PIOVILLICO FLOWERS PTY LTD (Migration)

PIOVILLICO FLOWERS PTY LTD (Migration) [2019] AATA 4488 (15 August 2019)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  PIOVILLICO FLOWERS PTY LTD
CASE NUMBER:  1612882
DIBP REFERENCE(S):  OPF2016/1929
MEMBER:Mary Sheargold
DATE:15 August 2019
PLACE OF DECISION:  Melbourne
DECISION:The Tribunal sets aside the decision under review and substitutes a decision not to take one or more of the actions specified in s.140M of the Migration Act 1958.
Statement made on 15 August 2019 at 3:17pm

CATCHWORDS
MIGRATION – cancellation – sponsorship approval – compliance with sponsorship obligations – record keeping – payment of wages in cash – capability for independent verification – Department policy – credible witness – ensure sponsored person work in nominated occupation – Nurseryperson – Departmental site visit – interview by ABF officers – consistency with ANZSCO description of tasks – decision under review set aside
LEGISLATION
Migration Act 1958 (Cth), s 140M
Migration Regulations 1994 (Cth), rr 2.82, 2.86, 2.89

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 to take an action under s.140M of the Migration Act 1958 (the Act) in relation to the applicant’s sponsorship.
The applicant was approved as a standard business sponsor on 11 February 2013. On 4 August 2016, the delegate decided to bar the applicant for 12 months from sponsoring additional persons for Temporary Work (Skilled) (Subclass 457) visas under s.140M(1)(c) of the Act on the basis that the applicant failed to satisfy a sponsorship obligation under r.2.89 of the Migration Regulations 1994 (the Regulations). Specifically, the applicant was found to have breached its obligations under r.2.82 to keep records of monies paid to Ms Ashaben Parimal Patel that are capable of being verified by an independent person, and was found to have breached its obligation under r.2.86 to ensure Ms Patel works in her nominated position of Nurseryperson.
Mr Robert Piovillico, the managing director of Piovillico Flowers Pty Ltd (the applicant), appeared before the Tribunal on 9 August 2019 to give evidence and present arguments. The Tribunal also received oral evidence from the nominee, Ms Patel.
The applicant was represented in relation to the review by its registered migration agent. The representative attended the Tribunal hearing.
Non-disclosure certificate issued pursuant to s.375A of the Act
At the hearing, the Tribunal informed the applicant that a delegate of the Minister had issued a non-disclosure certificate in relation to folios 6, 7-18, 19-20, 72-73, 78, and 118-120 of the Departmental file on the basis that disclosure of that information “would be contrary to public interest because they contain “personal information relating to individuals other than the review or visa applicant” (in respect of folios 6, 19-20, 78, and 118-120) and because they contain “documents or information which would normally be exempt from disclosure under Part IV of the FOI Act and do not fall within s.375” (in respect of folios 7-18 and 72-73).
The Tribunal told the applicant that it considered the non-disclosure certificate to be invalid. The applicant was invited to comment on the validity of the non-disclosure certificate, but declined to do so. As such, the Tribunal finds the non-disclosure certificate to be invalid.
For the following reasons, the Tribunal has decided to set aside the decision under review and substitute a decision not to take one or more of the actions specified in s.140M.
CONSIDERATION OF CLAIMS AND EVIDENCE
Sections 140K, 140L and 140M of the Act provide for the imposition of sanctions on approved sponsors in certain circumstances.
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.
For these purposes, the circumstances are prescribed in r.2.89 - r.2.94B 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.
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: r.2.89 – r.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?
In the present case, the delegate found that the applicant failed to satisfy 2 sponsorship obligations as required under r.2.89 of the Regulations.
Failure to satisfy a sponsorship obligation: r.2.89
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: r.2.89(2).
Regulation 2.82 – Obligation to keep records
In the Notice of Decision dated 4 August 2016, the delegate found that the applicant had failed in its obligation to keep records because it made cash payments to Ms Patel. The delegate noted that while the applicant “appears to have kept a record of monies paid to Ms Patel in the form of payslips, it has failed to satisfy subregulation 2.82(2)(c)(ii) as the Department does not consider the records of cash payments made to the [sic] Ms Patel to be capable of being verified by an independent person.”
At the hearing, Mr Piovillico admitted that, prior to the applicant being monitored by Australian Border Force (ABF) in May 2016, the applicant’s employees were paid cash wages. Mr Piovillico told the Tribunal that traditionally, the applicant’s business received many payments in cash. He told the Tribunal that his elderly father, the previous managing director of the applicant, managed the payroll week to week, and found it simplest to use the cash the business received for payments to pay the employees their wages each week, rather than take the cash to the bank and then transfer funds to the employees by EFT.
Mr Piovillico told the Tribunal that his father prepared manual payslips each week, showing the gross and net amounts of pay, that the appropriate income tax was always withheld from cash wages paid to staff, and that the applicant made (and continues to make) superannuation contributions for its employees. Mr Piovillico was upfront in acknowledging he understood the Department’s position in relation to payment of wages in cash because it would be easy to write one thing on a payslip and pay staff a different amount.
The Tribunal notes that in his email response (dated 9 July 2016) to the Department’s Notice of Intention to Take Action (NOITTA) dated 21 June 2016, Mr Piovillico informs the Department that since his discussion regarding the payment of cash wages to Ms Patel, he commenced directly depositing her weekly wage into her bank account. The Tribunal also notes further written submissions by Mr Piovillico, on the applicant’s letterhead (but undated) appearing on the Departmental file. In those submissions, Mr Piovillico states that the applicant has an excellent history of taxation, BAS, superannuation payments and has documentation including workplace insurance and work safety documents. Mr Piovillico states he can provide all documents that may be requested by ABF for verification, and that he is willing to undergo an audit from any qualified third party if required.
The Tribunal accepts Mr Piovillico’s evidence that after ABF’s visit to the applicant’s business in May 2016, Ms Patel’s weekly wage (and that of her husband) was paid by EFT, and accepts his evidence that the applicant ceased paying Ms Patel’s wage in cash from that time. Mr Piovillico told the Tribunal that over the past three years, the applicant’s business has modernised and almost all transactions are made electronically, and that payment of wages to all staff (not just Ms Patel) is done by EFT on a weekly basis.
At the hearing, Mr Piovillico provided the Tribunal with a number of documents, including PAYG statements for Ms Patel for the financial years ending on 30 June 2016, 30 June 2017, 30 June 2018 and 30 June 2019; evidence of superannuation contributions paid for the applicant’s employees in 2018 and 2019, samples of bank statements for the applicant’s business from 2017, 2018 and 2019 showing direct deposits to Ms Patel’s bank account for her weekly wages and business activity statements from 1 July 2015 to 30 June 2019.
The Tribunal found Mr Piovillico to be forthright and frank in his evidence, and found him to be a credible witness. The Tribunal accepts that Mr Piovillico genuinely intends to comply with his legal obligations in the conduct of the applicant’s business. He has demonstrated to the Tribunal that the applicant has changed its approach to the payment of wages.
The Tribunal notes that r.2.82(2)(c) applies to standard business sponsors, and requires that the sponsor keep a record of money paid to the primary sponsored person per r.2.82(3)(e)(i) (in this case, Ms Patel), and that such records must be maintained in a manner capable of being verified by an independent person. The Tribunal notes that the meaning of “capable of being verified by an independent person” is not set out in either the Act or the Regulations.
Further, the Tribunal notes that r.2.82(3)(e)(i) only requires a sponsor to keep a record of the money paid to the primary sponsored person. Nowhere in r.2.82 is it prescribed that monies paid must be paid by electronic funds transfer. While the Tribunal notes the Departmental policy (set out in the Procedures Advice Manual 3) states that “the ABF’s position is that cash payments are generally not capable of being verified by an independent person,” and that “sponsors are strongly encouraged to use salary payments which clearly meet the requirements of regulation 2.82,” “strong encouragement” does not oblige the sponsor to use electronic funds transfer to pay the primary sponsored person.
The Tribunal observes that a requirement to pay overseas workers by electronic funds transfer would be inconsistent with an employer’s obligations set out in the Fair Work Act 2009 (Cth) (Fair Work Act): s.323(2)(a) of that Act prescribes cash as a permissible method for the payment of wages. The Tribunal finds that paying an overseas worker in cash does not in itself breach r.2.82. The Tribunal notes that the Department’s policy is in conflict both with the obligations in r.2.82 and in s.323(2)(a) of the Fair Work Act, and as such, the Tribunal will not apply the Department’s policy in this case: to do so would be imposing obligations in excess of those set out at law.
While the Tribunal understands the Department’s policy intention behind “strongly encouraging” employers to utilise electronic funds transfer as a payment method that is capable of being verified by an independent person, the Tribunal observes that such payment methods could still be exploited by employers. In circumstances where the applicant has clearly demonstrated to ABF that it has consistently kept records of monies paid to Ms Patel, both via her payslips and PAYG statements, as well as evidence before the Tribunal including the applicant’s quarterly Business Activity Statements (BAS), its sample bank statements and its superannuation contributions paid to its employees, the Tribunal finds the applicant has substantially complied with its obligations set out in r.2.82.
Regulation 2.86 – Obligation to ensure sponsored person works in nominated occupation
In the Notice of Decision dated 4 August 2016, the delegate states they were satisfied that the daily tasks completed by Ms Patel, “as sighted by Departmental officers and described in interview by both the visa applicant and the sponsor, are not consistent with the ANZSCO definition of a Nurseryperson,” and found that the majority of Ms Patel’s work is that of a lower skilled level worker, a Packer.
In the NOITTA, the delegate states:
During the site visit conducted by Departmental officers on 17 May 2016, Ms Patel advised officers that other than actioning standard duties of a flower picker/packer for the sponsor, she occasionally administers sulphur to diseased flowers.
When further questioned about her duties as a nursery person, Ms Patel stated that she has no part in temperature controls in the nursery, or determining what type of chemical and how much to administer. Ms Patel stated she does not maintain any records relating to soil mixtures, chemical treatments and planting, as part of her role, and this type of work is actioned by the directors. When further questioned about the types of infestations applicable to the Gerbera’s [sic], which Ms Patel claims to be responsible for treating, she appeared to have limited knowledge and was unable to describe the symptoms of disease to officers.
I note that during the phone interview with director, Robert Piovillico, he disclosed that Ms Patel was nervous while speaking with officers. While I can appreciate Ms Patel may have been affected by nerves, I find that the questions asked by officers would be considered a basic line of questioning to anyone with experience working in horticulture.
In his email response to the NOITTA, dated 9 July 2016, Mr Piovillico stated that the delegate’s assertion that Ms Patel has no knowledge of describing symptoms of disease “unfortunately is very untrue” and that he relies solely on Ms Patel to monitor changes and problems occurring in the applicant’s gerbera department, such as mite infestation, white fly, aphids, plant rot, mildew and any other disease related problems. He also stated that Ms Patel does engage in hand application of sulphur and slug/snail bait, although acknowledges that the applicant does not permit its employees to handle or mix chemicals other than application. He stated that planting only occurs between November and January and that Ms Patel plays an important role in planting “even though potting is automatic.”
At the hearing, Mr Piovillico maintained that Ms Patel does perform the work of a Nuseryperson as set out in ANZSCO 362411, and discussed with the Tribunal the types of work Ms Patel engages in as set out in the ANZSCO description of the tasks performed by a Nurseryperson. For completeness, the Tribunal notes the tasks included for a Nurseryperson (ANZSCO 362411) are:
·     preparing potting media and containers before planting;
·     selecting seeds, bulbs and cuttings, and planting them in beds, lawn areas and tubs;
·     budding and grafting vegetative material onto root stock;
·     watering plants manually and controlling automatic watering operations;
·     applying pesticides to control pests, diseases, weeds and nutritional and environmental plant disorders;
·     keeping records of soil mixtures, planting, treatments, losses and yields;
·     selecting plants and packaging them for presentation and delivery;
·     advising customers on plant care and appropriate plants for local conditions; and
·     may plan sales area layouts and visual merchandise presentation.
Mr Piovillico conceded that in the context of the applicant’s business, Ms Patel does not deal directly with customers, nor is the applicant’s business a retail nursery store, and as such, she does not advise customers on plant care and appropriate plants for local conditions, nor does she plan sales area layouts and visual merchandise presentation. However, Mr Piovillico submitted that she otherwise performs the majority of these tasks.
Mr Piovillico gave detailed evidence regarding the operation of the applicant’s business, and explained that different tasks are focused on at different times of year and on different days of the week, and even at different times of day. For example, Mr Piovillico noted that flowers and plants are cut each morning, and that different tasks are performed in the afternoon. Mr Piovillico told the Tribunal that Ms Patel has been responsible for management of the applicant’s gerbera section for a number of years, and that it is her job to ensure that the plants are healthy and growing as expected, and to ensure they remain as free of disease as possible. While Mr Piovillico admitted Ms Patel does not physically engage in some of the aspects of spraying pesticides due to limitations in her physical strength, she is required to analyse and identify pests, determine how they are to be treated, and where appropriate, she engages in the hand application of some pesticides. He also noted that she is required to manage weeds in the gardens.
Mr Piovillico told the Tribunal that planting usually occurs once a year, but that when planting is taking place, it is a very busy time for the applicant’s business. He told the Tribunal that winter is the most quiet time of year for the applicant’s business, and is the time at which most people will take their holidays. He noted that ABF had visited the applicant’s business in mid May, when the winter season was starting, and as such, there was not an opportunity for ABF officers to witness Ms Patel engaging in the tasks around planting and the necessary preparations for that. He maintained that she does engage in that work, and plays a leading role in that work, at the time of year it is conducted. Mr Piovillico admitted that when ABF attended the applicant’s business, Ms Patel had been engaged in picking and packing flowers, but stated this was consistent with the task of “selecting plants and packaging them for presentation and delivery” as set out in the ANZSCO description of tasks for a Nurseryperson.
Mr Piovillico also told the Tribunal that Ms Patel was one of his most qualified and skilled workers, and noted that the applicant’s business relies on her to ensure the lower skilled labourers perform tasks as required on a day to day basis. He told the Tribunal that Ms Patel is trusted and highly skilled worker and that it would a “waste” to use someone with her skills simply as a packer. He refuted the delegate’s findings that the majority of Ms Patel’s work is that of a lower skilled level ‘Packer’.
The Tribunal asked Ms Patel if she recalled the interview she had with ABF officers. She told the Tribunal that she did remember the interview, and that she was only asked questions about the tasks she performed that could be answered with a “yes” or “no” answer. The Tribunal asked Ms Patel if she believed she had been able to tell the ABF officers about all aspects of her job. She told the Tribunal that she knew there were other things she did in her job, but that she was scared in the interview and thought it was best to stick to answering questions than to risk upsetting the officers by offering additional information. The Tribunal found Ms Patel to be an honest and truthful witness, and accepts her evidence that she was not able to fully describe her job to ABF officers when she was interviewed.
The Tribunal accepts Mr Piovillico’s evidence as set out in paragraphs 29 to 32 above, as well as Ms Patel’s evidence in paragraph 33 above. Based on that evidence, the Tribunal finds that Ms Patel does perform the majority of the tasks of a Nurseryperson as set out in ANZSCO 362411. As such, the Tribunal finds that the applicant met its obligation under r.2.86 to ensure that Ms Patel worked in her nominated occupation of Nurseryperson.

Accordingly, the Tribunal is not satisfied that the prescribed circumstance in r.2.89 exists for the purpose of s.140M of the Act.
Action to be taken
As the Tribunal finds that none of the circumstances for s.140L(1)(a) exist, it follows that the power to take an action under s.140M does not arise.
DECISION
The Tribunal sets aside the decision under review and substitutes a decision not to take one or more of the actions specified in s.140M of the Migration Act 1958.
Mary Sheargold
Member

ATTACHMENT – Extract from the Migration Regulations 1994
2.89   Failure to satisfy sponsorship obligation
…
(3)      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.
…

[2019] AATA 4488

15 August 2019

Key Legal Topics

Areas of Law

Immigration

Administrative Law

Legal Concepts

Judicial Review

Procedural Fairness

Statutory Construction

Remedies