Simar Mechanical Services Pty Ltd (Migration)

Simar Mechanical Services Pty Ltd (Migration) [2023] AATA 3231 (11 August 2023)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  Simar Mechanical Services Pty Ltd
CASE NUMBER:  2103118
HOME AFFAIRS REFERENCE(S):          BCC2019/3704534
MEMBER:R. Skaros
DATE:11 August 2023
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 11 August 2023 at 3:51pm
CATCHWORDS
MIGRATION – cancellation – sponsorship approval – compliance with sponsorship obligations – equivalent terms and conditions of employment – annual earnings indicated in approved nomination – leave without pay – reduced hours during COVID-19 – equivalent Australian worker – overtime underpayment due to software misconfiguration – ensure sponsored person work in nominated occupation – Mechanical Engineering Technician – action to be taken – nature and severity of the circumstances – extraordinary and unusual – decision under review set aside

LEGISLATION
Migration Act 1958 (Cth), ss 140L, 140M
Migration Regulations 1994 (Cth), rr 2.79, 2.86, 2.89, 2.90
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.

The applicant was approved as a standard business sponsor on 29 July 2019 for a period of five years. On 19 February 2021, the delegate decided to cancel the applicant’s approval as a standard business sponsor under s 140M on the basis that the applicant had failed to satisfy a sponsorship obligation.
3.On 21 July 2023 the Tribunal wrote to the review applicant advising that it had considered all the material before it relating to their application, but it was unable to make a favourable decision on that information alone. The Tribunal invited the applicant’s director to give oral evidence and present arguments on behalf of the applicant at a hearing on 8 August 2023. On 4 August 2023 the Tribunal was advised that the applicant’s director, Mr Mark Baryczka, did not wish to give oral evidence and consented to the Tribunal proceeding to make a decision on the review without taking any further action to allow or enable them to appear before it. This matter has therefore been determined on the evidence available to the Tribunal.
4.The Tribunal has before it the Department’s file which includes a certificate issue under s 376 of the Act. The certificate, which gives the Tribunal discretion to disclose certain information, states that disclosure of the material would be contrary to public interest because it would disclose lawful methods for preventing, detecting and investigating breaches or evasions of the law, which would, or be likely to prejudice the effectiveness of those methods. On 3 August 2023, an officer of the Tribunal sent the applicant’s director an email attaching a copy of the certificate. They were advised that the Tribunal would discuss the nature of the information covered by the certificate with them at the hearing and they would be invited to comment on its validity. As noted above, the director declined to attend the hearing and they have not made any submissions regarding the validity (or otherwise) of the certificate.
5.The Tribunal has nevertheless considered the following: whether the certificate is valid, the nature of the information covered by the certificate, whether the information is relevant to the issues in the review, and if so, whether the information, in as far as it is relevant, has been disclosed to the applicant.
6.Firstly, the Tribunal is satisfied that the certificate is valid as it provides a valid reason for why disclosure of the material would be contrary to public interest. Notwithstanding this, the Tribunal has an obligation to ensure that any information covered by the certificate, which is relevant to the issues in the review, has been disclosed to the applicant.
7.The information covered by the certificate included requests made by Australian Border Force (ABF) officers to produce financial records pertaining to the applicant and the sponsored person. The Tribunal notes that the Department does not appear to have relied on that information in its decision record. The financial information relied on by the delegate in the decision was that which was provided by the applicant to the Department, which the Tribunal has set out in detail further below. For these reasons, the Tribunal did not consider it necessary to exercise its discretion to disclose this information to the applicant.
8.Other information covered by the certificate, which the Tribunal considered relevant to the issues in the review, is that which was contained in the Sponsor Monitoring Recommendation Report (the Report). The Report provides background information about the applicant, its director, the approved position, location of the business, organisational chart, details about the site visit conducted by ABF officers, records of interview, summary of the information received from the applicant during the monitoring period and concerns of the delegate regarding the sponsored person’s employment, terms and conditions of employment and the tasks performed by the sponsored person. The Tribunal notes that the relevant information in the Report, being information relied on by the delegate in the decision record, was set out in the Notice of Intention to Take Action (the NOITTA). The delegate’s decision record indicates that the applicant did not respond to the NOITTA and as such the delegate proceeded to a decision on the information before them.
9.On review, the applicant’s director indicated that they had responded to the NOITTA, however, due to an issue with their email account, the response was not properly sent. A copy of the written response dated 9 February 2021 was provided to the Tribunal to which it has had regard.
10.The Tribunal is satisfied that the information contained in the NOITTA, being the relevant information on which the delegate (and the Tribunal) has relied upon in making its decision has been disclosed to the applicant. The Tribunal is also satisfied that the applicant has had an opportunity to respond to that information, and while the response was not considered by the delegate (as it was not received before the primary decision was made), it has been duly considered by the Tribunal.
11.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
Sections 140K, 140L and 140M of the Act provide for the imposition of sanctions on approved sponsors in certain circumstances.
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.
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.
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?
16.In the present case, the delegate found that the applicant had failed to satisfy a sponsorship obligation.
Failure to satisfy a sponsorship obligation: reg 2.89
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).
The sponsorship obligations found by the delegate to have been breached are:
·Regulation 2.79 – obligation to ensure equivalent terms and conditions of employment; and
·Regulation 2.86 – Obligation to ensure primary sponsored person works or participates in the nominated occupation.
19.The applicant operates a mechanical services business specialising in concrete trucks. As an approved standard business sponsor, the applicant successfully nominated a position in the occupation of Mechanical Engineering Technician (312512). The nomination, which was made under s 140GB of the Act, was approved on 22 October 2019. Mr Komal Sharma was identified in the nomination as the person who will fill the position. Mr Sharma was granted a Subclass 482 visa on 12 December 2019.
20.On 16 December 2020 the Department conducted a site visit of the applicant’s business premises and spoke to the director’s father, Mr George Baryczka. At the time of the visit, the director (Mr Mark Baryczka) was not available. Mr George Baryczka confirmed that Mr Sharma worked at the business but indicated that he (Mr Sharma) had problems and had not been at work since the preceding Friday. He also said that Mr Sharma does the mechanical fitting, painting and had to be trained. In subsequent email correspondence, Mr George Baryczka informed the Department that correspondence should be sent to the director, Mr Mark Baryczka, as he only attends the workshop when Mark is not available.
21.On 17 December 2020, as part of the monitoring process, the Department issued a notice to the applicant under reg 2.83 requesting records and information, which relevantly included records relating to the employment of Mr Sharma. In response to the request, the applicant provided various documents which relevantly included the following:
·Letter of engagement for Mr Sharma, dated 13 Oct 2019.
·Employee payment history report for Mr Sharma for period from 29 April 2020 to 31 December 2020.
·Payslips for Mr Sharma dated from 7 May 2020 to 31 December 2020.
·Bank transactions showing wage payments made from the applicant to Mr Sharma, dated from 7 May 2020 to 11 June 2020 and from 20 Aug 2020 to 31 Dec 2020.
·Pay run audit reports generated from the applicant’s accounting software, dated from 30 April 2020 to 1 July 2020.
·Timesheet report for Mr Sharma, dated from 30 April 2020 to 12 January 2021.
22.The Department was also provided with a large volume of technical specification information about the gearboxes, hydraulic equipment, and truck chassis, which the business rebuilds, repairs, and replaces. It was indicated in one of the emails that Mr Sharma undertakes this type of work with the business.
23.On 4 January 2021, ABF officers conducted a telephone interview with Mr Sharma. During the interview, Mr Sharma gave evidence about the business, his managers, other employees of the business and the work he undertakes on a day-to-day basis. Mr Sharma gave evidence that he found out about the job through his brother who forwarded him the advertisement. He said he has a mechanical diploma from India and worked as a mechanical technician. He said he commenced working for the applicant in May 2020. He only undertakes work at the workshop and his tasks involve removing the bowl of the concrete trucks, removing the gearbox, grinding, drilling on the chassis, refit the bowls onto the trucks and completing all related mechanical work. He said he works from 9:00am to 4:00pm, Monday to Friday. He completes a logbook of hours worked. He does not recall working overtime, but he may have done so on one or two occasions. He is paid $30 per hour and receives weekly payslips. He said during COVID-19 he did not get proper hours as there was not much work available at the time and he was getting paid around $546 a week. He said the situation has since improved, work was good, and that he was now doing complete shifts. He said he took some sick leave and annual leave. He has never worked for anyone else or for himself.
24.On 14 January 2021, ABF officers conducted an interview with Mr Mark Baryczka. During the interview, he provided details about the business, its operations, its main clients, which included major concreting companies, for whom they provide specialist mechanical services. He said Mr Sharma undertakes all the mechanical work on the trucks, including the engine and hydraulic pump system, but does not do any of the welding. He said they have invested time in upskilling him.
25.Mr Mark Baryczka stated that in 2019 he was struggling to find skilled workers, he advertised the position and did not have much success. He said the brother of Mr Sharma told him that his brother in India (Mr Sharma) had the qualifications and experience to work as an engineering technician. He said they wanted someone to start quickly and so decided to sponsor him. He said Mr Sharma arrived in Australia in February 2020 and was due to start in March 2020, however, the business as was affected by COVID-19. He said the business experienced a significant downturn in work and even though they no longer needed Mr Sharma they still gave him some work until things improved. He said Mr Sharma had not done a 38-hour week during that time, but the business was recovering.
26.Mr Mark Baryczka said Mr Sharma had taken some leave in December 2020 as he hurt his back and took one or two days of leave to attend to his children. He said there had been at least 20 days where Mr Sharma did not come to work and that would have used sick leave for some of it and annual leave for the other. When asked about the job-keeper payment top up in one of the payslips for Mr Sharma, Mr Mark Baryczka explained that they applied to the ATO for job-keeper due to the downturn and because Mr Sharma had been working part-time, he was eligible for part payment. After being informed that temporary visa holders were not eligible for job-keeper, Mr Mark Baryczka undertook to rectify the over-payment with the ATO.
27.On 15 January 2021, an email was received from Mr George Baryczka advising that they had provided to the Department all of Mr Sharma’s payslips and if any were missing then it was because Mr Sharma did not work in that period.
28.On 21 January 2021, the Department issued the applicant a NOITTA setting out information which indicated that the applicant may not have complied with the sponsorship obligations in regs 2.79 and 2.86.
29.Mr Mark Baryczka sought an extension of time to respond to the NOITTA, which was granted, however, by the extended due date the delegate had still not received a response to the NOITTA. The delegate proceeded on the basis of the information before them and decided to cancel the applicant’s approval as a standard business sponsor.
30.On review, the Tribunal received a copy of the response to the NOITTA, which was not before the delegate at the time the decision was made.
31.In considering whether the applicant has failed to comply with their sponsorship obligations, the Tribunal has considered the evidence before it as follows.
Compliance with the sponsorship obligation in reg 2.79
The obligation in reg 2.79 requires a standard business sponsor (or former standard business sponsor) of a primary sponsored person, who holds (or last held) a Subclass 482 visa was identified in a nomination made on or after 18 March 2018, to ensure that:
·the primary sponsored person’s annual earnings in relation to the occupation are not less than the annual earnings which the sponsor indicated would be provided to them when the nomination was approved;[1]
·the primary sponsored person’s earnings in relation to the occupation are not less than the earnings an Australian citizen or an Australian permanent resident earns, or would earn, for performing equivalent work in the same workplace at the same location;[2] and
·the employment conditions (other than in relation to earnings) that apply to the primary sponsored person are no less favourable than those that apply, or would apply, to an Australian citizen or an Australian permanent resident performing equivalent work at the same location.[3]
[1] reg 2.79(3)(b)(i).
[2] reg 2.79(3)(b)(ii).
[3] reg 2.79(3)(b)(iii).
33.In relation to the obligation in reg 2.79(3)(b)(i), Mr Sharma’s annual earnings, as indicated in the approved nomination for the position was $60,000 ($1,153 per week) based on 38 hours of work a week.
34.The records provided by the applicant for the period between 7 May 2020 and 11 June 2020 indicate that Mr Sharma was paid between $540 and $1,140 per week. While the payslips show that he was paid an hourly rate of $30, it appears that he was paid below the minimum weekly amount because he worked much less than the guaranteed 38 hours per week. In most weeks he worked approximately 18 hours.
35.For the period from 12 June 2020 to 13 August 2020, there was no evidence of any hours worked by Mr Sharma or payments received by him. There were also no records of Mr Sharma taking any leave during this period according to the pay run audit reports. Based on the email sent to the Department from Mr George Baryczka on 15 January 2021, it appears that Mr Sharma did not work at all for the applicant during that two-month period.
36.Records also indicate that for the period from 20 August 2020 to 17 December 2020, Mr Sharma was paid between $300 and $600 a week. The payslips indicate that he worked between 10 and 21 hours a week. The wages received for this period were also below the salary approved in the nomination and appear to be due to Mr Sharma having worked less than the guaranteed 38 hours per week.
37.In relation to the obligation in reg 2.79(3)(b)(ii), this required the applicant to ensure that the annual earnings of the sponsored person, throughout their period of employment with the sponsor, were not less than an Australian performing equivalent work at the same location. The evidence before the Tribunal is that there were no Australian workers in the same workplace performing equivalent work as Mr Sharma. In the circumstances, the equivalent terms and conditions are determined by reference to the applicable industry award. The delegate identified the relevant Award as the Manufacturing and Associated Industries and Occupations Award (MA000010) (the Award) and noted that an Associate Diploma holder with 3 years of experience was entitled to $26.69 per hour (as of 29 May 2020) and $27.15 per hour (as of 1 November 2020). The Tribunal notes that Mr Sharma’s hourly rate of $30 was higher than the hourly rate under the Award and was therefore more favourable than what would be received by an equivalent Australian worker. However, under the Award, a person working in that position is also entitled to an hourly rate of $40.73 on Saturdays. Payslips for Mr Sharma indicated that he worked on Saturday 17, 24 and 31 of October 2020, and that he was paid $30 per hour, which was less than the hourly rate payable for a Saturday, and therefore less favourable than the terms and conditions that would be received by an equivalent Australian worker.
38.In submissions provided to the Tribunal, Mr Mark Baryczka said he discussed with Mr Sharma, prior to his employment, the salary range of $57,000 to $60,000 which was agreed upon and consistent with the advertisements for the position. He said there was no intention to underpay Mr Sharma and what occurred was an error that rounded his hourly rate when it was entered into their payroll system. He said Mr Sharma also takes a 15-minute morning break and a 15-to-30-minute break for lunch, but records the hours worked from the time he arrives until he leaves. It was submitted that, in that regard, Mr Sharma was overpaid with respect to the terms of his contract. He said Mr Sharma starts work at 9:00 am and finishes at 4:00 pm and is paid for 7 hours. To comply with the legal requirements of his contract, they have altered his hourly rate to $30.36 and have paid back the 0.36 cents for all hours worked. It was submitted that Mr Sharma will alter his hours worked as excluding lunch and will work 38 hours a week.
39.In relation to the issue of overtime at the correct rate, it was submitted that there was no intention to underpay Mr Sharma. Mr Mark Baryczka said the company’s used the accounting system QuickBooks and that the payroll for each employee had to be individually set up, including provision for overtime. As Mr Sharma was not required to work overtime, this feature was never configured. He said Mr Sharma had requested to work outside normal hours as he was hoping to make up for the time he had off. He said the underpayment error has since been corrected and they have paid Mr Sharma the difference between the rate he was paid and the correct amount which should have been $45 as they pay 1.5x on a Saturday normally for those three days.
40.In relation to the period during which Mr Sharma had time off, it was submitted that Mr Sharma had misunderstood the question asked of him when he was interviewed. He said Mr Sharma had requested to take some time off and indicated that he would make it up later. As the COVID-19 problem was well in existence at that stage, they considered it a win-win situation and agreed that he could have some time off. It was submitted that, as can be seen from the pay records, Mr Sharma only got paid for time worked and was not paid for when he was away. He said this is what occurs when a person takes leave without pay in their business. He said for personal leave, they require employees to provide a medical certificate and Mr Sharma had not provided one to them. He said Mr Sharma had also not requested annual leave (apart from the 21 hours he took in December). He said they do not record time not paid in their system for any of their employees.
41.Mr Mark Baryczka stated that when there was a downturn in the business due to COVID-19, they thought they had terminate the employment of Mr Sharma (as well as the employment of other workers) but after being shown information stating that Mr Sharma’s class of visa holders could take time off without pay, they agreed to this arrangement because it would make it easier for them to keep Mr Sharma employed in the future.
42.He said at the time they sought advice from a migration agent and were informed that they could reduce Mr Sharma’s hours due to COVID-19. Mr Mark Baryczka said he was provided with the following extract from the Department of Home Affairs website:
"Temporary Skill Shortage (subclass 482) and subclass 457 visa holders who have been stood down but not laid off due to COVID-19, will maintain a valid visa. Businesses will have the opportunity to extend your visa as per normal arrangements. Businesses will be able to reduce your hours without you being in breach of your visa conditions or the business being in breach of their employer obligations"
43.Mr Mark Baryczka said they understood from this advice that it was within their rights to reduce Mr Sharma’s hours during that period.
44.The Tribunal has considered the submissions made by the applicant’s director and accepts that the government made several announcements during the COVID-19 period with respect to the employment of temporary visa holders. While some of the announcements were legislated for as part of various concession for temporary visa holders wishing to apply for subsequent visas, the Tribunal could not identify any concessions for employers with respect to their sponsorship obligations. Essentially, this means the applicant was under obligation, regardless of the circumstances, to comply with their sponsorship obligations. The Tribunal has, however, had regard to the submissions made by Mr Mark Baryczka and has had regard to the announcements made by government during the COVID-19 period, details of which it has set out below.
45.The Tribunal considered it somewhat harsh for the Department to proceed to take action against the applicant and cancel their sponsorship approval given the unusual and unprecedent circumstances brought about by COVID-19 and the policy announcements made by government which provided for employers to temporarily stand down or reduce the hours of their sponsored employees. The Tribunal has discussed these circumstances further below when considering what action, if any, should be taken. Before considering these issues, however, the Tribunal must first make findings on whether there has been non-compliance with reg 2.79 by the applicant.
46.A strict application of the requirements leads the Tribunal to conclude that the applicant has not complied with their obligation in reg 2.79(3)(b)(i). This is because Mr Sharma’s annual earnings in relation to the occupation for which he was nominated was less than the annual earnings (of $60,000 or the equivalent pro-rata) which the applicant indicated would be provided to him when the nomination was approved. The Tribunal accepts that Mr Sharma was paid (at an hourly rate) for work he had undertaken, however, as conceded by the applicant’s director, Mr Sharma was not provided with 38 hours of work a week (as agreed to in the employment agreement) which resulted in his earnings being less than $60,000 ($1,153 weekly). For these reasons, the Tribunal finds that the applicant has failed to comply with their obligation in reg 2.79(3)(b)(i).
47.The NOITTA also set out information which suggested a breach of reg 2.79(3)(b)((ii). The delegate considered that under the applicable Award, Mr Sharma should have been paid $40.73 an hour on the Saturdays that he worked and not $30 an hour as indicated his payslips for Saturday 17, 24 and 31 of October 2020. In his response to the NOITTA, Mr Mark Baryczka appears to have conceded that this was an underpayment, (albeit unintended due to their accounting system not being properly configured) and indicated that Mr Sharma had been back paid the shortfall for those three days.
48.The Tribunal has considered further below the reasons further underpayment, as explained by Mr Mark Baryczka, however, on the evidence before it, the Tribunal concludes that Mr Sharma, on three occasions, was not paid the correct hourly rate for working on Saturday. His conditions of employment on those days were therefore less favourable than the terms and conditions that would be received by an equivalent Australian worker. For these reasons, the Tribunal finds that the applicant has failed to comply with their obligation in reg 2.79(3)(b)(ii).
49.In relation to the obligation in reg 2.79(3)(b)(iii), there is no information before the Tribunal which suggests that any other employment conditions (not related to earnings) were less than those that would be provided to an equivalent Australian worker.
50.On the evidence before it, and as conceded by the applicant, the Tribunal finds that the applicant has not complied with their sponsorship obligations in regs 2.79(3)(b)(i) and (ii).
Compliance with the sponsorship obligation in reg 2.86
51.Regulation 2.86 requires an approved sponsor to ensure sponsored employees work in the nominated occupation: reg 2.86(2)(a), and do not work in an occupation unless they were nominated for that occupation and the nomination has been approved by the Minister under s 140GB of the Act: reg 2.86(2)(b).
52.Mr Sharma was nominated by the applicant to fill the position of Mechanical Engineering Technician. The tasks of the position, as describe in the ANZSCO (312512) include:
·preparing drawings, plans and designs for mechanical engineering work under the direction of Mechanical Engineers and Engineering Technologists
·assisting Mechanical Engineers and Engineering Technologists in the design of mechanical equipment and plant
·selecting tools and equipment
·assembling and installing new and modified mechanical assemblies, components, machine tools and controls, and hydraulic power systems
·estimating material costs and quantities, and machine requirements
·performing and directing field and laboratory tests
·collecting and analysing data, carrying out complex computations and preparing diagrams
·organising and supervising inspection and maintenance of machines and plant
·ensuring that designs and finished work are within specifications, regulations and contract provisions
53.The NOITTA set out information obtained during the site visit from Mr George Baryczka during which he stated that Mr Sharma had problems, does a bit of everything like mechanical fitting and painting and had to be provided with training, which may be due to a language issue. The delegate referred to the technical specification documents provided by the applicant in an email titled “work done by Komal” but noted that there was no evidence provided which demonstrates that Mr Sharma had undertaken the work claimed. The delegate also relied on information obtained during the interviews with Mr Mark Baryczka and Mr Sharma. While the delegate accepted that Mr Sharma was undertaking tasks such as “assembling and installing new and modified mechanical assemblies, components, machine tools and controls, and hydraulic power systems” they found that he was not undertaking the full range of tasks set out in the ANZSCO for the nominated occupation. The delegate was also concerned that Mr Sharma was undertaking low skilled work such as painting and cleaning.
54.In his response to the delegate’s concerns, Mr Mark Baryczka stated Mr Sharma was employed by the company as a Mechanical Technician and there was no other person employed by the company that was qualified to perform that role. He said the full scope of work to be done was determined prior to COVID-19 and this had changed due to the downturn of work. He said the company had only built one new cement mixer since COVID-19 occurred, hence it was expected that a major part of the scope of works would not be undertaken during that period.
55.Mr Mark Baryczka submitted that the delegate’s assessment of reg 2.86 was in error due to a lack of knowledge in their business practices. He gave the example of the task of rebuilding a gearbox, which he said would take a technician two to three days to rebuild according to the manufacturer's instructions, which were supplied to Sharma. He said the range of gearboxes were so vast it was not expected that Mr Sharma would be familiar with all of these and therefore time had to be spent explaining to him the rebuild procedure by the workshop manager. Mr Mark Baryczka further explained that the tasks involved include cleaning the gearbox prior to disassembly, draining the oil and disposing of same, stripping the gearbox, measuring critical parts, checking all gears, checking all bearings, and replacing as needed or as specified by manufacturer. He said after the job is completed, Mr Sharma would clean up the work area and, as this time was part of carrying out the work, it would be charged to the job. He said they do not have a dedicated person waiting around to sweep the floor or dispose of items used.
56.Mr Mark Baryczka also referred to the example given by Mr Sharma during the interview about the types of tasks he performs, which included the crack testing of critical welds on the bowls, which included clearing the weld slag using a handheld miniature blast unit, painting the crack dye on the welds, and inspecting for cracks and marking the same using a grinder. He said that the welds were performed by others (the welders) and that part of performing the main task, Mr Sharma had to perform several smaller tasks, such as painting, blasting and cleaning up. In relation to the task of drilling, Mr Mark Baryczka explained that this was in the context of a very complex truck chassis replacement, details of which were provided to the Department (in the specification documents). He explained that the task involved design and manufacture of reinforcing plates, which required Mr Sharma to use the oxy set to loosen bolts and a die grinder to clean out holes and a normal grinder to cut off damaged bolts and to clean up drill holes.
57.Having carefully considered all the evidence before it, including the information provided during in the interviews, the technical specification documents, and Mr Mark Baryczka’s explanation about the related tasks undertaken by Mr Sharma in the course of his work, the Tribunal is satisfied that the tasks performed by Mr Sharma during his employment with the applicant are consistent with the nominated occupation of Mechanical Engineering Technician. While Mr Sharma did not undertake all the tasks associated with that occupation as set out in the ANZSCO, the Tribunal is satisfied that the tasks undertook included assembling and installing new and modified mechanical assemblies, components, machine tools and controls, and hydraulic power systems. They also included organising inspection and maintenance of machines and plant, selecting tools and equipment, performing and directing tests and ensuring that designs and finished work are within specifications, regulations and contract provisions. The Tribunal further considers that the tasks undertaken by Mr Sharma, such as cleaning, painting, and grinding are incidental to, and part of, performing the core tasks of the occupation.
58.The evidence of Mr George Baryczka that Mr Sharma had to be trained to do some of the work was clarified by Mr Mark Baryczka, in that Mr Sharma was a new employee to the business and given the vast range of mechanical components (each with their own technical specifications) that this had to be explained to him by the workshop manager. It is understandable, given it was the first nine months of Mr Sharma’s employment, that time had to be invested to train Mr Sharma and ensure that he understood the work expected of him. The evidence does not suggest that Mr Sharma did not have the skillset to undertake the tasks of the position, but that he needed time to adjust to the new workplace environment and familiarise himself with technical information and carry out the work accordingly. The Tribunal is satisfied, on the totality of the evidence before it, that Mr Sharma worked for the applicant in the nominated occupation of Mechanical Engineering Technician.
59.An issue arose during the monitoring period about Mr Sharma having an Australian Business Number (ABN) and there was a concern raised by ABF officers that he may have undertaken other work outside of the approved nominated position with the applicant.
60.Mr Sharma informed the department that when he first arrived in Australia, his brother had assisted him in obtaining a tax file number (TFN) and an ABN. He gave evidence that he has never used the ABN or worked for any other employer or for himself. Mr Mark Baryczka also gave evidence that he was not aware of Mr Sharma undertaking any other work and did not believe that he was. The Tribunal notes that the Department sought to obtain information from another government authority regarding the ABN, and while the information indicated that Mr Sharma did have an ABN registered in his name, there was no evidence of any business activity or income derived from that ABN. Accordingly, the Tribunal finds that there is no evidence that Mr Sharma had undertaken work that is not consistent with the occupation for which he was nominated.
61.Given the above, the Tribunal is satisfied that the applicant has complied with their obligation in reg 2.86 to ensure that the sponsored employee works only in the occupation for which they were nominated.
62.Having found that the applicant has failed the sponsorship obligations in reg 2.79 the Tribunal finds that the prescribed circumstance in reg 2.89 exists for the purpose of s 140M of the Act.
Action to be taken

For the above reasons, the Tribunal is satisfied that a relevant circumstance for s 140L(1)(a) exists. Accordingly, it is necessary to consider whether one or more of the actions mentioned in s 140M should be taken.
In considering what action to take, the Tribunal has had regard to the prescribed criteria, as extracted in the attachment to this decision.
The past and present conduct of the person in relation to Immigration
The delegate noted that the applicant has not been previously monitored and there has been no previous findings of non-compliance with sponsorship obligations.
The Tribunal also notes that the applicant responded to the request for information under reg 2.83 and provided copies of the records they had kept.
The applicant did not respond to the NOITTA. The Tribunal accepts that this was due to an issue with their email which resulted in the response not being received by the Department prior to the decision being made. It is unfortunate that the Department did not receive Mr Mark Baryczka’s comprehensive response to the NOITTA, as this may have resulted in a different outcome for the applicant.
The number of occasions on which the person has failed to satisfy the sponsorship obligation
68.The delegate found that the applicant had failed to satisfy their sponsorship obligation in reg 2.79 in respect of the sponsored employee on 35 occasions. The Tribunal considers that the underpayments, particularly those in relation to the obligation in reg 2.79(3)(b)(i), were part of an ongoing failure to provide at least the nominated salary which was based on 38 hours of work a week.
In relation to the underpayment for overtime work, which occurred on three occasions, the Tribunal accepts that this was due to an accounting configuration error, that it was unintentional, and that the applicant has now paid the shortfall.
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
The failure to ensure that the sponsored person’s annual earnings were not less than the approved annual earnings of $60,000 ($1,153 weekly) was significant in that the shortfall for some of the weeks was well below the approved amount. There was also a two-month period where the sponsored person did not receive a wage. The Tribunal accepts, however, that the shortfall was not due to an underpayment in the hourly rate, but because the sponsored employee did not work the 38 hours a week in accordance with the employment agreement.
The Tribunal accepts, and considers significant, that the failure occurred in the context of COVID-19 and in circumstances where the applicant was under the impression, based on government announcements, that they could stand down or reduce the hours of temporary visa holders. As noted above, no concessions were provided for in legislation for approved sponsors, however, the Tribunal has located a transcript from a press conference held on 4 April 2020, during which the former Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs, the Hon Alan Tudge MP, stated the following with respect to the employment of temporary visa holders during the COVID-19 restriction period:
“…there's about 139,000 temporary skilled visa holders in Australia. These are people who were invited and sponsored into Australia to fill really valuable skills shortages here in this country. And they're typically on either a two-year visa or a four-year visa. Now we know though that those businesses who are sponsoring those people many of the are doing it very tough. They've had to stand down people or lay off people and that includes some of these foreign nationals on temporary skilled visas. We're making a distinction here in terms of our measures between those who have been laid off and those who have been stood down. For the individuals who have been stood down or had their hours reduced by their business owner, by their business sponsor, their visa will remain valid. It's an important point because clearly it's an indication from the business owner that they would like that person to be there and be part of the rebuild once we're post the corona crisis.”
The circumstances relating to the failure to comply with their obligations were unprecedented in that many businesses were forced to close during long periods of restrictions, whilst others (even if permitted to continue operating) suffered extensive losses. Mr Mark Baryczka informed ABF officers that while they continued to operate their work was significantly reduced and they suffered significant financial losses. In his written submissions, Mr Mark Baryczka stated that his business, like many others, had been through a difficult 12 months and the reduced hours provided to Mr Sharma was only ever intended to keep him employed. He said their business has made a positive recovery and they were now able to abide by all the conditions.
The Tribunal considers that the failure to satisfy the obligation in reg 2.79 occurred over a period of 8 months (from May 2020 to December 2020). This coincided with the COVID-19 restriction periods, which the Tribunal accepts adversely affected the applicant’s business operations and caused significant losses, as evidence by the applicant having qualified for the job-keeper and other government grants during the COVID-19 period.
The period of time over which the person has been an approved sponsor
The applicant was approved as a standard business sponsor on 29 July 2019 for a period of five years.
Whether, and the extent to which, the failure to satisfy the sponsorship obligation has had a direct or indirect impact on another person
The Tribunal considers that the failure to satisfy the obligation in reg 2.79 had a direct impact on the sponsored employee as they were not paid in accordance with the nominated annual salary and, on three occasions, did not receive the correct hourly rate under the relevant Award.
The Tribunal accepts that any underpayment with respect to the actual hours worked by Mr Sharma has now been remedied by the applicant.
Whether, and the extent to which, the failure to satisfy the sponsorship obligation was intentional, reckless or inadvertent
The delegate considered that the applicant’s failure to satisfy the sponsorship obligations was reckless because when they applied to be approved as a standard business sponsor, they indicated they were willing and able to satisfy your sponsorship obligations.
The Tribunal notes that the applicant was approved as a sponsor in July 2019. The failure occurred in the context of COVID-19, which was a circumstance that could not have been foreseen by the applicant when they applied for approval as a standard business sponsor.
The Tribunal accepts that there was no intention on the part of the applicant to intentionally breach their sponsorship obligations and that they were operating during an unprecedented period.
Whether, and the extent to which, the person has cooperated with Immigration, including whether the person informed Immigration of the failure
The evidence before the Tribunal indicates that the applicant cooperated with the Department throughout the monitoring process.
The Department was not informed of the failure to comply with the sponsorship obligations by anyone, and only became aware of these failures during the monitoring process.
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
The applicant rectified the failure by paying the sponsored employee the shortfall of the Saturday hourly rate. They have also rectified the minor underpayment for the hourly rate (from $30 to $30.36) for the hours that the sponsored employee worked. The Tribunal acknowledges that the applicant was under the impression, based on various government announcements, that they could reduce the hours of work for sponsored employees on temporary work visas if they were impacted by COVID-19.
The processes (if any) the person has implemented to ensure future compliance with the sponsorship obligation
83.It was submitted that the applicant’s business had recovered from the impact of COVID-19 and that the sponsored person had returned to full time hours.
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
84.Other than the sponsorship obligation found not to have been complied with by the applicant, the Tribunal is not aware of any other sponsorship obligations that the applicant has failed to comply with.
Conclusion
Having carefully considered all the evidence before it, the Tribunal finds that the non-compliance, whilst significant, occurred in extraordinary and unusual circumstances. There is no evidence before the Tribunal which suggests that the applicant had misused the sponsorship program or intentionally sought to underpay or take advantage of the sponsored person. Furthermore, there is no evidence or suggestion of the employment between the applicant and the sponsored employee not being genuine or having been arranged for migration purposes. In the absence of such factors and considering the non-compliance occurred in the context of COVID-19, with the backdrop of various government announcements, the Tribunal considers that the most appropriate action to take in the circumstances is to set aside the decision under review and substitute a decision not to take one or more of the actions mentioned in s 140M of the Act.
DECISION
86.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).
R. Skaros
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.
…

[2023] AATA 3231

11 August 2023

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