SBS FENCE PTY LTD (Migration)

SBS FENCE PTY LTD (Migration) [2019] AATA 1821 (12 June 2019)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  SBS FENCE PTY LTD
CASE NUMBER:  1702910
DIBP REFERENCE(S):  BCC2016/1926148
MEMBER:Michael Cooke
DATE:12 June 2019
PLACE OF DECISION:  Sydney
DECISION:The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.
Statement made on 12 June 2019 at 10:37am

CATCHWORDS
MIGRATION – Employer Nomination – approval of nominated position – Temporary Residence Transition stream – ICT Sales Representative – training commitments and obligations – Training Benchmark B – payments to various training organisations – at least 1% of the business' payroll – decision under review set aside
LEGISLATION
Migration Regulations 1994 (Cth), r 5.19
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 on 3 February 2017 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).
The applicant applied for approval on 2 June 2016. 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 Temporary Residence Transition nomination stream.
The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19(3)of the Regulations because the nominator failed to meet its training obligations.
The applicant SBS FENCE PTY LTD (in the person of Mr Alex Goncalves) appeared before the Tribunal on 11 December 2019 to give evidence and present arguments. The Tribunal also received oral evidence from Mr Vinoj Kumar (the visa applicant).
The applicant was represented in relation to the review by its registered migration agent (Dr Etienne de Villiers Hugo) who attended the hearing.
Following the hearing the applicant provided the Tribunal with a further explanatory submission as follows:
Dear Member Cooke,
Further to the hearing last week, I confirm that my business has invested time and money into Vinoj and we need him for the business growth more than ever.
I also confirm that as a business owner, training my staff members has always been a priority for my business. I always made sure that the Australian staff members are well trained and I spent thousands of dollars on training over the last few years (and constantly every year) even after my sponsorship expired in 2017. To date I still train my staff and I will continue to do so.
The old sponsorship rules required me to spend 1% of the payroll on training my Australian staff members. I understand this is now replaced with a one off payment of $3000 at the time of nomination under the SAF program.
The first calculation I needed to do before was what exactly payroll is as the formula includes the subcontractors costs. That calculation in itself is very difficult to achieve in the first place.
Our sub-contractors invoice SBS Fence weekly for the delivery, installation, dismantle and pick up of temporary fencing and portable toilets, their charging rates include the following.
·     Labour to Pick up temporary fence & accessories and portable toilets from our depot and deliver it to various building sites across the sydney metropolitan areas
·     Labour to Pick up temporary fencing & portable toilets from building sites and return them to our depot
·     Motor vehicle insurance, rego, repairs and maintenance, fuel
·     Tools
·     Bookkeeping, office supplies, phone
It's hard to split the difference between labour costs and general expenses but I would say 65% Labour and 35% General expenses as listed above.
We also spend over $100,000 per year on Google marketing and advertising, a percentage of this cost goes to on line training which involves mainly permanent residents and Australian citizens as well as the nominee Mr. Vinoj Kumar learning new updated techniques to maximise our presence on google search for temp fence and toilet hire, I attach an invoice for November that shows an amount of $16,875.28 Inc GST was spent in the month of November in this current financial year, unfortunately Google's Invoicing system does not break down costs to show what is training and what is marketing/advertising as it's all included in the package.
From my experience, I would say at least 10% of the cost goes towards online training.
I have always done my best to comply with all the necessary laws. I now wish to continue running the business and relying on the right staff members to ensure that the gradual growth in the business continues.
The applicant’s representative has made the following submission in rebuttal of the delegate’s findings:
Submissions
We submit that it is reasonable to disregard the training requirements under reg.5.19(3)(1) for the following reasons:
I) Confusion of the old system
We submit that the Department of Home Affairs has introduced a new system, Skilling Australia Fund to replace the old training requirements as the former system was open for incorrect outcomes, constantly criticized for being too difficult to correctly assess and comply with. Because of the confusion caused by the old system for both the Department of Home Affairs as well as sponsors who often had to go through rigorous calculations (also historic) to come up with the correct figures.
For instance in this case, the payroll calculations are difficult to estimate correctly as the sponsor explained in his letter, the subcontractors' invoices include both labour and cost of material expenditure combined and it is therefore impossible to accurately calculate what the payroll is for a particular period.
Additionally, over the years, the department changed its policy multiple times to reflect the definition of payroll as well as what is counted as training. We attached various policies and instruments from 2013 and 2017 which changed what is allowed to be counted under training Benchmark B. All of these requirements made it quite difficult for Australian businesses and sponsors to exactly understand or follow the immigration laws for training. In this instance, the sponsor has always in good faith paid for training every single year without necessarily knowing what is and isn't allowed under policy as well as the exact figures that needed to be calculated.
2)        The business intention should be taken into account
As the member correctly stated during the hearing, the purpose of the work visa program is to allow Australian businesses to employ overseas workers to fill skills gaps in the Australian market. This is a perfect case which reflects the importance of the program to work in favour of a small to medium size successful corporate who is in need to keep one of their valuable employees in the business on a long term basis. Furthermore, SBS Fence Pty Ltd, even though it may not have met the exact 1% of training in each separate year, the business has always placed an emphasis on training and spent thousands of dollars over the years training its staff members. The business intention to be a responsible/compliant standard business sponsor and law abiding business should be considered in this case
3)        The applicant did spend more than 1% on training to date when taken as a whole
Even though it is difficult to establish with accuracy the payroll for every year, we attached a summary of all the training receipts that the business can find at this stage, which show that the business has spent more than 1% overall on training even when taking into account the highest figures. Thousands of dollars have been spent on training and it is, therefore, submitted it is reasonable to disregard any technical non-compliance in one year.
4)        The sponsor's willingness to make any back payments, if required
We submit that the sponsor's willingness to make whatever back payments may be needed to compensate for any possible oversight that may have occurred in historic underpaid training should be considered in this case. This is not a business that is not meeting their obligations or manipulating the system in any way. In fact, this present situation only reflects the flaws of the old training benchmark system that was in place up until 12 August 2018. Under the new system, the sponsor would have been required to simply make a one off payment of $3000 at the time the ENS nomination is lodged. In this case the sponsor has spent over $30,000 over the last few years on training, nearly 10 times the required amount under the new system. We, therefore, submit it is reasonable to disregard.
Conclusion
We submit that based on the information provided, the nominator: SBS Fence Pty Ltd meets Regulation 5.19(3) cumulatively and the Tribunal should therefore be confident in remitting the application to the Department of Home Affairs with directions that the application is one for successful consideration and finalization.
Additionally, we ask the AAT to also remit Mr Kumar's review of his Subclass 186 visa application, AAT File Reference 1707953 to the Department of Home Affairs, on the basis that the nominator meets Regulation 5.19(3).
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 Temporary Residence Transition nomination stream set out in r.5.19(3), which is extracted in the attachment to this decision. For the nomination to be approved- all the requirements must be met.
The application must be compliant: r.5.19(3)(a)
Regulation 5.19(3)(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 relevant person and occupation.
On the basis of information in the Department file, the Tribunal is satisfied that the nomination was made on the approved form, that the prescribed fee has been paid and that the relevant written certification relating to conduct that contravenes s.245AR(1) has been provided as part of the application.
The Tribunal is also satisfied on the evidence in the Department file that the application for approval identifies Mr Vinoj Kumar as the relevant Subclass 457 visa holder and identifies the occupation (ICT Sales Representative - 225213) in relation to the position, which is listed in ANZSCO.
At the hearing, the Tribunal took evidence from Mr Alex Gonsalves (the owner of SBS FENCE) regarding the tasks, duties and responsibilities of the nominee during his employment as the holder of the Subclass 457 visa. Mr Goncalves gave evidence that Mr Kumar was a crucial staff member. He was involved in the selling of the new ‘cloud-based’ rental software created and sold by SBS Fence. He indicated that Mr Vinoj Kumar was invaluable to the running of the business and had assisted greatly in its financial success. For instance, his oral evidence indicated that the firm had grown from a small business of 3-5 employees and now had 20. He has moved from earnings of $3.5 million to $7.8 million.
The Tribunal is satisfied, on the evidence of Mr Alex Gonsalves that the occupation carried out by the nominee substantially corresponds with an occupation in ANZSCO.
Given the above findings, the requirement in r.5.19(3)(a) is met.
Status of the nominator: r.5.19(3)(b)
Regulation 5.19(3)(b) requires the nominator to be or have been the relevant standard business sponsor who is actively and lawfully operating a business in Australia. In addition, the nominator, as that standard business sponsor, must not have met certain criteria relating to the operation of a business overseas, in the most recent sponsorship approval.
The Departmental records confirm that the nominator is the standard business sponsor who last identified Mr Vinoj Kumar in a nomination made under section 140GB of the Act.
The Tribunal has received current information which evidences that the applicant is actively and lawfully operating a business in Australia. This includes a current ABN search, ASIC current and historical statements, and the 2015-17 financial reports. The Tribunal also received oral evidence from Ms Gonsalves at the hearing regarding the operations of applicant's business. He gave evidence that when the applicant commenced operating the business it took some time to flourish. However, thanks to the ability of the nominee, the fencing rental company had continued to gain favour with customers. Ms Gonsalves provided details of the applicant's current expansion plans.
On the totality of the evidence before it, the Tribunal is satisfied that the applicant ‘is actively and lawfully operating a business in Australia'.
The Tribunal has also had regard to Departmental records and is satisfied that the applicant was not granted the most recent business sponsorship on the basis of meeting either r.1.20DA, r.2.59(h) or r.2.68(i).
Given the above, the requirement in r.5.19(3)(b) is met.
Previous employment of the nominee: r.5.19(3)(c)
Broadly speaking, to meet the requirement in r.5.19(3)(c), either:
· the nominee must have been employed full time in Australia in the position for which he or she holds a Subclass 457 visa for at least 2 of the 3 years preceding the nomination application; or
· the nominee holds a Subclass 457 visa on the basis that s/he was identified in a nomination of a specified occupation for that visa, the nominator nominated the occupation, and the nominee has been employed in that occupation for at least 2 years in the 3 years immediately before the application.
In this case, r.5.19(3)(c)(i) is the relevant provision. The nominee was granted a Subclass 457 visa on 9 November 2012 to work in the nominated occupation of ICT Sales Representative with the nominator. This nomination was lodged on 2 June 2016.
The Tribunal has had regard to the payroll documents for the nominee, including the PAYG summaries and associated tax assessment notices for the 2015, 2016, 2017 and 2018 financial years and Mr Gonsalves’ oral evidence regarding the nature of nominee's employment with the nominator. On the totality of the evidence before it, the Tribunal is satisfied that the nominee has been employed full time in Australia in the relevant position for at least 2 years in the 3 years before the nomination was made. The requirements of r.5.19(3)(c)(i) are therefore satisfied.
The Tribunal finds the business entity that has applied for approval is SBS Fence Pty Ltd and the position to which the application relates is ICT Sales Representative – ANZSCO 225213.
The nominee (Mr Vinoj Kumar) has previously held a Student visa. He held a Subclass UC457 from 24/09/2013 until 24/09/2017. Departmental information indicates applications for Employer Nomination approval were made on 15 April 2014 and 16 September 2016.
Given the above findings, the requirement in r.5.19(3)(c) is met.
Future employment of the visa holder: r.5.19(3)(d)
Regulation 5.19(3)(d) only applies to certain nominees (those described in r.5.19(3)(c)(i)). For this class of person, the regulations require that the nominee will be employed on a full time basis for at least 2 years on terms that do not expressly preclude the possibility of an extension.
The Tribunal has before it a copy of the most recent signed employment agreement in respect of the nominee, dated 11 January 2016, which states that the applicant will provide permanent full time employment for the nominee for a period of 2 years. The agreement indicates that the nominee's base salary will be $60,000 plus superannuation.
The Tribunal has also had regard to the applicant's financial capacity to employ the nominee and is satisfied, on the basis of the applicant's financial records and its ability to maintain the nominee's employment to date, that the applicant can support the employment for the nominee for a period of at least 2 years
The Tribunal finds the nominee has been employed full time in Australia in the position for which he or she held a Subclass 457 visa for at least 2 of the 3 years preceding the nomination application.
Given the above findings, the requirement in r.5.19(3)(d) is met.
No less favourable terms and conditions of employment: r.5.19(3)(e)
Regulation 5.19(3)(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.
The applicant informed the Tribunal that the nominee's salary is consistent with market rate information, including salary surveys and similar vacancies in the same location. After considering the material, the Tribunal is satisfied that the nominee's annual salary is within the range offered to similar persons in Sydney.
Given the above, the Tribunal is satisfied that the terms and conditions applicable to the nominated position will be no less favourable than those that would be provided to an Australian citizen or permanent resident performing equivalent work in the same workplace at the same location.
Accordingly, the requirement in r.5.19(3)(e) is met.
Training commitments and obligations: r.5.19(3)(f)
Regulation 5.19(3)(f) requires the applicant to have fulfilled any commitments made relating to meeting training requirements, and complied with applicable obligations relating to training requirements, during the period of the applicant’s most recent sponsorship approval. These requirements may be disregarded if it is reasonable to do so.
The applicant was most recently approval as a standard business sponsor on 7 March 2014 for three years. The representative submitted that the applicant undertook to meet benchmark B and that they have fulfilled that commitment.
The material before the Tribunal, including the financial reports, payment summaries and activity statements indicate that the applicant's payroll in the relevant years has been between $1,152,469 and $3,112,032. The applicant provided receipts indicating payments to various training organisations. In oral and written submissions, it was stated that training was provided by various training providers to the business' employees. The material indicates that the applicant's expenditure on training in each year of its approval as a standard business sponsor was at least 1% of the business' payroll.
On the evidence sourced from recent information provided by the applicant, the Tribunal is satisfied that the applicant fulfilled the commitments made relating to meeting the training requirements and complied with the applicable sponsorship obligations relating the training requirements during its most recent period of approval as a sponsor.
Accordingly, the requirement in r.5.19(3)(f) is met.
No adverse information known to Immigration: r.5.19(3)(g)
Regulation 5.19(3)(g) 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 Tribunal is not aware of any adverse information known to Immigration

Accordingly, the requirement in r.5.19(3)(g) is met.
Satisfactory compliance with workplace relations laws: r.5.19(3)(h)
Regulation 5.19(3)(h) requires the applicant to have 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 is not aware of any adverse information and finds the nominator has a satisfactory record of compliance with workplace relations laws in the locations in which it operates a business and employs staff.
Accordingly, the requirement in r.5.19(3)(h) is 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.
Michael Cooke
Senior 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.
Temporary Residence Transition nomination
(3)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 person who holds a Subclass 457 … visa granted on the basis that the person satisfied the criterion in subclause 457.223(4) of Schedule 2; and
(iii)     identifies an occupation, in relation to the position, that:
(A)is listed in ANZSCO; and
(B)has the same 4-digit occupation unit group code as the occupation carried out by the holder of the Subclass 457 … visa; and
(b)the nominator:
(i)       is, or was, the standard business sponsor who last identified the holder of the Subclass 457 … visa in a nomination made under section 140GB of the Act or under regulation 1.20G or 1.20GA as in force immediately before 14 September 2009; and
(ii)      is actively and lawfully operating a business in Australia; and
(iii)     did not, as that standard business sponsor, meet regulation 1.20DA, or paragraph 2.59(h) or 2.68(i), in the most recent approval as a standard business sponsor; and
(c)either:
(i)       both of the following apply:
(A)in the period of 3 years immediately before the nominator made the application, the holder of the Subclass 457 …visa identified in subparagraph (a) (ii) has:
(I)held one or more Subclass 457 visas for a total period of at least 2 years; and
(II)been employed in the position in respect of which the person holds the Subclass 457 … visa for a total period of at least 2 years (not including any period of unpaid leave);
(B)the employment in the position has been full-time, and undertaken in Australia; or
(ii)      all of the following apply:
(A)the person holds the Subclass 457 … visa on the basis that the person was identified in a nomination of an occupation mentioned in sub-subparagraph 2.72(10)(d)(iii)(B) or sub-subparagraph 2.72(10)(e)(iii)(B);
(B)the nominator nominated the occupation;
(C)the person has been employed, in the occupation in respect of which the person holds the Subclass 457 … visa, for a total period of at least 2 years in the period of 3 years immediately before the nominator made the application; and
(d)for a person to whom subparagraph (c)(i) applies:
(i)       the person will be employed on a full-time basis in the position for at least 2 years; and
(ii)      the terms and conditions of the person’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)       the nominator:
(A)fulfilled any commitments the nominator made relating to meeting the nominator’s training requirements during the period of the nominator’s most recent approval as a standard business sponsor; and
(B)complied with the applicable obligations under Division 2.19 relating to the nominator’s training requirements during the period of the nominator’s most recent approval as a standard business sponsor; or
(ii)      it is reasonable to disregard subparagraph (i); and
Note Different training requirements apply depending on whether the application for approval as a standard business sponsor was made before 14 September 2009 or on or after that date.
(g)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
(h)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.

[2019] AATA 1821

12 June 2019

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Immigration

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