T.K.O Engineering Australia PTY LTD (Migration)

[2023] AATA 3696

T.K.O Engineering Australia PTY LTD (Migration) [2023] AATA 3696 (27 September 2023)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  T.K.O. Engineering Australia PTY LTD

CASE NUMBER:  1933190

HOME AFFAIRS REFERENCE(S):          BCC2018/3560707

MEMBER:Peter Emmerton

DATE:27 September 2023

PLACE OF DECISION:  Adelaide

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

Statement made on 27 September 2023 at 12:30pm

CATCHWORDS 
MIGRATION – nomination – Direct Entry stream – Contract Administrator– not satisfied there is a genuine need for the identified person to be employed in the position – decision under review affirmed 

LEGISLATION
Migration Act 1958, ss 65, 245AR
Migration Regulations 1994, r 5.19

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 1 November 2019 to reject the applicant’s application for approval of the nomination of a position under reg 5.19 of the Migration Regulations 1994 (Cth) (the Regulations).

2. The applicant applied for approval on 19 September 2018. The requirements for the approval of the nomination of a position in Australia are found in reg 5.19 of the Regulations, which contains general requirements for approval and additional requirements for approval set out in three alternative streams: a Temporary Residence Transition stream, a Direct Entry stream and a Labour Agreement stream. If the application meets the requirements for approval, then the application must be approved: reg 5.19(3)(a). If any of the requirements are not met, then the application must be refused: reg 5.19(3)(b).

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

4. The delegate refused the application on the basis the applicant’s nomination did not satisfy 5.19(12)(f) of the Regulations because they were not satisfied that there was a genuine need for an employee in this occupation.

5. The Tribunal has subsequently determined that the Minister was advised in the manner specified by reg 5.19(12)(f). The RCB for TKO Engineering Australia Pty Ltd, dated 17 September 2019 was not satisfied, ‘The nomination from the above business is not supported by CCIQ RCB due to the position not being genuine for the purposes the Regional Sponsored Migration Scheme.’ The Tribunal has perused a copy of the Form 1404 provided by the nominator.

6. However, the dispositive issue as identified by the Tribunal is in fact Regulation 5.19(9)(d). …. ‘there is a genuine need for the identified person to be employed in the position, under the direct control of the nominator’. …. . This was explained to the applicants at the hearing. Whilst it is in effect the same issue determining there is not a genuine need for the nominated role, the Minister was informed, this is irrespective of whether or not the RCB was satisfied.

7. The applicant appeared before the Tribunal on 27 September 2023 to give evidence and present arguments. The Tribunal also received oral evidence from the visa applicant, Ms Dominique Vanessa Roberts.

8. The Tribunal notes that all parties attempted to provide information in an open and honest manner and without any obfuscation.

9. The applicants were not represented in relation to the review.

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

    CONSIDERATION OF CLAIMS AND EVIDENCE

11. The issue in this case is whether the applicant meets the general requirements for approval of the nomination set out in reg 5.19(4) and the stream specific requirements set out in Direct Entry reg 5.19(9), which are extracted in the attachment to this decision. For the nomination to be approved, all the requirements must be met.

12. The Tribunal has read and carefully considered all of the evidence presented to the Department and delegate.

13. The Tribunal has read and carefully considered all of the evidence provided to it prior to conducting the hearing. Some documents were provided multiple times.

    • ASIC extract September 2023
    • Position Descriptions multiple staff
    • Organisation Chart
    • ASIC August 2023
    • Financial Statements FY 2022, FY 2020, associated Taxation Returns
    • ASIC Historical statement
    • Employment contracted signed but undated
    • BAS Statements
    • Recruitment summary – pre outreach for further details
    • Tax invoice samples
    • Product listings
    • Trademark information
    • Miscellaneous – public engagement related
    • Full submission of recruitment details
    • Bundle of recruitment details requested from Company
    • Activity Statements
    • Financial Statements FY 2021
    • Financials FY 2022
    • Email statement 7 September 2023 by Dominique Roberts
    • Financials FY 2023
    • Tax Returns
    • ATO Notices of Assessment
    • Organisation Chart
    • BAS Documents
    • Financials FY 2021
    • Financials FY 2022

    Genuine need for employment – regs 5.19(9)(c) and (d)

14. Regulation 5.19(9)(c) requires the nomination application to identify a need for the identified person to be employed in the position, under the direct control of the nominator, and reg 5.19(9)(d) requires this need to be genuine.

15. Upon perusing the range of financial information provided by the nominator, it is possible to ascertain that less than a total of AUD $200,000 revenue has been received by the organisation over the last 4 years. (FY 2020 $70,393, FY 2021 $25,630, FY 2022 $57,000 and FY 2023 $40,000). This is an average of $48,255 per year. This was agreed as correct by the nominator and the visa applicant during the hearing.

16. The unsigned Contract indicates the visa applicant will receive AUD $80,000 plus the Superannuation Guarantee, (Currently 11%) as the annual remuneration package. This is substantially below the average current annual market rate for a Financial Controller/Director as identified on the Organisation Chart. The salary stated during the hearing was AUD$75,000 and it was acknowledged that the company has not been able to pay this amount. It was recognised as a legitimate debt owed to the visa applicant and would be paid when finances allowed. The Tribunal appreciates that the nominator and the visa applicant are in a spousal relationship and the arrangement was mutually amicable.  

17. This rate of remuneration and oncosts is approximately double the average total revenue of each of the last 4 Financial Years.

18. The Tribunal notes and this was agreed at the hearing, the finance documentation indicates zero wages paid by TKO Engineering Australia for FY 2022 and FY 2023, $5,000 approximately was paid in FY 2021.

19. Evidence was provided prior to the hearing and confirmed during the hearing to indicate the visa applicant is working part time in another entity owned by the principals associated with the nominator. Evidence was provided to both the delegate and the Tribunal that indicates the nominator is linked to another entity based in South Africa. This entity appears to be substantial and profitable. However, they are not the nominating entity in this case, they do not have the same ABN designation and cannot therefore be considered in relation to this decision.

20. The Tribunal ascertained from the verbal evidence given to it at the hearing and to the delegate, that the visa applicant plays a role in the business. It is a very small business, it appears likely that many of the tasks undertaken by the applicant are not those associated with a Skill level 1 role, ANZSCO 132211, Finance Manager. The Tribunal acknowledges the growth and development aspirations explained by the Managing Director and the visa applicant. That does not justify this role at this point in time. The Tribunal has some sympathy for the current circumstances faced by the parties, they are trying to establish a business in Australia in an entrepreneurial manner in a challenging industry.

21. The Tribunal ascertained a during questioning the nominator expected a possible revenue of AUD $500,000 in FY 2024. It was also agreed that this business model relied upon long-term strategic business relationships. It is very difficult to accurately predict volumes of revenue or their timing.

22. It is clearly observable that the claimed members of staff are all members of the same family. This does not necessarily preclude a legitimate application if all the other requirements of the legislation are met, which is not the case. The Tribunal was informed that the nominator contracts additional work needed as it is required, a common practice in a fledgling enterprise in the Tribunal’s experience.

23. The Tribunal has noted the ‘not satisfied’ finding made by CCIQ, the relevant Registered Certifying Body (RCB) which is dated 17 September 2019. However, the Tribunal must make its own determination based upon the evidence before it.

24. As a stand-alone business in its current state and form TKO Engineering Australia Pty Ltd is not capable of supporting the claimed role or the associated remuneration. Nor does an entity of such current minimal magnitude warrant the role as claimed. Regulation 5.19(9)(d) stipulates that ‘there is a genuine need for the identified person to be employed in the position, under the direct control of the nominator’. The Tribunal is certain that this has not been met.

25. Given the above findings, the Tribunal is not satisfied that reg 5.19(9)(d) is met. Accordingly, reg 5.19(4)(f) is not met.

26. For these reasons the Tribunal is not satisfied that the applicant meets the requirements of reg 5.19. Accordingly, reg 5.19(3)(b) requires that the nomination must be refused. The decision under review must be affirmed.

    DECISION

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

    Peter Emmerton
    Member

    
    

    ATTACHMENT – EXTRACTS FROM THE MIGRATION REGULATIONS 1994

    5.19Approval of nominated positions—Subclass 186 (Employer Nomination Scheme) visa and Subclass 187 (Regional Sponsored Migration Scheme) visa

    Application

    (1)A person (the nominator) (including a partnership or unincorporated association) may apply to the Minister for approval of the nomination of a position in Australia.

    (2)The application must:

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

    (b)identify the position; and

    (c)identify a person (the identified person) in relation to the position; and

    (d)identify an occupation in relation to the position; and

    (e)identify the subclass and stream to which the nomination relates, which must be one of the following:

    (i)a Subclass 186 (Employer Nomination Scheme) visa in the Temporary Residence Transition stream;

    (ii)a Subclass 187 (Regional Sponsored Migration Scheme) visa in the Temporary Residence Transition stream;

    (iii)a Subclass 186 (Employer Nomination Scheme) visa in the Direct Entry stream;

    (iv)Subclass 187 (Regional Sponsored Migration Scheme) visa in the Direct Entry stream;

    (v)a Subclass 186 (Employer Nomination Scheme) visa in the Labour Agreement stream; and

    (f)be accompanied by the fee mentioned in regulation 5.37; and

    (fa)be accompanied by any nomination training contribution charge the nominator is liable to pay in relation to the nomination; and

    (fb)identify the annual turnover (within the meaning of the Migration (Skilling Australians Fund) Charges Regulations 2018) for the nomination; and

    (g)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.

    Approval of nomination

    (3)The Minister must, in writing:

    (a)approve the nomination if the Minister is satisfied that the requirements set out in subregulation (4) are met; or

    (b)otherwise—refuse to approve the nomination.

    Requirements for approval—general

    (4)The requirements to be met for the nomination to be approved are as follows:

    (a)the application is made in accordance with subregulation (2);

    (b)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;

    (c)if it is mandatory, in the State or Territory in which the position is located, for a person to:

    (i)hold a licence of a particular kind; or

    (ii)hold registration of a particular kind; or

    (iii)be a member (or a member of a particular kind) of a particular professional body;

    to perform tasks of the kind to be performed in the occupation, the identified person is, or is eligible to become, the holder of the licence, the holder of the registration, or a member of the body, at the time of application;

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

    (da)any debt due by the nominator as mentioned in section 140ZO of the Act (recovery of nomination training contribution charge and late payment penalty) has been paid in full;

    (e)if the nomination relates to a visa in a Temporary Residence Transition stream—the requirements set out in subregulation (5) are met;

    (f)if the nomination relates to a visa in a Direct Entry stream—the requirements set out in subregulation (9) are met;

    (g)if the nomination relates to a visa in a Labour Agreement stream—the requirements set out in subregulation (14) are met.

    …

    Direct Entry stream—additional requirements for approval

    (9)If the nomination relates to a visa in a Direct Entry stream, the following requirements must also be met:

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

    (b)if the nominator’s business activities include activities related 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;

    (c)the application identifies a need for the identified person to be employed in the position, under the direct control of the nominator;

    (d)there is a genuine need for the identified person to be employed in the position, under the direct control of the nominator;

    (e)the identified person will be employed on a full‑time basis in the position for at least 2 years;

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

    (g)the nominator’s business has the capacity to employ the identified person for at least 2 years and to pay the person at least the annual market salary rate for the occupation each year;

    (h)the requirements set out in subregulation 2.72(15) are met, applying subregulations 2.72(15) and (16) as if:

    (i)paragraph 2.72(15)(a) did not apply; and

    (ii)references to the nominee were references to the identified person; and

    (iii)references to the person were references to the nominator;

    (i)either:

    (i)there is no information known to Immigration that indicates that the employment conditions (other than in relation to earnings) that will apply to the identified person are less favourable than those that apply, or would apply, to an Australian citizen or an Australian permanent resident performing equivalent work at the same location; or

    (ii)it is reasonable to disregard any such information;

    (j)the requirements set out in subregulation (10) or (12) are met.

    Occupations for the Subclass 186 (Employer Nomination Scheme) visa in the Direct Entry stream

    (10)The requirements of this subregulation are as follows:

    (a)the tasks to be performed in the position will be performed in Australia and correspond to the tasks of an occupation specified in a legislative instrument:

    (i)made under subregulation (11); and

    (ii)in force at the time the application is made;

    (b)the occupation applies to the identified person in accordance with that instrument.

    (11)The Minister may, by legislative instrument, specify occupations for the purposes of subregulation (10) and, for each occupation, specify any matters for the purposes of determining whether the occupation applies to an identified person, including matters relating to any of the following:

    (a)the nominator;

    (b)the identified person;

    (c)the occupation;

    (d)the position in which the identified person is to work;

    (e)the circumstances in which the occupation is undertaken;

    (f)the circumstances in which the person is to be employed in the position.

    Occupations for the Subclass 187 (Regional Sponsored Migration Scheme) visa in the Direct Entry stream

    (12)The requirements of this subregulation are as follows:

    (a)the position is located at a place in regional Australia;

    (b)the business operated by the nominator is located at that place;

    (c)the position cannot be filled by an Australian citizen or an Australian permanent resident who is living in, or would move to, the local area concerned;

    (d)the tasks to be performed in the position correspond to the tasks of an occupation specified in a legislative instrument:

    (i)made under subregulation (13); and

    (ii)as in force at the time the application is made;

    (e)the occupation applies to the identified person in accordance with that instrument;

    (f)the Minister has been advised by a body that meets the requirements set out in paragraph (g) of this subregulation about matters relating to the following:

    (i)whether the identified person would be paid at least the annual market salary rate for the occupation;

    (ii)whether there is a genuine need for the identified person to be employed in the position, under the direct control of the nominator;

    (iii)whether the position can be filled by an Australian citizen or an Australian permanent resident who is living in, or would move to, the local area concerned;

    (g)the body must:

    (i)be specified in a legislative instrument made by the Minister for the purposes of this paragraph; and

    (ii)be located in the State or Territory in which the position is located; and

    (iii)have responsibility for the local area in which the position is located.

    (13)The Minister may, by legislative instrument, specify occupations for the purposes of subregulation (12) and, for each occupation, specify any matters for the purposes of determining whether the occupation applies to an identified person, including matters relating to any of the following:

    (a)the nominator;

    (b)the identified person;

    (c)the occupation;

    (d)the position in which the identified person is to work;

    (e)the circumstances in which the occupation is undertaken;

    (f)the circumstances in which the person is to be employed in the position.

    …

    Meaning of regional Australia

    (16)In this regulation:

    regional Australia means a part of Australia specified in legislative instrument made by the Minister for the purposes of this definition.