RAINBOW CEYLON INVESTMENT PTY LTD (Migration)

RAINBOW CEYLON INVESTMENT PTY LTD (Migration) [2020] AATA 259 (6 February 2020)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  RAINBOW CEYLON INVESTMENT PTY LTD
CASE NUMBER:  1616018
DIBP REFERENCE(S):  BCC2016/2501824
MEMBER:R. Skaros
DATE:6 February 2020
PLACE OF DECISION:  Sydney
DECISION:The Tribunal affirms the decision not to approve the applicant as a standard business sponsor.
Statement made on 06 February 2020 at 9:44am
CATCHWORDS
MIGRATION – Nomination – benchmarks – no PAYG withholdings – inconsistent evidence – employment obligations – financial capacity to comply with obligations – decision under review affirmed

LEGISLATION
Migration Act 1958 (Cth), s 140E
Migration Regulations 1994 (Cth), r 2.61

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 8 September 2016 not to approve the applicant as a standard business sponsor.
The applicant applied for approval as a standard business sponsor under s.140E of the Migration Act 1958 (the Act) and r.2.61 of the Regulations on 28 July 2016. The delegate decided not to approve the application on the basis that the applicant did not satisfy r.2.59(d)of the Migration Regulations 1994 (the Regulations) because they were a lawfully operating business in Australia operating for 12 months or more but did not satisfy the training benchmark requirements.
On 18 March 2018, r.2.59 was amended and the requirements relating to the training requirements were omitted. The transitional provisions[1] provide that r.2.59(d), (e), (i) and (j) do not apply in relation to an application for approval as a standard business sponsor made, but not finally determined, before the commencement date.
[1] cl.6704 to Schedule 13 of the Migration Legislation Amendment (Temporary Skill Shortage Visa and Complementary Reforms) Regulations 2018 (F2018L00262).
As this application was made before the commencement date, i.e. prior to 18 March 2018, and has not been finally determined, the requirements relating to training are no longer applicable in this case. However, for the application to be approved, the Tribunal must still be satisfied that at the time of decision, the applicant meets the applicable requirements for approval as required by r.2.59 and the additional criteria in r.2.60S. An extract of the applicable provisions is attached to this decision.
The Tribunal wrote to the applicant on 28 August 2019 and invited the applicant to give updated and current information addressing the remaining requirements in rr.2.59 and 2.60S of the Regulations. The applicant responded on 20 September 2019 with information that included the following:
a.a copy of ASIC extract for Rainbow Ceylon Investment Pty Ltd (ACN 601 073 189);
b.a copy of registration for ABN 81 601 073 189 with Rainbow Ceylon Investment Pty Ltd registered as the relevant entity;
c.copies of profit and loss statements and balance sheets for Rainbow Ceylon Investment Pty Ltd for the financial years ending 30 June 2018 and 30 June 2017;
d.copies of multiple Business Activity Statements lodged with the ATO for the quarters between July 2018 and June 2019;
e.statutory declaration the Director of Rainbow Ceylon Investment Pty Ltd, Mr Perera, attesting to the recruitment practices and costs associated with the sponsorship applications; and
f.statutory declaration from Ms Bandara, the proposed nominee for the position, attesting that the applicant had not transferred, or sought to recover, any costs associated with recruitment, sponsorship or associated nomination.
On 23 September 2019, the Tribunal requested further supporting documents, including a list of all the business’ employees, including information about when each employee commenced work, the position they hold within the business, their immigration status and whether the employment was full-time, part-time or casual. The Tribunal also requested evidence of the employees’ employment and evidence of payment of superannuation entitlements.
A number of documents were received, including hand-written PAYG payment summaries for Ms Tchim and Ms Bandara for the 2018 financial year, internally generated statements indicating payments of superannuation to Ms Tchim and Ms Bandara and print-outs of the business’ ATO itemised account for transactions between 1 July 2018 to date.
The Tribunal was unable to make a favourable decision on the evidence before it and invited the applicant’s Director, Mr Perera, to appear before it to give evidence and present arguments. Mr Perera appeared before the Tribunal by telephone on 18 November 2019.
The applicant was represented in relation to the review by its registered migration agent. The representative also attended the hearing.
The Tribunal notes that it was indicated in the response to hearing form that the applicant wished the Tribunal to take evidence from Ms Bandara and that the evidence Ms Bandara intends to provide at the hearing relates to the matters set out in her statutory declaration. The representative also informed the Tribunal that the nominee is recovering from medically related issues after losing her twins at childbirth.
The Tribunal had regard to the matters in Ms Bandara’s statutory declaration. Furthermore, given that the issues with which the Tribunal had concerns related to whether the applicant is lawfully operating a business, the Tribunal did not consider it necessary to take evidence from Ms Bandara.
On instructions from the member, an officer of the Tribunal contacted the representative to inform him that it was not necessary for the nominee to attend the hearing as the issues in the review relate to the requirements for sponsorship approval and not the nominee’s application for review, which is a separate review application.
At the hearing, the Tribunal agreed to grant the applicant additional time to provide further information, however, nothing further has been received. The Tribunal has decided to proceed to a decision on the information before it.
For the following reasons, the Tribunal has decided to affirm the decision under review not to approve the applicant as a standard business sponsor.
CONSIDERATION OF CLAIMS AND EVIDENCE
The issue in this case is whether the applicant meets all the requirements for approval as a standard business sponsor in accordance with the criteria in r.2.59 and the additional criteria in r.2.60S, which must be satisfied regardless of when the application for approval was made. For the application to be approved, all the requirements must be met: s.140E(1).
After reviewing all the documents provided by the applicant in support of the review, the Tribunal observed a number of inconsistencies which raised concerns about the reliability of the documentation, including whether the applicant has been lawfully operating a business and whether there is adverse information known about the applicant. The Tribunal discussed these concerns with Mr Perera at the hearing.
Mr Perera gave evidence that the applicant operates a food business. He stated that initially they had a shop which also had a café. When asked to clarify, he then stated that they are now just operating the café which is located a Dandenong South. Mr Perera gave evidence that the business started operating three years ago. When asked about the number of employees, he stated that they employed two people but they used to have four people. Mr Perera confirmed that the business currently employs two people on a full time basis. When asked how long the two employees had been employed by the business on a full time basis, Mr Perera stated that the two employees had worked there for three years.
The Tribunal referred Mr Perera to the business activity statements that had been provided and noted that the applicant does not appear to have declared to the ATO any salaries or wages for periods from July 2018 through to March 2019. The Tribunal noted that three of the business’ quarterly activity statements indicate that the business has not paid any salaries or wages. The Tribunal further noted that the business’ ATO itemised transactions account from July 2018 to October 2019 does not show any PAYG withholdings.
The Tribunal explained to Mr Perera that it had concerns that he may not have complied with Australian taxation laws as he would have been required to declare the wages and salaries paid to the employees. The Tribunal noted that this would be relevant to the issue of whether the business is operating lawfully in Australia.
In response to the above concerns, the applicant stated that after they were refused the sponsorship he discontinued the employment of the two workers because he was unable to find the right people to employ at the time. He stated that because the sponsorship was refused he could find the right people to work. The Tribunal did not consider the explanation to be credible and explained to Mr Perera that according to business’ list of employees, which was recently provided to the Tribunal, one of the employees, Ms Tchim (the chef) is an Australian citizen and her employment would not be dependent on whether or not the sponsorship had been approved. Mr Perera then stated that when the sponsorship was refused the business was not doing well and they had to discontinue the employees at that time of the year. The Tribunal did not consider Mr Perera’s explanation to be satisfactory because the sponsorship was refused in 2016 and the list of employees indicates that Ms Tchim had commenced employment in January 2017 and that Ms Bandara had commenced employment in March 2017. Furthermore, Mr Perera’s explanation that he discontinued the employment is inconsistent with his earlier evidence that the two employees had been working full time for the last three years.
The Tribunal put to Mr Perera that in his earlier evidence he had stated that two of the employees had worked full time for the last three years yet there was limited evidence that during that period the business had been properly paying the employees’ wages and superannuation entitlements. Mr Perera stated that they stopped paying the employees after they discontinued the employment.
The Tribunal acknowledged that some documentation regarding payments to the employees had been provided to the Tribunal, such as the PAYG payment summary for Ms Tchim and Ms Bandara for the financial year ending 30 June 2018, which were dated 5 February 2019. The Tribunal also acknowledged the documents provided suggesting that Ms Tchim and Ms Bandara had been paid superannuation for a period of six months, between January 2017 and December 2017, but noted that they were internally generated documents and that no independent supporting evidence was provided to substantiate the claim that wages and superannuation had been paid to the business’ employees for the period of the claimed employment. The Tribunal also raised the concern that while information on the business’ financial reports indicated that wages were paid in the 2017 and 2018 financial years, being $28,495 and $24,204 respectively, there was no indication that any superannuation had been paid or had been accounted for as a liability. The Tribunal put to Mr Perera that the inconsistencies in the supporting documents raised further concerns about whether the business was operating lawfully, including complying with taxation laws and employment laws, particularly the national employment standards. Mr Perera stated that he will speak with his accountant regarding this.
The Tribunal further noted that there was limited independent verifiable evidence that the business had complied with its employment obligations in respect of its employees, including payment of wages and superannuation, for the last three years. Mr Perera then stated that he is not sure of the exact dates but they may not have worked for three years. He stated that the two employees started working in 2017, Ms Bandara started working in March 2017 and Ms Tchim started working in January. The Tribunal noted that there is no indication in the documents that their employment had ceased. In response Mr Perera stated that after the sponsorship refusal they discontinued their work. The Tribunal is not satisfied with Mr Perera’s explanation because the application for approval of the sponsorship was refused on 6 September 2016 which is prior to dates that Mr Perera had indicated Ms Tchim and Ms Bandara had commenced employment with the applicant.
The Tribunal notes that the applicant was provided with additional time to provide supporting documents. Even though Mr Perera had indicated that he would obtain information from his accountant, the Tribunal informed the applicant that while it was not limiting the type of information he could provide, he should provide independent supporting documents to show that the business has complied with its obligations, such as records from the ATO portal or statements issued by the superannuation funds which could verify payments made to employees. The Tribunal notes that no further information was received after the hearing.
The Tribunal has had regard to all the evidence before it but is not satisfied that the applicant is lawfully operating a business in Australia. The applicant claims to have employed two people for the last three years however there is limited evidence before the Tribunal which indicates that the applicant has complied with their employment obligations towards these employees, such as payment of the correct wages and payment of superannuation. If the applicant has been paying wages and superannuation, then the concern is that the applicant has not declared these payments to the ATO as a number of the business’ activity statements and the ATO itemised accounts do not indicate that wages, salaries or other payments had been paid or that tax was withheld from the employees. The inconsistencies in the supporting evidence, together with the inconsistencies in Mr Perera’s oral evidence regarding the employment of Ms Tchim and Ms Bandara, raises concerns about whether the applicant has been complying with their obligations as an employer. For these reasons, the Tribunal is unable to be satisfied that the applicant is lawfully operating a business in Australia as required by r.2.59(c).
For the above reasons, the Tribunal is not satisfied that the applicant meets the requirements in r.2.59(c) for approval of the sponsorship.
The Tribunal also had considerable concerns about the financial capacity of the applicant. The financial reports show a significant decline in the business’ sales and show modest payments of wages and no payments for superannuation. The 2018 financial report indicates that the applicant made a loss in excess of $49,000. The Tribunal had serious concerns about whether the applicant had the financial capacity to comply with their sponsorship obligations towards the nominee. However, as the Tribunal has found that r.2.59(c) has not been met it was not necessary to determine whether there is adverse information relevant to the applicant’s suitability as an approved sponsor.
For the reasons given above, the Tribunal is not satisfied that the applicant meets the applicable criteria prescribed in the Regulations to be approved as a standard business sponsor. Accordingly, the Tribunal must affirm the decision under review.
DECISION
The Tribunal affirms the decision not to approve the applicant as a standard business sponsor.
R. Skaros
Senior Member

ATTACHMENT - Extracts from the Migration Regulations 1994
2.59      Criteria for approval as a standard business sponsor
For subsection 140E (1) of the Act, the criterion that must be satisfied for the Minister to approve an application by a person (the applicant) for approval as a standard business sponsor is that the Minister is satisfied that:
(a)the applicant has applied for approval as a standard business sponsor in accordance with the process set out in regulation 2.61; and
(b)the applicant is not a standard business sponsor; and
(c)the applicant is lawfully operating a business (whether in or outside Australia); and
(f)if the applicant is lawfully operating a business in Australia:
(i)   the applicant has attested, in writing, that the applicant has a strong record of, or a demonstrated commitment to, employing local labour; and
(ii) the applicant has declared, in writing, that the applicant will not engage in discriminatory recruitment practices; and
(g)either:
(i)       there is no adverse information known to Immigration about the applicant or a person associated with the applicant; or
(ii)      it is reasonable to disregard any adverse information known to Immigration about the applicant or a person associated with the applicant; and.
(h)if the applicant is lawfully operating a business outside Australia and does not lawfully operate a business in Australia – the applicant is seeking to be approved as a standard business sponsor in relation to a holder of, or an applicant or proposed applicant (the visa applicant) for a [Subclass 457 visa], and the applicant intends for the visa holder or visa applicant to:
(i)       establish, or assist in establishing, on behalf of the applicant, a business operation in Australia with overseas connections; or
(ii)      fulfil, or assist in fulfilling, a contractual obligation of the applicant.
[Note …]
2.60S Additional criteria for all classes of sponsor — transfer, recovery and payment of costs
(1)For subsection 140E(1) of the Act, the criteria in this regulation are in addition to the criteria in regulations 2.59 to 2.60M.
(2)The criteria that must be satisfied for the Minister to approve an application by a person (the applicant) for approval as a sponsor mentioned in any of regulations 2.59 to 2.60M include a criterion that the Minister is satisfied that:
(a)the applicant has not taken any action, and has not sought to take any action, that would result in the transfer to another person of some or all of the costs, including migration agent costs, associated with the applicant becoming an approved sponsor; and
(b)the applicant has not taken any action, and has not sought to take any action, that would result in another person paying to a person some or all of the costs, including migration agent costs, associated with the applicant becoming an approved sponsor; and
(c)the applicant has not taken any action, and has not sought to take any action, that would result in the transfer to another person of some or all of the costs, including migration agent costs, that relate specifically to the recruitment of a non-citizen for the purposes of a nomination under subsection 140GB(1) of the Act; and
(d)the applicant has not taken any action, and has not sought to take any action, that would result in another person paying to a person some or all of the costs, including migration agent costs, that relate specifically to the recruitment of a non-citizen for the purposes of a nomination under subsection 140GB(1) of the Act; and
(e)…
(f)....
(3)The criteria that must be satisfied for the Minister to approve an application by a person (the applicant) for approval as a sponsor mentioned in any of regulations 2.59 to 2.60M include a criterion that the Minister is satisfied that:
(a)the applicant has not recovered from another person some or all of the costs, including migration agent costs:
(i)       associated with the person becoming an approved sponsor; or
(ii)      that relate specifically to the recruitment of a non-citizen for the purposes of a nomination under subsection 140GB(1) of the Act; and
(b)the applicant has not sought to recover from another person some or all of the costs, including migration agent costs:
(i)       associated with the person becoming an approved sponsor; or
(ii)      that relate specifically to the recruitment of a non-citizen for the purposes of a nomination under subsection 140GB(1) of the Act; and
(c)…
(d)…
(4)However, the Minister may disregard a criterion referred to in subregulation (2) or (3) if the Minister considers it reasonable to do so.

[2020] AATA 259

6 February 2020

Key Legal Topics

Areas of Law

Immigration

Administrative Law

Legal Concepts

Judicial Review

Procedural Fairness

Statutory Construction

Jurisdiction