PAYLESS IMPORT & EXPORT PTY LTD (Migration)

PAYLESS IMPORT & EXPORT PTY LTD (Migration) [2020] AATA 4901 (8 September 2020)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  Payless Import & Export Pty Ltd
CASE NUMBER:  1731966
HOME AFFAIRS REFERENCE(S):          BCC2017/1151226
MEMBER:De-Anne Kelly
DATE:8 September 2020
PLACE OF DECISION:  Brisbane
DECISION:The Tribunal affirms the decision under review to refuse the nomination.

Statement made on 08 September 2020 at 3:34pm
CATCHWORDS
MIGRATION – nomination of a position – Temporary Residence Transition Nomination stream – position of Head Chef – top individual income tax rate – training commitments and obligations – recipient of the training must be an employee of the standard business sponsor – training expenditure in each year of the sponsorship – reasonable to disregard training obligations – decision under review affirmed
LEGISLATION
Migration Act 1958, s 359
Migration Regulations 1994, rr 2.87, 5.19
STATEMENT OF DECISION AND REASONS
APPLICATION FOR REVIEW

This is an application for review of a decision made by a delegate of the Minister for Immigration and Border Protection on 28 November 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).
The applicant applied for approval on 24 March 2017. 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).
In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in the Temporary Residence Transition nomination stream.
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 the ability to pay the full-time salary for the nominated position for at least two years.
The applicant appeared before the Tribunal on 30 July 2020 to give evidence and present arguments. The Tribunal also received oral evidence from the applicant’s director, Mr Wen Zhang. This was a dual hearing of both the employer nomination refusal review and the visa application refusal review. The Tribunal hearing was conducted with the assistance of an interpreter in the Mandarin and English languages.
The applicant was represented in relation to the review by its registered migration agent.
For the following reasons, the Tribunal has decided to affirm the decision under review to refuse the nomination.
CONSIDERATION OF CLAIMS AND EVIDENCE
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.
Documents including the following were provided with the nomination application:
(a)ABN lookup and historical details for the applicant 90 130 751 147.
(b)ASIC extract.
(c)Acknowledgement of application dated 24 March 2017.
(d)Employment agreement dated 13 June 2015 and signed by the nominee and applicant.
(e)Financial statement for FY 2015 and FY 2016.
(f)Letter from the applicant dated 1 March 2017 and explaining that the applicant company purchased the restaurant in 2014; the nominee has specialised skills and has worked in Australia for 10 years on a 457 visa.
(g)Certification form signed by the applicant.
(h)Contract for purchase of restaurant for $80,000 in March 2014.
(i)Photo of façade of restaurant and interior and diners.
(j)Online application for the nomination dated 24 March 2017.
(k)Company tax return for FY 2015 and FY 2016.
Documents including the following were provided with the review application:
(l)Notice of Decision for Nomination Refusal Notice dated 28 November 2017.
(m)Invitation to provide information from the Tribunal dated 15 June 2020.
(n)Cover email from the registered migration agent dated 29 June 2020.
(o)Photos of food prepared by the nominee.
(p)Photos of the nominee participating in a professional cooking competition and in a number of settings associated with culinary duties.
(q)ANZSCO extract from ABS for Chef.
(r)Employment agreement extension dated 20 June 2020 for four years with employer listed as Payless Import & Export Pty Ltd for position of Head Chef on $185,000 per annum and signed by both the nominee and applicant.
(s)Employment contract dated 1 February 2017 and signed by both nominee and applicant with job description attached.
(t)PAYG payment summary for the nominee for FY 2015, FY 2016, FY 2017 showing gross payment of $185,006; FY 2018 showing gross payment of $185,006; FY 2019 showing gross payment of $169,589.
(u)Letter dated 23 June 2020 explaining that the salary in 2019 was lower as the nominee took 10 days paid leave and 22 days unpaid leave in 2018 when his child was born.
(v)Tax return for the nominee showing gross income for FY 2015 of $141,016; FY 2016 of $185,038; FY 2017 of $185,017; FY 2018 of $185,012; FY 2019 of $169,592.
(w)Notice of assessment for the nominee showing taxable income of the following for FY’s 2015 – $134,704; 2016 – $159,608; 2017 – $159,587; 2018 – $159,612; 2019 – $144,192.
(x)ASIC current and historical extract dated 2020 for Payless Import & Export Pty Ltd showing the sole director and shareholder as Mr Wen Zhang.
(y)Tax return for the applicant business for FY 2018 and FY 2019.
(z)Financial statements for FY 2018 and FY 2019.
(aa)BAS statement for Q3, Q4 2017; Q1, Q2, Q3, Q4 2018; Q1, Q2, Q3, Q4 2019, Q1 2020.
(bb)Organisation chart showing Mr Wen Zhang as managing director of both businesses; the exporting business Payless Import & Export Pty Ltd with two employees and the Restaurant which employs the nominee, a kitchen hand and two waitresses. Names are not provided for any of the employees other than the director and nominee.
(cc)Position descriptions for the managing director and the Head Chef and other employees without names identifying the employees.
(dd)Selection of training invoices and receipts.
(ee)Chinese passport for Tangtang Tian and permanent residency granted 16 September 2010.
(ff)Australian passport for Chi Hung Chan from 26 June 2019.
(gg)Notification of approval of standard business sponsorship from 29 April 2014 to 29 April 2017.
(hh)Handwritten PAYG payment summary statement for Payless Import & Export Pty Ltd for FY 2015 showing five employees and total gross payments of $246,863; FY 2016 showing seven employees and gross payments of $357,387; FY 2017 showing 12 employees and gross payments of $460,512; FY 2018 showing 12 employees and gross payments of $387,354; FY 2019 showing six employees and gross payments of $293,877. Employee names are not provided.
Documents including the following were provided following the hearing:
(ii)Submission from the registered migration agent.
(jj)Updated ASIC documents for both businesses.
(kk)Letters from accountants detailing the payroll for FY 2018, 2019.
(ll)Activity statement July, August, July to September, October, November, October to December 2017.
(mm)Activity statement January, February, January to March, April, May, April to June, July, August, July to September, October, November, October to December 2018.
(nn)Activity statement January, February, January to March, April, May, April to June 2019.
(oo)Selection of training invoices and receipts.
(pp)Company tax return and Financial statement for FY 2013; 2015.
(qq)Australian passport for Chi Hung Chan from 15 October 2009.
(rr)Copy of IMMI 13/030.
(ss)Copy of IMMI 17/074.
(tt)Lease for the applicant’s premises as a restaurant dated 24 March 2014 for five years and for extension to 23 March 2024 for $47,587 per annum.
(uu)Beijing Duck Pty Ltd historical company extract.
The applicant Payless Import & Export Pty Ltd ABN: 90 130 751 147 was established in April 2008 and operates out of Beverley Hills NSW 2209. The managing director is Mr Wen Zhang. On 24 March 2017, the applicant lodged an Employer nomination scheme – visa Subclass 186 application in the Temporary Residence Transition (TRT) stream for the position of Head Chef on a salary of $185,000 in favour of Mr Guanxi Zhang. The sole director is Mr Wen Zhang.
The director advised in the hearing that the business started in 2008 and uses recycled plastic and mainly exported those materials to China previously. They deal with waste and residue exported to China. They have business partners in China and they do further processing there, of four to six 40-foot containers per week so a maximum of 45 to 50 containers per annum. From 2018, when the Chinese placed restrictions on plastic waste they shifted to other countries in South East Asia and currently export three containers per week.
The nominee is managing the canteen. Mr Guanxi Zhang is the best chef he has ever known. When he met him in 2014, he felt he could expand his business. He is a chef from an elite restaurant in Beijing and he is the only chef from that famous restaurant. At that time the business was booming and quite stable. He did not put all his eggs in one basket and they needed to diversify the business. As Australia is multicultural, they need to introduce different foods to Australia including Peking Duck. Business is very good for those dishes. You can Google Mr Zhang’s name. So, because of his expertise, the business is guaranteed. It is because of his expertise that the salary has been determined as $185,000.
The export business has been very stable with lots of steady suppliers and they always come to him for help. Cleanaway is one supplier. Recycling is the business of Payless Import & Export Pty Ltd ABN: 90 130 751 147. The nominee works in the restaurant Beijing Duck Pty Ltd Beverley Hills but it is under a different ABN 28 169 771 064. This restaurant was established in 2014. He has been working there all the time. The ABN of Payless pays his wages.
The employee gave a description of the job and said he manages the staff, menus and calculates the cost of the food, schedules the sequence of cooking and is responsible for promoting new foods, preparing and designing the food. He is also responsible for sourcing the food and training the staff, paying attention to hygiene issues and controlling the cost and supervising customer service.
The director advised there are two employees in Payless Import & Export Pty Ltd and four employees in Beijing Duck Pty Ltd.
In the hearing there was a concern over whether the applicant could satisfy r.5.19(3)(b) and (c) since the nominee was working for another legal entity with a different ABN. The registered migration agent in his post hearing submission made the case that r.2.72(10)(e)(iii)(B) allowed associated entities to employ 457 visa holders. The Tribunal is not making a finding on whether the applicant meets r.5.19(3)(b) or (c).
Law and issues
At the time this employer nomination and visa application were lodged there was an exemption in IMMI 15/083 from various clauses in the legislation for ‘persons who have applied under the Regulations for a visa, and whose earnings will be at least equivalent to the current Australian Tax Office’s top individual income tax rate.’ At the time, this income rate was $180,001 for a nominated position.
The exemption was as follows: cl.186.222(a) and (b) which related to having vocational English. This means that there are exemptions from English levels for more senior positions with a salary over the Tax Office’s top individual income tax rate.
Section 359AA of the Act
At the commencement of the hearing, the Tribunal explained that it may put information to the applicant, under s.359AA of the Act, that would be the reason, or a part of the reason, for affirming the decision that is under review and that it would explain why this information was relevant to the decision and how it may be relied upon in reaching a decision. The Tribunal also advised that the applicant would be given an opportunity to respond to this information in one of three ways: they could request an adjournment and the hearing could be stopped for 15 or 20 minutes or whatever period of time they wished and they could seek advice from the registered migration agent; the applicant could make a written submission within 14 days or an extended period of time if it requested an extension; or they could respond in the hearing. If they responded in the hearing, it would not prevent them from making a written submission within 14 days or a longer period if they requested an extension of time.
Section 359AA provides as follows:
(a) The Tribunal may orally give to the applicant clear particulars of any information that the Tribunal considers would be the reason, or a part of the reason, for affirming the decision that is under review; and
(b) if the Tribunal does so—the Tribunal must:
(i)ensure, as far as is reasonably practicable, that the applicant understands why the information is relevant to the review, and the consequences of the information being relied on in affirming the decision that is under review; and
(ii) orally invite the applicant to comment on or respond to the information; and
(iii) advise the applicant that he or she may seek additional time to comment on or respond to the information; and
(iv) if the applicant seeks additional time to comment on or respond to the information—adjourn the review, if the Tribunal considers that the applicant reasonably needs additional time to comment on or respond to the information.
Training commitments and obligations: r.5.19(3)(f)
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.
Regulation 5.19(3)(f)(i)(A) and (B) refer to Division 2.19 r.2.87B which is provided below, and the instrument in writing for the regulation is IMMI 13/030 which is also provided below:
Division 2.19
Regulation 2.87B Obligation to provide training
(1) This regulation applies to a person who was lawfully operating a business in Australia
at the time of:
(a) the person’s approval as a standard business sponsor; or
(b) the approval of a variation to the person’s approval as a standard business sponsor.
(2) If, during all or part of:
(a) the period of 12 months commencing on the day the person is approved as a standard business sponsor; or
(b) a period of 12 months commencing on an anniversary of that day;
the person is a standard business sponsor of at least one primary sponsored person, the
standard business sponsor must comply with requirements relating to training, specified by the Minister in an instrument in writing for this subregulation, for that 12 month period.
(3) If, during all or part of:
(a) the period of 12 months commencing on the day the terms of the person’s approval as a standard business sponsor are varied; or
(b) a period of 12 months commencing on an anniversary of that day;
the person is a standard business sponsor of at least one primary sponsored person, the
standard business sponsor must comply with requirements relating to training, specified by the Minister in an instrument in writing for this subregulation, for that 12 month period.
(4) The obligations referred to in subregulations (2) and (3) start to apply on the day the
person is approved as a standard business sponsor.
(5) If the period of the person’s approval as a standard business sponsor is less than 6
years, the obligation referred to in subregulation (2) or (3) ends 3 years after the person is approved as a standard business sponsor.
(6) If the period of the person’s approval as a standard business sponsor is at least 6
years, the obligation referred to in subregulation (2) or (3) ends 6 years after the person is approved as a standard business sponsor.
IMMI 13/030 - SCHEDULE A
Training Benchmarks
The business is not required to demonstrate that they are an industry leader in training.
The business is required to show that the training that has been, and continues to be, provided to employees who are Australian citizens and Australian permanent residents is related to the purpose of the business.
The training benchmarks for an established business are:
A) Recent expenditure, by the business, to the equivalent of at least 2% of the payroll of the business, in payments allocated to an industry training fund that operates in the same industry as the business.
OR
B) Recent expenditure, by the business, to the equivalent of at least 1% of the payroll of the business, in the provision of training to employees of the business.
Expenditure that can count towards this benchmark includes:
· paying for a formal course of study for the business’s employees who are Australian citizens and Australian permanent residents or for TAFE or University students, as part of the organisational training strategy
· funding a scholarship in a formal course of study approved under the Australian Qualifications Framework for the business’s employees who are Australian citizens and Australian permanent residents or, for TAFE or University students, as part of the organisational training strategy
· employment of apprentices, trainees or recent graduates on an ongoing basis in numbers proportionate to the size of the business
· employment of a person who trains the business’s Australian employees who are Australian citizens and Australian permanent residents as a key part of their job
· evidence of payment of external providers to deliver training for Australian employees
· on-the-job training that is structured with a timeframe and clearly identified increase in the skills at each stage, and demonstrating:
§ the learning outcomes of the employee at each stage;
§ how the progress of the employee will be monitored and assessed;
§ how the program will provide additional and enhanced skills;
§ the use of qualified trainers to develop the program and set assessments; and
§ the number of people participating and their skill/occupation
Expenditure that cannot count towards this benchmark includes training that is:
· delivered on-the-job, other than on the job training which meets the requirements outlined above under the heading ‘expenditure that can count towards this benchmark’
·confined to only one or a few aspects of the businesses broader operations, unless the training is in the primary business activity
·only undertaken by persons who are not Australian citizens or permanent residents
· only undertaken by persons who are principals in the business or their family members
· only relating to a very low skill level having regard to the characteristic and size of the business.
IMMI 13/030 mentions for both benchmark A and B, ‘Recent expenditure, by the business’. This refers only to employer nominations under the direct entry stream which does not apply to this application under the Temporary Residence Transition stream. For applications under the TRT stream, Division 2.19 and r.2.87B apply and require that training expenditure be made in each year of the standard sponsorship period whenever that may have been.

The most recently approved standard sponsorship period is 29 April 2014 to 29 April 2017.
Regulation 2.87B states as follows:
(5) If the period of the person’s approval as a standard business sponsor is less than 6
years, the obligation referred to in subregulation (2) or (3) ends 3 years after the person is approved as a standard business sponsor.
Therefore, the standard sponsorship period for the consideration of r.5.19(3)(f)(i) is for the first three years. The sponsorship periods are therefore 29 April 2014 to 28 April 2015, 29 April 2015 to 28 April 2016 and 29 April 2016 to 29 April 2017.
The registered migration agent submitted the table below as evidence of meeting the training obligations. He also submitted that the definition of payroll did not include superannuation until IMMI 17/074 was in force on 1 July 2017. The Tribunal notes that there are conflicting definitions of payroll in the Oxford Online dictionary; one states “A list of the company’s employees and the amount of money they are to be paid’ and ‘the total amount of wages paid by a company’. The fact that the Department opted to define payroll subsequently in IMMI 17/074 indicates that their intention was that it would be the total amount paid to employees including superannuation which aligns with the first definition in the dictionary however the agent has submitted that it should just be wages. The Tribunal on this occasion will be flexible and accept the agents definition.

1st year 2nd year 3rd year

Payroll 130,000.40 123,446.76 246,862.75

Benchmark B 1% 1,300 1,234.47 2,468.63

Evidence Tafe NSW $1,200+ $650 GMB Ed. Solns $3,500 McKkr's $3,500

Total training 1,850 3,500 3,500

The Tribunal cannot identify the wages figures that the agent has used in his calculations. The tax returns, financial statements and handwritten PAYG payment summaries for FY 2015 and 2016 show respectively wages of $246,863 and $357,387. The handwritten PAYG for FY 2017 shows gross payments to employees of $460,512. These are the figures the Tribunal will use.
In the hearing, the Tribunal took the applicant through the training requirements, namely determining the sponsorship periods and establishing that the training expenditure has been undertaken ‘for that 12-month period’ such that r.2.87B can be satisfied where it provides:
(3) If, during all or part of:
(a) the period of 12 months commencing on the day the terms of the person’s approval as a standard business sponsor are varied; or
(b) a period of 12 months commencing on an anniversary of that day;
the person is a standard business sponsor of at least one primary sponsored person, the
standard business sponsor must comply with requirements relating to training, specified by the Minister in an instrument in writing for this subregulation, for that 12 month period. (Emphasis added).
The Tribunal explained that the last two receipts from McKkr’s labelled (f) and (g) below are outside the sponsorship period. It is noted they were receipted on 28 June 2018 and 27 June 2019 after the employer nomination was refused on 28 November 2017 by the delegate. It is not unreasonable to find they were paid in anticipation of the merits review at the Tribunal hearing rather than a genuine attempt to provide training to employees who were Australian citizens or permanent residents.
The Tribunal also explained that the first two training receipts labelled (a) and (b) below were also outside the sponsorship period albeit the receipt for 7 April 2014 receipt is only a few days prior to the commencement of the first sponsorship period. However, receipt (b) has no details of who received the training. IMMI 13/030 requires that the training was provided to employees of ‘the business’.

No. Receipts/Invoices, dates. Compliance

23-May-13

(a) Receipt           $1,200 Out of sponsorship periods

Sydney Institute Attendees not identified

Attendees?

07-Apr-14

(b) Receipt               $650 Out of sponsorship periods

Sydney TAFE Attendees not identified

Attendees?

22-Jun-15

(c) Invoice and receipt     $3,500 Attendee not an employee

GBM Ed. Solutions

Chi Hung Chan - Attendee

21-Jun-16

(d) Invoice Receipt         $3,182 Attendee not an employee

McKkr's Inv no; 4618

Chi Hung Chan - Attendee

21-Mar-17

(e) Tax invoice/receipt    $4,727 Attendee not an employee

McKkr's

Chi Hung Chan - Attendee

28-Jun-18

(f) Tax Invoice/receipt     $5,683 Out of sponsorship periods

McKkr's Attendee not an employee

Chi Hung Chan - Attendee

27-Jun-19

(g) Tax Invoice/receipt     $4,245 Out of sponsorship periods

McKkr's

1 Attendee

Receipts (c), (d) and (e) indicate that the training was provided to Chi Hung Chan who under IMMI 13/030 must be an ‘employee’ of ‘the business’. The Tribunal needs to consider whose ‘employees’ they must be. IMMI 13/030 refers to ‘the business’ however this instrument is subject to r.2.87B which provides ‘(1) This regulation applies to a person who was lawfully operating a business in Australia at the time of: (a) the person’s approval as a standard business sponsor’. The person in question would be Mr Wen Zhang since he was approved as the standard business sponsor. Regulation 2.87B is subject to r.5.19(3) which refers to the nominator and r.5.19(3)(b)(i) identifies the nominator as follows:
(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 …
The employee who received the training must be an employee of Mr Wen Zhang. The Tribunal has evidence that Chi Hung Chan has held an Australian passport since 2009 and would qualify as an Australian citizen or permanent resident during the period of the training being provided. The Tribunal has sought evidence that Chi Hung Chan has been an employee of Mr Wen Zhang during the relevant periods of training. It has examined the organisation chart, the job descriptions, and PAYG summaries and can find no reference to Chi Hung Chan. It has sought an employment contract, payslips, PAYG summary, Notice of assessment or similar for Chi Hung Chan and can find no evidence of his employment. It is noted that in the registered migration agent’s submission there is a Document Submission List that states at item eight ‘Passport copy of Payless’ Australian Employee for training Mr Chi Hung CHAN’. However, there is scant evidence to substantiate the assertion that Chi Hung Chan is an employee.
It is open to the Tribunal to find that receipts (c), (d), (e) and (f) do not satisfy IMMI 13/030 as the recipient of the training is not an employee of the business or standard business sponsor and that the training expenditure is nil in each of the three sponsorship years. As such the applicant would not meet r.5.19(3)(f)(i).
The Tribunal will give the applicant the benefit of the doubt and allow that Chi Hung Chan is an employee and include the receipts in the training expenditure.
The Tribunal has prepared a table showing the wages in each of the sponsorship years 29 April 2014 to 28 April 2015, 29 April 2015 to 28 April 2016 and 29 April 2016 to 29 April 2017; the 1% of wages required to meet Benchmark B; and the complying training receipt totals being receipt (c) $3,500 in the second year and receipt (d) for $3,182 plus receipt (e) for $4,727 in the third year. Since GST is refunded to businesses by the Australian Taxation Office is not considered as part of the training expenditure.

First Year Second year Third year Aggregate

Wages     246,863      357,387    460,512

1% B     2,469      3,574      4,605 10,648

Training      3,500      7,909 11,409

Nil Not met Met

It is noted that there is no complying training expenditure in the first year of sponsorship. Regulation 2.87B(2) requires as follows: ‘If, during all or part of: (a) the period of 12 months commencing on the day the person is approved as a standard business sponsor; or (b) a period of 12 months commencing on an anniversary of that day; the person is a standard business sponsor of at least one primary sponsored person, the standard business sponsor must comply with requirements relating to training, specified by the Minister in an instrument in writing for this subregulation, for that 12 month period.’ (Emphasis added)
When the standard business sponsorship was granted the Department sent out a notification of approval as a standard business sponsor with the following advice under the heading, ‘Sponsorship Obligations’: ‘As an approved sponsor, it is your responsibility to ensure that all applicable sponsorship obligations are satisfied for the duration of your sponsorship approval, or in some cases for a different period as specified in the relevant regulation. If you do not comply with these obligations, there may be serious consequences. The Department may; issue an infringement notice to you; bar you from accessing the program for a period; cancel your approval as a sponsor and pursue civil litigation against you should the sponsorship obligations not be met. A list of applicable obligations is available on our website at >
The Tribunal considers there was no training expenditure in the first year of the sponsorship and r.2.87B was not met, Division 2.19 was not met and therefore r.5.19(3)(f)(i) was not met. The Tribunal needs to consider whether it is reasonable to disregard r.5.19(3)(f)(i) and find that the applicant meets r.5.19(3)(f)(ii) for the first year of the sponsorship.
Reasonable to Disregard
The Tribunal is not bound to follow policy but in this case will follow the recommendations in the Department Policy Advice Manual entitled ‘Reasonable to Disregard’ that states the following:
Disregarding regulation 5.19(3)(f)(i) …should only be considered if the delegate is satisfied the nominator has not, at any stage of the most recently approved standard business sponsorship, failed to maintain their commitment to the ongoing training of Australian citizens and permanent residents in their industry, as specified within the training benchmarks. (Emphasis added)
For example, delegates may form the view that it is Reasonable to Disregard regulation 5.19(3)(f)(i) if:
·The nominator has demonstrated meeting a combination of both training benchmark A and B in a required year during the term of the most recently approved sponsorship (for example, an amount equal to 1.5% of payroll was placed in an industry training fund and an amount equal to 0.5% of payroll spent on internal training to make up 2% of payroll spent in training) Or
·The nominator has an aggregate expenditure on training over the term of their most recently approved sponsorship commensurate with the total training commitment for that period.
Conversely, a delegate may form the view that it is not Reasonable to Disregard regulation 5.19(3)(f)(i) if the nominator has failed to demonstrate they have met either training benchmark A or B (or a combination of both), in full in each relevant year of their most recently approved standard business sponsorship.
Different scenarios may provide examples of what a delegate may or may not consider ‘reasonable’, however delegates should not apply regulation 5.19(3)(f)(ii) inflexibly, but must consider the merits of a particular case …
The Tribunal will consider whether the applicant has met the requirement in the first paragraph of ‘Reasonable to Disregard’ that states ‘the nominator has not, at any stage of the most recently approved standard business sponsorship, failed to maintain their commitment to the ongoing training…’ The applicant has failed to maintain their commitment to the ongoing training of Australian citizens and permanent residents in their industry in the first and second of the 12-month sponsorship periods although it has fallen short by only a modest amount in the second year. The applicant does not meet the requirements in the first paragraph of ‘Reasonable to Disregard’ and the recommendation is that disregarding r.5.19(3)(f)(i) should only occur if the applicant has not failed their sponsorship obligations at any stage but the applicant has failed their sponsorship obligation in the first year. As such it considers that it is not reasonable to disregard r.5.19(3)(f)(i) and find the applicant meets r.5.19(3)(f)(ii).
The Tribunal is aware that ‘Reasonable to Disregard’ advises that it must be reasonable and not apply r.5.19(3)(f)(ii) inflexibly and must consider different scenarios. The Tribunal has been flexible and accepted wages as the definition of payroll rather than wages and superannuation. It has also accepted the one attendee at training as an employee of the standard business sponsor when there is scant evidence to substantiate this finding.
The Tribunal notes the registered migration agent’s submission which states:
Since this is their first and only business sponsorship and nomination application, Payless Imports and Exports Pty Ltd’s non-compliance with its training obligation is inadvertent and of very minor nature, and the company has made genuine efforts to meet its training benchmark B obligation. Given the fact that Payless Imports and Exports Pty Ltd has paid more than its required training benchmark B contributions over its sponsorship period, their overall compliance with the training benchmark B is satisfactory, we strongly believe Reg 5.19(3)(f)(ii) should apply in this situation.
The Tribunal considers that the non-compliance may be inadvertent, but it is not minor and some of the training expenditure was made when the employer nomination had already been refused by the Department and in expectation of a merits review at the Tribunal. The Tribunal has exercised its discretion through applying the policy in ‘Reasonable to Disregard’. The Tribunal does note the director’s statement that the restaurant may close if the application is not approved but must consider the legislative requirements for the grant of the employer nomination and on this occasion, they have not been met.
The Tribunal finds the applicant does not meet r.5.19(3)(f)(i) and does not meet r.5.19(3)(f)(ii).
Accordingly, the requirement in r.5.19(3)(f) is not met.
For the above reasons the Tribunal is not satisfied that the applicant meets the requirements of r.5.19(3). The applicant has not sought to satisfy the criteria in the Direct Entry nomination stream, and as such has not met the requirements in r.5.19(4). Accordingly, the nomination of the position cannot be approved. Therefore, the Tribunal must affirm the decision under review.
DECISION
The Tribunal affirms the decision under review to refuse the nomination.
De-Anne Kelly
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.

[2020] AATA 4901

8 September 2020

Key Legal Topics

Areas of Law

Immigration

Administrative Law

Legal Concepts

Judicial Review

Statutory Construction

Procedural Fairness

1st year	2nd year	3rd year
Payroll	130,000.40	123,446.76	246,862.75
Benchmark B 1%	1,300	1,234.47	2,468.63
Evidence	Tafe NSW $1,200+ $650	GMB Ed. Solns $3,500	McKkr's $3,500
Total training	1,850	3,500	3,500

No.	Receipts/Invoices, dates.	Compliance
23-May-13
(a)	Receipt $1,200	Out of sponsorship periods
Sydney Institute	Attendees not identified
Attendees?
07-Apr-14
(b)	Receipt $650	Out of sponsorship periods
Sydney TAFE	Attendees not identified
Attendees?
22-Jun-15
(c)	Invoice and receipt $3,500	Attendee not an employee
GBM Ed. Solutions
Chi Hung Chan - Attendee
21-Jun-16
(d)	Invoice Receipt $3,182	Attendee not an employee
McKkr's Inv no; 4618
Chi Hung Chan - Attendee
21-Mar-17
(e)	Tax invoice/receipt $4,727	Attendee not an employee
McKkr's
Chi Hung Chan - Attendee
28-Jun-18
(f)	Tax Invoice/receipt $5,683	Out of sponsorship periods
McKkr's	Attendee not an employee
Chi Hung Chan - Attendee
27-Jun-19
(g)	Tax Invoice/receipt $4,245	Out of sponsorship periods
McKkr's
1 Attendee

First Year	Second year	Third year	Aggregate
Wages	246,863	357,387	460,512
1% B	2,469	3,574	4,605	10,648
Training	3,500	7,909	11,409
Nil	Not met	Met