SALT DESIGN AND CONSTRUCTION PTY LTD (Migration)
[2018] AATA 1206
•17 April 2018
SALT DESIGN AND CONSTRUCTION PTY LTD (Migration) [2018] AATA 1206 (17 April 2018)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT: SALT DESIGN AND CONSTRUCTION PTY LTD
CASE NUMBER: 1720799
DIBP REFERENCE(S): BCC2017/2296807 BCC2017/2299784
MEMBER:Sheridan Lee
DATE:17 April 2018
PLACE OF DECISION: Melbourne
DECISION:The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.
Statement made on 17 April 2018 at 4:26pm
CATCHWORDS
Migration – Nominating sponsor – Approval of a nomination – Direct entry nomination stream – Lawful business – Construction and design company – Increased business for restaurant fit outs – Employment contract for full time work provided – Favourable terms of employment – Role matches ANZSCO occupation description
LEGISLATION
Migration Act 1958 s 245AR
Migration Regulations 1994 r 5.19STATEMENT 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 on 22 August 2017 to reject an application for approval of the nomination of a position in Australia under r.5.19 of the Migration Regulations 1994 (the Regulations).
The applicant applied for approval of the position of Interior Designer (ANZSCO Code 232511) on 28 June 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).
In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in the direct entry nomination stream.
The delegate refused the application on the basis that the applicant’s nomination did not satisfy r.5.19(4)(a)(ii) of the Regulations because there was insufficient evidence to demonstrate a need for the business to employ a paid employee to work as an Interior Designer under the nominator’s direct control.
The applicant appeared before the Tribunal on 26 March 2018 to give evidence and present arguments. The Tribunal received oral evidence from Mr Joongshik Kim, Director of Salt Design and Construction Pty Ltd. The Tribunal hearing was conducted with the assistance of an interpreter in the Korean and English languages.
The applicant was represented in relation to the review by its registered migration agent.
For the following reasons, the Tribunal has decided to set aside the decision under review and substitute a decision approving the nomination.
CONSIDERATION OF CLAIMS AND EVIDENCE
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), which is extracted in the attachment to this decision. For the nomination to be approved, all the requirements must be met.
The Tribunal had before it the departmental file, and documents provided by the applicant through its registered migration agent.
On 28 February, 1 and 9 March 2018 the Tribunal received submissions in support of the application from the representative. The delegate did not have all of these documents before them when making a decision.
The documents provided to the Tribunal include: an employment contract dated 27 June 2017 between Salt Design and Construction Pty Ltd and the nominee, Mr Sunghun Lee, updated extracts from the Australian Security and Investments Commission (ASIC) and the Australian Business Registry (ABR), Business Activity Statements (BAS) lodged with the Australian Taxation Office (ATO), financial statements for year ending 30 June 2017, a training agreement and invoices for money paid to New Skills, invoices for building supplies, a letter of support from White Stone Accounting Group dated 6 April 2018, two letters of support from the applicant dated 25 March and 9 April 2018, employee superannuation summary and WorkCover Certificate for 2016 -2017.
The application is compliant: r.5.19(4)(a)
Regulation 5.19(4)(a) requires that the application for approval must be in the approved form, must be accompanied by the prescribed fee, and, where applicable, must include the required written certification relating to conduct that contravenes s.245AR(1). The application must also identify a need for the nominator to employ a paid employee to work in the position under their direct control.
From the information on the Department’s file, the Tribunal is satisfied that the application for approval was made on the prescribed form and that the prescribed fee was paid. Written certification stating the nominator has not engaged in conduct that contravenes s.245AR(1) was provided.
The application for nomination form outlines that the position to be filled is an Interior Designer. The applicant has provided a copy of the proposed employment contract, an organisational chart and a position statement for the Director of Interior Design outlining that the position will report to the company Director.
At the hearing, the applicant described the business as a construction and design company, with approximately 90% of jobs involving interior design. The company started as a design-based business, and now incorporates construction to better meet client’s needs. The business does a significant body of work fitting out Chinese and Korean restaurants that would like to keep the ‘traditional vibe’. This type of client has been increasing and the applicant explained that he would like to hire an interior designer with expertise that can provide for the merge between oriental and western design. The applicant is of the view that there are few companies that can meet these niche needs, which is why it has sought to employ someone with experience in Korean design.
The applicant supplied contracts with Angie’s Dumpling Bar, Dalongyi and Nutribiotech as examples of the work undertaken. The Tribunal notes that there are further examples of completed projects on the company’s publically available website, including Gami Chicken and Beer, Nemo Korean Eatery and the completed Angie’s Dumpling Bar.
The Tribunal accepts that a business of this nature needs to employ a paid employee to work in the position under the nominator’s direct control. The tasks that the business needs the position to undertake are discussed in more detail below.
Accordingly, the requirement in r.5.19(4)(a) is met.
Nominator is actively and lawfully operating a business in Australia: r.5.19(4)(b)
Regulation 5.19(4)(b) requires that applicant is actively, lawfully and directly operating a business in Australia.
The Tribunal has before it current extracts from ASIC and ABR showing that Salt Design and Construction is an Australian Private Company that has been registered since November 2015. The applicant has also supplied a letter dated 6 April 2018 from its accountant, White Stone Accounting Group, outlining that the business was previously operated by Studio Salt Pty Ltd. A change of ownership and the resignation of a previous Director led to the transfer to Salt Design and Construction.
The applicant has further supplied a lease agreement for its premises in Silverwater NSW, commencing 28 August 2017, rental receipts for its premises in Port Melbourne for January to March 2018, BAS from 1 April 2016 through to 30 September 2017, a WorkCover Insurance Certificate for 1 July 2016 – 30 June 2017, along with numerous contracts with clients and examples of completed work.
Based on the evidence before it, the Tribunal finds that the applicant is actively, lawfully and directly operating a business in Australia, as required by r.5.19(4)(b).
Position is not labour-hire: r.5.19(4)(c)
Regulation 5.19(4)(c) applies to nominators whose business activities include those relating to labour hire to an unrelated business. In these cases, the nominated position must be within the business activities of the nominator.
There is no evidence before the Tribunal to indicate that the applicant is involved in labour hire activities. The Tribunal is satisfied that the contract of employment offered to the nominee in June 2017, and letter of support from the applicant dated 25 March 2018, confirm that the nominee will work in the applicant’s direct employ.
Accordingly, the Tribunal finds that the nominator is not involved in labour-hire activities and the requirement in r.5.19(4)(c) is met.
Term of employment of the visa holder: r.5.19(4)(d)
Regulation 5.19(4)(d) requires the nominee to be employed in the nominated position for at least 2 years full time, and the terms and conditions of that employment do not expressly exclude the possibility of an extension.
The Tribunal has considered the applicant’s contract of employment, dated 27 June 2017, to employ the nominee as the ‘Director of Interior Design’ on a full-time bases with a base salary of $186,300. The contract provides for a minimum employment period of two years, with no term expressly excluding employment beyond two years.
The applicant has supplied copies of the company financials for the 2015 – 2016 and 2016 – 2017 financial years. The financials show that despite turnover of more than $6.5 million, the company suffered a loss of $217,354 in the 2016 – 2017 financial year. In addition, spending on wages in the 2016 – 2017 financial year was just $214,889. As outlined, the applicant has offered a salary of $186,300 for the nominated position. This would represent an increase in wages of more than 85%.
In response to these figures at the hearing, the applicant outlined that the company has experienced considerable growth over the last 12 months and has a number of large projects scheduled in 2018. A signed contract for a renovation with Nutribiotech with a value of $1.8 million and proposed contracts for a further extension with a value of $1 million and a construction project for Dalongyi for $950,000 were provided as evidence of the growth.
The applicant also supplied signed contracts for two smaller jobs worth $130,000 and $230,000, both entered into in the 2017 – 2018 financial year. A list of projects was supplied with the applicant’s portfolio, which lists seven new projects in Melbourne since 1 July 2017, and six additional projects still underway.
Following the hearing, the applicant submitted further information in a written response to the concerns raised in the hearing. The letter dated 9 April 2018 outlines that the company expects to achieve comparable turn over to 2016 - 2017 in the 2017 - 2018 financial year, with a reduction of more than $3 million in costs as a result of moving construction in-house.
Further, the applicant has supplied a letter from its accountant dated 6 April 2018 explaining the loss and providing a forecast for the 2017 - 2018 financial year. The letter outlines that during 2016 - 2017, the business spent $4,693,312 on contractors to undertake construction work; 70% of its total income. This function has since been shifted in house, which will result in a significant reduction in costs. In addition, the company spent $23,880 renovating its new premises in Port Melbourne during the 2016 – 2017 financial year. These figures are reflected in the company financials.
The Tribunal accepts that the company has made substantial investments in contracted labour in order to support the rapid growth of the business and has undertaken to reduce these costs by moving the function in-house. The Tribunal further notes that the company’s turnover increased from $923,656.81 to $6,721,781.60 from the 2015 – 2016 to the 2016 – 2017 financial year, supporting the applicant’s assertion of rapid growth. The Tribunal is satisfied that with a turnover of more than $6.5 million and a reduction of costs, the applicant has the capacity to employ the nominee for a minimum of two years.
Accordingly, the requirement in r.5.19(4)(d) is met.
No less favourable terms and condition of employment: r.5.19(4)(e)
Regulation 5.19(4)(e) requires that the terms and conditions of employment applicable to the nominated position will be no less favourable than those that are, or would be, provided to an Australian citizen or permanent resident performing equivalent work in the same workplace at the same location.
There is no Australian Citizen or permanent resident performing the job of Director, Interior Design in the business. At the hearing, the applicant gave evidence that this work is currently undertaken by the Director of the company. As such, there is no equivalent position to compare terms and conditions against those of the proposed new roll.
The employment contract indicates that the nominee will receive a base salary of $186,300. Salary surveys and other salary data, including from Payscale.com and Joboutlook.gov.au, indicate that the base salary for an Interior Designer in Melbourne, depending on experience, is between $50,000 and $150,000. A search of Seek.com shows 112 jobs currently advertised for Interior Designers in Melbourne, including a Senior Interior Designer for Retail projects offering $150,000. The Tribunal is satisfied on the basis of this information that the nominee's salary is no less favorable to that normally paid to an Interior Designer in Melbourne.
The Tribunal notes that the contract of employment confirms that the employment will be subject to workplace relations, superannuation and long service leave laws, which would apply to Australian citizens or Australian permanent residents in the same workplace at the same location. On the evidence before it, the Tribunal is satisfied that the terms and conditions of employment for the nominated position will be no less favourable than those that are provided, or would be provided, to an Australian citizen or permanent resident performing equivalent work at the same workplace at the same location.
No adverse information known to Immigration: r.5.19(4)(f)
Regulation 5.19(4)(f) requires that there is no adverse information known to Immigration about the nominator or person associated with the nominator; or it is reasonable to disregard any such information. For these purposes, ‘adverse information’ and ‘associated with’ have the meaning given in rr.1.13A and 1.13B.
The documents available to the Tribunal contain no relevant adverse information and the Tribunal infers that is because the Department has no adverse information about the company.
Accordingly the requirements of r.5.19(4)(f) are met.
Satisfactory compliance with workplace relations laws: r.5.19(4)(g)
Regulation 5.19(4)(g) requires that the applicant 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.
The Tribunal has no information indicating that the applicant has had compliance issues with workplace laws. Likewise, the terms and conditions of employment outlined in the contract of employment offered to the nominee do not raise any concerns.
The applicant has supplied a WorkCover Insurance certificate for 2016 – 2017 and a superannuation contribution report, generated 9 April 2018.
Accordingly the requirements of r.5.19(4)(g) are met.
Tasks of the position genuine need for the position and training requirements r.5.19(4)(h)
Regulation 5.19(4)(h) contains a number of alternative requirements. These are set out in detail in the attachment to the decision and those relevant to this matter are as follows:
·the tasks to be performed in the position will be performed in Australia and correspond to those of an occupation specified by the Minister (see legislative instrument IMMI 16/059 as amended by 17/040), the occupation is applicable to the proposed employee in accordance with any specifications made in that instrument, and specified training requirements are met.
The ANZSCO occupation description states that an Interior Designer plans, designs, details and supervises the construction of commercial, industrial, retail and residential building interiors to produce an environment tailored to a purpose, with particular emphasis on space creation, space planning, and factors that enhance living and working environments. The Tribunal finds that this is consistent with the information supplied by the applicant in both the written submissions and in oral evidence at the hearing for the position of Director of Interior Design.
In particular, the nominee will be responsible for focusing on incorporating traditional Korean ‘Hanok’ design into modern retail environments, ensuring projects are completed on time and in budget, supervising the creative team within the business, conducting client presentations, considering materials and liaising with suppliers and consulting with professional trades (such as architects, electrical and structural engineers).
The Tribunal is satisfied that the position description properly describes the type of work to be undertaken within a business of this kind, and that it is consistent with the tasks of an Interior Designer, which is specified in IMMI 16/059 as amended by 17/040.
The Tribunal further finds that the nomination meets r.5.19(4)(h)(i)(AAA), as there are no relevant specifications made in relation to the occupation in the instrument.
The relevant training requirements in this case are set out in IMMI 13/030.The Tribunal finds that Salt Construction and Design is an established business that has been operating for at least 12 months, as required by r.5.19(4)(h)(i)(B)(I). This is confirmed by the ASIC and ABR records, which show that it has been registered since 2015, and the BAS which have been lodged with the ATO for a period exceeding 12 months.
In accordance with the instrument, the business must show recent expenditure to the equivalent of at least 1% of the payroll of the business, in the provision of training to employees of the business.
Training that can count towards this benchmark includes ‘employment of apprentices, trainees or recent graduates on an ongoing basis in numbers proportionate to the size of the business.’ The applicant has supplied traineeship documentation dated 16 July 2015 for Trainee Dohoon Kim, who undertook Certificate III in Business Administration between 2015 and 2018. The applicant also supplied payslips for Mr Kim from August 2017 to February 2018. When compared against the most recently available financial year spend of $214,889.38 on wages, Mr Kim’s salary of $40,000 represents 18.5%.
Accordingly the requirements of r.5.19(4)(h) are met.
Based on the findings above, the Tribunal is satisfied that the applicant meets the requirements of r.5.19 for approval of the nomination of the position in Australia.
DECISION
The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.
Sheridan Lee
MemberATTACHMENT - 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).
Key Legal Topics
Areas of Law
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Immigration
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Administrative Law
Legal Concepts
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Judicial Review
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Statutory Construction
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Procedural Fairness
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Jurisdiction
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