NUTRITIONAL CHOICE AUSTRALIA PTY LTD (Migration)

[2016] AATA 4990

NUTRITIONAL CHOICE AUSTRALIA PTY LTD (Migration) [2016] AATA 4990 (16 March 2016)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Nutritional Choice Australia Pty Ltd

CASE NUMBER:  1500149

DIBP REFERENCE(S):  BCC2014/2408060 BCC2014/3194921

MEMBER:Miriam Holmes

DATE:16 March 2016

PLACE OF DECISION:  Melbourne

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

Statement made on 16 March 2016 at 5:00pm

CATCHWORDS

MIGRATION – Nomination of an occupation (employer nomination) – occupation of Sales and Marketing Manager – approved as a standard business sponsor – genuine position – qualitative analysis of the position duties – decision under review affirmed

LEGISLATION

Migration Act 1958, Division 3A, s 140
Migration Regulations 1994, r 2.72, 2.73

CASES

Cargo First Pty Ltd v MIBP [2015] FCCA 2091

Any references appearing in square brackets indicate that information has been omitted from this decision pursuant to s378 of the Migration Act 1958 and replaced with generic information.

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

1. This is an application for review of a decision made by a delegate of the Minister for Immigration on 20 December 2014 to refuse to approve the applicant’s nomination under s.140GB of the Migration Act 1958 (the Act) and r.2.72 of the Migration Regulations 1994 (the Regulations).

2. The applicant applied for approval on 25 November 2014 for a position for the nominated occupation of Sales and Marketing Manager. A nomination of an occupation for a Subclass 457 visa is made under s.140GB of the Act and r.2.73 of the Regulations. Regulations 2.72(3) to (12) prescribe the criteria that must be satisfied for the Minister to approve a nomination by a person. These criteria are extracted in the attachment to this decision. For visa applications made from 23 November 2013, additional criteria are specified in s.140GBA.

3. The delegate decided not to approve the nomination on the basis that the applicant did not satisfy r.2.72(10)(f) because the delegate was not satisfied that the position associated with the nomination is genuine.

4. Mr Guo, in his capacity as General Manager, appeared on behalf the applicant before the Tribunal on 1 March 2016 to give evidence and present arguments. The Tribunal also received oral evidence from  Yunling Huang, who is the applicant's nominee for the nominated position. The Tribunal hearing was conducted with the assistance of an interpreter in the Mandarin and English languages.

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

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

   CONSIDERATION OF CLAIMS AND EVIDENCE

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

   Nominator is a standard business sponsor or party to a work agreement

8. Regulation 2.72(4) requires that the person making a nomination is either a standard business sponsor or a party to a work agreement other than a Minister.

9. The Tribunal finds that the applicant was an approved standard business sponsor between 15 December 2014 and 15 December 2015. At the hearing, the applicant’s representative indicated that recently a new application had been lodged with the Department for the applicant to be approved as a standard business sponsor. The representative stated this process may take another 2 to 4 weeks. No application was made to the Tribunal seeking a postponement. In light of the Tribunal’s findings below regarding the genuineness of the position, the Tribunal decided not to defer making a decision to await the outcome of the application as a standard business sponsor.

10. On the information available, the Tribunal is not satisfied that the applicant is a standard business sponsor or a party to a work agreement. Therefore the Tribunal is not satisfied that the requirements in 2.72(4) are met.

    Position must be genuine

11. Regulation 2.72(10)(f) requires that the position associated with the nominated occupation is genuine.

12. The Tribunal notes that in Cargo First Pty Ltd v MIBP [2015] FCCA 2091 the Court considered the meaning of this clause. The Court held;

    With those matters in mind, and in particular, the purpose of div.3A of the Act, what is required by sub-reg.2.72(10)(f) is a determination of not only whether or not the position in question is genuine in that it exists but also whether it really is what it purports to be. The second part of the determination necessarily requires a qualitative analysis of the position and a comparison of that with the occupation which has been nominated by the proposed sponsor. If it were otherwise, the scheme envisaged for the protection of the Australian workforce could be readily undermined simply by describing one thing as being another. In light of this, the task of the Minister (and of the Tribunal on review of the Minister’s decision) is not simply to determine whether the duties relevant to the position include the majority of those referred to in the ANZSCO in respect of the nominated occupation.

13. The Tribunal finds that the applicant has nominated a position for the occupation of Sales and Marketing Manager. This occupation was set out in the nomination application, although the relevant ANZSCO Code number was not listed in the nomination application. The nominated person was Yunling Huang.

14. The delegate was not satisfied that the nominated position was a full time position, noting that the roles was to supervise 3 contractors and only 1 proposed future employee (America Market specialist). Further the delegate noted that the position would be reporting 2 Directors, but the organisation was small and it would be expected that Directors would have a hands on role and not require a full time Sales and Marketing Manager. Further in the profit and loss statement lodged with the sponsorship application the amount of expenses directed to marketing was $10,000 – which would indicate the business would not be undertaking sales and marketing campaigns and strategies of such a high level of complexity and require a full time sales and marketing manager. 

15. For the reasons set out below, the Tribunal is not satisfied that the position associated with the nominated occupation is genuine. In short, the Tribunal considers that the tasks currently being performed by the nominee in the nominated occupation of Sales and Marketing manager are substantially different to the tasks contained in ANZSCO.  Further, after having regard to the lack of actual production and the size of the business, the salary for the position and the relationship between the applicant, the nominee and Mr Guo, the Tribunal is not satisfied that there is a genuine position for a Sales and Marketing Manager.

16. At the outset the Tribunal notes that it did not find the evidence of Mr Guo and the nominee persuasive or compelling. At times, Mr Guo simply refused to answer questions directly but provided information unrelated to the question – for example when asked when the business commenced. At other times Mr Guo gave information that was confusing and inconsistent, for example the staffing of the business. Further, the evidence was not consistent with the documentary material provided. In addition, as explained below, during the course of the nomination application process and in the period prior to the hearing Mr Guo and the applicant did not disclose the nature of the relationship between the applicant, the nominee and Mr Guo. It was only disclosed after questioning by the Tribunal. In this context, the Tribunal had significant reservations regarding the reliability of the evidence when assessing whether the position associated with the nominated occupation is genuine. 

17. The Tribunal finds that the nominated occupation is described in ANZSCO under the Unit Group Advertising, Public Relations and Sales Manager.  Under the Unit Group the tasks listed for this general unit group is described as follows:

    Tasks Include:

    odirecting the development and implementation of sales strategies and setting sales targets in order to maximise an organisation's sales and customer loyalty

    odirecting the development and implementation of strategies to promote an organisation's goods and services to as many people as possible

    odirecting the development and implementation of strategies to generate increased consumption of an organisation's goods and services through the creation and reinforcement of 'brand image' or 'brand loyalty'

    odirecting the development and implementation of strategies to build and maintain an organisation's image and reputation with its customers, investors and the wider public

18. In ANZSCO the occupation of Sales and Marketing Manager is Code 131112 and it describes the  following duties

    -Plans, organises, directs, control and co-ordinates the sales and marketing activities within an organisation.

19. In assessing whether the position associated with the nominated occupation is genuine the Tribunal had regard to the size and actual operations of the company, the evidence pertaining to the duties of the nominee who is said to be performing the occupation in her position, the salary, and the relationship between the nominee and the applicant.

    Relationship between the nominee and the applicant and the actual operations of the applicant

20. The applicant, Nutritional Choice Australia Pty Ltd (hereafter referred to as NCA) was registered as a company on 7 August 2014. The Directors of the Company at the time of registration were Mr Guo and Ms Huang (the nominee). The sole shareholder at the time of company registration was IUIM Pty Ltd. IUIM Pty Ltd has one director Mr Guo and the sole shareholder is the nominee.  More recently, in January 2016, the nominee became the sole director of NCA and a third person took 4% shares in NCA. This third person is in China and is a friend of the nominee. The nominee, Ms Huang, is the de facto partner of Mr Guo.

21. The Tribunal notes that the personal relationship between Mr Guo and the nominee was not disclosed in any documentation prior to the hearing. Further, the Tribunal notes that the role of the nominee as a director and an investor and shareholder in NCA (the applicant) was not disclosed in any documentation prior to the hearing. These connections between the nominee, the General Manager and NCA were only disclosed after the Tribunal questioned Mr Guo and the nominee at the hearing, after having conducted ASIC searches. The Tribunal found it troubling that these connections were not disclosed at any stage prior to the hearing, despite the lodgement of numerous documents, and raised concerns as to the reliability more generally of the evidence regarding the genuineness of the position of the nominated occupation.

22. According to Mr Guo, the nominee has invested more than $4 million into the establishment and operation of NCA.  Mr Guo stated that all the investment in the new factory is from the nominee and her family. The nominee has also invested additional sums in an earlier business that is no longer operating – that business was known as APD – Mr Guo could not recall the full name of that trading entity.  Mr Guo stated in total the nominee has invested $8 million. The Tribunal has no documentary evidence before it establishing that the nominee and her family have invested $4 million in the business. Although the representative did provide, during the course of the hearing, part of a bank statement for an account with Westpac (account unknown) which shows small to moderate credits described as “loans to NCA” from the nominee in January and February 2016. There are also credits of interest form other accounts and substantial credits from Nutritional Choice from NCA Bank of China or BOC.   The statements also show a range of withdrawals by the nominee, for example a withdrawal for traffic fines, rental and wages. The Tribunal finds that the nominee has invested substantial sums into NCA and she is the primary investor in the business since at least August 2014. More recently, according to the nominee, the third party investor has invested approximately RMB1 million into NCA (about $210,000).

23. NCA plans to manufacture milk based powder products, including infant milk formula, for distribution in Australia and Asia, including China. Over the course of the nomination application process and review application process various documents have been provided setting out that the company is only recently established and is due to commence sales of its product shortly. For example, in the original business plan the projected output was 10 million cans per annum. In addition other documents were provided setting out plans to sell powder milk on a large scale. For example a distribution agreement with Shanghai Xinji Trading Ltd dated 13 January 2015 to distribute the products in China included projected KPIs of 400,000 units[1] in 2015 and 550,000 units in 2016. However, as Mr Guo stated at the hearing – no product has in fact been distributed as at 1 March 2016. Mr Guo stated they hope to start production soon. The Tribunal noted that despite various representations being made regarding the operations of the business since the nomination application was lodged in November 2014 and the company commencing in August 2014, to date there has still been no production and actual distribution of any milk powder products.

    [1] 900g cans as described in Schedule 1 to the agreement.

24. Mr Guo stated that the delay was due to not obtaining export permission from China to export the goods to China. Mr Guo stated that to obtain approval they now required officials from the Chinese government to inspect the plant before approval can be given. Mr Guo said that that they needed to get permission from China to export and out of the blue an official from China wanted to examine the business. The nominee gave evidence that this requirement to visit the manufacturing plant was a new requirement. They were hopeful that NCA would be given approval soon. Mr Guo stated that they believe someone from China will visit soon and that China will establish a new list of approved importers and they are confident they will be on the list. The nominee stated that they were however able to sell online to China. When the Tribunal asked about why this had not occurred, the nominee explained that various Departments in China were working on a website and had been unable to lodge an internet platform. Overall, the Tribunal was not persuaded that the delays in being able to produce and sell milk powders in Australia or other countries overseas was due to the lack of China’s approval of the export of the infant milk formula to China or the launch of a website in China. The Tribunal had real reservations that as no product had been made for the purposes meeting any sales in the 18 months since the business started that the product will be manufactured at all by NCA in the short term or long term. The Tribunal considered that since the nomination application was lodged the applicant had not commenced any manufacture of the products for sale and the Tribunal therefore had significant reservations that the position associated with the nominated occupation is genuine.

    The tasks of the position associated with the nominated occupation

25. The Tribunal considered the evidence available as to the actual duties currently being performed by the nominee as the Sales and Marketing Manager. It was clear from the evidence of Mr Guo and the nominee that the current duties are much broader than the duties of the occupation of Sales and Marketing Manager as described in ANZSCO.

26. The Tribunal had regard to the position description, the contract of employment and the marketing materials that were provided to the Tribunal. The marketing materials included power point presentations and branding for products, amongst other things.

27. The oral evidence of Mr Guo was that the nominee has undertaken a range of duties in relation to the operation of NCA. He explained through the course of his evidence as follows:

    -Mr Guo was authorised by the Board to give evidence to the Tribunal on behalf of NCA, the Board currently comprises the nominee – the sole director. It was the nominee who authorised him to speak on behalf of the applicant;

    -The nominee is the decision-maker for the business. When the Tribunal asked Mr Guo to clarify what decisions the nominee makes, Mr Guo replied that the nominee invests money and decides how much she would like to invest. The nominee needs to approve the purchase of equipment and investment planning. The nominee approved the lease and rental for the company premises. The nominee gave the final approval for the purchase of equipment. The nominee relies on the expertise of Mr Guo and the engineer and they make recommendations, and if the equipment is appropriate, she decides to purchase the equipment ;

    -Since August 2014, the role of the nominee has been as the investor and she is in charge of sales. He stated that the nominee does not know much about technical production.

    -The Board (now the nominee, previously the nominee and Mr Guo) manages the budget. Mr Guo and the engineer submit the proposal to the Board and if the Board considers it reasonable and doable then the Board will allow the amount to be spent. In the past the Board comprised Mr Guo and the nominee, but the nominee is the investor and she definitely has a say.

    -The nominee is responsible for sales and marketing. The nominee is the only person employed for sales and marketing. According to Mr Guo, the sales of product are more important than manufacture, as sales are where the value of the product is manifested. The nominee is familiar with the different channels of sale in China; The nominee is very familiar with Chinese markets and Asian market channels;

    -The nominee undertakes market research and product research. The nominee provides information about how to position the product and provide information regarding market demand. The nominee needs to design the product and needs to contact potential customers;

    -The nominee is in the process of negotiating with local companies – a giant in the industry to expand sales and expand channels in Australia and to do business internationally;

    -The nominee has done a lot of work before the factory was built. She met clients and undertaken market research. The nominee has undertaken work since around 2012. The nominee managed to accumulate lots of resources. The nominee has undertaken years of work for the business.

    -The nominee was personally involved in the planning to start the business, and prior to registration of the company the nominee put in work.

    -The nominee cannot carry out some things, without Mr Guo’s consent. For example if a client has specific requirements – such as a client asks to change the measurements of a tin, this will affect the quality of the product and the client tries to ask for a lower price – he cannot agree to that.

    -The nominee is negotiating with a Chinese company and is negotiating with Norco Foods. They are looking at making a brand together – Norco Foods sell to Woolworths and supermarkets but have no channels to China. Norco Foods wants to sell through NCA.

    -The nominee has asked Mr Guo and the engineer to plan ahead for stages three and four for the business. Mr Guo has completed the second stage planning for the factory and this will require $10 million. If the nominee approves the second stage it will go ahead.

    -The nominee is unique and knows a lot of operations in China, and she knows government officials and she needs to be in good relationships with large food groups in China and she has all the connections. She also has established good relations with the Chinese government.

1. The Tribunal considered the evidence of Mr Guo demonstrated that the nominee has been involved in the planning and establishment of the business and has taken on a wide range of duties for the company to operate, and has not confined her duties to sales and marketing duties or activities.

2. The Tribunal also took into account the evidence regarding the recent change in the directorship of NCA whereby the nominee became the sole director, effective from 11 January 2016. Mr Guo and the nominee both gave evidence that they recently were in negotiations with [Business 1] about NCA manufacturing [Brand 1] Skim milk and full cream milk powder for [Business 1]. They both stated that as part of the contractual negotiations for the deal [Business 1] required that NCA directors give a personal guarantee to [Business 1]. The nominee gave evidence, with which Mr Guo agreed, that the nominee decided that she would stay on the Board and ask Mr Guo to leave as a director because most of the investment is from the nominee. The Tribunal considered this decision by the nominee regarding the composition of the Board represented the extent of the control of decision-making by the nominee in relation to the operation of the business and that her role was not confined to a sales and marketing role.

3. The Tribunal took into account the nominee’s evidence regarding her role. She stated that her role is to report to the General Manager and her major responsibility is marketing. She stated her main duties involve product development, marketing sales and reporting to the General Manager. She stated that she works with the administration department, the production department, quality assurance and warehouse. She said her role has been in the marketing and sales department. She confirmed she is the sole director and that she and her family had invested money in the business. The small shareholder invested about $210, 000 – a family friend.  In relation to which factory to lease the nominee stated that she went to Mr Guo for advice and Mr Guo knows more about planning and development.  She said they do not hold Board meetings. The nominee stated that Mr Guo decides which employees. She stated that she is in charge of external duties – negotiating with clients and making calls and Mr Guo is good at managing employees. She said she put the nominee in charge of the internal operations of the business. The nominee referred to her role in negotiations with Norco Foods to distribute products and distributions through drug stores and other outlets in China and looking to sales in Malaysia and SE Asia and the deal with the Shanghai Xinji Trading Ltd. 

4. In addition, the nominee gave evidence that in relation to the proposed agreement with [Business 1] she “run” the numbers, and she realised they would not make a profit to make the products as NCA would need to employ 5 more staff. So they did not reach an agreement with [Business 1]. The nominee stated that she analysed the labour costs and they would need 5 additional people. She said this was from the perspective of the production line. The nominee also stated that she considered the sales and marketing perspective. She noted that [Business 1] is [a prominent player] in the dairy business in Australia. From NCA’s research, they found that there is a substantial amount of counterfeit product using the [Brand 1] brand and she considered in the long term, that with such a large amount of counterfeit product in the market place, manufacturing for [Business 1] would damage NCA’s reputation and delay the promotion of NCA’s products. The nominee stated that both the nominee and Mr Guo were present in meetings with [Business 1] and there were visits to the NCA factory and teleconferences. The nominee stated that Mr Guo decided whether to go ahead with the [Business 1] deal, although later said that she acted on Mr Guo’s advice. The Tribunal noted its concern that the nominee made the decision not to proceed with the [Business 1] deal due to her costs analysis, staffing required, the branding impacts and this affected her investment in NCA. The nominee replied that she thinks it was Mr Guo’s decision and she did the negotiation and built the relationship and if the decision was made by her she would not have approached [Business 1] and negotiated with them.  The Tribunal noted that Mr Guo gave evidence that he gives advice to the nominee and the nominee makes the decisions because the nominee is the director. The nominee replied that she put him in charge of the internal operations of the business.    Later, the nominee stated that she is in charge of the external duties such as negotiating with clients and making calls and Mr Guo is good at managing employees and Mr Guo is more visionary than the nominee – Mr Guo is better in terms of development and planning. The Tribunal observed that Mr Guo plans and the nominee decides because she is the director and investor and the nominee replied that if it involves large sums she will make the decision, although day to day Mr Guo runs the business. Mr Guo confirmed that the nominee did the sales and marketing analysis in relation to the [Business 1] proposal. In relation to the analysis of staffing the nominee stated that that they did have a discussion – the nominee costed the proposal and they discussed it together and the staff required for the production and eventually “we” decided not to go ahead with the plan.

5. The Tribunal finds on the evidence that the nominee and Mr Guo are consistent in that they were both involved in discussing the viability of the proposed deal with [Business 1] and that the nominee did the analysis regarding the sales, marketing, production and staffing aspects and they discussed the merits of the proposal and ultimately decided after discussion that they would not proceed with the [Business 1] deal. The Tribunal considers this evidence demonstrates that the nominee has taken a much more active role in the strategic decision –making of the business and undertaken an analysis of the profitability of the proposal outside the duties of a sales and marketing manager. The Tribunal considers this demonstrates that the position nominated as a Sales and Marketing Manager occupation includes duties substantially different to that of a sales and marketing manager.  

6. The Tribunal notes that in the Certification of Registration from the Department of Agriculture, Fisheries and Forestry dated 24 February 2015 under the heading “Persons who manage or control” the nominee and Mr Guo are listed. Mr Guo confirmed they were both listed and that initially they did not have many people so listed the investor and manager of the factory (himself) on the registration. It is clear that the applicant has represented to the Department for the purposes of the registration that the nominee has a management and control function. This is consistent with Mr Guo’s evidence and is also consistent with her role as a Director and owner of NCA.

7. The Tribunal notes that the nominee has also signed various documentation which indicates that she has responsibilities more than that of a Sales and Marketing Manager.   The nominee is a signatory to the lease for NCA – wherein NCA sublets the premises from the tenant, she is also a signatory to the distribution agreement between the business and Shanghai Xinji Trading Ltd. Mr Guo stated that the nominee signed the agreement in her capacity as Sales Manager, however it is apparent from the documentation that the nominee signed the documentation in her capacity as Director.

8. A letter dated 11 June 2015 from Fonterra was also addressed to the nominee and Mr Guo. Mr Guo confirmed that Fonterra is the supplier of the raw materials for the applicant to produce its products. Mr Guo stated that Fonterra had also visited the factory, the applicant is listed as a preferred customer and that Fonterra will support the applicant.  The Tribunal queried why Fonterra (a supplier, not customer) would be writing to the nominee. Mr Guo replied that some clients require that the applicant ensures that they use good products. The Tribunal noted that Fonterra is a supplier and not a client and Mr Guo responded that the primary concern of the clients is the source of the materials and the quality of the product and to make the milk powder they need raw materials. The Tribunal did not consider that a Sales and Marketing Manager would usually have a role in liaising with suppliers and the Tribunal considered the involvement by the nominee with the supplier for production indicates that the nominee’s role is broader than that of a Sales and Marketing Manager.  

9. In relation to the reporting, Mr Guo stated that the nominee reported to him. Mr Guo stated that he reported to the Board. The Board currently comprises the nominee. The Tribunal considers that the current reporting arrangements in reality are that the General Manager does not oversee the duties of the Sales and Marketing Manager, but rather the General Manager reports to the nominee. Again this indicates that the nominated position has tasks substantially different to the tasks of a Sales and Marketing Manager. 

10. Mr Guo stated that the nominee is critical to the business due to her efforts and without her the business will not have as many customers or potential customers and she has placed the business in a fantastic market position. He later stated that without a sales manager they could not do business and would be forced to close and return to China.

11. When the Tribunal commented that it was concerned that the nominee’s role is broader than undertaking the duties of a Sales and Marketing Manager, Mr Guo agreed and said “indeed, that is the case”.  Later when the Tribunal discussed this issue and whether the role of the nominee involved duties broader than the ANZSCO occupational duties he provided the following information. Mr Guo stated that there are two aspects to the nominee’s role. Firstly as an investor she has certain obligations and oversees the whole operation as this is within her power. Then her second role is in the sales department – where the nominee does a lot more than anyone else. He stated that in this role she has done a lot more than she is required to do. He stated that they tried to outsource sales to a local company but this was not satisfactory and they did not achieve what they expected.  He stated that she is playing different roles and one investor and one as sales manager and the nominee does things that other people consider too difficult because it affects her business in general and so she has to take it up. He stated that as sales manager the nominee needs to know everything about the market, needs to gather data and analyse customers so the business can position itself. He stated that she needed to study other competitor’s products and she negotiates for deals to happen. He also referred to her role in contact and working with [Business 1]. Mr Guo commented that the nominee has done a fantastic job in charge of sales and has sometimes gone beyond the scope of that role. The Tribunal queried whether the applicant was the nominee’s business – she has invested the money and is a director and Mr Guo replied that is right and that is why the nominee goes beyond her job as Sales Manager and it is perfectly reasonable.

12. The Tribunal finds that the range of tasks undertaken by the nominee are much broader than the tasks listed in ANZSCO for the occupation of Sales and Marketing Manager.  These tasks include responsibilities associated with being a director of NCA and an investor in NCA and a general manager of NCA. The Tribunal considers these duties are substantially different to the duties of a Sales and Marketing Manager.  Therefore the Tribunal is not satisfied that the position associated with the nominated occupation is genuine. The Tribunal finds that the position is not what it really purports to be.

    Salary for the position

13. The Tribunal also took into consideration the evidence regarding the proposed remuneration for the nominated position. The contracts of employment provided to the Department and the Tribunal list a salary of $68,000.

14. Mr Guo told the Tribunal that the nominee was paid in excess of over $50,000 but he could not recall her exact salary. Later he agreed with the nominee’s evidence that she receives a salary of $58,000. Mr Guo also acknowledged that the nominee is reimbursed for car and telephone expenses. The representative also noted that the nominee is provided with a car. Mr Guo stated that the nominee does not receive any directors fees or consultancy fees but does receive an end of year bonus (if a profit is made).The Tribunal notes there is no reference to the car in the contracts of employment provided to the Tribunal. The Tribunal also notes the salary of $58,000 is less than the salary as described in the various contracts of employment provided to the Department and the Tribunal which list the salary for the position at $68,000. Further this salary is less than the average salary for Advertising and Sales Managers, as set out in Job Outlook at $81,224 per annum. The nominee stated that they decided the level of remuneration for the nominee after speaking with the migration agent who advised what the Australian national standard is. Mr Guo stated that the remuneration does not reflect the contribution that the nominee has made to the business and noted that when production commences the nominee pay will be increased to reflect her contribution and will be about the scale of other managers- $70,0000 to $80,000 at least.  The Tribunal had some reservations that the salary currently being paid is at a level commensurate with the nominated occupation of Advertising and Sales Managers. The applicant did provide other documents for comparative purposes – such as payscale which gave an extremely large salary range from $47,873 to $119,995 and job advertisements for Digital Marketing Manager ($50,000 - $70,000), Marketing Manager ($70,000 plus), Marketing Manager ($65,000 to $80,000), Sales & Account Manager ( $60,000 plus), Sales and Marketing Administrator ( $50,000 plus super),Sales, Inventory & Imports Manager ($65,000 plus sales based commission), Sales Manager – Digital ($60,000 - $80,000 plus super plus commission). In light of this evidence and the Outlook information the Tribunal is not satisfied that the proposed salary is commensurate with others employed as Sales and Marketing Managers.  

    Size of the applicant

15. Over the course of the nomination process and the review process various organisation charts have been provided by NCA. As at 1 March 2016, 4 different organisation charts had been provided setting out the business structure and employees.

16. The organisational chart number 1, provided at the time the nomination application was being processed, indicated that there were various departments and numerous employees, at least 20 employees. However a number of the positions at that time 7 positions were vacant and 5 positions were held by contractors (a total of 12 out of 20 positions).  In the application form it notes that there are 4 Australian employees and 1 foreign employee. The organisational charts indicates that the nominated position supervises 3 contractors and an “America Market Specialist (vacant).

17. The organisation chart 2 presented to the Tribunal in June 2015 listed 21 positions, of which 7 were vacant and 4 were contracted and 1 was outsourced. According to organisation chart 2 the nominee in the nominated position supervises 4 contractors, 1 marketing specialist for China, exporters who were outsourced and a vacant customer service manager position.  It was listed as the largest team in the business. This chart had significant differences to the earlier chart provided in November 2014.

18. There were 2 further organisation charts provided to the Tribunal in February 2016. The organisational chart number 3 listed 8 positions, 4 positions were the nominee, Mr Guo, Mr Zhang and Ms Mu (the casual cleaner) and 4 were due to commence on the day of the Tribunal hearing or later. The nominee supervises no staff in organisational chart number 3. The organisational chart number 4 listed 31 positions. The submissions dated 25 February 2016 noted that the original organisational chart provided is redundant as it was based on the business at full capacity. It describes the organisational chart no 4 as the updated proposed organisational chart once the factory is at full capacity.

19. During the hearing, Mr Guo told the Tribunal that when they first set up the factory they had a big number of staff – they had contractors and outsourced the work, since then up until yesterday (March 2016) there were only 4 staff employed by NCA. From 1 March 2016 there will be 7 staff. Mr Guo stated that three of the four staff commenced since the company was founded, and the temporary staff member started a bit later. He said at the commencement there was Mr Guo, the nominee and Shao Ling Zhang (engineer).  Mr Zhang worked for Mr Guo previously at another factory and has been with them since the beginning. The temporary staff member (Ms Mu) had a role and carried out a range of paperwork. The temporary staff member (Ms Mu), started prior to the business operating running errands but was not paid, and then about 1 or 2 months after the start of the business was paid for her duties. Mr Guo stated that the temporary person (Ms Mu) is still with the business but she is considered temporary because she does not come to the office every day. The Tribunal notes that Ms Mu is described in organisational charts 1 as a production assistant and in organisational chart 3 as a cleaner, she is not described in organisational chart number 2.   At the hearing Mr Guo explained that new staff started work for the business on the day of the hearing. He stated they were required for production to commence very soon and they needed people in Quality Assurance and the office.

20. Mr Guo stated that the organisation charts 1 and 2 were not reflective of the actual employees of NCA at that time but it was their intention to recruit staff in accordance with the organisation charts.  He said that they needed to get paperwork ready so they could export to China, but then out of the blue an official from China wants to examine their business. The Tribunal queried whether Ms Joseph, Mr Joseph and Mr Tan ever worked for the business as set out in organisation chart number 1. Mr Guo replied that Mr Paul did work for them but was fired due to misconduct. He made no reference to the other names in the chart. After the Tribunal highlighted Mr Guo’s earlier evidence that only four people had been employed up until 1 March 2016 which was not reflected in the charts, Mr Guo responded that his recollection is not accurate and the business has gone through changes.

21. Later the nominee gave evidence. The nominee stated that before March 2016 there were four employees in the business – herself, Mr Guo, and two other people – the production manager and Engineer, Mr Zhang and a casual Ms Mu. She stated that over the period they have had different employees. They did have a QA Manager Mr P Joseph, however they later used a consultant B Nis for a few months. The nominee said they also had a production assistant, but that person left 2 months ago, and another office person– Stephanie and had various casuals to build the factory.  The nominee was unable to name the other 2 longest employees – one was the QA consultant’s son and one was an Indian national who was injured. Mr Guo stated that he agreed with the nominee’s evidence regarding staffing and stated that he got confused as they brought employees from the old business and his recollection was not accurate.

22. At the end of the hearing, the representative provided a range of PAYG summaries for various persons. There were 9 PAYG summaries – most of the payments were for less than $20,000. Only two employees had a gross salary above $25,000 – Haibin Li and Sholin Zhang (engineer) in the 2015 tax year. This indicates a very small full time workforce and is indicative that there were 2 full time employees and the nominee and Mr Guo working in the business.

1. The Tribunal finds that the applicant has had a very small workforce since October 2014. The Tribunal finds that the full time workforce has been in the vicinity of 4 persons, including the nominee and Mr Guo, for most of the period and other persons have been employed on a casual or short term basis between October 2014 and March 2016. The Tribunal finds that as at March 2016 there were four employees. The Tribunal notes the oral evidence that another three persons started employment on the day of the hearing – although it appears uncertain to the Tribunal that they will be retained for any lengthy period due to the lack of any actual production and distribution of products. The Tribunal considers the small scale of the business over the previous period indicates that the role of Sales and Marketing Manager is not a full time role.  

2. Further, the Tribunal is not satisfied that the position associated with the nominated occupation is a full time position – having regard to the size of the business, the lack of production of any product to date and given the wide range of other duties undertaken by the nominee.

3. After taking into consideration the matters above, the Tribunal is not satisfied that the position associated with the nominated occupation is genuine.

4. For these reasons, the Tribunal is not satisfied that the requirements of r.2.72 (10)(f) are met.

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

   DECISION

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

   Miriam Holmes
   Senior Member

   
   

   ATTACHMENT - EXTRACTS FROM THE MIGRATION REGULATIONS 1994

   2.72 Criteria for approval of nomination — Subclass 457…

   (1)This regulation applies to a person who is:

   (a)a standard business sponsor; or

   (b)a party to a work agreement (other than a Minister);

   who, under paragraph 140GB (1) (b) of the Act, has nominated an occupation in relation to a holder of, or an applicant or a proposed applicant for, a [Subclass 457 visa].

   (2)For subsection 140GB (2) of the Act, the criteria that must be satisfied for the Minister to approve a nomination by a person are set out in subregulations (3) to (12).

   (3)The Minister is satisfied that the person has made the nomination in accordance with the process set out in regulation 2.73.

   (4)The Minister is satisfied that the person is:

   (a)a standard business sponsor; or

   (b)a party to a work agreement (other than a Minister).

   (5)The Minister is satisfied that the person has identified in the nomination the visa holder, or the applicant or proposed applicant for the visa, who will work in the nominated occupation.

   (6)If the person identifies a holder of a [Subclass 457 visa] (the visa holder) for subregulation (5), the Minister is satisfied that the person:

   (a)has listed on the nomination each other holder of a visa of that kind who was granted the visa on the basis of having the necessary relationship with the visa holder as mentioned in clause 457.321 of Schedule 2; and

   (b)if the Minister requires the visa holder to demonstrate that he or she has the skills necessary to perform the occupation — the visa holder demonstrates that he or she has those skills in the manner specified by the Minister.

   (7)For paragraph (6) (a), the Minister may disregard the fact that 1 or more persons required to be listed on the nomination are not listed, if the Minister is satisfied it is reasonable in the circumstances to do so.

   (7A)In addition to subregulation (6):

   (a)if:

   (i)       the person identifies a holder of a [Subclass 457 visa] (the visa holder) for subregulation (5); and

   (ii)      the [Subclass 457 visa] was granted after the Minister had waived the requirements of paragraph 4006A (1) (c) of Schedule 4 on the basis of a written undertaking made by the current sponsor of the visa holder (as set out in subclause 4006A (2) of that Schedule);

   the Minister is satisfied that the person has provided, in writing, an undertaking that is equivalent to the undertaking made by the current sponsor of the visa holder; and

   (b)if:

   (i)       the person identifies a holder of a [Subclass 457 visa] (the visa holder) for subregulation (5); and

   (ii)      the person has listed on the nomination a person described in paragraph (6) (a); and

   (iii)     the [Subclass 457 visa] was granted to the person described in paragraph (6) (a) after the Minister had waived the requirements of paragraph 4006A (1) (c) of Schedule 4 on the basis of a written undertaking made by the current sponsor of the visa holder (as set out in subclause 4006A (2) of that Schedule);

   the Minister is satisfied that the person has provided, in writing, an undertaking that is equivalent to the undertaking made by the current sponsor of the visa holder.

   (8)If the nomination was made before 1 July 2010 — the Minister is satisfied that the person has provided the following information as part of the nomination:

   (a)if there is a 6‑digit ASCO code for the nominated occupation — the 6-digit ASCO code;

   (b)if there is no 6-digit ASCO code for the occupation, and the person is a standard business sponsor — the name of the occupation as it appears in the instrument in writing made for the purposes of paragraph (10) (a);

   (c)if there is no 6-digit ASCO code for the occupation and the person is a party to a work agreement — the name of the occupation as it appears in the work agreement;

   (d)the location or locations at which the nominated occupation is to be carried out.

   (8A)If the nomination is made on or after 1 July 2010 – the Minister is satisfied that the person has provided the following information as part of the nomination:

   (a)if there is a 6-digit ANZSCO code for the nominated occupation - the name of the occupation and the corresponding 6-digit ANZSCO code;

   (b)if:

   (i)       there is no 6-digit ANZSCO code for the nominated occupation; and

   (ii)      the person is a standard business sponsor;

   the name of the occupation and the corresponding 6-digit code as they are specified in the instrument in writing made for paragraph (10)(aa);

   (c)if:

   (i)       there is no 6-digit ANZSCO code for the nominated occupation; and

   (ii)      the person is a party to a work agreement;

   the name of the occupation and the corresponding 6-digit code (if any) as they are specified in the work agreement;

   (d)the location or locations at which the nominated occupation is to be carried out.

   (9)The Minister is satisfied that either:

   (a)there is no adverse information known to Immigration about the person or a person associated with the person; or

   (b)it is reasonable to disregard any adverse information known to Immigration about the person or a person associated with the person.

   (10)If the person is a standard business sponsor — the Minister is satisfied that:

   (a)if the nomination was made before 1 July 2010 - the nominated occupation corresponds to an occupation specified by the Minister in an instrument in writing for this paragraph; and

   (aa)if the nomination is made on or after 1 July 2010 – the nominated occupation and its corresponding 6-digit code correspond to an occupation and its corresponding 6-digit code specified by the Minister in an instrument in writing for this paragraph; and

   (b)if required by the instrument mentioned in paragraph (a)  or (aa) — the nomination of an occupation mentioned in the instrument is supported, in writing to the Minister, by an organisation specified by the Minister in an instrument in writing for this paragraph; and

   (c)the terms and conditions of employment of the person identified in the nomination will be no less favourable than the terms and conditions that:

   (i)       are provided; or

   (ii)      would be provided;

   to an Australian citizen or an Australian permanent resident for performing equivalent work at the same location; and

   (cc)the base rate of pay, under the terms and conditions of employment mentioned in paragraph (c), that:

   (i)       are provided; or

   (ii)      would be provided;

   to an Australian citizen or an Australian permanent resident, will be greater than the temporary skilled migration income threshold specified by the Minister in an instrument in writing for this paragraph; and

   (d)if the nomination was made before 1 July 2010 - the person has certified as part of the nomination, in writing, that:

   (i)       the tasks of the position include a significant majority of the tasks of:

   (A)the nominated occupation listed in the ASCO; or

   (B)the nominated occupation specified in an instrument in writing for paragraph (a); and

   (ii)      if the person is lawfully operating a business outside Australia but does not lawfully operate a business in Australia:

   (A)the nominated occupation is a position in the business of the standard business sponsor; or

   (B)the nominated occupation is an occupation specified by the Minister in an instrument in writing for this sub-paragraph; and

   (iii)     if the person lawfully operates a business in Australia:

   (A)the nominated occupation is a position with a business, or an associated entity, of the person; or

   (B)the nominated occupation is an occupation specified by the Minister in an instrument in writing for this sub-paragraph; and

   (iv)     the qualifications and experience of the visa holder, or the applicant or proposed applicant for the visa, identified in relation to the nominated occupation are commensurate with the qualifications and experience specified:

   (A)for the occupation in the ASCO; or

   (B)if there is no ASCO code for the nominated occupation — for the occupation in the instrument in writing made for the purpose of paragraph (a); and

   (e)if the nomination is made on or after 1 July 2010 – the person has certified as part of the nomination, in writing, that:

   (i)       the tasks of the position include a significant majority of the tasks of:

   (A)the nominated occupation listed in the ANZSCO; or

   (B)the nominated occupation specified in an instrument in writing for paragraph (aa); and

   (ii)      if the person is lawfully operating a business outside Australia but does not lawfully operate a business in Australia:

   (A)the nominated occupation is a position in the business of the standard business sponsor; or

   (B)the nominated occupation is an occupation specified by the Minister in an instrument in writing for this sub-subparagraph; and

   (iii)     if the person lawfully operates a business in Australia:

   (A)the nominated occupation is a position with a business, or an associated entity, of the person; or

   (B)the nominated occupation is an occupation specified by the Minister in an instrument in writing for this sub-subparagraph; and

   (iv)     the qualifications and experience of the visa holder, or the applicant or proposed applicant for the visa, identified in relation to the nominated occupation are commensurate with the qualifications and experience specified:

   (A)for the occupation in the ANZSCO; or

   (B)if there is no ANZSCO code for the nominated occupation - for the occupation in the instrument in writing made for paragraph (aa).

   (f)the position associated with the nominated occupation is genuine; and

   (g)if the person has identified in the nomination the holder of a Subclass 457 (Temporary Work (Skilled)) visa in relation to whom the requirements in subclause 457.223(6) of Schedule 2 were met—one of the following applies:

   (i)       the requirements in subclause 457.223(6) of Schedule 2 continue to be met;

   (ii)      if:

   (A)the holder would be required to hold a licence, registration or membership that is mandatory to perform the occupation nominated in relation to the holder; and

   (B)in order to obtain the licence, registration or membership, the holder would need to demonstrate that the holder has undertaken a language test specified by the Minister under subparagraph 457.223(4)(eb)(iv) of Schedule 2 and achieved a score that is better than the score specified for the test by the Minister under subparagraph 457.223(4)(eb)(v) of Schedule 2;

   the holder demonstrates that he or she has proficiency in English of at least the standard required for the grant (however described) of the licence, registration or membership;

   (iii)     the holder is an exempt applicant within the meaning of subclause 457.223(4) of Schedule 2;

   (iv)     unless subparagraph (ii) applies—the holder:

   (A)has undertaken a language test specified by the Minister under subparagraph 457.223(4)(eb)(iv) of Schedule 2; and

   (B)achieved within the period specified by the Minister in a legislative instrument for this subparagraph, in a single attempt at the test, the score specified by the Minister under subparagraph 457.223(4)(eb)(v) of Schedule 2; and

   (h)either:

   (i)       the person will:

   (A)engage the visa holder, the applicant for a visa or the proposed applicant for  a Subclass 457(Temporary Work (Skilled)) visa only as an employee under a written contract of employment; and

   (B)give a copy of that contract to the Minister; or

   (ii)      the nominated occupation is an occupation specified by the Minister in an instrument in writing for sub-subparagraph (e)(iii)(B).

   (10AA)For paragraphs (10) (c) and (cc), if no Australian citizen or Australian permanent resident performs equivalent work in the person’s workplace at the same location, the person must determine, using the method specified by the Minister in an instrument in writing for this subregulation:

   (a)the terms and conditions of employment; and

   (b)the base rate of pay, under the terms and conditions of employment;

   that would be provided to an Australian citizen or an Australian permanent resident to perform equivalent work in the person’s workplace at the same location.

   (10AB)Paragraphs (10) (c) and (cc) do not apply if the annual earnings of the person identified in the nomination are equal to or greater than the amount specified by the Minister in an instrument in writing for this subregulation.

   (10A)The Minister may disregard the criterion in paragraph (10) (cc) for the purpose of subregulation (2) if:

   (a)the base rate of pay will not be greater than the temporary skilled migration income threshold specified for that paragraph; and

   (b)the annual earnings are equal to or greater than the temporary skilled migration income threshold; and

   (c)the Minister considers it reasonable to do so.

   (11)If the person is a party to a work agreement (other than a Minister) — the Minister is satisfied that:

   (a)the nominated occupation is specified in the work agreement as an occupation that the person may nominate; and

   (b)if the nomination was made before 1 July 2010 - the person has certified as part of the nomination, in writing, that:

   (i)       the tasks of the position include a significant majority of the tasks of:

   (A)if the nomination is made using an ASCO code - the nominated occupation listed in the ASCO; or

   (B)if the nomination is not made using an ASCO code -the nominated occupation specified in the work agreement; and

   (ii)      the qualifications and experience of the visa holder, or the applicant or proposed applicant for the visa, identified in relation to the nominated occupation are commensurate with the qualifications and experience specified for the occupation in the work agreement; and

   (c)if the nomination is made on or after 1 July 2010 - the person has certified as part of the nomination, in writing, that:

   (i)       the tasks of the position include a significant majority of the tasks of:

   (A)if the nomination is made using an ANZSCO code - the nominated occupation listed in the ANZSCO; or

   (B)if the nomination is not made using an ANZSCO code -the nominated occupation specified in the work agreement; and

   (ii)      the qualifications and experience of the visa holder, or the applicant or proposed applicant for the visa, identified in relation to the nominated occupation are commensurate with the qualifications and experience specified for the occupation in the work agreement.

   (12)If the person is a party to a work agreement and the work agreement specifies requirements that must be met by the party to the work agreement — the Minister is satisfied that the requirements of the work agreement have been met.