Quay Civil Pty Ltd (Migration)

Quay Civil Pty Ltd (Migration) [2024] AATA 662 (5 March 2024)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  Quay Civil Pty Ltd
REPRESENTATIVE:  Mr Miklos Rakos (MARN: 1173293)
CASE NUMBER:  2307067
HOME AFFAIRS REFERENCE:               OPF2022/13554
MEMBER:R. Skaros
DATE:5 March 2024
PLACE OF DECISION:  Sydney
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 (Cth).

Statement made on 05 March 2024 at 10:48am
CATCHWORDS
MIGRATION – cancellation – standard business sponsorship – compliance with sponsorship obligations – keep records – payment of wages in cash – independent verification – unclear or incomplete information on Department’s website – combination of signed payslips, BAS statements, taxation records, business summaries and superannuation payment records – micro-business – credible witness – decision under review set aside
LEGISLATION
Migration Act 1958 (Cth), ss 140M
Migration Regulations 1994 (Cth), r
CASES
Hasran v MIAC [2010] FCAFC 40
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 (Cth) (the Act) in relation to the applicant’s sponsorship.

The applicant was approved as a standard business sponsor on 19 June 2018 for a period of five years. On 1 May 2023, the delegate decided to bar the applicant from sponsoring more people under the terms of the approved standard business sponsorship (which was due to cease on 19 June 2023) and from making applications for approval as a standard business sponsor or temporary activities sponsor until 19 December 2023. The decision was made under s 140M on the basis that the applicant had failed to satisfy various obligations as a standard business sponsor.
The applicant’s director, Mr Padraic Kennedy, appeared before the Tribunal on 15 February 2024 to give evidence and present arguments.
The applicant was represented in relation to the review. The representative attended the hearing.
The Tribunal has before it the Department’s file which includes a certificate and notification issued by the delegate under s 376 of the Act in respect of various documents. The representative did not raise any concerns regarding the validity of the certificate. The Tribunal is satisfied that the certificate, which was signed and dated by a delegate of the Minister, provides a valid public interest reason for non-disclosure of the information in the subject documents. In any case, the Tribunal has a discretion to disclose the information, which was given in confidence to the Department and, to the extent it was relevant to the issues in the review, the Tribunal discussed the nature of the information with Mr Kennedy at the hearing and he was invited to comment upon it.
6.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 regs 2.89–2.94B 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: 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?
11.In the present case, the delegate found that the applicant had failed to satisfy several sponsorship obligations.
Failure to satisfy a sponsorship obligation: reg 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: reg 2.89(2).
The delegate considered that the applicant had failed to satisfy the following sponsorship obligations:
·Regulation 2.79 – obligation to ensure equivalent terms and conditions of employment.
·Regulation 2.84 – obligation to provide information when certain events occur.
·Regulation 2.86 – obligation to ensure primary sponsored person works or participates in the nominated occupation, program or activity.
The applicant operates a civil works business which specialises in excavation, concreting, drainage and conduit placements. The business was established by Mr Kennedy, who is a qualified civil engineer, and his brother. The applicant’s clients include major utility providers, such as Sydney Water and TransGrid, and several regional councils. They currently have five major projects on foot across NSW, including the building of water reservoirs at Wagga Wagga and Kemps Creek. The applicant’s turnover in the last financial year was $13 million. They currently employ 25 people, including civil engineers, project managers, supervisors, administrative staff, carpenters and drainers. Six of the employees are on temporary visas, including Subclass 482 and bridging visas, and the others are either Australian citizens or permanent residents. Two of the sponsored persons who were the subject of monitoring by the Australian Border Force (ABF) have now been granted permanent resident visas by the Department.
The applicant was most recently approved as a standard business sponsor on 19 September 2018 for a period of five years. Departmental records indicate that the applicant sponsored seven people for Subclass 482 visas under that agreement, including three carpenters, two civil construction engineers and two drainers. This included the following three approved nominated positions which were the subject of monitoring by the ABF:
·Carpenter in respect of Mr Guyen Enkhbat, with a nominated salary of $75,088.
·Formwork carpenter in respect of Mr Erdene-ochir Baatar, with a nominated salary of $75,088.
·Formwork carpenter in respect of Mr Gansukh Namnansuren, with a nominated salary of $75,088.
On 24 November 2022, as part of the monitoring process, the ABF wrote to the applicant pursuant to reg 2.83 requesting records and information, which relevantly included information relating to the employment of the above-named sponsored persons for the period from 1 August 2022 to 31 October 2022. In response to the request, the applicant’s then representative provided various documents which relevantly included the following:
·List of all employees, including all temporary visa holders.
·Employment contracts, payslips, timesheets, income statements, leave request forms and payroll remittance notices in respect of the above-named sponsored persons.
·Loan agreement between the applicant and Mr Enkhbat, together with bank statements and records of regular repayments.
·Evidence of recruitment and migration fees paid by the applicant in relation to the nomination applications for the sponsored persons.
·Letter regarding the COVID-19 stand down periods.
In his letter to the Department, Mr Kennedy said it had been an unprecedented and difficult time due to the impacts of the COVID-19 outbreak and that employees had been stood down without pay for different periods between 2020 and 2022. Details of the stand down periods were set out in the letter and included the following periods, which were of concern to the Department, as they occurred after the COVID-19 restrictions in NSW had been lifted:
·Mr Namnansuren and Mr Baatar: from 31 January 2022 to 13 February 2022 and from 19 February 2022 to 20 March 2022 (periods totalling six weeks).
Mr Kennedy also indicated that Mr Enkhbat had taken unpaid parental leave for the following periods: from 7 June 2021 to 23 July 2021 and from 28 August 2021 to 20 February 2022, and had to travel to Mongolia to visit his sick father from 10 April 2022 to June 2022.
In a submission to the Department, the applicant’s then representative noted that the annual salaries paid to the sponsored employees in the 2020/21 and 2021/22 financial years were lower than the nominated salaries due to the stand down periods. It was submitted that the applicant, like most civil construction companies around Australia, was seriously affected by the COVID-19 pandemic and was only just starting to recover. It was noted that all sponsored persons had returned to full-time employment and were on track to earn the nominated salary in the 2022/23 financial year. The representative also referred to the Department’s announcements in November 2020 (extracts of which were provided) regarding the COVID-19 concessions for Subclass 482 visa holders who had been stood down, had their hours reduced or asked to take unpaid leave, indicating that they would not be disadvantaged and that this time would count as time employed for the purposes of the permanent visa application under the Temporary Residence Transition pathway. It was submitted that all employees of the business (including Australian citizens and permanent residents) were stood down and that the sponsored employees were not treated any differently.
On 3 February 2023 ABF officers conducted interviews with Mr Namnansuren, Mr Baatar and Mr Enkhbat. They also interviewed the applicant’s finance manager. The information obtained during the interviews with the sponsored persons indicated that they were being paid at or higher than the nominated salary, that they worked 38 hours a week, and in some cases overtime, and that they completed timesheets. They all indicated that they were entitled to four to five weeks of annual leave and each employee was aware of their annual leave balance. The employees also provided details of the periods they were stood down. Mr Enkhbat provided details of his unpaid leave and the loan agreement with the applicant, stating that during COVID-19 he had to take a lot of leave and did not have sufficient income, his wife had a third child and his father needed money for medical treatment in Mongolia. He said he requested loans (of $20,000) from the company in January 2021 and he has been repaying $600 each week from his wages. Documents relating to the loan agreement and records of the loan repayments were provided to the Department. The sponsored persons also provided evidence of their day-to-day tasks which were consistent with the occupation of carpenter/formwork carpenter. The officer conducting the interview concluded that they were satisfied that each of the sponsored persons were working in their nominated occupations.
The finance manager provided details about the employment of each of the sponsored employees which was consistent with other evidence before the Department. In relation to why Mr Namnansuren and Mr Baatar were stood down for periods totalling 6 weeks in January 2022 and February/March 2022, the finance manager said the projects had slowed. He also indicated that about five or six people had been stood down and they were sent a letter informing them of the stand down periods.
On 20 March 2023, the ABF issued the applicant with a Notice of Intention to Take Action (NOITTA) setting out information in relation to which action was being considered. Relevantly, the ABF raised concerns regarding the applicant’s compliance with their sponsorship obligations in regs 2.79, 2.84 and 2.86.
In determining whether there has been a breach of sponsorship obligations as set out in the NOITTA, the Tribunal has considered the relevant evidence before it as follows.
Compliance with the sponsorship obligation in reg 2.84
Regulation 2.84 requires the applicant to provide information to the Department when certain events occur. Relevantly, the obligation in reg 2.84(3)(a) requires a sponsor to notify the Department about the cessation, or expected cessation, of a primary sponsored person’s employment with the sponsor. The applicant is required to notify the Department in a specified manner and within the specified timeframe of 28 days.
Information before the Department, which was set out in the NOITTA, indicated that the applicant had successfully nominated a drainer, Mr Harry McManamon, who was granted a Subclass 482 visa on 15 February 2019 which was valid for four years. The Department subsequently received information which indicated that Mr McManamon had ceased working for the applicant in June 2019 and was working for another business which had sought to nominate him. The Department had no record of the applicant having properly notified them of Mr McManamon’s cessation of employment.
In their response to the NOITTA, the applicant submitted that Mr McManamon had informed them that he would transfer his nomination to his new employer and the company assumed that the transfer had been facilitated. The applicant acknowledged that they had failed to notify the Department of Mr McManamon’s resignation from the business.
In recent submissions to the Tribunal, it was conceded that the applicant had breached their obligation in reg 2.84 by failing to inform the Department that Mr McManamon had ceased employment with them. The applicant indicated that they had put measures in place to ensure this does not reoccur.
The Tribunal finds that the applicant has failed to notify the Department (in the prescribed manner and within the prescribed period) about the cessation of employment of a primary sponsored person (Mr McManamon). The applicant has therefore failed to comply with the sponsorship obligation in reg 2.84.
Compliance with the sponsorship obligation in reg 2.86
Regulation 2.86 requires an approved sponsor to ensure that sponsored employees work in the nominated occupation: reg 2.86(2)(a), and that they do not work in an occupation unless they were nominated for that occupation and the nomination has been approved by the Minister under s 140GB of the Act: reg 2.86(2)(b). The obligation commences on the day the sponsored person is granted the Subclass 482 visa or, if the primary sponsored person already holds the relevant visa, the obligation commences on the day the nomination relating to the sponsored person is approved.
The ABF had concerns about the employment of one of the sponsored employees, Mr Guyen Enkhbat, who held a Subclass 482 visa on the basis of an approved nomination in the occupation of formwork carpenter. It was indicated in the NOITTA that the applicant, when responding to the request for information, had advised the Department that Mr Enkhbat was on unpaid parental leave from 7 June 2021 to 23 July 2021 and from August 2021 to 20 February 2022. The Department was also advised that Mr Enkhbat had to return to Mongolia due to his father being unwell from April 2022 to June 2022.
The ABF expressed its suspicion that Mr Enkhbat may have breached condition 8607 (work limitation) imposed on his visa because Mr Enkhbat’s bank records for the period from 1 July 2021 to 30 June 2022 showed that he had received money on several occasions from other individuals and companies. The ABF was further concerned that recent documents provided by the applicant indicated that Mr Enkhbat recently had several days of unpaid leave, which raised the concern that he may still be working in breach of condition 8607.
In responding to the NOITTA, the applicant said they were not aware that Mr Enkhbat was working for other organisations. The applicant’s director provided copies of text messages and emails sent to and from Mr Enkhbat indicating that Mr Enkhbat had requested parental leave as his wife was due to give birth to their third child, which was approved by the applicant, and leave to visit his father in Mongolia who was unwell, which was also approved.
Other than the bank transactions which appear on Mr Enkhbat’s bank statement, there was no other information gathered by the ABF to establish where, when and for whom Mr Enkhbat may have worked during his periods of unpaid leave. The record of the interview conducted by ABF officers with Mr Enkhbat on 3 February 2023 does not indicate that Mr Enkhbat was asked about the transactions in his bank statements or the source of the funds that the ABF suspected was from other employment. Furthermore, the Department does not appear to have acted on their suspicion that Mr Enkhbat may have breached condition 8607 as no steps appear to have been taken to cancel his Subclass 482 visa, such as the issuing of a notice of intention to consider cancellation. Mr Kennedy gave evidence at the hearing that Mr Enkhbat still holds his Subclass 482 visa and that he continues to work for the applicant as a carpenter.
Mr Kennedy indicated that he was not aware that Mr Enkhbat had worked for anyone else or in any other occupation. The Tribunal asked Mr Kennedy whether he had considered how Mr Enkhbat could have survived financially (and supported his family) given the long periods of unpaid leave he took. Mr Kennedy said Mr Enkhbat had requested a loan from the company because his father in Mongolia required medical treatment. Mr Kennedy said they agreed to provide the loan to Mr Enkhbat to assist him during that time. When asked about why the sponsored employees were stood down after the COVID-19 restrictions had been lifted in NSW (in December 2021), Mr Kennedy explained that the projects were slowly restarting, but they experienced flooding in February/March 2022 at one of the sites they were working at. They wanted to transfer the workers to another project at Northmead, but that was also delayed, and they had to stand down the trade workers until the sites were operational. When asked if all employees of the company were stood down, Mr Kennedy said only the trade workers were stood down, but they had maintained the employment of the engineers, supervisors and administrative staff.
The Tribunal has also considered the written submissions made by the applicant’s representative on review. It was contended that the applicant should not be found to have breached their sponsorship obligation in reg 2.86 because there is no legislative power available to the applicant to ensure compliance by employees whilst they are on leave. It was submitted that this obligation should only apply to employees within its business and that the applicant should not be made responsible for activities of a sponsored person outside their company’s business operations. It was contended that the applicant’s managers had no knowledge that Mr Enkhbat had misused his legitimate parental leave to work for someone else.
In addressing the delegate’s findings that the applicant was reckless in not contemplating how the sponsored workers would be able to support themselves during the stand down periods, it was submitted that the applicant was neither reckless nor lacked interest in the wellbeing of their employees and had in fact assisted Mr Enkhbat by providing loans totalling $20,000. It was contended that the applicant, by law, has limited power to pry into the personal and financial circumstances of their employees. It was submitted that one of the minimum National Employment Standards imposed by the Fair Work Act2009 is parental leave and that employees who have been employed in the business in the preceding 12 months were entitled to have up to 12 months of unpaid parental leave. It was submitted that as Mr Enkhbat had been employed with the applicant since February 2020, he was entitled to parental leave of up to 12 months and that the applicant had confirmed this entitlement in writing with Mr Enkhbat in May 2021 when they approved his leave on this basis.

It was further submitted that the applicant had sought advice from the Fair Work Ombudsman about monitoring their employees during periods of leave or ascertaining their financial situation and they were informed that there was no provision under the Fair WorkAct2009 to monitor employees or their financial situation during periods of unpaid leave. In relying on the documentary evidence provided, including the emails and text messages between the applicant’s director and Mr Enkhbat, it was submitted that the applicant complied with their obligation to provide the leave to which Mr Enkhbat was entitled and that if they had refused to grant the requested leave, they may have been in breach of their obligations under the Fair WorkAct2009.
As explained to Mr Kennedy at the hearing, approved sponsors are required to comply with sponsorship obligations under the Act (and Regulations) in addition to obligations under the Fair WorkAct2009 and other applicable industrial relations legislation. Mr Kennedy indicated he understood this and said the company has done what it could to comply with obligations.
The obligation in reg 2.86(2) required the applicant to ensure that Mr Enkhbat:
(a) worked in the nominated occupation; and
(b) did not work in an occupation unless both of the following apply:
(i)the occupation was nominated by the person in relation to the primary sponsored person under s 140GB of the Act.
(ii)the nomination was approved by the Minister under s 140GB of the Act.
40.The Tribunal accepts, as submitted by the applicant, that there is no provision in any legislation to enable them to monitor the conduct of employees whilst they are on leave. The Tribunal does not consider that this is what the obligation in reg 2.86(2) is requiring an approved sponsor to do. They are, however, expected to demonstrate that they have taken steps or implemented measures to ensure that sponsored employees work only in the occupation for which they were nominated and that they do not engage in work for which a nomination has not been approved. Depending on the circumstances, this could include regularly monitoring the tasks undertaken by the sponsored employee throughout their employment, communicating the obligation to the sponsored employee, ensuring they understand the requirement and possible consequences of non-compliance and keeping detailed records of the steps taken to ensure compliance. The Tribunal does not consider that the obligation in reg 2.86(2) relates only to the work undertaken by the sponsored person whilst in the employ of the sponsor. The provision suggests that the obligation extends to any work undertaken by the sponsored person and the onus will be on the sponsor to demonstrate that they have taken the necessary steps/measures to ensure compliance with the work obligation.
41.In determining whether the applicant in this case has complied with their obligation in reg 2.86(2), the Tribunal has considered the nature of the work undertaken by Mr Enkhbat during his employment with the sponsor, the evidence pertaining to the unpaid leave taken by Mr Enkhbat, including the basis on which that leave was approved by the applicant, and whether the applicant had done all they could to ensure that Mr Enkhbat worked in the nominated occupation and did not work in an occupation for which he had not been approved.
42.In relation to the work undertaken by Mr Enkhbat in the course of his employment with the applicant, the evidence before the Tribunal indicates that the tasks carried out were entirely consistent with the occupation of formwork carpenter, being the occupation for which the nomination was approved. There is no evidence before the Tribunal to suggest that Mr Enkhbat worked for the applicant in an occupation other than that which was nominated by the applicant and approved under s 140GB of the Act.
The Tribunal has next considered the evidence surrounding the leave arrangements. The Tribunal accepts, based on the contemporaneous evidence, that Mr Enkhbat made a request in May 2021 (in writing) to take leave on the basis that his wife was due to give birth. In responding to the request, Mr Kennedy replied to Mr Enkhbat’s email advising him that he was entitled to take up to 12 months of unpaid leave but stated that “normally most guys have taken 1 – 2 weeks”. Mr Kennedy attached the Fair Work Australia PDF information sheet about parental leave and provided a link to a government website (servicesaustralia.gov.au) which provides details about the entitlement to claim two weeks of parental leave. Subsequent email correspondence between Mr Enkhbat and Mr Kennedy indicates that Mr Kennedy had asked Mr Enkhbat to return to work in December 2021, however, Mr Enkhbat requested an extension of his leave until 25 January 2022 to assist with the care of his children as his wife was experiencing physical and psychological issues following the birth of their child.
After having returned to work for one month, in March 2022, Mr Enkhbat again requested (by email) unpaid extended leave as his father in Mongolia had been hospitalised and he wanted to see him. This request appears to have been declined (in writing) by Mr Kennedy on the basis that Mr Enkhbat had already had extensive leave from August 2021 to February 2022, but Mr Kennedy indicated that he was willing to review this decision again in a few months. Subsequent correspondence indicates that on 18 June 2022, Mr Enkhbat emailed Mr Kennedy apologising that he had not been in contact for a long time and advising that his father had passed away in Mongolia and that he was busy because much had to be arranged. Mr Enkhbat advised Mr Kennedy that he was scheduled to return to Sydney on 27 June 2022 and could return to work from 29 June 2022.
The evidence before the Tribunal demonstrates that the applicant’s director maintained regular contact with Mr Enkhbat during the periods of unpaid leave, which had been approved by the applicant and properly documented. The Tribunal accepts that the leave requested (and approved) was, in the case of the parental leave, leave to which the applicant was entitled under the Fair WorkAct 2009 following the birth of his third child.[1] As for the unpaid leave, which Mr Enkhbat requested so he could travel overseas to see his father (who subsequently passed away), the applicant submits that this was approved for compassionate reasons.
[1] Section 70, Fair WorkAct2009
In relation to the employment that Mr Enkhbat is alleged to have undertaken in contravention of his visa condition, Mr Kennedy’s evidence was that he had no knowledge that Mr Enkhbat had engaged in any other employment. Mr Kennedy maintained that Mr Enkhbat requested unpaid parental leave following the birth of his third child so he could care for his wife and children, and unpaid compassionate leave to go overseas to see his ill father. Mr Kennedy did not suspect that Mr Enkhbat was engaged in any other work during his periods of leave. Mr Enkhbat had requested a loan from the company, which was approved, and for which documents were kept, and the applicant had no reason to suspect that Mr Enkhbat was working elsewhere.
The Tribunal considers that the applicant’s conduct, in granting the leave requested by Mr Enkhbat, was consistent with their obligations under the Fair Work Act2009 and accepts that the applicant had no reason to suspect that Mr Enkhbat was engaging in other work during those periods of leave, particularly given the company had agreed to financially assist Mr Enkhbat by lending him a total of $20,000.
Further to the above, the Tribunal notes that there is limited evidence before it about the nature of the work that is alleged to have been undertaken by Mr Enkhbat. The amounts of money deposited into Mr Enkhbat’s account, some of which are described on the statement as “Jindabyne job” and “St Peters – 1 man wage”, do not of themselves prove that Mr Enkhbat had in fact engaged in other employment. While the transactions may raise suspicion, they do not (on their own) provide a strong basis for concluding that Mr Enkhbat was engaged in other employment. Given the limited evidence before it, the Tribunal is not satisfied that Mr Enkhbat had undertaken work in an occupation for which a nomination has not been approved.
Having regard to the above considerations, the Tribunal is not satisfied that the applicant has failed to comply with the sponsorship obligation in reg 2.86(2).
Compliance with the sponsorship obligation in reg 2.79
The obligation in reg 2.79 requires a standard business sponsor (or former standard business sponsor) of a primary sponsored person, who holds (or last held) a Subclass 482 visa and was identified in a nomination made on or after 18 March 2018, to ensure that:
·the primary sponsored person’s annual earnings in relation to the occupation are not less than the annual earnings which the sponsor indicated would be provided to them when the nomination was approved;[2]
[2] Regulation 2.79(3)(b)(i).
·the primary sponsored person’s earnings in relation to the occupation are not less than the earnings an Australian citizen or an Australian permanent resident earns, or would earn, for performing equivalent work in the same workplace at the same location;[3] and
[3] Regulation 2.79(3)(b)(ii).
·the employment conditions (other than in relation to earnings) that apply to the primary sponsored person are no less favourable than those that apply, or would apply, to an Australian citizen or an Australian permanent resident performing equivalent work at the same location.[4]
[4] Regulation 2.79(3)(b)(iii).
In the NOITTA, the ABF raised the following concerns in relation to the earnings of Mr Namnansuren and Mr Baatar.
It was noted that at the time of the nomination approval the salary for Mr Namnansuren and Mr Bataar was $75,088. That salary increased to $80,000 as indicated by the contracts provided to the Department, dated 16 May 2022, in response to the request for information. It was further noted that the rate of pay was approved at $38 an hour for 38 hours per week.
The ABF referred to the below periods during which Mr Namnansuren and Mr Baatar were stood down by the applicant, which the applicant explained were due to the impact of the COVID‑19 outbreak:
09 May–30 August 2020.
03 April–19 April 2021.
17 July–24 October 2021.
29 November–05 December 2021.
31 January–13 February 2022.
19 February–20 March 2022.
The ABF had no concerns about the earnings of Mr Namnansuren and Mr Baatar for the periods up to December 2021, which included various stand down periods, given the various restrictions imposed on businesses in NSW due to the impact of COVID-19. However, they considered the stand down of the sponsored employees for the periods from 31 January 2022 to 13 February 2022 and from 19 February 2022 to 20 March 2022 (the 2022 stand down periods) to be in contravention of the Fair Work Act2009 provisions.
55.The ABF referred to information gathered by officers during their interview with the applicant’s finance manager indicating that the reason five or six staff members, including Mr Namnansuren and Mr Baatar, were stood down during the relevant periods was because projects were slow. The ABF noted that there were no restrictions on the construction industry in NSW during the 2022 stand down periods.
56.In relying on provisions in the Fair Work Act 2009, the ABF noted that an employer can only stand down an employee in circumstances where the employee cannot do useful work because of equipment breakdown, industrial action or because work stops for a reason that the employer cannot be held responsible for, such as: a lack of supply, a natural disaster or the business has closed because of an enforceable government direction.[5] It was noted that employers cannot stand down an employee just because the business is quiet or there is not enough work. The delegate was not satisfied that the applicant had met the standing down provision for workers under the Fair WorkAct2009 and considered that the applicant had breached their obligation in reg 2.79(3) during the 2022 stand down periods in respect of Mr Namnansuren and Mr Baatar.
[5] Section 524, Fair Work Act2009.
57.In responding to the above concerns, the applicant submitted that they had come to an agreement with the sponsored employees that they would use unpaid leave during the 2022 stand down periods, due to the slow down and the stoppage of work. It was claimed that the sponsored employees were given the option to use their annual leave but chose to take unpaid leave as they understood the company was struggling. Letters were provided from Mr Namnansuren and Mr Baatar, dated 30 March 2023, stating that they were given the choice of annual leave or unpaid leave due to the slow down and stoppage of projects and they chose to take unpaid leave. In addition, Mr Baatar said he chose to keep his annual leave for when his child is born.
58.At the hearing, Mr Kennedy gave evidence that the standing down of employees up to December 2021 was largely due to the impacts of COVID-19 which, in part, included work prohibitions imposed on the construction industry. In relation to the standing down periods in early 2022, Mr Kennedy explained that it was due to the flooding at the project sites which greatly slowed down the work. He said the trade workers (who would normally work onsite) had to be stood down during those short periods until the work could resume. They had another project at Northmead which they hoped would start within the week but that was further delayed. Mr Kennedy said at the time the company was still recovering from the impacts of COVID-19 and the two sponsored employees chose to take the leave as unpaid.
59.In determining whether the applicant has failed to comply with their obligation in reg 2.79(3)(b) to ensure equivalent terms and conditions of employment for Mr Namnansuren and Mr Baatar (the sponsored employees), the Tribunal has considered the evidence before it as follows.
60.The obligation in reg 2.79(3)(b)(i) requires the applicant to ensure that a sponsored person’s annual earnings in relation to the occupation are not less than the annual earnings which the sponsor indicated would be provided to them when the nomination was approved.[6] The obligation in reg 2.79(3)(b)(ii) requires the applicant to ensure that the sponsored person’s earnings are not less than the earnings of an equivalent Australian worker.[7] The term “earnings” is defined in reg 2.57A and includes a person’s wages.
[6] Regulation 2.79(3)(b)(i).
[7] Regulation 2.79(3)(b)(ii).
61.The delegate in this case was satisfied that the hourly rate of pay for the sponsored employees was at least that which was indicated in the nomination application ($38 an hour) and was higher than those of an equivalent Australian worker because (at the time of the monitoring) the relevant Award for Carpenters (Construction) Level 3 indicated the minimum hourly rate was $24.76. The Tribunal is satisfied that for the periods during which the sponsored employees were working or took paid leave (i.e., for the periods that they were not stood down or not on unpaid leave) they were being paid the equivalent (pro-rata) of their nominated annual earnings. The Tribunal is also satisfied that for the period they were working for the applicant their earnings (when calculated on an hourly basis) were not less than those of an equivalent Australian worker.
62.Notwithstanding the above, the Tribunal considers that on a plain reading of reg 2.79(3)(b)(i), it appears that the applicant has breached that obligation because the “annual earnings” of the sponsored persons fell below the annual earnings identified in the approved nomination. Mr Namnansuren was granted the Subclass 482 visa to work for the applicant on 7 February 2019. The evidence before the Tribunal indicates that his annual earnings for the financial year ended 30 June 2021 were $61,900 and for 30 June 2022 were $51,500. Mr Baatar was granted his Subclass 482 visa on 18 February 2019. His annual earnings for the 2021 financial year were $44,764 and for the 2022 financial year were $48,925. These amounts were less than the annual earnings of $75,088 that the sponsor indicated would be provided to them when the nomination was approved.
63.The reason the annual earnings of the sponsored employees fell below the annual earnings indicated in the approved nomination was evidently because of the claimed stand down periods/unpaid leave during which the sponsored workers were not paid by the applicant. The periods of unpaid leave (which included those the Department considered to be in contravention of the Fair Work Act2009) resulted in the annual earnings of the sponsored employees for the 2020/21 and 2021/22 financial years being below the annual earnings of $75,088.
64.While the Tribunal has found, for reasons explained further below, that the applicant had not contravened the stand down provisions in the Fair WorkAct2009 in relation to the sponsored employees, there is no provision in the legislation to take this into account when considering whether the applicant has failed to comply with the obligation in reg 2.79(3)(b)(i).
65.For the above reasons, the Tribunal finds that the annual earnings for the sponsored employees were less than the annual earnings that the sponsor indicated would be provided to them when the nomination was approved. It follows that the applicant has failed to comply with their obligation in reg 2.79(3)(b)(i).
66.In relation to the obligation in reg 2.79(3)(b)(ii), Mr Kennedy informed the Tribunal that at the time of the monitoring there were no Australian citizens or permanent residents that worked in the occupation of formwork carpenter with the applicant at the same location. In the circumstances, the Tribunal is required to ascertain what a carpenter at the same skill level working in the construction industry would earn under the relevant Award. As discussed above, the Award indicates that the hourly rate for a Carpenter (Construction) Level 3 was $24.76. The hourly rate for the sponsored workers was $38; it was therefore not less than what an equivalent Australian worker would earn. Accordingly, the Tribunal is satisfied that the applicant has complied with the obligation in reg 2.79(3)(b)(ii).
67.The obligation in reg 2.79(3)(b)(iii) requires the applicant to ensure that the employment conditions (other than in relation to earnings) that apply to sponsored workers are no less favourable than those that apply, or would apply, to an equivalent Australian worker.
68.Employment conditions (other than earnings) include the minimum entitlements of employees under the Fair Work Act 2009. Relevantly, it includes annual leave entitlements. In this case, the delegate considered that the sponsored employees were entitled to be paid for the 2022 stand down periods because there was no lawful basis under the Fair Work Act2009 for them to have been stood down. The delegate was not satisfied that the sponsored employees had sufficient annual leave to take paid leave or that they had chosen to take unpaid leave when given the option by the applicant. The delegate was also concerned that the documents (i.e., the letters from Mr Namnansuren and Mr Baatar) explaining that they wished to take unpaid leave were not contemporaneous.
69.Mr Kennedy gave evidence at the hearing that in January 2022, which was shortly after the COVID-19 restrictions had been lifted in NSW, projects were slowly restarting. He said the site at which sponsored employees were working had flooded and they had to stop work at that site. It appears that the workers could not be deployed, and on Mr Kennedy’s evidence, they were given the option of taking their paid leave or being stood down and they chose to take unpaid leave.
70.The Tribunal notes that a stand down and unpaid leave relate to different circumstances which are provided for at s 524 and s 525 of the Fair Work Act 2009. Relevantly, s 524(1) provides that an employer may stand down an employee during a period in which the employee cannot usefully be employed due to various circumstances including:
(a) industrial action (other than industrial action organised or engaged in by the employer);
(b) a breakdown of machinery or equipment, if the employer cannot reasonably be held responsible for the breakdown; or
(c) a stoppage of work for any cause for which the employer cannot reasonably be held responsible.
71.Section 525 provides that an employee is not taken to be stood down under s 524(1) during a period when the employee is taking paid or unpaid leave that is authorised by the employer; or is otherwise authorised to be absent from his or her employment. The provision notes that an employee may take paid or unpaid leave (for example, annual leave) during all or part of a period during which the employee would otherwise be stood down.
72.On one view, it appears that the applicant may have validly exercised their right to stand down the sponsored employees for the relevant periods in 2022 due to a stoppage of work for which the applicant could not be held responsible, namely, the flooding at the site at which the sponsored employees (and other trade workers) were undertaking work. The evidence before the Tribunal suggests that in early 2022 projects were slow in restarting due to the impacts of COVID-19 restrictions and trade workers could not be deployed to other projects and had to wait until the site they were working at (which had flooded) was operational before they could return to work. The Tribunal considers that the circumstances relating to the stoppage of work in February/March 2022, including the applicant’s inability to “usefully employ” the sponsored employees on other projects during that period, come within the circumstances provided for in s 524(1)(c) and the applicant has not contravened the stand down provisions in the Fair Work Act2009.
73.Alternatively, it appears that the sponsored employees were not considered stood down for the relevant periods in 2022 because they had agreed to take unpaid leave which was authorised by their employer. The Tribunal acknowledges the concerns raised by the Department regarding the leave and the lack of contemporaneous documentary evidence, however, there is no evidence before the Tribunal which contradicts the information subsequently given by the applicant and the sponsored employees regarding the nature of the leave. The evidence of the applicant and the sponsored employees is that they were given the option of taking paid leave (i.e., the leave which they had accrued, which would have likely only covered part of the six-week period) or taking unpaid leave and that they chose to take unpaid leave. The unpaid leave was authorised by the applicant. The Tribunal considers that the circumstances may also come within those provided for in s 525 of the Fair Work Act 2009 and the applicant has not contravened the stand down provisions.
74.On either view, the Tribunal considers that the applicant has not contravened the stand down provisions in the Fair Work Act 2009. It follows that the applicant was not required to make wage and/or annual leave payments during the stand down/unpaid leave periods in 2022. Accordingly, the Tribunal finds that the applicant has not breached their obligation in reg 2.79(3)(b)(iii) to provide employment conditions (other than in relation to earnings) which are not less than those that would apply to an equivalent Australian worker.
75.Notwithstanding the above findings in relation to the obligation in reg 2.79(3)(b)(iii), the effect of the sponsored employees taking authorised unpaid leave and/or being lawfully stood down has resulted in the annual earnings of the sponsored employees being less than the annual earnings indicated that would be provided to them at the time the nomination was approved. Meaning, as found above, that the applicant has failed to comply with the obligation in reg 2.79(3)(b)(i).
Conclusion on the existence of a prescribed circumstance
76.As the Tribunal has found that the applicant has failed to comply with the sponsorship obligations in regs 2.84 and 2.73(3)(b)(i), 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

For the above reasons, the Tribunal is satisfied that a relevant circumstance for s 140L(1)(a) exists. Accordingly, it is necessary to consider whether one or more of the actions mentioned in s 140M should be taken.
In considering what action (if any) to take, the Tribunal has had regard to the prescribed criteria, as extracted in the attachment to this decision.
The past and present conduct of the person in relation to Immigration
The delegate noted that the applicant had not been previously monitored and that there have been no previous findings of non-compliance with sponsorship obligations.
In relation to the current proceedings, the evidence before the Tribunal indicates that the applicant provided all the information and documents requested by the ABF, that their director was cooperative with ABF inspectors and that their sponsored employees participated in the interviews conducted by ABF officers.
The Tribunal is satisfied that the applicant’s past and present conduct in relation to Immigration has been satisfactory.
The number of occasions on which the person has failed to satisfy the sponsorship obligations
The Tribunal has found that the applicant failed to satisfy the sponsorship obligations in reg 2.84 and reg 2.79(3)(b)(i).
The applicant failed to satisfy their obligation in reg 2.84 to notify the Department of the cessation of employment of Mr McManamon on one occasion.
The applicant has also failed to comply with their obligation in reg 2.79(3)(b)(i) to provide the annual earnings indicated in the approved nomination to two sponsored employees in the financial years ended 30 June 2021 and 30 June 2022. The failure therefore occurred on a total of four occasions. The Tribunal acknowledges that these failures occurred in the context of COVID-19 restrictions and the slow recovery of projects following the lifting of restrictions in NSW.
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
In relation to the failure to comply with the obligation in reg 2.84, it was submitted that the applicant did not intentionally fail to notify the Department of Mr McManamon ceasing employment and that they did not benefit from this inaction. It was submitted that processes, which are discussed in further detail below, have now been put in place to ensure that this does not reoccur.
The Tribunal accepts that the applicant’s failure to comply with reg 2.84 was unintentional, however, the applicant was under obligation to ensure they notified the Department of certain events within a prescribed period. In this case, the applicant’s failure was not identified until monitoring commenced in November 2022, resulting in the Department being unaware that Mr McManamon had ceased employment with the applicant from June 2019, a period of over three years.
In relation to be breach of the obligation in reg 2.79(3)(b)(i), the Tribunal acknowledges that this occurred in the context of COVID-19 restrictions which had an impact on the applicant’s business operations and led to the sponsored employees being stood down and/or taking leave without pay for intermittent periods until the applicant could re-establish the projects following the lifting of restrictions.
The period of time over which the person has been an approved sponsor
The applicant was approved as a standard business sponsor on 19 June 2018 for a period of five years.
Whether, and the extent to which, the failure to satisfy the sponsorship obligation has had a direct or indirect impact on another person
89.The Tribunal considers that the failure to satisfy the sponsorship obligation in reg 2.84 had an impact on Mr McManamon. This is because, unfortunately, Mr McManamon’s subsequent employment (with a different employer) was also not notified to the Department, meaning that Mr McManamon was in breach of condition 8607 (work limitations) imposed on his visa which required him to only work for the sponsor who last nominated him. Had the applicant notified the Department that Mr McManamon ceased employment with them in June 2019, it is likely the Department would have contacted Mr McManamon about the status and conditions of his work visa.
In relation to the breach in reg 2.79, the Department found that the failure to comply with reg 2.79(3)(b)(iii) resulted in the two sponsored employees not being paid for a total period of six weeks for which they were entitled to be paid. While the Tribunal has found that the two sponsored employed were not paid the annual nominated earnings in two of the financial years that they worked for the applicant, which resulted in the applicant’s failure to comply with their obligation in reg 2.79(3)(b)(i), the Tribunal nevertheless found that the applicant had not contravened the provisions in the Fair Work Act2009 which provides for employers to stand down employees in specified circumstances or for an employee to take unpaid leave that is authorised by the employer.
While the financial impact (of not receiving the nominated annual earnings) on the two sponsored employees may have been significant, the Tribunal is mindful that the failure occurred in the context of COVID-19 restrictions and the lingering impact those restrictions had on businesses in NSW.
The Tribunal has also had regard to the submission that the nominations made by the applicant under reg 5.19 in respect of those two sponsored employees have since been approved by the Department and the two sponsored employees have also been granted permanent Subclass 186 visas. It appears therefore that the applicant’s failure to comply with sponsorship obligations has not adversely affected the sponsored employees’ eligibility for permanent resident visas.
It was submitted that the applicant’s non-compliance with obligations may impact current temporary visa holders whose visas may not be able to be renewed if the applicant is unable to obtain further approval as a standard business sponsor. It was also submitted that the applicant is generally required to disclose any adverse information when tendering for projects, and that the outcome of this review could impact the applicant, its Australian citizen and permanent resident employees and contractors.
It appears that the applicant has been successful in satisfying the Department that it was reasonable to disregard the adverse information when considering whether to approve the nomination in relation to the sponsored employees. The Tribunal nevertheless acknowledges that a decision to take any action under s 140M for the applicant’s failures could have an impact on future sponsorship and nomination applications made by the applicant, which could in turn impact its ability to sponsor further people and its ability to tender for projects.
Whether, and the extent to which, the failure to satisfy the sponsorship obligation was intentional, reckless or inadvertent
The Tribunal accepts, as submitted by the representative, that the applicant’s failure to satisfy their sponsorship obligations was not intentional.
Whether, and the extent to which, the person has cooperated with Immigration, including whether the person informed Immigration of the failure
The evidence before the Tribunal indicates that the applicant cooperated with the Department throughout the monitoring process.
The Department was not informed of the failure to comply with the sponsorship obligations by anyone, and only became aware of these failures during the monitoring process.
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
The applicant is unable to rectify the failure to comply with their obligation in reg 2.84 as the period by which they were required to notify the Department has now passed.
In relation to the failure to comply with the obligation in reg 2.79(3)(b)(i) which resulted in the sponsored employees’ annual earnings being less than what was indicated in the nomination, the Tribunal notes that the failure occurred due to unprecedented events associated with the impacts of the COVID-19 pandemic, including the stop-work directions imposed on businesses in NSW, slow recovery of projects and flooding at the site at which the sponsored employees were working. As the applicant has not breached the provisions in the Fair Work Act 2009 in respect of the entitlements owed to the sponsored employees, it is therefore not reasonable to expect the applicant to pay the shortfall in the annual nominated salaries for authorised stand down/unpaid leave periods.
The processes (if any) the person has implemented to ensure future compliance with the sponsorship obligations
It was submitted that the applicant’s business had now fully recovered from the impacts of COVID-19 and that the sponsored employees had returned to full-time work.
The Tribunal also accepts that the applicant has taken steps towards future compliance by engaging an employment law advisor and purchasing the licence to use Bright HR, which is a compliance HR software that will enable more accurate monitoring of employees and compliance by the applicant.
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
Other than the sponsorship obligations found in these Reasons not to have been complied with by the applicant, the Tribunal is not aware of any other sponsorship obligations that the applicant has failed to comply with.
Any other relevant factors
It was submitted that the applicant specialises in the delivery of complex water retaining structures and their focus is on projects with significant community value, including reservoirs, wastewater treatment and filtration plans. Their client base includes regional councils, TransGrid and Sydney Water. Their projects are subject to regular monitoring by various authorities. Delays or substandard performance on these projects could cause significant detriment to the company, its stakeholders and the wider community. Other than one prohibition notice issued by Safe Work, which was promptly actioned and the notice lifted on the same day, the applicant has not had any adverse history of compliance. The applicant’s business is family owned and operated, is involved in construction projects with significant community value and has received numerous international accreditations. The Tribunal has had regard to these factors in its consideration of what action, if any, to take.
It was submitted that while there may have been some shortcomings in the applicant’s compliance with sponsorship obligations, the failures were not intentional or malicious and there were numerous mitigating factors which warrant a reconsideration of the action taken by the delegate.
Conclusion
The applicant’s approval as a standard business sponsor ceased on 19 June 2023. As they are now a ‘former sponsor’, the only action that can be taken, as provided for in s 140M(2) in relation to former sponsors, is to bar the applicant for a specified period from making future applications for approval as a work sponsor. The Tribunal did not consider it appropriate, having regard to all the relevant circumstances, to impose any future sanctions on the applicant.
There is no evidence before the Tribunal which suggests that the applicant had misused the sponsorship program or intentionally sought to underpay or take advantage of the sponsored employees. In the absence of such factors and having regard to all the circumstances discussed above, the Tribunal considers that the correct and preferable decision is to set aside the decision under review and substitute a decision not to take one or more of the actions mentioned in s 140M of the Act.
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 (Cth).
R. Skaros
Senior 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.
…

[2024] AATA 662

5 March 2024

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