Optimum Tyre and Service Centre Pty Ltd (Migration)

[2022] AATA 2673

Optimum Tyre and Service Centre Pty Ltd (Migration) [2022] AATA 2673 (3 June 2022)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Optimum Tyre and Service Centre Pty Ltd

CASE NUMBER:  2005378

HOME AFFAIRS REFERENCE(S):          OPF2019/5093

MEMBER:Jason Pennell

DATE:3 June 2022

PLACE OF DECISION:  Melbourne

DECISION:The Tribunal affirms the decision under review.

Statement made on 3 June 2022 at 10.17am

CATCHWORDS
MIGRATION – cancellation – sponsorship cancellation –2 years bar –applicant had breached its sponsorship obligation – failed to maintain and provide records of salaries and wages paid to sponsored workers – record keeping – action should be taken –– decision under review affirmed

LEGISLATION
Migration Act 1958, s 140M
Migration Regulations 1994, rr 2.83, 2.86, 2.89

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 Home Affairs to take an action under s.140M of the Migration Act 1958 (the Act) in relation to the applicant’s sponsorship.

2. The applicant (Optimum Tyre and Service Centre Pty Ltd) was initially approved as a standard business sponsor under the 457-temporary work (skilled) visa program on 4 April 2016 for a period of 5 years (4 April 2016 to 4 April 2021). 

3. On 2 March 2020, the delegate decided to cancel the applicant’s approval as a standard business sponsor and bar the applicant from making applications for approval as a standard business sponsor and temporary activities for two years under s.140M of the Act on the basis that the applicant breached r.2.89 by failing to satisfy their sponsorship obligations.

4. The applicant provided the Tribunal with a copy of the delegate’s primary decision record dated 2 March 2020.

5. The applicant’s Director (Mr Ahmad Anwar Awan) appeared in-person before the Tribunal on Thursday 24 June 2021 to give evidence and present arguments on behalf of the applicant.

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

CONSIDERATION OF CLAIMS AND EVIDENCE

1. Sections 140K, 140L and 140M of the Act provide for the imposition of sanctions on approved sponsors in certain circumstances. 

2. Under s 140M, if prescribed circumstances exist, the Minister (and the tribunal on review) may take one or more of the following actions:

   ·cancelling the sponsorship approval in relation to a class to which the sponsor belongs.

   ·cancelling the sponsorship approval for all classes to which the sponsor belongs.

   ·barring the sponsor for a specified period from sponsoring more people under the terms of any existing approval; and

   ·barring the sponsor for a specified period from making future applications for sponsorship approval in relation to one or more classes of sponsor.

3. For these purposes, the circumstances are prescribed in regulations 2.89 - 2.94B of the Migration Regulations 1994 (the Regulations) and include circumstances in which the Minister, or Tribunal on review, is satisfied there has been:

   ·a failure to satisfy a sponsorship obligation.

   ·provision of false or misleading information.

   ·sponsorship application or variation criteria no longer met.

   ·a contravention of the law.

   ·unapproved changes to a program.

   ·a failure to pay additional security.

   ·a failure to comply with certain terms of an agreement; or

   ·a failure to pay medical and hospital expenses.

4. Where a prescribed circumstance has been found to exist, the regulations prescribe criteria that must be taken into account when determining what action, if any, to take: regs 2.89 - 2.94B. These criteria, as they relevantly apply to the circumstances of this case are set out in the attachment to this decision.

Does a circumstance for the taking of an action exist?

1. In the present case, the delegate found that the applicant failed to satisfy the following four sponsorship obligations:

   i.Regulation 2.82 - Obligation to keep records

   ii.Regulation 2.83 - Obligation to provide records and information to the Minister

   iii.Regulation 2.84 - Obligation to provide information to Immigration when certain events occur

iv.Regulation 2.86 - Obligation to ensure sponsored person works in nominated occupation

Failure to satisfy a sponsorship obligation: reg 2.89

1. The Minister may take one or more of the actions in s 140M if satisfied the sponsor has failed to satisfy a sponsorship obligation referred to in Division 2.19 of the Regulations: reg 2.89(2).

2. The applicant was approved as a standard business sponsor on 4 April 2016 for a period of 5 years. Department of Home Affairs’ (the Department’s) records indicate the applicant was not previously nor subsequently approved as a standard business sponsor[1].

   [1] Department of Home Affairs - Integrated Client Services Environment (ICSE) records

3. During the 5-year period of their approval as a sponsor, the applicant successfully nominated two people under the Subclass 457 program, Mr Junaid Aziz and Mr Muhammad Imran Khan (the sponsored workers).

4. On 14 May 2019 the Department commenced monitoring the applicant to ascertain compliance with its sponsorship obligations.

5. Australian Border Force (ABF) officers conducted a site visit at the applicant’s place of business on 23 July 2019 (‘the site meeting’). During the inspection the applicant’s director Mr Awan was interviewed by the ABF officer, during which he confirmed that he had the sponsored workers working in the business. In addition, Mr Awan admitted to paying the sponsored workers in cash because of the applicant’s customers paying in cash.

6. On 1 August 2019 the Department wrote to the applicant under r.2.83 of the Regulations requesting records and information pertaining to its sponsorship obligations[2].  

   [2] Email and letter from Australian Border Force to applicant dated 1 August 2019, Department File No. OPD2019/335718, DOC ID # 7076176

7. On 15 August 2019 the applicant responded to the request to provide records and information and provided various supporting documentation.  

8. Based on the information provided by the applicant, the Department was not satisfied the applicant had complied with its sponsorship obligations. Accordingly, on 10 September 2019 the Department issued the applicant with a Notice of Intention to Take Action (NOITTA) outlining the delegate’s reasons to believe the applicant had failed to satisfy its sponsorship obligations under regulations 2.82, 2.83, 2.84 and 2.86 thus providing the applicant an opportunity to comment on the delegate’s concerns.  

9. After considering the applicant’s responses and supporting documentation, on 2 March 2020 the delegate decided under s.140M(1) of the Act to cancel the applicant’s approval as a standard business sponsor and to bar the applicant for 2 years from making applications for approval as a standard business sponsor and temporary activities sponsor.

10. On 17 March 2020 the applicant lodged a merits review application in respect to the delegate’s decision resulting in this AAT case number 2005378.

11. The applicant provided its emails to the Australian Border Force at the Department dated 18 September 2019 and 18 June 2020 about his employees and their payroll.

12. On 14 August 2019 the applicant was issued an infringement notice by the department. Pursuant to s.140Q and 506A of the Act the applicant was required to pay $12,600.00 for failing to comply with reg 2.82 of the Act.  By an email dated 9 December 2019 the applicant requested an extension of time from the department to pay the fine. By email dated 7 January 2020 the department demanded the amount be paid within 14 days. 

Non-disclosure certificate: s 375A

1. The Department’s file includes documents that are covered by a non-disclosure certificate issued under s.375A of the Act. The s.375A certificate provides that disclosure of the documents specified, which include internal working documents, tactical plans and a recommendation report, would be contrary to public interest because it contains information that would be detrimental to the workings of the Departmental processes and procedures should they be disclosed.

2. The Tribunal has had regard to the information contained in the documents referred to in the s.375A certificate, particularly in the recommendation report, which may contain information specific to the applicant and the matter under review rather than about processes and procedures. The Tribunal notes that the recommendation report is part of the Department’s internal procedures, and while it contains information that is relevant to the issues in this review, the Tribunal is satisfied that, to the extent that it is relevant, the information has been disclosed to the applicant in the ‘Notice of Intention to Take Action’ (NOITTA) and that the applicant had an opportunity to respond to that information.

3. The Tribunal is satisfied that the s 375A certificate is valid as it provides a valid public interest reason for the non-disclosure. The Tribunal is also satisfied that the information relevant to the issues in the review have been disclosed to the applicant by the Department.

4. For the following reasons, the Tribunal has decided to affirm the decision under review.

Considerations

Regulation 2.82 - Obligation to keep records

1. The ABF conducted a site visit to the sponsors principal place of business on 23 July 2019. The applicant’s director, Ahmed Anwar Awan (Awan) advised the department and confirmed with the Tribunal that he had two sponsored persons being Muhammad Imran Khan (Khan) and Junaid Aziz (Aziz).

2. Awan’s evidence to the Tribunal was that when he first employed a sponsored person, Junaid Aziz, he paid him via direct debit. The applicant provided a copy of Mr Aziz’s bank account for the period from 6 June 2016 to 6 September 2016 as evidence that he was paid via direct debit. However, his evidence was that as customers paid in cash, it was easier for him to pay his sponsored workers in cash. He claimed that Khan and Aziz both preferred being paid in cash. The applicant provided the Tribunal with statutory declarations by Muhammad Imran Khan dated 17 April 2019 and Junaid Aziz dated 17 April 2019 stating that they have received their salary from the applicant being an annual salary of $54,000.00 (Gross) being $1698.16 per fortnight.

3. However, the statutory declaration of Mr Aziz states that he received cash payment from the applicant for the periods 15 April 2019 to 9 June 2019 and 13 August 2019 and 15 September 2019. This is contrary Mr Awan’s evidence that Mr Aziz had been on extended leave from July 2018 for a period of 13 months and that he had not returned to work.

4. Mr Awan’s evidence was that he had consulted his accountant who advised him that payslips signed by the sponsored persons would suffice as independently verifiable records of salary payments made to the sponsored persons. The applicant provided to the Tribunal copies of Staff Schedule reports from 5 August 2019 to 1 September 2019 together Payroll Advise from 18 February 2019 to 15 September 2019 advise. The Staff Schedule reports indicated the days and time worked by each sponsored person during these periods. However, these reports show that Mr Aziz worked during these period contraries to the applicant evidence that he was on unpaid leave and had not returned to work.  

5. The applicant also provided Payroll Advises detailing the sponsored person’s salary paid based on their hourly rate together with the amounts deducted for PAYG Tax and Superannuation contribution. Each Payroll Advise was signed and dated by the sponsored person. Only the payroll slips for Mr Khan were provided to the Tribunal. 

6. In addition, the applicant also provided its financial accounts for the year ending 30 June 2015, including payroll register [summary] and the applicant’s ATO Reporting Bill for Superannuation payments for 2016 and 2017. In addition, the applicant provided the Tribunal with copies of its Westpac Bank account for June 2016 to September 2016 in which the wages withdrawals for each of the sponsored persons is detailed. Finally, the applicant provided the Tribunal with sponsored workers PAYG payment summary for the year ending 30 June 2019. However, the fact that most documents provided by the applicant were not within the relevant period requested by the ABF, being period 26 July 2018 to 26 July 2019 it was not possible for the Tribunal to identify how the payments claimed to be made to each of the sponsored workers could be independently verified as required pursuant to reg 2.82 of the Act.    

7. Accordingly, the Tribunal finds that the applicant failed to comply with its obligation to keep records in breach of reg 2.83 of the Act by failing to maintain and provide records of salaries and wages paid to sponsored workers such that they are capable of being independently verified.

Regulation 2.83 - Obligation to provide records and information to the Minister

1. Regulation 2.83 requires a sponsor to provide records and information, as requested the ABF in writing, that it is required to keep either under the law of the Commonwealth, a State, or a Territory. The records and information requested must be provided a manner and within the timeframe as requested by the ABF.

2. On 1 August 2019 the ABF requested from the applicant records of any unpaid leave taken by the sponsored workers during the period 26 July 2018 to 26 July 2019. In its response dated 15 August 2019 the applicant advised that due compassionate and personal reasons Mr Aziz had been on unpaid leave since July 2018 and claimed that Mr Aziz would re-join the business in Australia 2019.

3. Its is expected that the applicant would maintain formal records of a sponsored worker’s application for unpaid leave and any acceptance by the applicant of such leave being granted. The applicant provided two letters dated 3 July 2018 and 8 October 2018 from Mr Aziz requesting a total of 10 weeks unpaid leave due to his wife’s mental condition. As noted in the NOITTA, this accounts for 10 weeks of the 13 months of unpaid leave taken by Mr Aziz. The applicant confirmed to the Tribunal that Mr Aziz had been on unpaid leave for compassionate reasons for a period of a period of 13 months since July 2018.[3] Mr Awan’s evidence to the Tribunal was that Aziz requested the compassionate leave due to health concerns of his wife. Mr Awan was not able to say what Aziz’s wife had suffered but believed that she had health concerns in relation to her kidneys. His evidence was at the time he was not aware that Aziz had travelled to Pakistan. He stated that on his return to Australia Aziz requested further unpaid leave so that he could return to Pakistan. Mr Awan was not able to provide any documentation in relation Aziz’s further leave. He stated that he had either lost the letter from Aziz requesting the further unpaid leave or it was an oral agreement.

   [3] Letter from Junaid Aziz requesting leave dated 3 July 2018.

4. In circumstances where the applicant has been able to provide only partial records and unable to provide documentation relating to the unpaid leave taken by Aziz during the period 26 July 2018 to 26 July 2019 and based on the applicant own evidence that he has no records in relation to Mr Aziz further unpaid leave beyond the 10 weeks initially requested, the Tribunal finds that the applicant did not keep the proper records and information as required under the reg 2.83. Accordingly, the Tribunal finds that the applicant failed to comply with its obligation to provide records and information to the Minister in breach of reg 2.83 of the Act by failing to maintain and provide records of Aziz’s unpaid leave as requested by the ABF.  

Regulation 2.84 - Obligation to provide information to Immigration when certain events occur

1. Regulation 2.84 of the Act requires a sponsor to notify the Department when certain events occur, including any change of address, in writing within 28 days.

2. On 23 July 2019 departmental officers conducted a site visit to the nominated business address of 4/9 Brooklyn Avenue, Dandenong (‘the Brooklyn Avenue address’) as provided by the applicant in its Standard Business Sponsorship (SBS) application. The officers were advised that the property was no longer tenanted by the applicant but rather by Mr Awan’s cousin. The officers were advised that the applicant had not occupied the property for a period of two years prior to the date of the inspection and that it now occupies a property known as unit 8, 18/41 Bennet Street Dandenong (‘the Bennet St address’).

3. As a result, on the same day the department officers attended the Bennet Street address, during the visit Mr Awan confirmed that the applicant had relocated from the Brooklyn Avenue address to the Bennet St address approximately two years prior. Mr Awan stated to the officers that he had informed the Australian Securities and Investment Commission (ASIC) of the applicant’s change of address but not the department. He stated that he was not aware of the applicant’s obligation to notify the department.

4. Nevertheless, in the applicant response to the NOITTA Mr Awan claimed that he had informed his migration agent of the applicant change of address. The applicant confirmed to the Tribunal that he had informed ASIC of the applicant’s change of address and not the department. He claimed that he had informed his migration agent but accepted the department was not notified of the change of address.

5. Based on the applicant’s own evidence and the department file the Tribunal finds that the applicant did not inform the department of its change of address from the Brooklyn Avenue address to the Bennet St address in accordance with reg 2.83 of the Act. Accordingly, the Tribunal finds that the applicant failed to comply with its obligation to provide information upon certain events occurring in breach of reg 2.83 of the Act, by failing to provide the department with notice of its change of address.

Regulation 2.86 - Obligation to ensure sponsored person works in nominated occupation

1. Regulation 2.86(2)(a) of the Act provides a sponsor is required to ensure that the sponsored worker works in their nominated occupation. A breach of this occupation can include circumstances where there is insufficient evidence to demonstrate that the sponsored worker is working in their nominated occupation.

2. At the site meeting on 29 July 2019, Mr Awan was the only staff member of the applicant present at the business premises.  He explained to the officer that Mr Khan was absent that day. He stated that Mr Khan had attended work the previous day and was expected the following day. Mr Awan was not able to inform the officer for the reason for his absence. In addition, he was not able to show the officers any message or documentation of Mr Khan having requested leave of absence due to ill health or any other reason that day.

3. The NOITTA notes that Mr Awan stated that Mr Khan sometimes helped his cousins in the business at the Brooklyn Avenue address. His evidence to the tribunal as that he had been aware that Mr Khan had worked at the other business from time to time.  He confirmed to the ABF officers that the business at the Brooklyn Avenue address was not a related to the applicant’s business.  Nevertheless, his evidence to the Tribunal was that Mr Khan continued to work for the applicant during the relevant period. In addition, the pay slips provided by the applicant indicate that Mr Khan did continue to be employed by the applicant during the relevant period from 26 July 2018 to 26 July 2019. The applicant provided copies of payroll advises which showed that Mr Khan continued to be employed by the applicant throughout the relevant period and up to September 2019. The Tribunal finds and accepts that Khan continued to work for the applicant during the relevant period.

4. Nevertheless, Mr Awan confirmed to the ABF officers at the site meeting that Mr Aziz was on extended leave due to health concerns for his wife. His evidence to the ABF officers was that he was not aware of how Mr Aziz was supporting himself and his children during his extended unpaid leave. He confirmed to the Tribunal that he did not know how Mr Aziz was supporting himself during this time. The Tribunal referred to Mr Awan the fact the department had advised that Mr Aziz had a taxi licence. Mr Awan said that he was not aware that Mr Aziz had a taxi license at that time but confirmed he had subsequently been informed by the department. His evidence was the mere fact that Mr Aziz had a taxi license was not evidence of itself that Mr Aziz was driving a taxi during his unpaid leave. The applicant confirmed to the Tribunal that he had lost contact with Aziz and that he did not return to work after his unpaid leave period. Mr Awan was not able to say where Aziz was living.

1. Accordingly, for the reason expressed above the Tribunal is satisfied that the prescribed circumstance in reg 2.89 exists for the purpose of s 140M of the Act.

Action to be taken

1. For these reasons, the Tribunal is satisfied that a relevant circumstance for s 140L(1)(a) exist. Accordingly, it is necessary to consider whether one or more of the actions mentioned in s 140M should be taken.

2. In considering what action to take, the Tribunal has had regard to the prescribed criteria, as extracted in the attachment to this decision.

The applicant’s past and present conduct in relation to Immigration

1. This is the first time the applicant had been monitored by the ABF. The applicant was cooperative with the ABF and the Tribunal. The Tribunal gives little weight in the applicant favour in relation to this consideration.

The number of occasions on which the applicant has failed to satisfy the sponsorship obligation

1. For the reason detailed in these reasons the Tribunal has found that the applicant has failed to comply with his obligation in relation to reg 2.82, 2.83, 2.84 and 2.86. The Tribunal gives this consideration significant weight in favour of taking one or more of the actions mentioned in s 140M of the Act.

The nature and severity of the circumstances relating to the failure to satisfy the sponsorship obligation, including the period over which the failure has occurred

1. The applicant failure to fulfil its obligations under reg 2.82, 2.83, 2.84 and 2.86 of the Act have negatively impacted the ABF ability to assess if the sponsored workers received their salaries and entitlements in accordance with the terms and conditions of their employment. In addition, negatively impacted the ABF’s ability to complete and audit of the applicant’s compliance of its obligations. The fact that the applicant changed its address without notifying the ABF is considered reckless and greatly impacts the ABF’s ability to monitor the applicant to ensure that it is maintaining its obligations under the Act. Mr Awan on behalf of the applicant conceded that he lacked the administrative and financial resources to meet the sponsor obligations. The Tribunal gives this consideration great weight in favour of taking one or more of the actions mentioned in s 140M of the Act.

The period of time over which the applicant has been an approved sponsor

1. The applicant was approved as a sponsor once and for a relatively short period of time and had 2 nominations approved under this SBS agreement for:

   ·Mr Junaid Aziz (457 visa valid from 22 June 2016 to 22 June 2020)

   ·Mr Muhammad Imran Khan (457 visa granted on 14 December 2018 but subsequently cancelled on 19 August 2020 resulting in his active related case 2013249).  

2. The Tribunal gives this consideration some weight in favour of taking one or more of the actions mentioned in s 140M of the Act.

Whether, and the extent to which, the failure to satisfy the sponsorship obligation has had a direct or indirect impact on another person

1. Mr Awan’s evidence was that he is now the only worker in the business. Nevertheless, applicant’s the applicant’s cancellation as a sponsor has impacted the applicant’s nominee, Mr Muhammad Imran Khan’s 457 visa (see active related case 2013249). Mr Junaid Aziz’s 457 visa naturally ceased on 22 June 2020.

2. There is no other information on ICSE to establish whether any other persons or applications were impacted by this SBS bar/cancellation. The Tribunal gives this consideration some weight in the applicant’s favour.

Whether, and the extent to which, the failure to satisfy the sponsorship obligation was intentional, reckless or inadvertent

1. The applicant has accepted that its failure to comply with its obligation has been because it lacked the administrative and financial resources to be able to comply with its obligations under the Act. The Tribunal accepts that the applicant is a small business operating effectively as a sole trader. However, from the evidence of Mr Awan the applicant failed to conduct its business in a manner by which it would be able to meet its obligations under the Act. The evidence of Mr Awan was that he was not aware of his obligations in respect to reg 2.82 and reg 2.83. As such it appears that by becoming a sponsor and taking on the sponsored workers the applicant has acted recklessly in the performance of its obligations under the Act. The Tribunal gives this consideration great weight in favour of taking one or more of the actions mentioned in s 140M of the Act.

Whether, and the extent to which, the applicant has cooperated with Immigration, including whether the sponsor informed Immigration of the failure

1. The applicant has cooperated with the ABF and the Tribunal in relation to this proceeding. However, the applicant did not inform the ABF of any breach, primarily because it was not aware that it was in breach of its obligations under the Act. The Tribunal gives this consideration little weight in favour of taking one or more of the actions mentioned in s 140M of the Act

The steps (if any) the applicant has taken to rectify the failure to satisfy the sponsorship obligation, including whether the steps were taken at the request of Immigration or otherwise

1. The applicant’s evidence was that it has introduced a MYOB financial package into its reporting and as such is able to produce more meaningful and updated financial information. The Tribunal gives this consideration no weight in favour of taking one or more of the actions mentioned in s 140M of the Act

The processes (if any) the applicant has implemented to ensure future compliance with the sponsorship obligation

1. Save for the introduction of the MYOB financial package the applicant has not introduced any other process to ensure future compliance. The Tribunal gives this consideration no weight in favour of taking one or more of the actions mentioned in s 140M of the Act

The number of other sponsorship obligations that the applicant has failed to satisfy, and the number of occasions on which the applicant has failed to satisfy other sponsorship obligations

1. The applicant has only been approved an approved sponsor once which was subsequently bar/cancelled. There are no other instances of failed sponsorship obligations. The Tribunal gives this consideration no weight in favour of taking one or more of the actions mentioned in s 140M of the Act

Any other relevant factors

1. There are no other relevant considerations.

Conclusion

1. Considering the totality of the circumstances and having regard to the prescribed criteria the Tribunal finds that the action mentioned in s 140M(1)(a) should be taken.

DECISION

1. The Tribunal affirms the decision under review.

Jason Pennell
Senior Member

ATTACHMENT – Extract from the Migration Regulations 1994

2.89   Failure to satisfy sponsorship obligation

…

1. For paragraph 140L(1)(b) of the Act, the criteria that the Minister must take into account in determining what action (if any) to take under section 140M of the Act in relation to the circumstance mentioned in subregulation (2) are:

(a)    the past and present conduct of the person in relation to Immigration; and
(b)    the number of occasions on which the person has failed to satisfy the sponsorship obligation; and

(c)     the nature and severity of the circumstances relating to the failure to satisfy the sponsorship obligation, including the period of time over which the failure has occurred; and

(d)    the period of time over which the person has been an approved sponsor; and

(e)     whether, and the extent to which, the failure to satisfy the sponsorship obligation has had a direct or indirect impact on another person; and

(f)     whether, and the extent to which, the failure to satisfy the sponsorship obligation was intentional, reckless or inadvertent; and

(g)     whether, and the extent to which, the person has cooperated with Immigration, including whether the person informed Immigration of the failure; and

(h)    the steps (if any) the person has taken to rectify the failure to satisfy the sponsorship obligation, including whether the steps were taken at the request of Immigration or otherwise; and

(i)    the processes (if any) the person has implemented to ensure future compliance with the sponsorship obligation; and

(j)     the number of other sponsorship obligations that the person has failed to satisfy, and the number of occasions on which the person has failed to satisfy other sponsorship obligations; and

(k)    any other relevant factors.

…