SLEEPEEZEE BEDDING AUSTRALIA PTY LTD (Migration)

SLEEPEEZEE BEDDING AUSTRALIA PTY LTD (Migration) [2020] AATA 2896 (4 June 2020)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  SLEEPEEZEE BEDDING AUSTRALIA PTY LTD
CASE NUMBER:  1723682
DIBP REFERENCE(S):  BCC2016/2417327
MEMBER:Amanda Mendes Da Costa
DATE:4 June 2020
PLACE OF DECISION:  Melbourne
DECISION:The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.

Statement made on 4 June 2020 at 2.03pm

CATCHWORDS
MIGRATION– Direct Entry Nomination stream – requirements of Benchmark B met – training requirements met –applicant lawfully operating a business in Australia–decision under review set aside
LEGISLATION
Migration Act 1958, s 245AR
Migration Regulations 1994, 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 14 September 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 20 July 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 Direct Entry Nomination stream.
The delegate refused the application on the basis the applicant’s nomination did not satisfy both r.5.19(4)(h)(i)(B) and r.5.19(4)(h)(ii) of the Regulations because it did not meet its training requirements and had not provided advice from a Regional Certifying Body.
Mr Konstantinos Mantzis, a director of the applicant appeared before the Tribunal on 16 January 2020 to give evidence and present arguments on behalf of the company.
The applicant was represented in relation to the review by its registered migration agent. The representative attended the Tribunal hearing.
At the time of hearing this matter was constituted to Member Keith Kendall. The matter was subsequently constituted to the current Member, who has considered the material in both the Department and Tribunal’s files together with the audio recording of the hearing, in making her decision.
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 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.
Based on the material in the Department’s file, the Tribunal is satisfied that the application was made on the approved form and accompanied by the prescribed fee. The relevant s.245AR(1) certification was provided in the application form.
The application identifies Zeji Tan (the nominee) and identifies the position and occupation of Sales and Marketing Manager-ANZSCO 131112. It further identifies a need for the nominator to employ a paid employee to work in the position under the nominator’s direct control.
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 had regard to ASIC information, financial documents and the oral evidence of Mr Mantzis. The applicant operates a successful business manufacturing and distributing bedding, which is located in Brisbane, Sydney, Melbourne and Perth. It supplies mattresses for sale to large retailers including Forty Winks and AMart Furniture. On the evidence, the Tribunal is satisfied that the applicant is actively and lawfully operating a business in Australia and the applicant directly operates that business.
Accordingly, the requirement in r.5.19(4)(b) is met.
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.
Accordingly, the requirement in r.5.19(4)(c) does not apply.
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 applicant has provided the Tribunal with an up-to-date employment contract for the nominee dated 14 July 2016. The Tribunal notes that the length of the nominee’s proposed employment is four years and that terms and conditions of the nominee’s employment do not expressly exclude the possibility of extending the period of employment. Mr Mantzis told the Tribunal that although the nominee is yet to commence his employment, this contract has not been cancelled.
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.
The Tribunal notes that the nominee’s contract of employment nominates a salary of AUD182,000 per year (exclusive of superannuation). Although the applicant’s employs other staff in management positions in sales and marketing, it does not employ an Australian citizen or Australian permanent resident performing equivalent work in the same workplace at the same location as the proposed workplace for the nominee.
The Tribunal has considered the information contained in the Australian government’s Payscale.com website which indicates that the salary range for a Sales and Marketing Manager is between AUD36,000.00 and AUD106,000.00 per annum with a median salary of AUD57,704.00 per annum.
The Tribunal has further consulted the SEEK.com website which contains various advertisements for the position of Sales and Marketing Manager, with salaries ranging from AUD80,000.00 to AUD150,000.00
Based on the above information and the oral evidence of Mr Mantzis, the Tribunal is satisfied that the proposed salary and the leave and sick pay entitlements for the nominee are reflective of the level of responsibility and his responsibility for an export sales strategy for the applicant and that the terms and conditions applicable to the nominee’s 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. The Tribunal is also satisfied that the terms and conditions of the nominee’s employment contract are consistent with the Fair Work Act 2009 and the National Employment Standards.
Accordingly, the requirements of r.5.19(4)(e) are met.
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.
There is no adverse information known to the Department about the nominator or a person associated with the nominator. The Tribunal further notes that in his evidence Mr Mantzis confirmed that there is no adverse information known to the Department about the applicant or any person associated with it.
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.
There is no evidence before the Tribunal to suggest that the applicant does not have a satisfactory record of compliance with workplace relations laws in the locations in which it operates a business and employs staff.
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 but can be briefly summarised as requiring either that:
·the tasks to be performed in the position will be performed in Australia and correspond to those of an occupation specified by the Minister in the relevant legislative instrument[1], the occupation is applicable to the proposed employee in accordance with any specifications made in that instrument, and specified training requirements are met; or
·the position and nominator’s business is located in regional Australia, there is a genuine need for the paid position under the nominator’s direct control which cannot be filled by a locally resident Australian citizen or permanent resident, the tasks of the position correspond to those of an occupation specified in the relevant legislative instrument, the occupation is applicable to the proposed employee in accordance with the specification of the occupation and that a regional certifying body has advised the Minister about certain matters relating to the position.
[1] IMMI 16/059
The applicant’s business has been operating in Australia for over 70 years and has been owned by Mr Mantzis’ family since 1989. During the period of the family’s ownership, the business has grown from a turnover of a few hundred thousand dollars to one of several million dollars this year. During the past five years, the applicant has been importing bedding components for its manufacturing production and also importing mattresses for sale in Australia. This has substantially reduced its costs whilst it has been able to retain its staffing and wage levels. Mr Mantzis explained in his oral evidence, that the company was facing a “cross-roads” with a decision to be made about continuing its business model of manufacturing in Australia and importing some of its stock from China, or fully importing stock from overseas, which was likely to be more cost-effective and lead to a greater growth in profits for the company. Mr Mantzis estimated that the 50% turnover in profits over the last five years would lead to a further 50% increase in turnover if the business ceased manufacturing in Australia and has its products manufactured overseas. However, this would require a reduction in staff levels in Australia by 110 to 140 employees. Mr Mantzis told the Tribunal that he was reluctant for the business to cease manufacturing in Australia and lose its heritage and tradition. In order to continue growing the business whilst maintaining its manufacturing in Australia, the applicant had recently developed a business plan for developing an export market for its products. This was the primary reason for the applicant deciding to employ the nominee (as National Sales and Marketing Manager) to direct the applicant’s sales and marketing to its prospective overseas market. Mr Mantzis met the nominee approximately 10 to 15 years ago when the applicant was sourcing materials in China. He assisted the applicant in obtaining springs and fabric for use in its Australian manufacturing. Although the nominee is not currently employed by the applicant, he has been assisting the business by establishing business connections in China, some of which have been converted to sales.
The nominee has over 10 years-experience, working in the position of Sales and Marketing Manager with a large bedding company in China, exporting products to various overseas markets predominantly Southeast Asia, Southern Europe, South America, Africa and the Middle East. In his position, the nominee led a department with 30 staff, establishing a network of distributors in China and overseas, launching the company’s Alibaba page and making total sales of over US200M within a period of two years.
The ANZSCO dictionary describes a Sales and Marketing Manager as a position involved in the planning, organising, directing, controlling and co-ordinating the sales and marketing activities with an organisation. The tasks of a Sales and Marketing Manager include the following:
·formulating and implementing policies and plans for advertising public relations, sales and marketing in consultation with other Managers;
·directing the development of initiatives for new products, marketing and advertising campaigns;
·organising and controlling sales activities by setting product mix, geographical sales areas and customer standards;
·directing merchandising methods and distribution policy by coordinating the work of salespersons and organising agents and distributors; and
·directing sales methods and arrangements by setting prices and credit arrangements.
The nominee’s proposed duties with the applicant include the following:
·     directing the development and implementation of sales strategies and setting targets in order to maximise the company’s sales and customer loyalty;
·     performing sales activities on major Chinese and overseas accounts and negotiating sales prices and discounts in consultation with senior management;
·     directing the development and implementation of strategies to promote the company’s goods and services to the APEC region with a specific target to penetrate the Chinese market;
·     reviewing the progress of sales throughout the company;
·     formulating all sales and marketing policies, practices and procedures;
·     directing the development and implementation of strategies to generate increased revenue through the creation and reinforcement of ‘brand image’ and loyalty;
·     collaborating with counterparts for overseas to develop sales strategies to improve APEC region market share in all product lines;
·     directing the development and implementation of strategies to build and maintain the company’s image and reputation with its customers, investors and the wider public;
·     identifying and locating areas of sales opportunities in the APEC region; and
·     locating the demand for any new products and service offered by the company in the APEC region.
The Tribunal is satisfied that the tasks performed in the position correspond to the tasks of an occupation specified by the Minister in an instrument in writing.
The Tribunal is further satisfied that the tasks will be performed in Australia and that the occupation is applicable to the nominee in accordance with the specification of the occupation.
Regulation 5.19(4)(h)(i)(b) requires that an applicant provide evidence that it has been or intends to provide training to Australian citizens or permanent residents employed in its business operations.
If the nominator’s business has been operating for at least 12 months, it needs to satisfy the training requirements specified in the relevant instrument. Or if it has been operating for less than 12 months, it needs to have an auditable plan for meeting the requirement specified in the relevant instrument[2].
[2] IMMI 13/030
As the applicant’s business has been operating in Australia for at least 12 months, it is required to show that the training that has been and continues to be provided to employees who are Australian citizens or permanent residents is related to the purpose of the business.
The Training benchmarks for an established business are:
Benchmark A
Recent expenditure by the business to the equivalent of at least 2% of the payroll of the business in payments allocated to an industry training fund that operates in the same industry as the business.
OR
Benchmark B
Recent expenditure by the business, to the equivalent of at least 1% of the payroll of the business, in the provision of training to employees of the business.
Expenditure that can count towards this benchmark includes:
·paying for a formal course of study for the business’s employees or for TAFE or university students, as part of the organisational training strategy;
·funding a scholarship in a formal course of study approved under Australian Qualification Framework or for TAFE or university students as part of the organisational strategy;
·employment of apprentices, trainees or recent graduates on an ongoing basis in numbers proportionate to the size of the business;
·employment of a person who trains the business’s employees as a key part of their job; and
·structured on-the-job training with a timeframe and clearly identified increase in skills and the use of qualified trainers and set assessments.
Given that that the nomination application was lodged on 20 July 2016, the Tribunal considers that the relevant period in respect of the applicant’s training requirements is 20 July 2015 to 20 July 2016.
The applicant has made no claims and has not provided evidence to demonstrate recent expenditure amounting to at least 2% of its payroll on the provision of training to Australian citizens, or permanent residents visa contribution to an Industry Training Fund. The applicant does not therefore meet Training Benchmark A.
In respect of Benchmark B, the applicant claims that in the 12 months prior to the application, its gross payroll expenditure was AUD6,425,253.00. The company further claims that in the same period, it spent AUD64,350.00 on training Australian citizens or permanent residents and provided invoices evidencing that amount.
The delegate was not satisfied that the applicant had provided any evidence of bank transactions or statements, to confirm that the company actually paid for those training amounts.
The invoices provided by the applicant regarding its training expenditure during the relevant period included the following:
·Auskills  Invoice dated 7.6.16              AUD51,840.00
·L & S Owen  Invoice dated 25.2.16            AUD750.00
·L & S Owen  Invoice dated 1.4.16              AUD250.00
·Dimension Network Solutions            Invoice dated 30.12.15          AUD3,500.00
·Pronto  Invoice dated 22.10.15          AUD1,270.00
·Isbel  Invoice dated 19.7.15            AUD1,120.00
Invoice dated 14.8.15            AUD1,920.00
Invoice dated 21.10.15          AUD1,200.00
Invoice dated 13.12.15          AUD1,600.00
Invoice dated 9.2.16              AUD900.00
Total:              AUD64,350.00
The Tribunal has considered this information together with the financial documents provided by the applicant. These include a detailed profit and loss statement for the financial year 2015 to 2016 with accompanying spreadsheet; business activity statements and bank statements. The Tribunal is satisfied that this information demonstrates that the above invoices were paid by the applicant during the relevant period.

Based on that material and the oral evidence of Mr Mantzis, the Tribunal is satisfied that the applicant’s payroll for the financial year 2015 to 2016 was AUD6,274,935.00 and that the business’s training expenditure for the same period was AUD64,350.00. The Tribunal calculates that the applicant’s training expenditure for the relevant period was 1.026% of its payroll expenditure. The Tribunal is satisfied that the training provided by Auskills includes the following training:
·facilitating effective workplace relationships and emotional intelligence;
·contributing to team effectiveness;
·methods of monitoring staff performance and contributing to workplace innovation;
·maintaining business resources;
·planning and implementing administrative systems;
·managing work stress;
·devising, implementing and evaluating diversity programs;
·stock control and inventory programs; and
·participating in safe work practices.
The Tribunal is further satisfied that the expenditure incurred with the other training providers includes training for forklift licences, training provided to new sales and customer service personnel in relation to call recording and accounting software and training in the use of ERP[3] management software. The Tribunal is satisfied that the applicant’s training expenditure for the relevant period, was made in respect of the manner of training set out in paragraph 46 of this decision.
[3] Enterprise Resource Planning
Accordingly, the Tribunal finds that the applicant meets the requirements of Benchmark B.
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.
Amanda Mendes Da Costa
Member

ATTACHMENT - EXTRACTS FROM THE MIGRATION REGULATIONS 1994
5.19Approval of nominated positions (employer nomination)
…
(2)The application must:
(a)be made in accordance with approved form 1395…; and
(aa) include a written certification by the nominator stating whether or not the nominator has engaged in conduct, in relation to the nomination, that constitutes a contravention of subsection 245AR(1) of the Act; and
(b)be accompanied by the fee mentioned in regulation 5.37.
…
Direct Entry nomination
(4)The Minister must, in writing, approve a nomination if:
(a)the application for approval:
(i)       is made in accordance with subregulation (2); and
(ii)      identifies a need for the nominator to employ a paid employee to work in the position under the nominator’s direct control; and
(b)the nominator:
(i)       is actively and lawfully operating a business in Australia; and
(ii)      directly operates the business; and
(c)for a nominator whose business activities include activities relating to the hiring of labour to other unrelated businesses — the position is within the business activities of the nominator and not for hire to other unrelated businesses; and
(d)both of the following apply:
(i)       the employee will be employed on a full-time basis in the position for at least 2 years;
(ii)      the terms and conditions of the employee’s employment will not include an express exclusion of the possibility of extending the period of employment; and
(e)the terms and conditions of employment applicable to the position will be no less favourable than the terms and conditions that:
(i)       are provided; or
(ii)      would be provided;
to an Australian citizen or an Australian permanent resident for performing equivalent work in the same workplace at the same location; and
(f)either:
(i)       there is no adverse information known to Immigration about the nominator or a person associated with the nominator; or
(ii)      it is reasonable to disregard any adverse information known to Immigration about the nominator or a person associated with the nominator; and
(g)the nominator has a satisfactory record of compliance with the laws of the Commonwealth, and of each State or Territory in which the applicant operates a business and employs employees in the business, relating to workplace relations; and
(h)either:
(i)       both of the following apply:
(A)the tasks to be performed in the position will be performed in Australia and correspond to the tasks of an occupation specified by the Minister in an instrument in writing for this sub-subparagraph;
(AAA)the occupation is applicable to the person identified under subparagraph (a)(ii) in accordance with the specification of the occupation;
(B)either:
(I)the nominator’s business has operated for at least 12 months, and the nominator meets the requirements for the training of Australian citizens and Australian permanent residents that are specified by the Minister in an instrument in writing for this sub-sub-subparagraph; or
(II)the nominator’s business has operated for less than 12 months, and the nominator has an auditable plan for meeting the requirements specified in the instrument mentioned in sub-sub-subparagraph (I); or
(ii)      all of the following apply:
(A)the position is located in regional Australia;
(B)there is a genuine need for the nominator to employ a paid employee to work in the position under the nominator’s direct control;
(C)the position cannot be filled by an Australian citizen or an Australian permanent resident who is living in the same local area as that place;
(D)the tasks to be performed in the position correspond to the tasks of an occupation specified by the Minister in an instrument in writing for this sub-subparagraph;
(DA)the occupation is applicable to the person identified under subparagraph (a)(ii) in accordance with the specification of the occupation;
(E)the business operated by the nominator is located at that place;
(F)a body that is:
(I)specified by the Minister in an instrument in writing for this sub-subparagraph; and
(II)located in the same State or Territory as the location of the position;
has advised the Minister about the matters mentioned in paragraph (e) and sub-subparagraphs (B) and (C).

[2020] AATA 2896

4 June 2020

Key Legal Topics

Areas of Law

Immigration

Administrative Law

Legal Concepts

Judicial Review

Statutory Construction

Procedural Fairness

Jurisdiction