Stephanie's Management Services Pty Ltd ATF Shepherd Management Trust (Migration)

[2021] AATA 4270

Stephanie's Management Services Pty Ltd ATF Shepherd Management Trust (Migration) [2021] AATA 4270 (3 November 2021)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Stephanie’s Management Services Pty Ltd ATF Shepherd Management Trust

CASE NUMBER:  1830703

HOME AFFAIRS REFERENCE(S):          BCC2018/471841

MEMBER:Terrence Baxter

DATE:3 November 2021

PLACE OF DECISION:  Brisbane

DECISION:The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.

Statement made on 03 November 2021 at 8:43am

CATCHWORDS
MIGRATION – application for approval of nomination of position – temporary residence transition stream – financial capacity to employ nominee for two years – no financial statements or tax returns provided to department – documentary and oral evidence provided to tribunal – continuing trading during COVID-19 restrictions – continuing employment of nominee as integral part of team – group of companies or trusts related to applicant – joint hearing with review of refusal of visa application – decision under review set aside

LEGISLATION  
Migration Act 1958 (Cth), s 140GB
Migration Regulations 1994 (Cth), r 5.19(3)(d)(i)
Corporations Act 2001 (Cth), s 50AAA

CASE     
MIBP v Jayshree Enterprises Pty Ltd [2017] FCA 264

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 on 11 October 2018 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).

2. The applicant, Stephanie’s Management Services Pty Ltd as trustee for the Shepherd Management Trust, applied for approval on 29 January 2018. The applicant nominated Mr Willington Rene Jimenez Garnica (the nominee) in the position of Client Services Manager. 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).

3. In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in the Temporary Residence Transition nomination stream.

4. The delegate refused the application on the basis the applicant’s nomination did not satisfy reg 5.19(3)(d)(i) of the Regulations because the delegate found that the applicant did not demonstrate the financial capacity to employ the nominee on a full-time basis in the position for at least two years.

5. The applicant lodged an application for review of the delegate’s decision with the Tribunal on 19 October 2018.

6. The applicant’s Director of Finance and Inventory, Ms Natalie Dunstan, appeared before the Tribunal on 1 September 2021 by video conference to give evidence and present arguments. The hearing was a joint hearing with the application for review of a decision to refuse the visa application of the nominee. The Tribunal also received oral evidence from the nominee by video conference. The Tribunal hearing was conducted with the assistance of an interpreter in the Spanish and English languages.

7. The Tribunal exercised its discretion to hold the hearing by video conference. The hearing was held during the COVID-19 pandemic. The Tribunal determined it was reasonable to hold a hearing by video conference, having regard to the nature of this matter and the individual circumstances of the applicant. The Tribunal also had regard to the Tribunal’s objective of providing a mechanism of review that is fair, just, economical and quick, and the delay to the matter if the hearing was not to be conducted by video conference.

8. The applicant was represented in relation to the review by its legal practitioner, Mr Martin Salvo of Salvo Migration. Mr Salvo did not attend the Tribunal hearing.

9. 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

10. The issue in this case is whether the applicant meets the requirements for approval of the nomination under the Temporary Residence Transition nomination stream set out in reg 5.19(3), which is extracted in the attachment to this decision. For the nomination to be approved, all the requirements must be met.

    Evidence presented prior to the hearing

11. The applicant produced to the Department of Immigration and Border Protection (now the Department of Home Affairs) (the Department) the following documents:

    a.An unsigned copy of the trust deed for the Shepherd Management Trust.

    b.A current ABN Lookup form for The Trustee for the Shepherd Management Trust, ABN 53 743 599 190.

    c.A job advertisement for the position.

    d.Market salary research.

    e.An employment contract of the nominee dated 7 July 2015.

    f.An application by the nominee for the position dated 24 June 2015.

    g.A letter from the applicant dated 14 November 2017 confirming the availability of the nominee’s position for a period of two years.

    h.Activity statements for the period from July 2016 to February 2018.

    i.Payroll activity summaries prepared by the applicant for the 2016 and 2017 financial years.

    j.An employment contract for the position Beauty Therapist/Spa Trainer addressed to Stacey Leong, dated 23 January 2014.

    k.A payslip of Stacey Leong from December 2017.

    l.A position description.

    m.Website extracts of the applicant.

    n.Payslips of the nominee for the period from October 2015 to August 2017.

    o.An organisational chart.

    p.A training expenditure summary prepared by the representative.

    q.A letter from the applicant confirming the nominee’s position and duties dated 14 November 2017.

    r.A document summarising in-house training expenditure of the applicant.

    s.Notification of the applicant’s nomination approval for the nominee’s subclass 457 visa dated 26 August 2015.

    t.Notices of tax assessment and PAYG payment summaries of the nominee for the 2016 and 2017 financial years.

    u.A letter from the applicant confirming Stacey Leong’s position and duties dated 18 April 2017.

    v.Various internal training logbooks of the applicant.

    w.An employment contract of Stacey Leong dated 31 March 2017.

    x.A submission from the applicant’s accountant dated 19 April 2018.

12. The applicant produced to the Tribunal the following documents:

    a.A copy of the delegate’s decision.

    b.Submissions from the representative dated 22 July 2021.

    c.Details of the contact person for the business, Ms Dunstan.

    d.An updated current ABN Lookup form for The Trustee for Shepherd Management Trust, ABN 53 743 599 190.

    e.A further unsigned copy of the trust deed for the Shepherd Management Trust.

    f.Trust tax returns and financial reports of the Shepherd Management Trust for the 2018 to 2020 financial years.

    g.Activity statements for the period from July 2019 to June 2021.

    h.An updated organisational chart and position description.

    i.Updated extracts from the applicant’s website.

    j.A copy of the job advertisement for the position and the nominee’s covering letter previously produced to the Department.

    k.A copy of the employment contract of the nominee dated 7 July 2015 previously produced to the Department.

    l.A letter from the applicant confirming the availability of the nominee’s position dated 20 July 2021.

    m.Updated market salary research.

    n.PAYG payments summaries and notices of assessment of the nominee for the 2016 to 2020 financial years.

    o.Payslips of the nominee for the period from January 2019 to June 2021.

    p.Notification of the applicant’s approval as a standard business sponsor for the period from 31 July 2015 to 31 July 2020.

    q.An updated training expenditure summary prepared by the representative.

    r.Payroll activity summaries prepared by the applicant for the 2016 and 2020 financial years.

    s.A summary of in-house training hours and expenditure prepared by the applicant for the 2015 to 2020 financial years.

    t.Payslips of Stacey Leong from December 2017 and June to July 2021.

    u.An employment contract of Stacey Leong dated 23 January 2017 and a copy of the employment contract dated 31 March 2017. 

    v.A copy of the letter from the applicant confirming Stacey Leong’s position and duties dated 18 April 2017.

    w.Copies of the internal training logbooks of the applicant.

    x.Training procedure manuals of the applicant.

    y.A submission from the applicant regarding adverse information dated 21 July 2021.

    Evidence presented at the hearing regarding the applicant’s operations

13. Ms Dunstan gave evidence regarding the business operations of the applicant. She stated that the applicant provided a payroll employment service for six discrete entities operating spas under the umbrella of Stephanie’s Luxury Spas. She explained that the applicant trust had been established because employees worked for the various spas within the Group. She stated that the applicant employed all of the employees working at the various spas and received payment from the respective spa operators for the labour supplied. She said that the operators of the six spas were all related to the applicant.

14. Ms Dunstan stated that the applicant operated from premises situated in Murarrie, Queensland, which she described as the head office of the Group. She said that the premises included an office, a reservations team, a commercial laundry facility and a training room.

15. Ms Dunstan said that the Group currently employed approximately 65 employees. She said that the applicant invoiced the various spa operators fortnightly for the payroll and superannuation costs of employees working at each spa, together with an administration fee. Ms Dunstan said that the applicant trust had been established as an employment service in 2007 after the second spa had begun operating within the Group.

16. The nominee gave evidence regarding his employment by the applicant and the tasks performed by him in the position.

    Evidence presented after the hearing

17. After the hearing, the applicant produced to the Tribunal the following documents:

    a.A signed copy of the trust deed for the Shepherd Management Trust.  

    b.Trust tax return and financial report of the Shepherd Management Trust for the 2021 financial year.

    c.Company tax return and financial report of Shepherd Consolidated Pty Ltd, ABN 30 088 6786 471, for the 2021 financial year.

    d.Trust tax return and financial report of Shepherd Family Trust, ABN 64 261 371 409, for the 2021 financial year.

    e.Trust tax return and financial report of the SMS trust, ABN 64 324 240 277, for the 2021 financial year.

    f.Trust tax return and financial report of the SOS trust, ABN 26 967 721 323, for the 2021 financial year.

    g.Trust tax return and financial report of the SVS trust, ABN 28 817 363 585, for the 2021 financial year.

    h.Superannuation contribution details made by Stephanie’s Management Services from April to June 2021.

    i.Instalment activity statement of the Trustee for the Shepherd Management Trust for the period from July 2020 to September 2021.

    j.An ASIC company statement for Stephanie’s Management Services Pty Ltd, ACN 126 289 521.

    k.An ASIC company statement for Retreat Spa’s Australia Pty Ltd, ACN 123 020 333.

    l.An ASIC company statement for Shepherd Consolidated Pty Ltd, ACN 088 686 471.

    m.An ASIC company statement for Stephanie’s Mountain Spa Pty Ltd, ACN 138 632 934.

    n.An ASIC company statement for Stephanie’s Ocean Spa Pty Ltd, ACN 143 238 322.

    o.An ASIC company statement for Stephanie’s Vintage Spa Pty Ltd, ACN 156 655 444.

    p.A Diploma of Human Resources Management awarded to Stacey Kar-Yarn Leong.

    q.A Diploma of Beauty Therapy awarded to Stacey Kar-Yarn Leong.

    r.Driver licences of Australian Citizens employed by the applicant.

    s.A submission from the applicant regarding the nominee’s renumeration, dated 9 September 2021.

18. At the hearing, before evidence was taken from Ms Dunstan and the nominee, the Tribunal noted that, although the applicant had been represented in the proceedings, the representative was not present at the hearing. Ms Dunstan stated that the applicant wished to proceed with the hearing without the representative being present.

    The application must be compliant: reg 5.19(3)(a)

19. Regulation 5.19(3)(a) requires that the application for approval must be in the approved form, must be accompanied by the prescribed fee and, where applicable, must include the required written certification relating to conduct that contravenes s 245AR(1). The application must also identify a relevant person and occupation and identify a need for the nominator to employ that person, as a paid employee, to work in the position under the nominator’s direct control.

20. Having regard to the information provided by the Department, the Tribunal is satisfied that the application for approval was made on the approved form, was accompanied by the prescribed fee and included a written certification stating whether the applicant had engaged in conduct in relation to the nomination that contravenes s 245AR(1). The requirements of

    
    

    reg 5.19(2) and consequently of reg 5.19(3)(a)(i) are met.

21. Regulation 5.19(3)(a)(ii) requires that the application for approval identifies a person who holds a Subclass 457 (Temporary Work (Skilled)) visa granted on the basis that the person satisfied the criterion in cl 457.223(4) of Schedule 2 to the Regulations. The person identified in the application is the nominee, Willington Rene Jimenez Garnica. Department records reveal that the nominee was granted a Subclass 457 visa on 6 October 2015, which was valid until 6 October 2019. Accordingly, the nominee held the required subclass of visa on the date of the application, 29 January 2018. The Tribunal is satisfied that the requirements of reg 5.19(3)(a)(ii) are met.

22. Regulation 5.19(3)(a)(iii) requires that the application identifies an occupation, in relation to the position, that is listed in the Australian and New Zealand Standard Classification of Occupations (ANZSCO) and has the same 4-digit occupation unit code as the occupation carried out by the holder of the Subclass 457 (Temporary Work (Skilled)) visa. The application identifies the position as Client Services Manager and the occupation (ANZSCO) as Call or Contact Centre Manager. The Tribunal finds that ANZSCO lists the occupation Call or Contact Centre Manager, ANZSCO Code 149211, within unit group code 1492 Call or Contact Centre and Customer Service Managers. The nominee’s 2015 employment contract describes his position as Client Services Manager, which is an alternative occupation in ANZSCO for Call or Contact Centre Manager. At the hearing, Ms Dunstan gave evidence of the tasks performed by the nominee in the position. Having regard to the evidence as to the duties being performed by the nominee, the Tribunal is satisfied that the nominee has carried on the occupation of Client Services Manager listed in ANZSCO. Accordingly, the Tribunal is satisfied that the requirements of reg 5.19(3)(a)(iii) are met.

23. Given the above findings that the requirements in reg 5.19(3)(a)(i), (ii) and (iii) are met, the requirement in reg 5.19(3)(a) is met.

    Status of the nominator: reg 5.19(3)(b)

24. Regulation 5.19(3)(b) requires the nominator to be or have been the relevant standard business sponsor who is actively and lawfully operating a business in Australia. In addition, the nominator, as that standard business sponsor, must not have met certain criteria relating to the operation of a business overseas, in the most recent sponsorship approval.

    The applicant is or was the standard business sponsor who last identified the nominee in a nomination – reg 5.19(3)(b)(i)

25. The Department’s records confirm the applicant was approved as a standard business sponsor from 31 July 2015 for five years and was the standard business sponsor who last identified the nominee in a nomination under s 140GB of the Act. Regulation 5.19(3)(b)(i) is therefore met.

    The applicant is actively and lawfully operating a business in Australia – reg 5.19(3)(b)(ii)

26. This regulation requires that the applicant is actively and lawfully operating a business in Australia. The applicant produced various documents to the Tribunal including taxation returns, activity statements, financial statements and current ASIC registration documents for the trustee of the applicant trust. Ms Dunstan gave evidence regarding the business activities of the applicant. The financial documents produced to the Tribunal disclose that the applicant received total income exceeding $2,000,000 in each of the 2019, 2020 and 2021 financial years.

27. Having regard to the evidence presented to the Tribunal, the Tribunal is satisfied that the applicant is actively and lawfully operating a business in Australia, namely a payroll employment service. The requirement in reg 5.19(3)(b)(ii) is therefore met.

    The applicant did not, as a standard business sponsor, meet reg 1.20DA, or reg 2.59(h) or reg 2.68(i), in the most recent approval as a standard business sponsor – reg 5.19(3)(b)(iii)

28. Department records confirm that the applicant was not granted its most recent standard business sponsorship on the basis of meeting reg 1.20DA, reg 2.59(h) or reg 2.68(i) of the Regulations. Accordingly, the requirement in reg 5.19(3)(b)(iii) is met.

29. Given the above findings that the requirements in reg 5.19(3)(b)(i), (ii) and (iii) are met, the requirement in reg 5.19(3)(b) is met.

    Previous employment of the nominee: reg 5.19(3)(c)

30. Broadly speaking, to meet the requirement in reg 5.19(3)(c), either:

    ·     the nominee must have been employed full time in Australia in the position for which he or she holds a Subclass 457 visa for at least two of the three years preceding the nomination application; or

    ·     the nominee holds a Subclass 457 visa on the basis that s/he was identified in a nomination of a specified occupation for that visa, the nominator nominated the occupation, and the nominee has been employed in that occupation for at least two years in the three years immediately before the application.

31. The nomination application was lodged on 29 January 2018. It is therefore required that the nominee was employed in the position for at least two years in the period from 29 January 2015 to 29 January 2018. The applicant produced PAYG payment summaries for the nominee for the 2016 to 2018 financial years. The applicant also produced a payslip for the nominee which showed that he had been employed from 14 October 2015. Ms Dunstan and the nominee gave evidence that the nominee had been employed full time by the applicant from the commencement of his employment in 2015 until the present time. Having had regard to the evidence of Ms Dunstan as to the duties performed by the nominee, the Tribunal is satisfied that the nominee was employed in the position of Client Services Manager.

32. The Tribunal is accordingly satisfied that the nominee has been employed full time in Australia in the position for which he held a Subclass 457 visa for at least two of the three years immediately before the date of the nomination application. Accordingly, the requirement in reg 5.19(3)(c)(i) is met.

1. Given the above findings, the requirement in reg 5.19(3)(c) is met.

   Future employment of the visa holder: reg 5.19(3)(d)

2. Regulation 5.19(3)(d) only applies to certain nominees (those described in reg 5.19(3)(c)(i)). For this class of person, the Regulations require that the nominee will be employed on a full-time basis for at least two years on terms that do not expressly preclude the possibility of an extension.

3. The nominee is a person to whom reg 5.19(3)(c)(i) applies (see paragraph 32 above) and is therefore required to meet this requirement.

4. The Tribunal has had regard to the terms and conditions of the nominee’s employment as set out in the 2015 employment contract. The contract provides that the nominee is to work 38 hours per week, which is equivalent to full-time employment. The contract states that the nominee’s employment is permanent, to commence on 13 July 2015 or an alternate date to be mutually agreed by the applicant and the nominee. Evidence was provided to the Tribunal that the nominee’s employment commenced on 14 October 2015. The applicant provided a written statement to the Tribunal that the position would be made available to the nominee for two years from the grant of his permanent residency. At the hearing, Ms Dunstan stated that the nominee was an integral part of the applicant’s “team” and that it was the applicant’s intention to employ him for as long as possible. There is no exclusion in the contract of the possibility of extension of employment beyond two years.

5. However, it is also open to the Tribunal to consider whether the applicant’s business has the financial resources to meet the wages costs for the nominee over the employment period (MIBP v Jayshree Enterprises Pty Ltd [2017] FCA 264). The delegate was not satisfied that this requirement had been met. This finding is not surprising, given that no financial statements or taxation returns were provided by the applicant to the Department. The applicant did provide business activity statements to the Department, but the delegate found, correctly in the opinion of the Tribunal, that these statements do not provide a full picture of the applicant’s financial position.

6. The financial statements and taxation returns provided by the applicant to the Tribunal establish that the applicant received total income in the 2020 and 2021 financial years of $2,184,841 and $2,987,626 respectively. The applicant recorded profits before tax of $78,167 and $140,312 in those years respectively.

7. The Tribunal noted to Ms Dunstan at the hearing that the applicant’s 2020 balance sheet (which was the most recent balance sheet available at the date of hearing) disclosed that, as at 30 June 2020, the applicant had a liability to the Australian Taxation Office of over $350,000 for tax and PAYG withheld. After the hearing the applicant provided evidence, as at 1 September 2021, the applicant had no liability to the ATO. The applicant also provided evidence that all superannuation payable in respect of its employees as at 27 July 2021 had been paid.

8. The applicant has continued to employ the nominee since October 2015. The applicant has provided evidence that the nominee was paid salaries exceeding $55,000 in the 2017 to 2019 financial years and exceeding $50,000 in the 2020 financial year.

9. The applicant has traded profitably in recent years, even during the COVID-19 pandemic. The applicant has a sound balance sheet. The Tribunal is satisfied that the applicant has the financial capacity to employ the nominee in the position of Client Services Manager in accordance with the employment contract and that the nominee will be employed on a full-time basis in that position for at least two years. Accordingly, the requirement in reg 5.19(3)(d)(i) is met.

10. Given the above findings, the requirement in reg 5.19(3)(d) is met.

    No less favourable terms and conditions of employment: reg 5.19(3)(e)

11. Regulation 5.19(3)(e) requires that the terms and conditions of employment applicable to the nominated position will be no less favourable than those that are, or would be, provided to an Australian citizen or permanent resident performing equivalent work in the same workplace at the same location.

12. The recent organisational chart establishes, and Ms Dunstan confirmed at the hearing, that the applicant has no Australian citizen or permanent resident working in the position of Client Services Manager at the present time.

13. The current employment contract provides that the applicant will pay to the nominee a salary of $54,340 per annum, plus superannuation. The amount of the salary being paid to the nominee is supported by the payroll activity summaries produced to the Tribunal.

14. The applicant produced to the Tribunal evidence said to be from PayScale, that the average salary payable in Australia for a Client Service Manager ranges between $48,000 and $87,000 per annum, with an average of $60,967 per annum.

15. After the hearing, the applicant produced evidence that the position of Client Services Manager is a Level 5 position under the Clerks – Private Sector Award 2020 and that the current full-time pay rate for this position is $27.32 per hour, equivalent to $53,984.32 per annum for a 38 hour week. The applicant stated that the nominee’s pay rate would be reviewed for an increase once a decision in relation to his permanent residency visa had been made.

16. Based on the evidence available, the Tribunal is satisfied that the terms of employment applicable to the nominee are no less favourable than the terms and conditions which would be provided to an Australian citizen or Australian permanent resident for performing such work in that workplace at that location.

17. Accordingly, the requirement in reg 5.19(3)(e) is met.

    Training commitments and obligations: reg 5.19(3)(f)

18. Regulation 5.19(3)(f) requires the applicant to have fulfilled any commitments made relating to meeting training requirements and complied with applicable obligations relating to training requirements during the period of the applicant’s most recent sponsorship approval. These requirements may be disregarded if it is reasonable to do so.

19. In relation to the Subclass 457 scheme, a person who was a standard business sponsor of at least one primary sponsored person was required by reg 2.87B of the Regulations to comply with requirements relating to training of Australian workers, in each year they engaged a Subclass 457 visa holder. The annual periods during which this requirement applies are expressed to commence on the day of the person’s approval as a standard business sponsor and each anniversary of that day.

20. The period of the applicant’s most recent sponsorship approval is for five years from 31 July 2015. The nominee was issued a Subclass 457 visa on 6 October 2015, which was valid until 6 October 2019 and has been employed continuously by the applicant since 14 October 2015.

21. The training benchmarks and training requirements are specified in Instrument IMMI 13/030. The business is required to show that the training that has been, and continues to be, provided to employees who are Australian citizens and Australian permanent residents is related to the purpose of the business. The training benchmarks for an established business are:

    (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

    (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.

22. The Instrument provides that expenditure that can count towards Benchmark B includes the employment of a person who trains the business’s Australian employees who are Australian citizens and Australian permanent employees as a key part of their job.

23. It is necessary to determine the periods of time, if any, in respect of which the applicant was or is required to comply with the training benchmarks. The relevant regulation, being reg 2.87B of the Regulations, was repealed by the Migration Amendment (Skilling Australians Fund) Regulations 2018 (Cth). A transitional provision introduced by those Regulations provides that a person is not required to comply with reg 2.87B(2) or (3) in relation to a period of 12 months ending on or after the commencement day (12 August 2018). As the only annual periods of the applicant’s most recent sponsorship which ended prior to 12 August 2018, were the years ending on 31 July 2016, 31 July 2017 and 31 July 2018, the Tribunal finds that the applicant is required to comply with the training obligations in respect of those sponsorship years only.

24. There is no evidence before the Tribunal of any expenditure by the business during the sponsorship period in payments allocated to an industry training fund that operates in the same industry as the business to meet Benchmark A.

25. The applicant provided evidence that it had, during the relevant period of the business sponsorship, employed Ms Stacey Leong, originally as a Beauty Therapist/Spa Trainer and later as a Spa Manager and Spa Trainer. The applicant also provided evidence that, in her employment, Ms Leong was responsible for the continual training and up-skilling of all staff members across the Group’s locations and that such training was performed in accordance with the Group’s formal training log books and manuals. The applicant maintained that the training of the business’s Australian employees and Australian permanent residents was a key part of her job. The applicant provided evidence of the total salaries paid to Ms Leong in each relevant sponsorship year, the number of hours devoted by her to training in those years and the amount of her wages in each relevant year attributable to training. The applicant also provided evidence of the trainer’s qualifications to train the business’s employees, together with facilitators’ logbooks and procedure manuals.

26. In order to meet Benchmark B, the applicant is required to establish that the expenditure on employment of a trainer is equivalent to at least 1% of the payroll of the business in the relevant period. It is necessary to consider the meaning of “the payroll of the business” for this requirement. The Department’s policy contained in its Procedures Advice Manual (PAM3) states that for this requirement, payroll expenditure includes any wages, remuneration, salary, commission, bonuses, allowances, superannuation contributions or eligible termination payments, defined as wages in the Act relating to payroll tax in the relevant state/territory, that the applicant has paid to their employees during the relevant 12-month period.

27. The Tribunal is not bound by the policy, but the Tribunal may refer to it where it is appropriate to do so. The definition in the policy is consistent with the definition in the Macquarie Dictionary (accessed August 2020) which relevantly defines “payroll” as:

    Noun 1. A roll or list of persons to be paid, with the amounts due.

    2. the aggregate of these amounts.

    3. the money that is actually paid out.

28. The definition in the policy is also consistent with the terminology contained in the Payroll Tax Act 1971 of Queensland under which payroll tax is imposed on all taxable wages, and wages are relevantly defined to mean any wages, remuneration, salary, commission, bonuses or allowances paid or payable (whether at piecework rates or otherwise and whether paid or payable in cash or in kind) to an employee as an employee, and, without limiting the generality of the foregoing, includes a superannuation contribution. Accordingly, the Tribunal finds that the term payroll in the Instrument for any period includes wages and superannuation paid for that period.

29. The applicant failed to produce to the Tribunal particulars of the payroll of the business for each of the sponsorship years ending on 31 July 2016, 31 July 2017 and 31 July 2018. As the sponsorship years closely corresponded to the 2016, 2017 and 2018 financial years, at the hearing, Ms Dunstan, on behalf of the applicant, consented to the Tribunal’s consideration of the applicant’s payroll during those three financial years when considering this requirement.

30. Particulars of the applicant’s payroll, Benchmark B amounts and the salary of its trainer for the relevant financial years are as follows:

Financial year	2016	2017	2018
Payroll	$1,994,415.76	$2,260,085.99	$2,303,568.48
Benchmark B amount	$19,945	$22,601	$23,036
Trainer’s total wages	$51,503.80	$59,058.18	$64,059.38
Training component	$32,813.50	$50,257.50	$37,672

1. The applicant’s expenditure on the trainer’s wages in each of those financial years exceeded the Benchmark B amounts for those years. Accordingly, the Tribunal is satisfied that the applicant fulfilled its commitments relating to training requirements and complied with the applicable obligations under the Regulations relating to those requirements during each relevant year of the sponsorship period. Accordingly, the Tribunal is satisfied that the requirements of reg 5.19(3)(f)(i) are met. It is therefore not necessary to consider whether it is reasonable to disregard any non-compliance under reg 5.19(3)(f)(ii).

2. Accordingly, the requirement in reg 5.19(3)(f) is met.

   No adverse information known to Immigration: reg 5.19(3)(g)

3. Regulation 5.19(3)(g) requires that there is no adverse information known to Immigration about the nominator or person associated with the nominator; or it is reasonable to disregard any such information. For these purposes, ‘adverse information’ and ‘associated with’ have the meaning given in regs 1.13A and 1.13B of the Regulations.

4. There is no evidence before the Tribunal that there is any adverse information of the type described in the relevant definitions known to the Department about the applicant or any associated person.

5. Accordingly, the requirement in reg 5.19(3)(g) is met.

   Satisfactory compliance with workplace relations laws: reg 5.19(3)(h)

6. Regulation 5.19(3)(h) requires the applicant to have a satisfactory record of compliance with the laws of the Commonwealth, and of each State or Territory in which the applicant operates a business and employs employees in the business, relating to workplace relations.

7. There is no evidence before the Tribunal to suggest that the applicant has an unsatisfactory record of compliance with workplace relations laws of the Commonwealth or any State or Territory in which the applicant operates a business. The Tribunal is satisfied that the applicant does have a satisfactory record of compliance.

8. Accordingly, the requirement in reg 5.19(3)(h) is met.

   Genuine need to employ nominee: reg 5.19(3)(i)

9. Regulation 5.19(3)(i) requires that there is a genuine need for the nominator to employ the person, as a paid employee, to work in the position under the nominator’s direct control.

10. The applicant provided to the Tribunal a job description which included a position overview. This document states that the primary responsibility of the position is to provide leadership, direction and supervision of staff in the daily operations of the Contact Centre whilst developing and maintaining customer service policies to maintain, promote and improve customer engagement and relations throughout the related spas and Contact Centre as well as monitoring after-sales performance and client satisfaction across the Group’s spas.

11. At the hearing, Ms Dunstan gave evidence regarding the genuine need for the position. She stated that the nominee spent the majority of his time working in the head office/Contact Centre, but that he was also required to visit the various spas operated by the Group. She said that he was responsible for all aspects of client satisfaction. The Tribunal questioned whether time spent by the nominee in addressing the satisfaction of clients of the various spas was relevant to his employment by the applicant, a business primarily provided a payroll employment service.

12. The Tribunal sought confirmation from Ms Dunstan of the individual entities which operated the six spas within the Group’s operations. She stated that each spa was operated by a separate company or trust, but that all were related to the applicant. Prior to the hearing the applicant had provided evidence that Ms Stephanie Shepherd was the sole Ordinary shareholder in the corporate trustee of the applicant trust (Mr Desmond Plaisted holding one Class C share in that company). After the hearing, the applicant provided evidence that Ms Shepherd was the sole Ordinary shareholder in each of the companies which operated the various spas. The Tribunal is satisfied that the spa operators are related bodies corporate to the applicant and are entities associated with the applicant pursuant to s 50AAA of the Corporations Act 2001.

13. The applicant maintains a Contact Centre and provides employees to the spa operators to enable those operators to provide services to their clients. The Tribunal accepts the evidence provided by Ms Dunstan that the nominee, as Client Services Manager, plays a key role in ensuring that reservations in the Contact Centre are handled in a timely manner, that staff are properly trained, that laundry services are properly maintained and that the spa locations are presented so as to ensure continued customer satisfaction. The Tribunal accepts that these duties are integral to the operation of the applicant’s business.

14. The Tribunal accepts that the nominee has been employed by the applicant for over six years in the position. The Tribunal is satisfied that there is a genuine need for the applicant to employ the nominee to work in the position of Client Services Manager under the nominator’s direct control.

15. Accordingly, the requirement in reg 5.19(3)(i) is met.

16. 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

17. The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.

    Terrence Baxter
    Member

    
    

    ATTACHMENT  -  EXTRACTS FROM THE MIGRATION REGULATIONS 1994

    5.19Approval of nominated positions (employer nomination)

    …

    (2)The application must:

    (a)be made in accordance with approved form 1395…; and

    (aa) include a written certification by the nominator stating whether or not the nominator has engaged in conduct, in relation to the nomination, that constitutes a contravention of subsection 245AR(1) of the Act; and

    (b)be accompanied by the fee mentioned in regulation 5.37.

    Temporary Residence Transition nomination

    (3)The Minister must, in writing, approve a nomination if:

    (a)the application for approval:

    (i)       is made in accordance with subregulation (2); and

    (ii)      identifies a person who holds a Subclass 457 … visa granted on the basis that the person satisfied the criterion in subclause 457.223(4) of Schedule 2; and

    (iii)     identifies an occupation, in relation to the position, that:

    (A)is listed in ANZSCO; and

    (B)has the same 4-digit occupation unit group code as the occupation carried  out by the holder of the Subclass 457 … visa; and

    (iv)    identifies a need for the nominator to employ the person, as a paid employee, to work in the position under the nominator’s direct control; and

    (b)the nominator:

    (i)       is, or was, the standard business sponsor who last identified the holder of the Subclass 457 … visa in a nomination made under section 140GB of the Act or under regulation 1.20G or 1.20GA as in force immediately before 14 September 2009; and

    (ii)      is actively and lawfully operating a business in Australia; and

    (iii)     did not, as that standard business sponsor, meet regulation 1.20DA, or paragraph 2.59(h) or 2.68(i), in the most recent approval as a standard business sponsor; and

    (c)either:

    (i)       both of the following apply:

    (A)in the period of 3 years immediately before the nominator made the application, the holder of the Subclass 457 …visa identified in subparagraph (a) (ii) has:    

    (I)held one or more Subclass 457 visas for a total period of at least 2 years; and

    (II)been employed in the position in respect of which the person holds the Subclass 457 … visa for a total period of at least 2 years (not including any period of unpaid leave);

    (B)the employment in the position has been full-time, and undertaken in Australia; or

    (ii)      all of the following apply:

    (A)the person holds the Subclass 457 … visa on the basis that the person was identified in a nomination of an occupation mentioned in sub-subparagraph 2.72(10)(d)(iii)(B) or sub-subparagraph 2.72(10)(e)(iii)(B);

    (B)the nominator nominated the occupation;

    (C)the person has been employed, in the occupation in respect of which the person holds the Subclass 457 … visa, for a total period of at least 2 years in the period of 3 years immediately before the nominator made the application; and

    (d)for a person to whom subparagraph (c)(i) applies:

    (i)       the person will be employed on a full-time basis in the position for at least 2 years; and

    (ii)      the terms and conditions of the person’s employment will not include an express exclusion of the possibility of extending the period of employment; and

    (e)the terms and conditions of employment applicable to the position will be no less favourable than the terms and conditions that:

    (i)are provided; or

    (ii)would be provided;

    to an Australian citizen or an Australian permanent resident for performing equivalent work in the same workplace at the same location; and

    (f)either:

    (i)       the nominator:

    (A)fulfilled any commitments the nominator made relating to meeting the nominator’s training requirements during the period of the nominator’s most recent approval as a standard business sponsor; and

    (B)complied with the applicable obligations under Division 2.19 relating to the nominator’s training requirements during the period of the nominator’s most recent approval as a standard business sponsor; or

    (ii)      it is reasonable to disregard subparagraph (i); and

    Note Different training requirements apply depending on whether the application for approval as a standard business sponsor was made before 14 September 2009 or on or after that date.

    (g)either:

    (i)       there is no adverse information known to Immigration about the nominator or a person associated with the nominator; or

    (ii)      it is reasonable to disregard any adverse information known to Immigration about the nominator or a person associated with the nominator; and

    (h)the nominator has a satisfactory record of compliance with the laws of the Commonwealth, and of each State or Territory in which the applicant operates a business and employs employees in the business, relating to workplace relations; and

    (i)there is a genuine need for the nominator to employ the person, as a paid employee, to work in the position under the nominator’s direct control.