australian employees. He confirmed that all employees of the company are either Australian citizens or permanent residents, and he undertook to provide a statutory declaration to that effect and an organisational chart listing current employees. In addition, he undertook to provide evidence of the payroll and training expenditure for the 2012/13 financial year, when the applicant had previously been approved by the Department as a standard business sponsor.
Following the hearing, the Tribunal received the following additional documents for the applicant from Mr Agarwal:
·most recent Business Activity Statements (BAS) for the business and payment slip from most recent one in December 2016;
·evidence of training provided to the following employees, including payment confirmation, in the last 12 months:
oBDO Training for an Australian employee to attend 2016 Business & Taxation Forum ($295 paid on 31 August 2016);
oAccounting Client Service Training for all Australian employee accountants provided by Training Beyond Accounting ($660 paid 29 May 2016);
oCPA Australia training for an Australian employee ($1,020 paid 24 June 2016);
oDecinar Leadership Training for all Accounting Managers ($1,100 paid 2 October 2016 and $1,100 paid 23 January 2017); and
oMaster Wealth Control training for an Australian employee ($6,500 paid 19 October 2016);
·statement from Mr Agarwal noting that the above was still only a small portion of the total the business spent on training and development, as the business also had a Graduate, who was on a salary of $40,000 per year plus superannuation. The Graduate was provided with 2 hours of formal training a week, which amounted to 5% of the work commitment, hence 5% of $40,000 = $2,000. Mr Agarwal also states that they are a professional services business and their people were their only asset, hence they spent substantial amounts of money on training and education to enable growth;
·organisational chart for the applicant showing names and positions of all employees;
·statutory declaration dated 14 March 2017 from Mr Agarwal in which he states that all employees are Australian permanent residents or citizens;
·financial statements for the business for 2012/13 and 2013/14; and
·evidence of training expenditure in the 2012/13 financial year (when the applicant was last an approved standard business sponsor), including:
oProactive Training Asset Allocation Services training provided to Australian employees ($385 paid 13 March 2013);
oProactive Accountants Network ProClient monthly fees ($499 paid per month from February 2013 to January 2014, totalling $5,489);
oSMSF Professionals of Australia Ltd Exam Tutorial Seminar ($239.20 paid 22 February 2013); and
oSocad Systems Pty Ltd Accelerate event ($1,388.48 paid 31 March 2013).
For the following reasons, the Tribunal has decided to set aside the decision under review and substitute a decision approving the applicant as a standard business sponsor.
CONSIDERATION OF CLAIMS AND EVIDENCE
The issue in this case is whether the applicant meets the requirements for approval of as a standard business sponsor in accordance with the criteria in r.2.59 and the additional criteria in r.2.60S, which must be satisfied regardless of when the application for approval was made. For the application to be approved, all the requirements must be met: s.140E(1).
Process for application
Regulation 2.59(a) requires that the applicant has applied for approval as a standard business sponsor in accordance with the process set out in r.2.61. It requires the applicant to make the application for approval in accordance with the approved form, to pay the prescribed fee and, for applications made on or after 1 July 2013, to make the application by using the internet unless the Minister specifies an alternative means.
Based on the material on the Department’s file, the Tribunal is satisfied that the applicant applied in the way required in r.2.61 and finds that the requirement in r.2.59(a) is met.
Not an existing sponsor
Regulation 2.59(b) requires that the applicant is not a standard business sponsor.
The Department’s records indicate that the applicant was previously approved as a standard business sponsor between 31 March 2012 and 31 March 2015, but is not currently an approved standard business sponsor.
Given the above, the Tribunal finds that the requirement in r.2.59(b) is met.
Lawfully operating business
Regulation 2.59(c) requires that the applicant is lawfully operating a business either in or outside Australia.
The applicant has provided recent BAS and an organisational chart listing its employees. The Tribunal has taken this evidence into account, along with Mr Agarwal’s oral evidence at hearing, the fact that the applicant company is registered with ASIC, and information on the applicant’s website ( from which it is satisfied that the applicant is lawfully operating a business in Australia at the time of the Tribunal’s decision. The business specialises in providing accounting and financial advice to medical professionals.
Given the above, the Tribunal finds that the requirement in r.2.59(c) is met.
Training benchmarks
Regulations 2.59(d) and (e) contain alternative criteria relating to training requirements an applicant must satisfy if the applicant is lawfully operating a business in Australia depending on how long the applicant has been trading.
If the applicant has traded in Australia for 12 months or more, the applicant must meet the benchmarks for the training of Australian citizens and Australian permanent residents specified in a written instrument: r.2.59(d). The relevant instrument is IMMI 13/030. If the applicant has traded for less than 12 months, the applicant must have an auditable plan to meet the benchmarks specified in that relevant instrument: r.2.59(e).
The evidence before the Tribunal is that the applicant has been trading in Australia for more than 12 months. Therefore, it must meet the requirements of Training Benchmark A or Training Benchmark B as specified in IMMI 13/030. Under Training Benchmark A, the applicant is required to demonstrate recent expenditure, by the business, to the equivalent of at least 2% of the payroll of the business, in payments allocated to an industry-training fund that operates in the same industry as the business.
To satisfy Training Benchmark B an applicant must show recent expenditure, by the business, to the equivalent of at least 1% of the payroll of the business, in the provision of training to employees of the business.
The Tribunal is satisfied from the organisational chart and Mr Agarwal’s oral evidence and statutory declaration of March 2017 that the current employees of the business are either Australian citizens or permanent residents, including a Graduate.
The payroll of the business, according to its BAS statements for the period 1 July 2015 to 30 June 2016, was $489,994, 1% of which is $4,900 (rounded up). During that period, the Tribunal is satisfied that the applicant spent $9,346 on training for Australian employees (as evidenced by invoices and payment confirmations relating to MYOB training in 2015, Accounting Client Service Training for all Australian employee accountants provided by Training Beyond Accounting, and CPA Australia training for an Australian). This amount is greater than 1% of the applicant's payroll for the relevant period.
The payroll of the business for the period 1 July 2016 to 30 September 2016, based on its BAS statements, was $148,252, 1% of which is $1,482. During that period, the Tribunal is satisfied that the applicant spent in excess of this amount training its Australian employees, taking into account its current employment of a Graduate accountant (with annual training costs calculated at 5% of his annual salary of $40,000 ($2,000 per year, or $500 per quarter), plus $1,100 paid to Decinar Leadership Training for all Accounting Managers in October 2016 (totalling $1,600 for that quarter).
The Tribunal is satisfied that this constitutes reliable evidence of the applicant’s recent training expenditure in relation to its Australian staff.
On behalf of the applicant, Mr Agarwal gave detailed and credible evidence that the business is committed to ongoing professional development of its Australian accounting staff.
On the basis of this information, the Tribunal is satisfied the applicant meets Training Benchmark B.
As the applicant is required to meet r.2.59(d) and given the above findings, the Tribunal finds that the requirements in r.2.59(d) are met.
Written attestation and declaration
Regulation 2.59(f) only applies if the applicant is lawfully operating a business in Australia. It requires that the applicant has attested in writing, that the applicant has a strong record of, or demonstrated commitment to, employing local labour; and has declared in writing that the applicant will not engage in discriminatory recruitment practices (as defined in r.2.57(1)).
The Tribunal is satisfied that Mr Agarwal made such a declaration in the sponsorship approval application form, and finds that the requirement in r.2.59(f) is met.
Adverse information
Regulation 2.59(g) requires 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 such information. The terms ‘associated with’ and ‘adverse information’ are defined in r.1.13A and 1.13B.
The Tribunal has reviewed the Department's records, including its Integrated Client Services Environment (ICSE) and has found nothing to indicate that there is any adverse information known to Immigration about the nominator or person associated with the nominator.
Given the above, the Tribunal finds that the requirement in r.2.59(g) is met.
Offshore business
Regulation 2.59(h) applies if the applicant is lawfully operating a business outside, and not in, Australia. In these cases, the applicant must be seeking approval as a standard business sponsor in relation to a holder of, or applicant or proposed applicant for, a Subclass 457 visa. The applicant must also intend for that person to establish, or assist in establishing, on behalf of the applicant, a business operation in Australia with overseas connections, or to fulfil, or assist in fulfilling, a contractual obligation of the applicant.
The Tribunal is satisfied that r.2.59(h) is not relevant in this case, as there is no evidence to indicate that the applicant is operating a business outside Australia.
Number of nominees
Regulation 2.59(i) requires the applicant to have provided to the Minister the number of persons who the applicant proposes to nominate during the period of the applicant’s approval as a standard business sponsor.
This number must be reasonable, having regard to the information provided to the Minister, or alternatively, if the Minister proposes another number, the applicant must have agreed in writing to nominate no more than the other number of persons during the period of the approval as a standard business sponsor.
The Department’s records indicate that the applicant has proposed 1 nominee, and the Tribunal considers that this is reasonable. There is no evidence that the Minister has proposed another number.
Given the above, the Tribunal finds that the requirement in r.2.59(i) is met.
Training requirements
Regulation 2.59(j) applies only where the applicant has previously been a standard business sponsor. In these cases, the applicant must have fulfilled any commitments made relating to meeting its training requirements and must have complied with the applicable obligations relating to the training requirements during the applicant’s most recent approval as a standard business sponsor, unless it is reasonable to disregard this.
As noted above, the Department’s records indicate that the applicant was previously an approved standard business sponsor between 31 March 2012 and 31 March 2015, and Mr Aggarwal confirmed this at hearing.
On the basis of the evidence before it, the Tribunal is satisfied that the applicant has fulfilled its commitments to meet its training requirements and has complied with the applicable obligations relating to the training requirements during the applicant's most recent approval as a standard business sponsor. In reaching this conclusion, the Tribunal gives weight to the fact that the Department found that the applicant met the applicable training benchmarks when it approved the applicant as a standard business sponsor in 2012, and that there is no indication (until the current refusal of its new sponsorship application) that it did not comply with its training obligations in the period March 2012 to March 2015 (such as a Departmental investigation or sanction). The Tribunal gives further weight to the additional documentary evidence provided by the applicant in relation to payroll expenditure and staff training costs in the 2012/13, 2013/14 and 2014/15 financial years and the oral evidence of Mr Agrawal that the business is committed to ongoing continuing professional development of its Australian accounting staff.
Given the above, the Tribunal finds that the requirement in r.2.59(j) is met.
Additional criteria
Regulation 2.60S provides for additional criteria that must be met for the sponsorship to be approved. A copy of the criteria, as relevant to this case, is attached to this decision.
Broadly speaking, to meet r.2.60S the Tribunal must be satisfied that the applicant has not taken any action, or sought to take any action that would:
·result in the transfer of costs to another person, or another person paying costs, associated with the applicant becoming an approved sponsor; and
·result in the transfer of costs to another person, or another person paying costs, that relate specifically to the recruitment of a non-citizen for the purposes of a nomination: r.2.60S(2)
The Tribunal must also be satisfied that the applicant has not recovered, or sought to recover from another person, costs associated with the sponsorship approval, or costs that relate specifically to the recruitment of a non-citizen for the purposes of a nomination: r.2.60S(3)
These requirements may however be disregarded if the Tribunal considers it reasonable to do so: r.2.60S(4).
There is no suggestion in this case that the applicant has taken, or has sought to take, any action that would result in transferring its sponsorship costs and/or the costs of recruitment of a non-citizen, to another person.
Given the above, the Tribunal finds that the additional criteria in r.2.60S are met.
For the reasons given above, the Tribunal finds that the applicant meets all the applicable criteria prescribed in the Regulations to be approved as a standard business sponsor. The Tribunal finds that, consistent with Department policy, the term of approval as a standard business sponsor is 5 years.
DECISION
The Tribunal sets aside the decision not to approve the application and substitutes a decision that the applicant is approved as a standard business sponsor.
Alison Mercer
Member

ATTACHMENT - Extracts from the Migration Regulations 1994
2.59      Criteria for approval as a standard business sponsor
For subsection 140E (1) of the Act, the criterion that must be satisfied for the Minister to approve an application by a person (the applicant) for approval as a standard business sponsor is that the Minister is satisfied that:
(a)the applicant has applied for approval as a standard business sponsor in accordance with the process set out in regulation 2.61; and
(b)the applicant is not a standard business sponsor; and
(c)the applicant is lawfully operating a business (whether in or outside Australia); and
(d)if the applicant is lawfully operating a business in Australia, and has traded in Australia for 12 months or more — the applicant meets the benchmarks for the training of Australian citizens and Australian permanent residents specified in an instrument in writing made for this paragraph; and
(e)if the applicant is lawfully operating a business in Australia, and has traded in Australia for less than 12 months — the applicant has an auditable plan to meet the benchmarks specified in the instrument, in writing, made for paragraph (d); and
(f)if the applicant is lawfully operating a business in Australia:
(i)   the applicant has attested, in writing, that the applicant has a strong record of, or a demonstrated commitment to, employing local labour; and
(ii) the applicant has declared, in writing, that the applicant will not engage in discriminatory recruitment practices; and
(g)either:
(i)       there is no adverse information known to Immigration about the applicant or a person associated with the applicant; or
(ii)      it is reasonable to disregard any adverse information known to Immigration about the applicant or a person associated with the applicant; and.
(h)if the applicant is lawfully operating a business outside Australia and does not lawfully operate a business in Australia – the applicant is seeking to be approved as a standard business sponsor in relation to a holder of, or an applicant or proposed applicant (the visa applicant) for a [Subclass 457 visa], and the applicant intends for the visa holder or visa applicant to:
(i)       establish, or assist in establishing, on behalf of the applicant, a business operation in Australia with overseas connections; or
(ii)      fulfil, or assist in fulfilling, a contractual obligation of the applicant.
(i)the applicant has provided to the Minister the number of persons who the applicant proposes to nominate during the period of the applicant’s approval as a standard business sponsor, and:
(i)       the proposed number is reasonable, having regard to the information provided to the Minister; or
(ii)      if the Minister proposes another number of persons as part of considering the application — the applicant has agreed, in writing, to nominate no more than the other number of persons during the period of the applicant’s approval as a standard business sponsor; and
(j)if the applicant has previously been a standard business sponsor:
(i)       the applicant:
(A)fulfilled any commitments the applicant made relating to meeting the applicant’s training requirements during the period of the applicant’s most recent approval as a standard business sponsor; and
(B)complied with the applicable obligations under Division 2.19 relating to the applicant’s training requirements during the period of the applicant’s most recent approval as a standard business sponsor; or
(ii)      it is reasonable to disregard subparagraph (i).
[Note …]
2.60S Additional criteria for all classes of sponsor — transfer, recovery and payment of costs
(1)For subsection 140E(1) of the Act, the criteria in this regulation are in addition to the criteria in regulations 2.59 to 2.60M.
(2)The criteria that must be satisfied for the Minister to approve an application by a person (the applicant) for approval as a sponsor mentioned in any of regulations 2.59 to 2.60M include a criterion that the Minister is satisfied that:
(a)the applicant has not taken any action, and has not sought to take any action, that would result in the transfer to another person of some or all of the costs, including migration agent costs, associated with the applicant becoming an approved sponsor; and
(b)the applicant has not taken any action, and has not sought to take any action, that would result in another person paying to a person some or all of the costs, including migration agent costs, associated with the applicant becoming an approved sponsor; and
(c)the applicant has not taken any action, and has not sought to take any action, that would result in the transfer to another person of some or all of the costs, including migration agent costs, that relate specifically to the recruitment of a non-citizen for the purposes of a nomination under subsection 140GB(1) of the Act; and
(d)the applicant has not taken any action, and has not sought to take any action, that would result in another person paying to a person some or all of the costs, including migration agent costs, that relate specifically to the recruitment of a non-citizen for the purposes of a nomination under subsection 140GB(1) of the Act; and
(e)…
(f)....
(3)The criteria that must be satisfied for the Minister to approve an application by a person (the applicant) for approval as a sponsor mentioned in any of regulations 2.59 to 2.60M include a criterion that the Minister is satisfied that:
(a)the applicant has not recovered from another person some or all of the costs, including migration agent costs:
(i)       associated with the person becoming an approved sponsor; or
(ii)      that relate specifically to the recruitment of a non-citizen for the purposes of a nomination under subsection 140GB(1) of the Act; and
(b)the applicant has not sought to recover from another person some or all of the costs, including migration agent costs:
(i)       associated with the person becoming an approved sponsor; or
(ii)      that relate specifically to the recruitment of a non-citizen for the purposes of a nomination under subsection 140GB(1) of the Act; and
(c)…
(d)…
(4)However, the Minister may disregard a criterion referred to in subregulation (2) or (3) if the Minister considers it reasonable to do so.
NB: the legislation extracted above does not include criteria directed at persons who are sponsoring a Subclass 402, 416 or 488 applicant.

[2017] AATA 437

22 March 2017

Key Legal Topics

Areas of Law

Immigration

Administrative Law

Legal Concepts

Judicial Review

Statutory Construction

Procedural Fairness