SONETA PTY LTD (Migration)

[2020] AATA 471

SONETA PTY LTD (Migration) [2020] AATA 471 (7 January 2020)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  SONETA PTY LTD

CASE NUMBER:  1719091

DIBP REFERENCE(S):  BCC2017/2029757

MEMBER:Karen McNamara

DATE:7 January 2020

PLACE OF DECISION:  Sydney

DECISION:The Tribunal affirms the decision under review to refuse the nomination.

Statement made on 07 January 2020 at 3:04pm

CATCHWORDS
MIGRATION – nomination – Direct Entry stream – Construction Project Manager – lack of evidence of need for position – lack of evidence applicant attempted to find suitable Australian citizen or permanent resident for position – position vacant for two years – business plan not provided – insufficient financial information – decision under review affirmed

LEGISLATION
Migration Regulations 1994 (Cth), r 5.19, Schedule 2, cl 457.223

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 Immigration and Border Protection on 3 August 2017 to reject the application by Soneta Pty Ltd (the applicant) for approval of the nomination of a position in Australia under r.5.19 of the Migration Regulations 1994 (the Regulations).

2. The applicant applied for approval on 8 June 2017. The requirements for the approval of the nomination of a position in Australia are found in r.5.19 of the Regulations which contains two alternative streams: a Temporary Residence Transition nomination (r.5.19(3)) stream and a Direct Entry nomination (r.5.19(4)) stream. If the application is made in accordance with r.5.19(2) and meets the requirements of either stream, then the application must be approved. If any of the requirements are not met then the application must be refused: r.5.19(5).

3. In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in the Direct Entry Nomination stream.

4. The application was refused by the delegate on the basis the applicant’s nomination did not satisfy r.5.19(4)(h)(i)(B)(I) of the Regulations because the applicant did not provide evidence to support that they had meet the training requirements under this regulation.

5. The applicant was represented at the hearing by Mr Steven Dib. Mr Dib appeared before the Tribunal on 28 November 2019 to give evidence and present arguments. The Tribunal also received oral evidence from Mr Jianfeng Huang (the nominee). The Tribunal hearing was conducted with the assistance of an interpreter in the Mandarin and English languages.

6. The applicant was represented in relation to the review by its registered migration agent. The representative attended the Tribunal hearing.

7. For the following reasons, the Tribunal has decided to affirm the decision under review to refuse the nomination.

   CONSIDERATION OF CLAIMS AND EVIDENCE

8. 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.

   Background

9. The applicant is a family owned business that was established in 1984. ASIC records show that the business was registered on 11 October 1984 with its principal place of business recorded at Punchbowl NSW. The applicant told the Tribunal that the business provides commercial, residential, industrial and maintenance plumbing services and provides subcontracting and project work to approximately 20 builders.

10. On 8 June 2017, the applicant lodged an application for an employer nomination approval for the position of Construction Project Manager (ANZSCO 133111) under the Direct Entry stream. The nominated salary is $185,000 per annum.

11. The delegate subsequently refused this application on 3 August 2017. The applicant lodged an application for review with the Tribunal on 23 August 2017 and provided the Tribunal with a copy of the primary decision.

12. On 16 October 2019, the Tribunal invited the applicant to provide updated and current information regarding the criteria in r.5.19(4) for approval of the nomination. The Tribunal invited the applicant to provide this information by 30 October 2019.

13. On 30 October 2019, the Tribunal received the following documents from the applicant:

    ·Current and historical ASIC extract.

    ·Company Tax return 2018

    ·Financial statements 2019

    ·BAS returns for 2018 and 2019 financial years

    ·Organisation chart

    ·Position description for nominated position

    ·Employment agreement

    ·Apprentice contract  - Mr Marcus Fisher

    ·Apprentice contract – Mr Jeffrey Sobotat

14. At the conclusion of the hearing of 28 November 2019, the Tribunal invited the applicant to provide further documentation including a copy of the business’s most recent Workers Compensation policy showing amount of wages declared.

15. On 28 November 2019, the applicant provided to the Tribunal a copy of its Workers Compensation certificate of currency.

16. The Tribunal notes that numerous evidence and submissions were lodged by or on behalf of the applicant.  While the Tribunal has considered all of same, only that which was considered material to its decision has been expressly referred to herein.

    The application is compliant: r.5.19(4)(a)

17. Regulation 5.19(4)(a)(ii) requires that the application for approval must identify a need for the nominator to employ a paid employee to work in the position under their direct control.

18. The Tribunal considers that the law is unsettled about the effect of r.5.19(4)(a)(ii) in relation to whether this sub regulation is directed just at a statement or declaration that the position is needed or something of a more qualitative nature. The wording ‘identifies a need’ arguably suggests more is required to meet this criterion than simply a statement or declaration that there is such a need. ‘Identify’ is defined as ‘to recognise or establish as being a particular person or thing; attest or prove to be as claimed or asserted.’[1]

    [1] Macquarie Dictionary online (accessed 7 January 2020).

19. Departmental policy[2] approach to this regulation suggests that something more qualitative is required and discusses the information that may identify a need for a position such as whether the position is relevant to the nature and scope of the business activities of the nominator and whether the position has arisen through attrition or expansion of the business including;

    “ Delegates would need to be satisfied that the business has the intention and the financial capacity to support such business expansion.  The type of additional information that may be sought in this particular example could include:

    ·            Evidence of appropriate market research

    ·            Business plans detailing proposed expansion and timelines

    ·            Financial budgets covering expenditure and anticipated revenue

    ·            Evidence of availability of funding (such as own funds or bank loans)[3].”

    [2] Policy - Migration Regulations – Divisions – Div 5.3 – General > Approval of nominated positions (employer nomination) > Part C - Criteria applicable to Direct Entry stream nominations > Need for a paid employee > Applicability and overview (reissued 12/05/17 – last reissue prior to 1 July 2017).

    [3] The Tribunal notes that whilst PAM3 may provide guidance, it is not bound to follow it. (see Brennan, J in Re Drake(no 2) (178-1980) 2 ALD 634).

20. There are alternate interpretations of r.5.19(4)(a)(ii) as r.5.19(4)(a) overall is a sub regulation that focuses on requirements of the application form and process of a more administrative rather than qualitative nature. This view is supported by the presence of other sub regulations in r.5.19(4) that are expressed more clearly as requiring a qualitative assessment rather than a mere procedural assessment.

21. In the present case, the Tribunal considers that subparagraph 5.19(4)(a)(ii) will be satisfied if the nomination application lodged by the applicant (the nominator) sets out why it believes it has a need for a paid employee in its business.

22. In undertaking this assessment, the Tribunal is aware that the concept of ‘onus of proof ’ is not appropriate to administrative inquiries and decision-making. On the other hand, the Courts have held that an applicant will have to supply the relevant facts of the individual case, in as much detail as necessary to enable a decision maker to establish the relevant case, and in as much detail as is necessary to enable a decision maker to establish the relevant facts. As a result, a decision maker is not required to make the applicant’s case for it. Nor is the Tribunal required to accept uncritically any and all the claims an applicant puts forward.

23. In this instance, the Tribunal notes that there is no evidence before it to show that the applicant provided to the Department or to the Tribunal any supporting evidence including a supporting statement to explain why there is a need for the nominated position in the business.

    Hearing:

24. At the hearing, the applicant told the Tribunal that the business’s former General Manager    had been responsible for sourcing the nominee for the position. The position had not been advertised and there is no evidence to support the applicant attempted to find a suitable Australian citizen or permanent resident for the position.

25. The Tribunal noted that the organisation chart provided by the applicant shows two Project Managers as direct reports to the nominated position. When asked if the position had been offered to either of these Project Managers, the applicant told the Tribunal that they had not been offered the position as they were onsite Project Managers and required more education.

26. The Tribunal asked the applicant why they needed the position, particularly as the business had been operating since 1984 without this position. The applicant told the Tribunal that at the moment he needs to step back from the business and that he has been dealing with “stuff” that he felt he has been wasting his time on and that he needed someone to “overlook” what he had been doing and to take the next step within the company. The applicant told the Tribunal that the Chinese market was one market that he hadn’t approached yet.

27. The applicant told the Tribunal that originally, the business only had three men and in the last 4 to 5 years had expanded and now, due to the demand of the clientele, the business needed the position. The Tribunal raised its concerns with the applicant that the position had been vacant for over two years therefore on this basis the Tribunal may be of the view that the applicant does not demonstrate a need to employ someone in the position.

28. The applicant told the Tribunal that the former General Manager had undertaken 50% of the position and that whilst the former General Manager had management experience, the business requires someone with experience in the construction industry as well as finance experience of which the nominee has. The applicant told the Tribunal that the business has been without someone doing at least 50% of the position for at least 8 to 10 months. At one stage, the applicant employed an Operations Manager but according to the applicant, this did not work out, as the person did not have the required experience. The Tribunal notes that there is no persuasive evidence before it to support the applicant’s claims that other employees have undertaken the duties of the position over the last two years and therefore places no weight on the applicant’s evidence in this regard.

29. The nominee told the Tribunal that he was introduced to the business’s former General Manager through friends and that he applied for the position because he personally likes Australia and that the salary and benefits are good. The applicant owns his own business in China of which he is the General Manager. If his visa is granted, he has supervisors who will take over the running of his company in his absence. The nominee told the Tribunal that the need for the position was threefold as far as the business wished to develop further in the future, save costs by purchasing materials from overseas and thirdly there are potential opportunities for the business in the Chinese market. The nominee repeatedly told the Tribunal that he has contacts and resources in China that can supply material at a lower cost and that, compared to China, Australia has low efficiencies. When asked what he knew about Australian building codes and standards the nominee told the Tribunal that he has a simple understanding but will invest time and learn.

30. Based on the information before it, the Tribunal is not satisfied that the applicant meets the requirements of r.5.19(4)(a)(ii) for the following reasons:

    ·     The applicant provided limited information that addressed their need to employ a paid employee to work in the position under the applicant’s direct control. Apart from the oral evidence provided by the applicant and the nominee at the hearing, there is no verifiable supporting evidence including a business plan or evidence of financial forecasting or budget analysis covering expenditure and anticipated revenue to support the applicant’s claims for the need to employ a paid employee to work in the position.

    ·     The organisational chart shows this position is a second level position reporting directly to the Director of the business with a salary of $185,000 per annum. Despite the seniority of the position and the significant salary attached to the position, the applicant has not provided collaborative evidence such as a written statement to support the need to employ a paid employee to work in the position.

    ·     The applicant has not provided a business or marketing plan to demonstrate how the business will benefit from opportunities within the Chinese market that establish the need to employ a paid employee to work in the position.

    ·     The financial information provided by the applicant does not indicate or reveal to the Tribunal how the nominated position will contribute to the overall financial position of the business and how the position will reduce costs and add to the business’s operational efficiencies.

    ·     The applicant’s application and supporting information does not reveal what research the applicant undertook when deciding to create the position and subsequently employ a paid employee to work in the position; and

    ·     The applicant’s application and supporting information does not reveal any financial or other performance targets for the position.

31. In the absence of persuasive and collaborative evidence to support the applicant has identified a need to employ a paid employee to work in the position under their direct control, the Tribunal finds the requirement in r.5.19(4)(a) (ii) is not met and therefore the applicant does not satisfy r.5.19(4)(a).

32. For the above reasons the Tribunal is not satisfied that the applicant meets the requirements of r.5.19(4). The applicant has not sought to satisfy the criteria in Temporary Residence Transition Nomination stream, and as such has not met the requirements in r.5.19(3). Accordingly, the nomination of the position cannot be approved. Therefore, the Tribunal must affirm the decision under review.

    DECISION

33. The Tribunal affirms the decision under review to refuse the nomination.

    Karen McNamara
    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).