Southern Sun Restaurants Pty Ltd (Migration)

Southern Sun Restaurants Pty Ltd (Migration) [2022] AATA 3006 (28 July 2022)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  Southern Sun Restaurants Pty Ltd
REPRESENTATIVE:  Mr Jamie Lingham
CASE NUMBER:  1908361
HOME AFFAIRS REFERENCE(S):          BCC2017/3070898
MEMBER:Stephen Witts
DATE:28 July 2022
PLACE OF DECISION:  Melbourne
DECISION:The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.

Statement made on 28 July 2022 at 2:11pm
CATCHWORDS
MIGRATION–nomination – Direct Entry stream –tasks to be performed are consistent with that of a retail manager in accordance with ANZSCO code 142111– genuine need for the nominator to employ a paid employee – no less favourable terms and condition of employment –applicant lawfully operating a business in Australia – decision under review set aside
LEGISLATION
Migration Act 1958, ss 65, 140GB, 245AR
Migration Regulations 1994, rr 1.13, 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 Home Affairs on 18 March 2019 to reject the applicant’s application for approval of the nomination of a position in Australia under reg 5.19 of the Migration Regulations 1994 (Cth) (the Regulations).
The applicant applied for approval on 25 August 2017. The requirements for the approval of the nomination of a position in Australia are found in reg 5.19 of the Regulations which contains two alternative streams: a Temporary Residence Transition nomination stream (reg 5.19(3)) and a Direct Entry nomination stream (reg 5.19(4)). If the application is made in accordance with reg 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: reg 5.19(5).
In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in the Direct Entry stream for the nominated occupation of Retail Manager (General) ANZSCO code 142111.
The delegate refused the application on the basis the applicant’s nomination did not satisfy reg 5.19 of the Regulations because the delegate was not satisfied that the tasks to be performed in the position correspond to the nominated occupation of Retail Manager (General).
The applicant, Mr Duy Tran and Mr Gabriel Rodriguez form Southern Sun Restaurant Pty Ltd, appeared before the Tribunal on 28 July 2022 to give evidence and present arguments.
The Tribunal also received oral evidence from the nominee, Mr Mansoor Akram.
The applicant was represented in relation to the review.
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 reg 5.19(4), which is extracted in the attachment to this decision. For the nomination to be approved, all the requirements must be met.
The Tribunal has considered all the material before it including evidence provided prior to the hearing and evidence given at the hearing.
The Tribunal notes that it has been provided with a copy of the relevant delegate’s decision by the applicant. In this decision it was contended by the delegate that the tasks to be performed in the position in this business, which is a fast-food KFC franchise, do not correspond to the tasks of the nominated occupation, specifically that the predominant tasks of the position are not those of an ANZSCO skill level 2 retail manager but are those of an ANZSCO skill level 4 retail supervisory position. The delegate contended that both roles were responsible for staff management, stock, product quality control, customer service and regulatory requirements; but that a retail manager is also responsible for higher-level decision-making aspects of the business such as budgeting, marketing, pricing and product mix and includes responsibilities such as determining product mix, stock levels and service standards; formulating and implementing purchasing and marketing policies and setting prices, promoting and advertising the business’s goods and services, and undertaking budgeting for the business. It was also stated that the nature of this business as a franchise business is such that a significant proportion of the operation of the businesses is predetermined by the franchise agreement and that therefore there is limited scope in relation to many of the retail manager duties. It was further stated that the delegate had considered that under ANZSCO code 142111 retail managers organise and control the operations of establishments which provide retail services as outlined in the above duties and responsibilities.
The Tribunal has also considered material provided by the applicant prior to the hearing.
The Tribunal notes that this includes BAS statements for the business, ASIC material, a KFC National Enterprise Agreement 2020, a 2008 KFC Franchise Renewal Agreement, a submission from the Chief People Officer of Southern Restaurants Group dated 19 April 2022, financial material, material regarding the certification of the nominee under the regional sponsored migration scheme, a generic employment contract used in the business, an organisation chart, other employees’ contract employment information, other general information regarding the KFC business at various locations, various store reports including labour forecasts and transaction information, RGM reports, and reports regarding controllable expenses, and other material.
In particular the Tribunal notes a submission by Southern Restaurants Pty Ltd where it was stated that the information provided is identical across a number of matters before the Tribunal and that this organisation owns and operates KFC restaurants throughout NSW, Victoria and the ACT. It was stated that the business has been trading for some 20 years and that it employs over several thousand employees in many KFC franchise operations, of which up to 300 employees are temporary visa holders. It was stated that the business is the largest privately owned franchise in Australia and that it urgently requires the nominated role of a full-time retail manager and fast-food manager in the business. It was stated that the retail manager does have decision-making authority ensuring correct day-to-day decisions are made to improve the overall performance of the restaurant and examples of reports including compliance checklists, labour reports, profit and loss statements, and controllable expense reports, were provided to demonstrate this.
The Tribunal notes that it was also stated that the organisation does make efforts within its domestic recruitment activities, that it seeks to promote from within, but that low unemployment, and local issues in rural areas means that this option is not always available and that therefore external recruitment may be necessary but that regional sponsorship options are a final resort. It was further stated that there are many barriers that the organisation faces in domestic recruitment including a failure to meet the initial selection criteria, which was stated can be difficult in a quick service restaurant environment, and an inability to meet the operational trading hours of the business or location which often do not suit candidates due to the geographic span of the restaurants. Also, it was stated that the remuneration packages are challenging in a very competitive environment as the organisation cannot meet the salary demands of skill candidates due to the fact that the role is traditionally an entry level management role, and that there are various geographic and demographic constraints in these restaurant locations which leads to a high degree of difficulty in sourcing applicants.
The Tribunal notes that the following “position impact” list of duties and responsibilities was provided:
“Major Problems: (Describe a few of the most complex problems critically involved in achieving
the position’s basic purpose).
 Maintaining required standards of operational excellence and implementing company
programmes and systems in a multi-outlet environment that is subject to constant change,
i.e., sales level fluctuations, labour turnover, product changes, procedure changes, increasing
competition, etc.
 Establish priorities and work schedules to ensure the CUSTOMERS, PEOPLE SALES and PROFIT
objectives are met or exceeded.
2. Sources of Support: (Indicate what resources the position depends upon to overcome problems
encountered).
 Company Support Staff: Human Resources, Marketing, Purchasing and Supply, Finance and
Administration, Development, IRM, R & D Technical, Planning and Franchising (policy,
procedure, technical advice, specialised knowledge).
3. Decision Making Authority: (Indicate the limits and controls on the position’s authority)
 Control of general and administrative for Area including all decision making responsibility for the
Restaurant including stock levels, expenses and expenditure, menu items, human
resources/recruitment and marketing initiatives.
4. Contacts: (Nature and purpose of internal/external contacts).
 Internal - Operations Manager, Field Training, other Operations Staff,
departmental support staff all levels.
 External - Suppliers, Unions, Government and Semi-Government
agencies, special interest groups, customers, etc.
5. Specialised or Technical Knowledge/Skills: (The knowledge/skills required to perform the position’s
basic responsibilities).
 Tertiary level education with major in business or management discipline, eg.
Supervision or Management
Certificate preferred. Diploma or Degree level qualification highly regarded.
 Minimum of 5-6 years overall experience, with emphasis on operations in a retail and/or
consumer orientated service industry, preferably in multi-outlet food/quick service restaurant
environment.
 Experienced in operations management and business administration (minimum 2-3 years)
with responsibility for achievement of operations targets, i.e., sales, profit, people
management and procedural compliance.
Sound management level planning, organising, leading and controlling skills. Should be self
motivated and disciplined.
 Sound negotiating, communication and interpersonal skills.
Special Note:
 Position requires evening and weekend work, including Public Holidays and it should be noted
that there is no ‘permanent’ office facility. This position is field orientated.
 Position requires ‘hands-on’ approach and detailed managerial and operational knowledge is essential”
The Tribunal notes that a position description for a retail manager was provided as well as a sample organisational structure, and a statement asserting that the position description of a retail manager-fast food is a necessary position in each of its KFC restaurants not only to achieve each of the tasks but also to provide guidance and mentorship to other staff.
The Tribunal notes it was further stated that the position is a leader in the business and that the company has undertaken an expensive exercise seconding several restaurant managers to help build restaurant operations and personnel levels in other regions and that the company is completing an intensive training program and development plans to secure the future of the business.
The Tribunal notes that a submission was provided by the applicant’s representative and received on 22 July 2022. Included in this submission was an updated organisation chart and organisation structure and examples of the organisation’s implementation and maintenance systems, as well as retail manager reports, certification processes for retail managers, position descriptions, management manuals, and other material.
The Tribunal notes that a further submission was provided in regard to this matter on the above date indicating that it applied to not only the current nominee but to 4 other nominees also before the Tribunal in different hearings. According to this submission it was stated that the department did not take into account the level of autonomy provided to the nominees in their duties and responsibilities, nor did it take into account the significant skill shortages faced by regional and remote areas.
In particular it was asserted that Southern Sun is a part of Southern Restaurants Holdings Pty Ltd which owns and operates a number of companies, that it currently owns 86 restaurants in Australia and that it employs 7000 employees and is currently hiring 350 new employees every month and it is seen opening 10 new stores of varying kinds per year. It was further stated that the organisation operates its own systems, policies, and processes and that managers in the business have the capacity and ability to make autonomous decisions for the benefit of the individual store or region and that the business is not a typical franchisee with a direct reporting mechanism to the owner but are one step removed from the overall brand company.
It was argued that the policy guidelines regarding fast food are a useful tool to assess an individual franchise but that it is limited when applied to the applicant who is a multi-site operator and that the degree of autonomy for the store structure is different under this model. The Tribunal notes that comparisons were made in regard to this between a traditional franchisee and the settings that exist in the applicant’s business. This includes an assessment that a normal franchisor has fixed systems and processes to maintain quality and performance standards, implements national marketing and advertising plans for the entire franchise, provides ongoing guidance and marketing to franchisees, identifies regional or area growth opportunities, provides training to new franchisees and other activities; but that the arrangements in this business are that the managers in these businesses are only guided by the specifications as outlined by Southern Sun and not dictated to by the KFC business as a whole and that local managers present their own proposals and plans for the store to the management of Southern Sun and that they are responsible for long-term planning for the success of their particular store.
The Tribunal notes that it was also asserted that each manager has a support and administrative team responsible for the collection and analysis of data and that this provides visibility to current operations and determines the success of long-term initiatives; and that therefore there was a difference between this business and a normal franchise operation in this industry. On that basis it was asserted that the skill level required by the managers who were nominated as part of these applications are at such a level that the company does struggle to find suitable employees to fill these labour gaps. It was asserted that the nominees maintain a high level of managerial responsibility over the operation of the individual stores and a majority of the tasks outlined in the ANZSCO description are demonstrated.
The Tribunal also notes that a statement was provided in each category in regard to an assessment of their duties and responsibilities in accordance with ANZSCO code 142111 in particular the determining of product mix, determining stock levels, service standards, and formulating and implementing purchasing and marketing policies, and setting prices. In this submission it was asserted that the applicant accepted that in a standard single restaurant arrangement the franchisor would determine various aspects of the operation of the business including the price of products but in this model the manager undertakes individualistic strategies for promotion. In this submission an assessment was also made of the other tasks under the code including promoting and advertising the establishment’s goods and services, selling goods and services to customers and advising them on product use, maintaining records of stock levels and financial transactions, undertaking budgeting for the establishment, controlling the selection, training and supervising of staff, and ensuring compliance with Occupational Health & Safety regulations.
At the hearing the Tribunal had a discussion with the applicant regarding the application.
The nominator stated the business is unique in that it is the largest private group of its kind in Australia and that it has almost 100 separate operations of which a few are under the KFC banner and as such it is in a unique position to control the growth of its business in a way that is not consistent with standalone franchise operations. Various examples were given of how this operates including the use of retail or store managers across multiple sites particularly during periods where new businesses are opening and that the individual managers may in fact manage an existing store as well as planning for and budgeting for a new one opening at the same time. The Tribunal had a detailed discussion with the nominator regarding the nature of its operations as a varied and significant business noting its separate IT and forecasting systems and its unique accounting management tools developed by the organisation’s head office which is coordinated with retail managers in the business.
The nominee stated that he first arrived in Australia on a student visa in 2011 and completed a diploma level qualification in accounting, an advanced diploma level qualification in accounting, and a bachelor level qualification in commerce and accounting. He stated that he started work with the nominator in 2011 on a part-time basis, he then started work full-time after he finished his study in 2013 as a team member, and after that became a shift supervisor in 2013, an assistant manager in 2014, and then a retail manager and that at present he is an acting area manager in charge of eight stores which includes 22 assistant managers and 500 staff and that these businesses together have a turnover of approximately $25 million per annum. He talked in detail about the breadth of his duties and responsibilities and it is noted by the Tribunal that he was a retail manager of the year and a top 5% champion and as such will be travelling to the United States in October this year as part of his training and mentor management program. It was stated that as an acting area manager at the present time he is currently on a salary of $84,400 base level plus superannuation and other benefits.
The Tribunal has considered the evidence carefully and finds that this particular business is not a standalone franchise operation subject to a standard franchise agreement and that it does have some autonomy not common in a KFC style franchise operation noting in particular the evidence given in regard to comparisons made by the senior executives in the applicant’s business as to its differing framework from other franchise operations than those that they have previously worked in. In particular the Tribunal notes that the KFC stores run by this applicant feature as only a few stores as part of a business that runs over 86 such retail operations across many sectors of the economy. As such the Tribunal notes the specific evidence provided regarding the differing internal structures that operate in this business that affect the breadth of responsibilities of the individual retail managers in the business.
The Tribunal notes also the evidence provided that these nominees are working across other stores as area managers, in particular during the acquisition and start-up phase of the business, and that they are often across several businesses that are part of the KFC operation within the applicant’s business but also across other business acquisitions and operations that are not necessarily part of the KFC franchise operation within the company.
On that basis, that this is a special situation as noted above, in particular that these individual stores are controlled in a differing manner via a large corporation which has significant other interests in other sectors of the economy, and that therefore they have set up their own processes and management overview in their fast food and restaurant businesses to match other elements of the business, the Tribunal therefore finds in this case that the tasks to be performed are consistent with that of a retail manager in accordance with ANZSCO code 142111.
The application is compliant: reg 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 an identified person as a paid employee to work in the position under their direct control.
The Tribunal finds that the application was made on the approved form within the timeframes provided and that it identified the need for the nominator to employ the identified person to work in the position under the nominator’s direct control.
Accordingly, the requirement in reg 5.19(4)(a) is met.
Nominator is actively and lawfully operating a business in Australia: reg 5.19(4)(b)
Regulation 5.19(4)(b) requires that the applicant is actively, lawfully and directly operating a business in Australia.
The Tribunal finds that the nominator is actively and lawfully operating a business in Australia.
Accordingly, the requirement in reg 5.19(4)(b) is met.
Position is not labour-hire: reg 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.
The Tribunal finds that the nominator is not involved in labour hire activities.
Accordingly, this requirement does not apply.
Term of employment of the visa holder: reg 5.19(4)(d)
Regulation 5.19(4)(d) requires the nominee to be employed in the nominated position for at least 2 years full time, and the terms and conditions of that employment do not expressly exclude the possibility of an extension.
The Tribunal finds that the terms and conditions of employment do not expressly exclude the possibility of an extension.
Accordingly, the requirement in reg 5.19(4)(d) is met.
No less favourable terms and conditions of employment: reg 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 finds that the terms and conditions of employment for the nominee will be no less favourable than those that would be provided to an Australian citizen or permanent resident performing equivalent work in the same workplace at the same location.
Accordingly the requirements of reg 5.19(4)(e) are met.
No adverse information known to Immigration: reg 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 regs 1.13A and 1.13B.
The Tribunal finds that there is no evidence before it of any adverse information known to Immigration.
Accordingly the requirements of reg 5.19(4)(f) are met.
Satisfactory compliance with workplace relations laws: reg 5.19(4)(g)
Regulation 5.19(4)(g) requires that the applicant has a satisfactory record of compliance with the laws of the Commonwealth, and of each State or Territory in which the applicant operates a business and employs employees in the business, relating to workplace relations.
The Tribunal finds that there is no evidence before it that the applicant does not have a satisfactory record of compliance with workplace relations laws in locations in which it operates a business and employs staff.
Accordingly the requirements of reg 5.19(4)(g) are met.
Tasks of the position, genuine need for the position and training requirements reg 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 and where the occupation is applicable to the proposed employee in accordance with any specifications made in that instrument, there is a genuine need for the nominee to be employed as a paid employee in the position, and certain specified training requirements are met; or
·the position and nominator’s business is located in regional Australia, there is a genuine need for the nominee to be employed as a paid employee in the position under the nominator’s direct control, the position 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.
The Tribunal finds that there is a genuine need for the nominator to employ the person identified as a paid employee to work in the position under the nominator’s direct control and that the nominator has met the training requirements specified in the relevant instrument.
Accordingly the requirements of reg 5.19(4)(h) are met.
Based on the findings above, the Tribunal is satisfied that the applicant meets the requirements of reg 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.
Stephen Witts
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)       all 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;
(AA)there is a genuine need for the nominator to employ the person identified under subparagraph (a)(ii), as a paid employee, to work in the position under the nominator’s direct control;
(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 the person identified under subparagraph (a)(ii), as 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).

[2022] AATA 3006

28 July 2022

Key Legal Topics

Areas of Law

Immigration

Administrative Law

Legal Concepts

Judicial Review

Statutory Construction

Procedural Fairness

Jurisdiction