Roz Australia Pty Ltd (Migration)

[2019] AATA 5619

Roz Australia Pty Ltd (Migration) [2019] AATA 5619 (5 December 2019)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Roz Australia Pty Ltd

CASE NUMBER:  1802754

DIBP REFERENCE(S):  BCC2017/1831039

MEMBER:Ian Berry

DATE:5 December 2019

PLACE OF DECISION:  Brisbane

DECISION:The Tribunal affirms the decision under review to refuse the nomination.

Statement made on 05 December 2019 at 12:46pm

CATCHWORDS
MIGRATION – Employer Nomination – approval of nominated position – Direct Entry Nomination stream – financial capacity to maintain term of employment – unpaid tax and unpaid superannuation – significant liabilities – decision under review affirmed

LEGISLATION
Migration Regulations 1994 (Cth), r 5.19

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 Immigration on 12 January 2018 to reject the applicant’s application for approval of the nomination of a position in Australia under r.5.19 of the Migration Regulations 1994 (the Regulations).

2. The applicant applied for approval on 23 May 2017. The requirements for the approval of the nomination of a position in Australia are found in r.5.19 of the Regulations which contains two alternative streams: a Temporary Residence Transition nomination (r.5.19(3)) stream and a Direct Entry nomination (r.5.19(4)) stream. If the application is made in accordance with r.5.19(2) and meets the requirements of either stream, then the application must be approved. If any of the requirements are not met then the application must be refused: r.5.19(5).

3. In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in the Direct Entry Nomination stream.

4. The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19(4)(d) of the Regulations because the evidence provided does not demonstrate that the nominating business has sufficient financial capacity to provide full-time paid employment and superannuation contributions to the nominee for a minimum period of two years, given that the salary of this nominee will place unnecessary pressure on the nominator without factoring in other costs such as a lease commitment.

5. The applicant appeared before the Tribunal on 7 November 2019 to give evidence and present arguments.  

6. The applicant was represented in relation to the review by its registered migration agent Mr Aggarwal (the representative).  The applicant included a copy of the delegate’s decision made 12 January 2018.

7. For the following reasons, the Tribunal has decided to affirm the decision under review to refuse the nomination.

   CONSIDERATION OF CLAIMS AND EVIDENCE

8. The issue in this case is whether the applicant meets the requirements for approval of the nomination under the Direct Entry nomination stream set out in r.5.19(4), in particular, the ability of the applicant to employ its nominee for two years in full-time employment: r.5.19(4)(d)(i). Extracted in the attachment to this decision is r.5.19(4). However, for the nomination to be approved, all the requirements must be met.

   Term of employment of the visa holder: r.5.19(4)(d)

9. Regulation 5.19(4)(d) requires the nominee to be employed in the nominated position for at least two years full-time, and the terms and conditions of that employment do not expressly exclude the possibility of an extension.

10. The applicant is a corporation operating a hairdressing business in regional New South Wales, which was incorporated on 12 May 2016. It was registered for GST from 12 May 2016 and identified the need for the nomination of a hairdresser, to be employed for at least two years full-time.

11. The applicant’s organisational chart shows the applicant’s director as the manager, the nominee in a full-time position, on a salary of $54,000, a part-time hairdresser, a full-time assistant and a part-time assistant.

12. A hearing took place on 7 November 2019, with the applicant being represented by the sole director and shareholder, Mrs Singh.  The most significant issue for the Tribunal, as was conveyed to the applicant’s director was the accumulation of the debt in unpaid tax and unpaid superannuation, as evidenced in the financial statements.   Asked about the liability of $20,000, the applicant could not say that the liabilities had been paid. In her evidence, she did say they were being paid.  The Tribunal brought to her notice the asset of $62,000 referred to  as an asset in the financial statements and why some of those funds could not be used to pay some or all of the outstanding liabilities.  Her answer was to the effect that the amount goes up and down, meaning that the $62,000 may not be there now.  The Tribunal directly pointed out that the liability of superannuation and tax, to be paid, is a significant issue for the applicant to address.

13. It was left for the applicant to ascertain as to whether these liabilities had been paid.  At the end of the hearing the applicant was offered time  to provide information that would satisfy the Tribunal that the liabilities had been paid, or alternatively, for the applicant to set out its position concerning the payment of the liabilities detailed in the 2019 financial statement.

14. The financial statements for the fiscal year 2017, has the gross profit at $65,917.21, total expenses at $64,862.42 and the net profit at $1,054.79.  It was the applicant’s first year of business with the financial statements reflecting that.  The Tribunal notes the significance of the  wages and salaries component of the expenses totalling  $45,501.88 representing nearly 70% of  the total liabilities.

15. The financial statements for the fiscal year 2018, detail the gross income at $125,596.82; the  total expenses of $95,612.11 with the net profit of $29,984.71. The significant expenses include rent of $19,090 and payroll expenses of $61,687.94 with superannuation totalling $5,708.95.

16. The financial statements for the fiscal year 2019 detail the gross income at $89,244.70; total expenses $77,418.95 and net profit of $11,825.75.  The significant expenses include rent of $14,657.27, payroll expenses of $59,395.67 and superannuation of $5,414.80.

17. The company taxation returns for 2018 and 2019 omit reference to assets and liabilities where they would normally be populated in “section 8 – Financial and other information”.  It may be information that is discretionary, but the Tribunal requires financial information to ascertain whether tax and superannuation liabilities have been paid.

18. The balance sheets for the applicant for the fiscal year 2019, continued to reflect the Tribunals concerns about the applicant’s liabilities which are detailed in this and the following paragraph. Importantly, it seems that the payroll liability and superannuation may have accumulated over two years:

Motor vehicle finance	$20,790
GST
GST payable	$22,322.54
GST collected	$7177.67
GST paid	$11,774.00
Balance GST owing	$3,370.87
Payroll liabilities
Super payable	$10,506.25
PAYG withholding payable	$12,483.76
Total payroll liabilities	$23,607.51
Total Liabilities	$47,768.38

1. The balance sheet for the fiscal year 2018 has not been provided by the applicant.

2. The balance sheet for the fiscal year 2017 has the following expenses:

Liabilities
Payroll accruals payable	$14,207.78
Current liabilities
GST collected	$6871.96
GST paid	$-2097.49
Total GST liabilities	$4774.47
Payroll liabilities
Superannuation	$442.70
Total Liabilities	$19,424.95

1. With the documents supplied post hearing, the applicant included a certificate of balance from the National Australia Bank dated 18 November 2019 showing a credit balance of $15,554.05.  The Tribunal is unaware as to whether this represents the balance of the $62,000 referred to by the Tribunal.

2. The National Australia Bank statements of the “Business Everyday Account” show that the deposits and withdrawals are almost equal for each statement.  In other words,  the amount paid in and the amount taken out are almost equal.  It is the applicant’s daily working account and so it is understandable that it has a credit balance of a fairly insignificant amount.  However, it does indicate there are no funds in that account allowing the applicant a source of capital to liquidate  the debt or decrease it significantly. Other than the $15,000 previously referred to, it appears there is no surplus upon which the applicant can draw should there be a downturn in the economy or another unexpected event.

3. The applicant has obtained an opinion from its accountants in a letter dated 20 November 2019 and it states:

   20 November 2019

   To whom it may concern

   We are act as an accountant and Tax Agent for the Roz Australia Pty Ltd ATF ABN XX XXX XXX  XXX [deleted by the Tribunal] since 2016.

   This is to confirm Mrs Parneet Kaur working Full Time permanent as Hairdresser in Roz Australia Pty Ltd on $54,000 salary package as pro-rata basis.

   In 2017 there were typo error on Salary slips due to changing Accounting Software but she was paid correctly though out the period.  In 2019 Withheld Variation changes reduced her hourly rate but she been paid $847 net wages throughout her employment.

   This is to be confirmed that Business is operating lawfully and financially viable.  It’s meeting debt and obligation.  They were leg behind but up to date now.

   Should you have any queries in relation to this matter, please do not hesitate to contact the undersigned

   Yours sincerely

   Purvish Panchal  (IPA,B.Com. Dip Fin Planner Reg. Tax Agent)

4. This letter does not assist the Tribunal for the reason that the basis for the accountant’s opinion is not stated. If an expert opinion is to be proffered to support the applicant that it can sustain an employee for two years full-time, then it should be spelt out, so the Tribunal can give due consideration to it.

5. Effectively, the submission for the applicant is that it has been trading since July 2016 and has consistently paid the nominee’s salary.  However, that is not the only matter that the Tribunal must take into account.  As it was explained by the Tribunal at the hearing, there was a concern that the applicant’s debt is significant and casts doubt on the ability of the applicant to be able to adjust to the changing economic environment when it has significant salary and wages expenses.

6. There was no evidence upon which the Tribunal can be satisfied that the applicant is able to pay its debts as they arise.

7. Upon careful consideration of the financial information provided by the applicant, the Tribunal is not satisfied that it is able to employ a full-time nominee for at least two years.

8. Accordingly, the requirement in r.5.19(4)(d)is not met.

9. For the above reasons the Tribunal is not satisfied that the applicant meets the requirements of r.5.19(4). The applicant has not sought to satisfy the criteria in the Temporary Residence Transition Nomination stream, and as such has not met the requirements in r.5.19(3). Accordingly, the nomination of the position cannot be approved. Therefore, the Tribunal must affirm the decision under review.

   DECISION

10. The Tribunal affirms the decision under review to refuse the nomination.

    Ian Berry
    Member

    ATTACHMENT  -  EXTRACTS FROM THE MIGRATION REGULATIONS 1994

    5.19Approval of nominated positions (employer nomination)

    …

    (2)The application must:

    (a)be made in accordance with approved form 1395…; and

    (aa) include a written certification by the nominator stating whether or not the nominator has engaged in conduct, in relation to the nomination, that constitutes a contravention of subsection 245AR(1) of the Act; and

    (b)be accompanied by the fee mentioned in regulation 5.37.

    …

    Direct Entry nomination

    (4)The Minister must, in writing, approve a nomination if:

    (a)the application for approval:

    (i)       is made in accordance with subregulation (2); and

    (ii)      identifies a need for the nominator to employ a paid employee to work in the position under the nominator’s direct control; and

    (b)the nominator:

    (i)       is actively and lawfully operating a business in Australia; and

    (ii)      directly operates the business; and

    (c)for a nominator whose business activities include activities relating to the hiring of labour to other unrelated businesses — the position is within the business activities of the nominator and not for hire to other unrelated businesses; and

    (d)both of the following apply:

    (i)       the employee will be employed on a full-time basis in the position for at least 2 years;

    (ii)      the terms and conditions of the employee’s employment will not include an express exclusion of the possibility of extending the period of employment; and

    (e)the terms and conditions of employment applicable to the position will be no less favourable than the terms and conditions that:

    (i)       are provided; or

    (ii)      would be provided;

    to an Australian citizen or an Australian permanent resident for performing equivalent work in the same workplace at the same location; and

    (f)either:

    (i)       there is no adverse information known to Immigration about the nominator or a person associated with the nominator; or

    (ii)      it is reasonable to disregard any adverse information known to Immigration about the nominator or a person associated with the nominator; and

    (g)the nominator has a satisfactory record of compliance with the laws of the Commonwealth, and of each State or Territory in which the applicant operates a business and employs employees in the business, relating to workplace relations; and

    (h)either:

    (i)       both of the following apply:

    (A)the tasks to be performed in the position will be performed in Australia and correspond to the tasks of an occupation specified by the Minister in an instrument in writing for this sub-subparagraph;

    (AAA)the occupation is applicable to the person identified under subparagraph (a)(ii) in accordance with the specification of the occupation;

    (B)either:

    (I)the nominator’s business has operated for at least 12 months, and the nominator meets the requirements for the training of Australian citizens and Australian permanent residents that are specified by the Minister in an instrument in writing for this sub-sub-subparagraph; or

    (II)the nominator’s business has operated for less than 12 months, and the nominator has an auditable plan for meeting the requirements specified in the instrument mentioned in sub-sub-subparagraph (I); or

    (ii)      all of the following apply:

    (A)the position is located in regional Australia;

    (B)there is a genuine need for the nominator to employ a paid employee to work in the position under the nominator’s direct control;

    (C)the position cannot be filled by an Australian citizen or an Australian permanent resident who is living in the same local area as that place;

    (D)the tasks to be performed in the position correspond to the tasks of an occupation specified by the Minister in an instrument in writing for this sub-subparagraph;

    (DA)the occupation is applicable to the person identified under subparagraph (a)(ii) in accordance with the specification of the occupation;

    (E)the business operated by the nominator is located at that place;

    (F)a body that is:

    (I)specified by the Minister in an instrument in writing for this sub-subparagraph; and

    (II)located in the same State or Territory as the location of the position;

    has advised the Minister about the matters mentioned in paragraph (e) and sub-subparagraphs (B) and (C).