ONE COAT SET PLASTER PTY LTD (Migration)

[2020] AATA 2695

ONE COAT SET PLASTER PTY LTD (Migration) [2020] AATA 2695 (26 June 2020)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  ONE COAT SET PLASTER PTY LTD

CASE NUMBER:  1723056

HOME AFFAIRS REFERENCE(S):          BCC2016/4223320

MEMBER:Alan McMurran

DATE:26 June 2020

PLACE OF DECISION:  Sydney

DECISION:The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.

.

Statement made on 26 June 2020 at 4:57pm

CATCHWORDS
MIGRATION – application for approval of nomination of position – temporary residence transition stream – nominee the founder, principal employee and manager of business – capacity to pay full-time salary for two years – salary paid to nominee – financial evidence – increasing sales – description and tasks of nominated position – nominee’s skills and experience – decision under review set aside

LEGISLATION
Migration Act 1958 (Cth), s 245AR(1)
Migration Regulations 1994 (Cth), r 5.19(3)(d)(i), Schedule 2, cl 457.223(4)

STATEMENT OF DECISION AND REASONS

APPLICATION FOR REVIEW

The Application

1. This is an application lodged 26 September 2017 for review of a decision made by a delegate of the Minister for Immigration and Border Protection on 18 September 2017 to reject the applicant’s application for approval of the nomination of a position in Australia under r.5.19 of the Migration Regulations 1994 (the Regulations).

2. The applicant applied for approval on 14 December 2016. The requirements for the approval of the nomination of a position in Australia are found in r.5.19 of the Regulations which contains two alternative streams: A Temporary Residence Transition nomination stream (r.5.19(3)) and a Direct Entry nomination stream (r.5.19(4)). If the application is made in accordance with r.5.19(2) and meets the requirements of either stream, then the application must be approved. If any of the requirements are not met, then the application must be refused: r.5.19(5).

3. In this case, the applicant has applied for approval of a nomination of a 53-year-old Portuguese citizen, Jose Maria de Oliveira da Silva as a carpenter, seeking to satisfy the criteria in the Temporary Residence Transition nomination stream. The nominee was 49 years old at the time of application.

   Department Decision

4. The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19(3)(d)(i) of the Regulations, because the applicant had not demonstrated it would be able to pay the nominated salary and employ the nominee on a full-time basis in the position of carpenter for at least 2 years.

5. The delegate found that the financial package for the nominee which totalled $202,520 was not financially sustainable given the financial performance of the applicant in the years 2014 to 2016. The delegate found that there was insufficient evidence to demonstrate the nominee had special skills to warrant the salary package, and that the nominee would be employed full-time with the applicant for at least 2 years.

   Background

6. The applicant corporation is engaged in the construction industry, principally in the process of cement rendering. This process usually occurs in the early stage of construction following excavation and laying of foundations. It involves pouring large quantities of cement within completed timber and steel formwork templates for walls, and which may require rendering and then plastering in the case of walls. The applicant’s activities include plastering and painting.

7. On 24 February 2020, the Tribunal sent an invitation to the applicant to provide information about the nominated position. The request set out the requirements in relation to regulation 5.19 and sought updated and current information to address the relevant criteria. The applicant’s representative responded initially on 9 March 2020. The applicant was granted time extensions to provide this updated information in the period from 9 March 2020 to 30 April 2020.

8. The applicant provided updated financial evidence for the period 2017 to 2020. This included the applicant’s tax returns, BAS lodgements 2018-2019, ASIC extract, employment contract, job description, training expenditure, and the nominee’s group certificates and tax assessment notices.

9. The Tribunal was not satisfied on the information that it could determine the matter without a hearing. The applicant was invited to a hearing on 9 June 2020. The applicant’s representative withdrew on 12 May 2020, and the applicant’s director represented the corporation.

10. The applicant appeared before the Tribunal on 9 June 2020 by its director, Ms da Silva, an Australian citizen, who gave evidence and presented arguments. The hearing was combined with three other nomination applications by the applicant for two plasterers and a painter, which had also been refused. The director asked that one of those related matters under review, for the position of painter[1], continue notwithstanding that the related review[2] of the refusal of the visa for that nominee had been finalised. The director did not oppose the four applications being dealt with together, as evidence and information relating to the nominator was relevant to all four applications.

    [1] 1830084

    [2] 1830089

11. This application concerns the nomination and employment of the nominee as a carpenter. The nominee is a citizen of Portugal who has lived in Australia with his family since 2008. The nominee has been working in the applicant’s business continually since that period. Ms da Silva made a further written submission shortly before the hearing on 2 June 2020, addressing the issue of financial capacity, and attaching documents previously submitted.

12. Following the hearing, the applicant was given a further short period until 12 June 2020 to provide any additional information. The applicant provided references from Sydney Building Corporation Pty Ltd dated 12 June 2020 and from Consystex Concrete Systems Technologies attesting to the carpentry skills of the nominee, and photographs of the nominee at work as a carpenter.

    The Hearing

    The Director’s evidence

13. The Tribunal explained to the witness that there were two primary issues, being the salary paid to the nominee, and the choice of occupation, as described. The Tribunal then had a lengthy discussion with the director about the financial performance of the applicant and the evidence, which disclosed that the nominee has been working full-time in the business since 2008 when it was first established.

14. The Tribunal raised the issue of the nominated occupation at hearing, as the applicant’s financial records and the documents submitted to the ATO including completed tax returns, described the nominee as a “cement renderer”. The director acknowledged that was the case but relied on the description as being relevant for the taxation reference describing the business generically in the sense that the occupation of cement rendering included principally carpentry. She explained that the applicant does the erection of timber formwork necessary before cement is poured.

15. The director gave evidence the nominee has always been a carpenter, as it is integral to the work of a cement renderer in the applicant’s business, to prepare and install timber formwork.

16. The director explained that the nominee started the business in 2008, and is the principal employee in the business, unable to be a director or officeholder while he remained on a temporary work visa. The applicant explained that the nominee has been on three subclass 457 visas over the period since 2008.

17. The Tribunal asked why the nominee had not previously sought permanent residency, given his time in Australia since 2008, always in the same occupation and being the principal employee in the business. The director herself has permanent residency as does her brother and her aunt (her mother’s sister), but not her father or mother.

18. The director explained that there had been two previous migration representatives instructed to deal with the matter of permanent residency for her parents, one of whom had failed to continue and follow instructions, and effectively “disappeared”, and the second who also failed to follow instructions to complete the applications.

19. The director said it would be very unfortunate if her parents had to return to Portugal. She said that consequently the company would have to close, as the nominee had commenced the business, was the principal employee and without him, the business could not continue. The nominee was very experienced and responsible for doing quotations, hiring and training workers, carrying out formwork carpentry and supervising work performed by the applicant on sites. The nominee also manages the business and is the principal contact with other contractors and clients.

20. For the following reasons, the Tribunal has decided to set aside the decision under review and substitute a decision approving the nomination.

    CONSIDERATION OF CLAIMS AND EVIDENCE

21. The issue in this case is whether the applicant meets the requirements for approval of the nomination under the Temporary Residence Transition nomination stream set out in r.5.19(3), which is extracted in the attachment to this decision. For the nomination to be approved, all the requirements must be met.

    The application must be compliant: r.5.19(3)(a)

22. Regulation 5.19(3)(a) requires that the application for approval must be in the approved form, must be accompanied by the prescribed fee and, where applicable, must include the required written certification relating to conduct that contravenes s.245AR(1). The application must also identify a relevant person and occupation.

23. On the available information, the Tribunal finds the application was made on the approved form and was accompanied by the fee prescribed in r.5.37. The application includes the requisite written certification for compliance with s. 245AR(1).

24. The Tribunal asked the director questions about the work performed by the nominee on various sites, erecting formwork. The Tribunal finds it is satisfied on the information provided following the hearing that the applicant has identified a need to employ the nominee in the position of carpenter, under the nominator’s direct control.

25. The application has identified the nominee, Jose Maria de Oliveira da Silva, who was the holder of a subclass 457 visa from 5 December 2014 to 5 December 2018, issued based on satisfying cl.457.223(4). The application identifies the occupation of carpenter, in relation to the position that is listed in ANZSCO 331212 and has the same code as the occupation carried out by the Subclass 457 visa holder.

26. Given the above findings, the requirement in r.5.19(3)(a) is met.

    Status of the nominator: r.5.19(3)(b)

27. Regulation 5.19(3)(b) requires the nominator to be or have been the relevant standard business sponsor who is actively and lawfully operating a business in Australia. In addition, the nominator, as that standard business sponsor, must not have met certain criteria relating to the operation of a business overseas, in the most recent sponsorship approval.

28. The Tribunal finds on the available information that the applicant was a standard business sponsor commencing in the period from 28/05/2012 to 28/05/2015, who last identified the nominee as the holder of the Subclass 457 visa in a nomination made under s.140GB of the Act. The applicant’s last business sponsorship approval dates from 8/03/2017 for 5 years to 8/03/2022.

29. The Tribunal finds on the information provided including the ASIC extract, and evidence of the current contracts produced showing work underway and being performed by the applicant, that the applicant is actively and lawfully operating its business principally in Sydney Australia.

30. The Tribunal is further satisfied on the information that the applicant was not granted the most recent business sponsorship based on meeting either r.1.20DA, r.2.59(h) or r.2.68(i).

31. Given the above, the requirement in r.5.19(3)(b) is met.

    Previous employment of the nominee: r.5.19(3)(c)

32. Broadly speaking, to meet the requirement in r.5.19(3)(c), either:

    ·     the nominee must have been employed full time in Australia in the position for which he or she holds a Subclass 457 visa for at least 2 of the 3 years preceding the nomination application; or

    ·     the nominee holds a Subclass 457 visa on the basis that s/he was identified in a nomination of a specified occupation for that visa, the nominator nominated the occupation, and the nominee has been employed in that occupation for at least 2 years in the 3 years immediately before the application.

33. The Tribunal is satisfied on the director’s evidence and the evidence produced to the Tribunal that the nominee has been employed full-time in Australia in the position since commencement of the business in 2008. This includes the period in 2014/15, being 2 of the 3 years preceding the nomination application (December 2016) when the nominee held a Subclass 457 visa.

34. Given the above findings, the requirement in r.5.19(3)(c) is met.

    Future employment of the visa holder: r.5.19(3)(d)

35. Regulation 5.19(3)(d) only applies to certain nominees (those described in r.5.19(3)(c)(i)). The Tribunal is satisfied the regulation applies in this instance, as the nominee was the holder of one or more subclass 457 visas for a total period of at least 2 years and has been engaged in the position in which he held the visas for at least 2 years preceding the application.

36. For this class of person, the Regulations require that the nominee continue to be employed by the nominator on a full-time basis for at least 2 years on terms that do not expressly preclude the possibility of an extension.

37. This is the issue that troubled the Department delegate, based on the applicant’s financial performance. The concern comprised two elements, namely the size of the nominee’s salary package in the vicinity of $202,000 per annum, and whether it was affordable when aligned with the profit margins for the business.

38. The Tribunal considers information afresh on review, including updated information and submissions. The Tribunal has reviewed the BAS information relevantly produced for the periods since lodgement of the review, for 2017 to 2020. It has also had regard to the taxation returns produced by the applicant, for the years 2017 to 2019, each of which reveals profitable trading. The nominee was receiving a salary in that period in excess of $185,000 p.a.

39. The trading statement for the financial year ending 30 June 2018, shows a significant increase in sales from the preceding year, from $1,995,404 to $2,653,864. Information available at the hearing date shows current contracts underway with a total value of approximately $2.5 million, not including work already completed for the current financial year. The gross profit margin for 2018 is stated at 48.4%. The anticipated profit margin for the current year is likely to exceed that figure. According to the June 2019 BAS, the total sales ending for that financial year increased to $2,869,671. The director pointed to the ever-increasing sales figures as evidence of the applicant’s ability to meet its financial obligations.

40. The company has a small workforce, six employees, and otherwise engages contractors when and if required. The permanent employees are the director, the nominee, the nominee’s wife, who is also the company secretary, and three plasterers. There are approximately 8 subcontractors used from time to time, which include plasterers and carpenters.

41. The Tribunal discussed the evidence at the hearing with the director. The director stated the company has not had any financial difficulties and has always paid staff wages and employment obligations as and when they were due, including for the nominee. The director explained that the nominee’s high salary was due to his principal role, experience and management control of the business. The director submitted that the tribunal could not point to any financial discrepancies in the history produced which might indicate the company was not able to meet its financial obligations into the future.

42. The Tribunal has also had regard to the employment contract produced for the nominee. The written terms of the agreement do not preclude an extension of the employment beyond 2 years from the granting of a visa. The Tribunal notes the employment of the nominee whilst a subclass 457 visa holder and continuously on a full-time basis since 2008, when the company commenced.

43. The Tribunal finds it is satisfied on the available information that the nominee will continue to be employed on a full-time basis pursuant to his written agreement with the applicant and for a minimum period of at least 2 years. The Tribunal also finds that this period is likely to be extended, given the employment history, and is certainly not precluded by the agreement.

44. Given the above findings, the requirement in r.5.19(3)(d) is met.

    No less favourable terms and conditions of employment: r.5.19(3)(e)

45. Regulation 5.19(3)(e) requires that the terms and conditions of employment applicable to the nominated position will be no less favourable than those that are, or would be, provided to an Australian citizen or permanent resident performing equivalent work in the same workplace at the same location.

46. The director has given evidence as to the nature of the work and duties carried out by the nominee. This includes the erection of formwork, carpentry, supervision, site management, training of other employees and negotiating contracts.

47. The Tribunal has had regard to the information provided, including the employment contracts for the nominee. The Tribunal is satisfied as to the length and nature of the employment, the nominee having been continuously engaged full-time in the occupation since 2008. The Tribunal finds the employment in the occupation involves principally carpentry on-site erecting formwork and carrying out activities relevant for the business of cement rendering.

48. The Tribunal discussed the position with the director at the hearing. The nominee is the applicant’s principal employee, carrying out site work including erection of formwork, negotiating with clients and providing quotations for the applicant’s work. The director has given evidence of projects undertaken by the applicant, and still to be completed, in a total sum of approximately $2.5 million. The director gave evidence that the nominee is usually in attendance at sites and on a daily basis.

49. The Tribunal is satisfied on the available information and taking into account the age and experience of the nominee, that the terms and conditions applicable to the nominee’s employment are no less favourable than those that would be provided to an Australian citizen or permanent resident performing equivalent work in the same workplace and at the same locations.

50. Accordingly, the requirement in r.5.19(3)(e) is met.

    Training commitments and obligations: r.5.19(3)(f)

51. Regulation 5.19(3)(f) requires the applicant to have fulfilled any commitments made relating to meeting training requirements, and complied with applicable obligations relating to training requirements, during the period of the applicant’s most recent sponsorship approval.  These requirements may be disregarded if it is reasonable to do so.

52. The Tribunal finds from departmental records that the last approved sponsorship for the applicant extends for 5 years from 8 March 2017 to 8 March 2022. The training provisions were repealed on 12 August 2018, meaning in this instance that the training commitment for the current standard business sponsorship approval operated for a period of 12 months only from 8 March 2017 to 8 March 2018 (when the legislation was introduced[3]).

    [3] 18 March 2018

53. The applicant has produced evidence of training expenditure of $6,700 relevant to the business of the applicant in the 2017/18 financial year. Evidence of receipts paid for training expenditure has been produced from Simili Training Aust Pty Ltd. The training activities include “working at height”, operating boom type elevating work platforms and associated licensing training. The expenditure exceeds more than 1% of the applicant’s payroll.

1. The director has stated in her written submission that during the financial year completed June 2019, the company “expended a total of $41,178 on staff training and welfare”. The Tribunal is not satisfied there is enough evidence to demonstrate the stated level of expenditure in that period, however, given the evidence produced concerning training expenditure stated over the 2017/18 period and during the current sponsorship approval, the Tribunal is satisfied the requirement has been met. To the extent it is necessary to do so, the Tribunal finds that it would be reasonable in the circumstances to disregard any remaining obligation for the stated period.

2. Accordingly, the requirement in r.5.19(3)(f) is met.

   No adverse information known to Immigration: r.5.19(3)(g)

3. Regulation 5.19(3)(g) requires that there is no adverse information known to Immigration about the nominator or person associated with the nominator; or it is reasonable to disregard any such information. For these purposes, ‘adverse information’ and ‘associated with’ have the meaning given in rr.1.13A and 1.13B. 

4. The Tribunal finds that it is not aware based on the available information of any adverse information known to Immigration, or the tribunal, about the nominator or any person associated with the nominator.

5. Accordingly, the requirement in r.5.19(3)(g) is met.

   Satisfactory compliance with workplace relations laws: r.5.19(3)(h)

6. Regulation 5.19(3)(h) requires the applicant to have a satisfactory record of compliance with the laws of the Commonwealth, and of each State or Territory in which the applicant operates a business and employs employees in the business, relating to workplace relations.

7. There is no information or evidence before the Tribunal that the applicant has failed to comply with relevant workplace laws in Australia and New South Wales where the business operates and employs staff. The director gave evidence on oath as to the regular compliance by the applicant with its employment obligations, and the Tribunal has no reason not to accept that evidence.

8. Accordingly, the requirement in r.5.19(3)(h) is met.

9. Based on the findings above, the Tribunal is satisfied that the applicant meets the requirements of r.5.19 for approval of the nomination of the position in Australia.

   DECISION

10. The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.

    Alan McMurran
    Member

    
    

    ATTACHMENT  -  EXTRACTS FROM THE MIGRATION REGULATIONS 1994

    5.19Approval of nominated positions (employer nomination)

    …

    (2)The application must:

    (a)be made in accordance with approved form 1395…; and

    (aa) include a written certification by the nominator stating whether or not the nominator has engaged in conduct, in relation to the nomination, that constitutes a contravention of subsection 245AR(1) of the Act; and

    (b)be accompanied by the fee mentioned in regulation 5.37.

    Temporary Residence Transition nomination

    (3)The Minister must, in writing, approve a nomination if:

    (a)the application for approval:

    (i)       is made in accordance with subregulation (2); and

    (ii)      identifies a person who holds a Subclass 457 … visa granted on the basis that the person satisfied the criterion in subclause 457.223(4) of Schedule 2; and

    (iii)     identifies an occupation, in relation to the position, that:

    (A)is listed in ANZSCO; and

    (B)has the same 4-digit occupation unit group code as the occupation carried  out by the holder of the Subclass 457 … visa; and

    (b)the nominator:

    (i)       is, or was, the standard business sponsor who last identified the holder of the Subclass 457 … visa in a nomination made under section 140GB of the Act or under regulation 1.20G or 1.20GA as in force immediately before 14 September 2009; and

    (ii)      is actively and lawfully operating a business in Australia; and

    (iii)     did not, as that standard business sponsor, meet regulation 1.20DA, or paragraph 2.59(h) or 2.68(i), in the most recent approval as a standard business sponsor; and

    (c)either:

    (i)       both of the following apply:

    (A)in the period of 3 years immediately before the nominator made the application, the holder of the Subclass 457 …visa identified in subparagraph (a) (ii) has:    

    (I)held one or more Subclass 457 visas for a total period of at least 2 years; and

    (II)been employed in the position in respect of which the person holds the Subclass 457 … visa for a total period of at least 2 years (not including any period of unpaid leave);

    (B)the employment in the position has been full-time, and undertaken in Australia; or

    (ii)      all of the following apply:

    (A)the person holds the Subclass 457 … visa on the basis that the person was identified in a nomination of an occupation mentioned in sub-subparagraph 2.72(10)(d)(iii)(B) or sub-subparagraph 2.72(10)(e)(iii)(B);

    (B)the nominator nominated the occupation;

    (C)the person has been employed, in the occupation in respect of which the person holds the Subclass 457 … visa, for a total period of at least 2 years in the period of 3 years immediately before the nominator made the application; and

    (d)for a person to whom subparagraph (c)(i) applies:

    (i)       the person will be employed on a full-time basis in the position for at least 2 years; and

    (ii)      the terms and conditions of the person’s employment will not include an express exclusion of the possibility of extending the period of employment; and

    (e)the terms and conditions of employment applicable to the position 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 in the same workplace at the same location; and

    (f)either:

    (i)       the nominator:

    (A)fulfilled any commitments the nominator made relating to meeting the nominator’s training requirements during the period of the nominator’s most recent approval as a standard business sponsor; and

    (B)complied with the applicable obligations under Division 2.19 relating to the nominator’s training requirements during the period of the nominator’s most recent approval as a standard business sponsor; or

    (ii)      it is reasonable to disregard subparagraph (i); and

    Note Different training requirements apply depending on whether the application for approval as a standard business sponsor was made before 14 September 2009 or on or after that date.

    (g)either:

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

    (ii)      it is reasonable to disregard any adverse information known to Immigration about the nominator or a person associated with the nominator; and

    (h)the nominator has a satisfactory record of compliance with the laws of the Commonwealth, and of each State or Territory in which the applicant operates a business and employs employees in the business, relating to workplace relations.