Sabcha Pty Ltd (Migration)

[2022] AATA 4663

Sabcha Pty Ltd (Migration) [2022] AATA 4663 (21 December 2022)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Sabcha Pty Ltd

REPRESENTATIVE:  Mr Daniel Mattheus Estrin

CASE NUMBER:  2109599

HOME AFFAIRS REFERENCE(S):          OPF2020/11612

MEMBER:Michael Cooke

DATE:21 December 2022

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 21 December 2022 at 2:57pm

CATCHWORDS

MIGRATION – sponsorship cancellation or bar – ensuring equivalent terms and conditions of employment – employees worked excessive hours – entitlement to overtime – Australia wide minimum – annualised salary – decision under review set aside     

LEGISLATION

Fair Work Act 2009
Migration Act 1958, s 140
Migration Regulations 1994, rr 2.79, 2.82, 2.89-2.94

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.

1. The applicant was approved as a work sponsor on 9 July 2021, the delegate decided to bar you for 24 months from making applications for approval as a standard business sponsor and temporary activities sponsor under s 140M on the basis that that the review applicant pursuant to regulation 2.89 failed to satisfy its sponsorship obligation being the obligation to ensure equivalent terms and conditions of employment.

2. The applicant (Sabcha Pty Ltd) appeared before the Tribunal on 19 December 2022 to give evidence and present arguments.

3. The applicant was represented in relation to the review. The representative attended the Tribunal hearing.

4. The applicant’s representative has tendered a comprehensive submission to the Tribunal rebutting the findings of the delegate.

   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

5. Sections 140K, 140L and 140M of the Act provide for the imposition of sanctions on approved sponsors in certain circumstances.

6. 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.

7. 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.

8. 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 review applicant failed to satisfy its sponsorship obligation being the obligation to ensure equivalent terms and conditions of employment.

   Failure to satisfy a sponsorship obligation: reg 2.89

9. 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).

   Findings and reasons including: the sponsorship obligation alleged to have been breached, the requirements of the obligation.

   13.The representative has addressed the contentious findings as follows:

   The relevant employees “worked excessive hours” and overall hours contrary to their ECA

   • “Excessive” is not defined in any legislation of the ECA.

   • The ECA does not prohibit the number of hours worked – the attachment at page 14 of the questionnaire is part of a Fairness Test which “helps the Workplace Authority to assess your collective agreement against the Fairness Test.” It does not form part of the ECA.

   • On the contrary, clause 4 of the ECA states “Your basic hours of work can be worked between 6am and 2am Monday to Sunday inclusive of public holidays”.

   • Clause 9 of the ECA specifies that “overtime is specified as being paid at a basic hourly rate of pay”.

   “The ECA clearly states that employees are entitled to overtime, albeit at the base rate, if their working week exceeds 38 hours, and that they should only work a maximum of four weekend hours per fortnight.”

   • This requirement seems to be drawn from the fairness test form attached to the ECA.

   • Again, this is not an operative clause of the ECA. The only operative clause which governs overtime under the ECA is cl 4.

   • In the Decision, the Respondent has failed to identify any breach of clause 4.

   “If they are not meeting these minimum requirements regulation 2.79 cannot be met, even if they earn their guaranteed annual earnings at nomination. This is due to the market rate being not met as this is an Australian wide minimum.”

   • To assert that an annualised rate is an “Australia wide minimum” contains an inherent implication that employers within the industry are typically paying above the legal minimum. This assertion is not evidenced and contrary to industry practice of setting wages based on assessed or advised minimums.

   • In fact, the national regulator, the Fair Work Ombudsman provides guidance on employer minimums through the Fair Work Infoline, numerous minimum pay calculation tools and the small business advisory service.

   “Australia-wide minimum”

   • The referencing of an “Australia wide minimum” is also inconsistent with the language of regulation 2.79A which references an employer and occupation specific test, starting at 2.79A (3)

   “Going off the rosters provided for the visa holders, I am satisfied that the hours and shifts they work means they deserve an annualised salary”

   • What employees “deserve” may be the Delegate’s personal opinion but has no basis in law or industry practice.

   • In any event, the ECA displaces the RIA, with the exception of the applicability of base rates of pay. The annualisation clause in the RIA is displaced and does not apply.

   “I have determined that working excessive hours such as 46.25 hours a week for an extended period of time is not considered reasonable additional hours as UN A NAN (a worker) does not receive any additional remuneration for the extra hours of work she undertakes each week”

   • Firstly, the finding that Un a Nan does not receive additional remuneration for extra hours worked is plainly wrong. As outlined in Annexure B at page 4, Un Na Nan’s base salary was$60,000, meaning that at the hourly rate of $24.54, she can work up to 46.25 hours per week before getting close to any underpayment. 46.25 hours x $24.54 = $1,135 per week, which equates to around $59,000. She was paid $60,000 per annum.

   • The Delegate appears to have conflated minimum pay rates with the contract’s regulation of working reasonable additional hours. The rejection of the Sponsor’s assertions on pay minimums by the Delegate appears to be based solely on an interpretation of whether the additional hours are reasonable.

   • While the reasonable hours clause is situated near to the general pay rate in the contract, it is clearly designed to regulate the performance of additional hours, not the applicable pay rate.

   • It is standard industry practice, and indeed general practice, for a contract to regulate the performance of additional hours, while deferring the minimum remuneration for additional hours to the applicable Modern Award or registered agreement. The minimum remuneration for additional hours for an employee of the Applicant is determined solely by the ECA and the applicability of the RIA base rate of pay.

   14.In concluding, the answers to the three preliminary issues are as follows:

   ISSUE ONE

   Which employment law framework applied to the employees during the Monitoring Period?

   Answer: The Sabcha ECA, except for the base rate of pay which was governed by the RIA rates at all material times.

   ISSUE TWO

   Was the employees’ pay during the monitoring period required to be annualised as found by the ABF delegate?

   Answer: No, there is no basis for imposing the 125% annualization uplift.

   ISSUE THREE

   What rate of pay was the employee entitled to during the Monitoring Period and were they underpaid? Answer: No.

   15.The Tribunal observes that the chief regulatory authority tasked with monitoring workplace conduct (such as payment of correct wages) is the Office of the Fair Work Ombudsman FWO). The Tribunal notes from the available information that (apart from a requested amendment to the initial Sabcha ECA in 2007) there is no evidence before the Tribunal that the applicant has drawn ongoing adverse attention from the FWO. The Tribunal notes from the evidence led by the applicant spokesperson that the Sabcha restaurant change is a sizeable enterprise. It has around 13 outlets in various states – principally NSW – with plans to grow in other states.

   16.The applicant informs that, despite the current ban expiring in a few months, the company does not want its reputation sullied permanently. Such is the impact of the ban (to the chagrin of the applicant spokesperson) that he wants the ban erased and the company reputation restored.

   17.The Border Force findings on the applicant business are a result of a separate monitoring situation attributed to Departmental processing of an application. The Tribunal has had the benefit of the delegate’s decision record and a comprehensive submission from the applicant’s representative.

   18.The Tribunal is of the view that the Border Force investigation has imported findings into its decision that obviously have not drawn the attention previously of the FWO. In particular, its findings on ‘’annualization’ are not evidenced in law and seem to be the personal opinion/judgment of the delegate.

   “Going off the rosters provided for the visa holders, I am satisfied that the hours and shifts they work means they deserve an annualised salary”

   19.Overall, there seems to the Tribunal, to be an inadequate understanding of the actual workplace law governing ECAs and their particular applicability to the individual employer. The present ECA predates the Fair Work Act of 2009 and has been in continuous legitimate use since that time. Yet, surprisingly, the significant findings elaborated in the delegate’s decision have not drawn the ire of the FWO and caused an investigation of Sabcha over the last 15 years. Hence when balancing the delegate findings against the rebuttal submission of the applicant’s representative - the Tribunal gives greater weight to the submission rebuttal (see above).

   20.Accordingly, the Tribunal is not satisfied that the prescribed circumstance in reg 2.89 exists for the purpose of s 140M of the Act.

   Action to be taken

10. As the Tribunal finds that none of the circumstances for s 140L(1)(a) exist, it follows that the power to take an action under s 140M does not arise.

    22.Considering the totality of the circumstances and having regard to the prescribed criteria the Tribunal finds that none of the actions under s 140M should be taken.

    decision

    23.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).

    Michael Cooke
    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.

    …