THE TRUSTEE FOR BD & LPJ FAMILY TRUST (Migration)

[2021] AATA 3487

THE TRUSTEE FOR BD & LPJ FAMILY TRUST (Migration) [2021] AATA 3487 (6 September 2021)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  THE TRUSTEE FOR BD & LPJ FAMILY TRUST

CASE NUMBER:  1814290

HOME AFFAIRS REFERENCE(S):          BCC2017/2081887

MEMBER:Susan Reece Jones

DATE:6 September 2021

PLACE OF DECISION:  Melbourne

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

Statement made on 06 September 2021 at 10:04am

CATCHWORDS
MIGRATION – application for approval of nomination of position – temporary residence transition stream – financial capacity to pay full-time salary for 2 years – employment for 3 years already – nominee’s contribution to applicant’s business growth beyond franchise requirements – decision under review set aside

LEGISLATION
Migration Act 1958 (Cth), s 359(2)
Migration Regulations 1994 (Cth), r 5.19(3)(d)

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 14 May 2018 to reject the applicant’s application for approval of the nomination of a position in Australia under r.5.19 of the Migration Regulations 1994 (the Regulations).

2. The applicant applied for approval on 13 June 2017. The requirements for the approval of the nomination of a position of Pastrycook (ANZSCO: 351112) in Australia are found in r.5.19 of the Regulations which contains two alternative streams: a Temporary Residence Transition nomination stream (r.5.19(3)) and a Direct Entry nomination stream (r.5.19(4)). If the application is made in accordance with r.5.19(2) and meets the requirements of either stream, then the application must be approved. If any of the requirements are not met then the application must be refused: r.5.19(5).

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

4. The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19(3)(d) of the Regulations because the evidence provided did not demonstrate the applicant had the capacity to employ the employee on a full time position for at least 2 years.

5. The Tribunal received a review application on 17 May 2018. It was signed on behalf of the applicant by Mr Brian Downes, the applicant’s director. The review application was accompanied by a copy of the delegate’s decision.

6. On 17 November 2020, the Tribunal wrote to the applicant’s representative Dr Xiaokang Zhou of Ausbest Australia under s359(2) of the Migration Act 1994 (the Act) inviting them to provide the Tribunal with further information in support of this application.

   ·     ASIC Current and Historical extract dated 23 November 2020

   ·     ASIC Extract

   ·     BAS July 2019 to June 2020.

   ·     Financial Statement 2016

   ·     Trust Tax Returns 2017, 2018, 2019

   ·     Organisational Structure Chart.

   ·     Job Description

   ·     Employment Contracts December 2014, May 2017, November 2020

   ·     Nominee PAYG 2015 to 2019

   ·     Nominee ATO Income Statement 2020

   ·     Training Statements

   ·     Training Tax Invoice and Receipt 2017,2018, 2019

   ·     Franchise Fee & Training Fee Tax Invoices 2015, 2016,

7. The Tribunal exercised its discretion to hold the hearing by telephone. The hearing was held during the COVID-19 pandemic. The Tribunal determined it was reasonable to hold a hearing by telephone, 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 telephone. The Tribunal is satisfied that the applicant was given a fair opportunity to give evidence and present arguments.

8. On behalf of the applicant, its manager and director, Mr Brian Downes, appeared before the Tribunal on 8 April 2021 to give evidence and present arguments. The Tribunal also received oral evidence from the nominee, Mr Soon Fatt Gan.

9. The applicant was represented in relation to the review by its registered migration agent, Mr Damien Nugara of CPD Immigration Services.

10. Following the hearing, on 27 April 2021, the applicant provided further evidence in support of its application namely,         

    • Financial Statement 2020
    • Business Activity Statements (BAS) for 2020, 2021 
    • Franchise Agreement
    • Westfield Lease Agreement
    • Letter from Accountant dated 29 March 2021 from SWP Pty Ltd, Abbotsford
    • Proof of payment of superannuation to the nominee
    • Facebook / Google reviews for the applicant
    • Photos of the business and the product made by the nominee
    • Training provided by the Franchisee to the Franchisor

11. Following a request for further evidence, on 18 August 2021, the applicant submitted the following to the Tribunal:

    • The Trustee for BD & LPJ Family Trust Return 2020
    • BAS 2021
    • Accountant Letter: Mr Kok Keat Chow, SWP Pty Ltd, dated 18 August 2021,
    • Nominee Income statement: 2020, 2021
    • Nominee Notice of Tax Assessment 2020, 2021

12. 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

13. 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 r.5.19(3), which is extracted in the attachment to this decision. For the nomination to be approved, all the requirements must be met.

    The application must be compliant: r.5.19(3)(a)

14. 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.

15. From the material on the Department file, the Tribunal is satisfied that the nomination application complied with the above requirements.

16. Given the above findings, the requirement in r.5.19(3)(a) is met.

    Status of the nominator: r.5.19(3)(b)

17. 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.

18. The identified occupation in the application is Pastrycook (ANZSCO 351112), with a base salary of $55,000.

19. On the nomination application, the applicant indicated that the business was established or commenced trading in Australia on 19 April 2013. The head office is located at Abbotsford, Victoria and the nominated position is located at the applicant’s business which trades under the franchised brand, Bonbons Bakery Plenty Valley in the Westfield Centre, Mill Park, Melbourne, Victoria. The Tribunal notes that the lease term at the Westfield Centre was initially for seven years to March 2020 and has been renewed for another five years to 2025. According to the applicant, the site at the Westfield Centre seats 38 patrons and the kitchen provides a full capacity service for food and drinks in addition to being a fully equipped bakery.

20. In relation to whether the applicant is actively and lawfully operating a business in Australia, the applicant provided evidence to the Tribunal of its current ASIC Current and Historical extract dated 23 November 2020, Tax Returns, Financial Statements, BAS Statements, Franchise Agreement and Lease Agreement which show that it is actively trading and lawfully operating a business in Australia.

21. The Tribunal is satisfied that the company was the standard business sponsor who last identified the nominee, Mr Soon Gan, and nominated him for a subclass 457 visa. The Tribunal is further satisfied that the company was not operating a business overseas in its most recent sponsorship approval.

22. Given the above, the requirement in r.5.19(3)(b) is met.

    Previous employment of the nominee: r.5.19(3)(c)

23. Broadly speaking, to meet the requirement in r.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 2 of the 3 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 2 years in the 3 years immediately before the application.

24. The Tribunal is satisfied on the evidence before it that:

    • the nomination was made on 13 June 2017 for the position of Pastry Cook 351112;
    • the relevant 3-year period is therefore 13 June 2014 to 13 June 2017;
    • the nominee was initially employed by the applicant at least since 2 April 2015 (employment contract signed on 10 December 2014) while the holder of a 457 visa;
    • the nominee applied for a subclass 457 visa on 17 December 2014 on the basis of his nomination by the applicant and was granted a Bridging visa on that date;
    • he was granted a subclass 457 visa on 2 April 2015, which was valid until 2 April 2019; and

    he had therefore worked for the applicant in the nominated position for approximately 2.2 years prior to the nomination, and for 2.2 years in the 3-year period immediately prior to the nomination application being lodged.

25. Given the above findings, the requirement in r.5.19(3)(c) is met.

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

26. Regulation 5.19(3)(d) only applies to certain nominees (those described in r.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 2 years on terms that do not expressly preclude the possibility of an extension.

27. The Department refused the nomination because the applicant did not show a financial capacity to be able to pay the full-time salary for the nominated position for at least 2 years. In considering the applicant’s financial ability to meet its undertakings, the Department considered the applicant’s Financial Statements.

28. At the hearing, the applicant’s director, Mr Downes provided evidence as to the activities and financial status of the applicant’s business. In summary, he advised that the applicant’s business is a family business, and that the applicant has invested continuously in improving the operations of the applicant’s store – including investing in an extensive fit out ($350,000).

29. The Tribunal notes that the applicant has paid the salary and superannuation of the nominee (in full) since the Department decision three years ago. The nominee initially commenced in 2014 as a temporary pastry cook, having responded to an advertisement in Seek. Mr Downes noted to the Tribunal at hearing that the nominee has in his view, has been a significant contributory to the growth of the applicant’s business. Mr Downes also told the Tribunal that the nominee is renowned for his Swiss rolls and muffins and can be relied on to make what the customers like, as opposed to always making merely what the Franchisor requires the nominee to bake.

30. The applicant currently employs 6 employees which includes Mr Downes and his wife, the nominee and 3 part-timers. 5 of the employees are Australian Citizens or Permanent Residents.

31. The Tribunal’s analysis of the applicant’s financial evidence shows as follows:

$	2016	2017*	2018*	2019*	2020
Total income	632,210	685,392	771,934	837,012	774,243
Gross Profit	410,861	415,427	559,603	461,442
Assets	198,792	159,379	131,161
Liabilities	514,892^	457,562

*Financial Statements deprecation schedule shows $350,000 store fitout

^ Includes Mortgage – Home Loan Account

1. The applicant’s BAS shows as follows:

Date	Sales income $	Salaries $
July – Sept 2019	229,220	58,020
October - December 2019	227,322	57,350
TOTAL
January- March 2020	179,870	60,314
April – June 2020	145,579	59,696
July – Sept 2020	102,989	53,320
October - December 2020	180,667	47,096
TOTAL	609,105	220,426
January- March 2021	190,532	58,812
April – June 2021	212,225	47,096

33.      The applicant submitted a letter from Mr Kok Keat Chow, Accountant, SWP Pty Ltd, dated 18 August 2021, confirming the accounts of the applicant for 2020.

34.      In relation to COVID-19, Mr Downes advised that the applicant’s financial performance has been impacted because of reduced trading hours; however, the applicant’s business has been supported strongly by the local community. The Tribunal notes that the applicant’s BAS for the first two quarters of calendar 2021, show a significant growth in the applicant’s business in comparison to the same trading quarters in 2020. The Tribunal also notes that the most significant part of the applicant’s liabilities (as noted in the table at paragraph 31) is the applicant director’s home mortgage- i.e. a liability unrelated to the applicant’s business operations.

35.      Given the additional material provided to the Tribunal, and its ability to review the ongoing operations of the applicant since the delegate’s decision, the Tribunal is satisfied that it has the financial capacity to continue to employ the nominee on a full-time basis for at least 2 years.

36. Given the above findings, the requirement in r.5.19(3)(d) is met.

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

37.      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. The Tribunal is satisfied that there is no equivalent Australian employee working in the business.

38.      Noting that the applicant’s employment contract dated 17 November 2020 provides for a salary of $55,000 (plus superannuation), the nominee PAYG and ATO Notice of Assessments for 2015 to 2021 show as follows:

$	2015	2016	2017	2018	2019	2020	2021
PAYG	18,517	54,028	54,142	55,016	55,016	55,038	55,016

39.      The applicant provided evidence of payment of the nominee’s superannuation for the term of employment.

40.      The Tribunal has consulted a range of sources of information, including:

• the Payscale website (accessed 28 June 2021) indicates that a Pastrycook in Australia earns an average salary of $57,899 annually:

pastry+cook&aqs=chrome.

• advertisements for experienced Pastrycook positions in Melbourne listed on Seek.com.au (as at 28 June 2021) where a salary range is given is stated to be $55,000-$70,000

 

1. From the above, the Tribunal is satisfied that the proposed salary associated with the nominated position is at the commencement level for what an equivalent Australian employee would be paid. 

2. The Tribunal is further satisfied that the contract of employment dated November 2020           for the nominee has standard provisions relating to leave and termination that are consistent with those in the Fair Work Act 2009 (Commonwealth) and National Employment Standards (NES).

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

   Training commitments and obligations: r.5.19(3)(f)

4. 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.

5. The most recent Standard Business Sponsorship for the applicant commenced on 2 April 2015 to 2 April 2018.             

6. Specifically, the training requirements applicable for an established business with approval as a standard business sponsor in that period are set out in written instrument IMMI 13/030 as follows:

   • A) recent expenditure by the business to the equivalent of at least 2% of payroll of the business, in payments allocated to an industry training fund that operates in the same or related industry of 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.

7. Expenditure that can count towards Training Benchmark B includes:

   • paying for a formal course of study for the business’s employees who are Australian citizens and Australian permanent residents or for TAFE or University students, as part of the organisational training strategy
   • funding a scholarship in a formal course of study approved under the Australian Qualifications Framework for the business’s employees who are Australian citizens and Australian permanent residents or, for TAFE or University students, as part of the organisational training strategy
   • employment of apprentices, trainees or recent graduates on an ongoing basis in numbers proportionate to the size of the business
   • employment of a person who trains the business’s Australian employees who are Australian citizens and Australian permanent residents as a key part of their job
   • evidence of payment of external providers to deliver training for Australian

   employees

   • on-the-job training that is structured with a timeframe and clearly identified

   increase in the skills at each stage, and demonstrating:

   • the learning outcomes of the employee at each stage;
   • how the progress of the employee will be monitored and assessed;
   • how the program will provide additional and enhanced skills;
   • the use of qualified trainers to develop the program and set

   assessments; and

   • the number of people participating and their skill/occupation

8. The applicant director Mr Downes provided a submission to the Tribunal in regard to training spent on the Australian employees of the applicant between 2015 to 2019. For each financial year the applicant provided details of the training programs undertaken, location, training provider and the names of the employee participants (confirmed as all Australian) in the sum as set out below:

$	2015	2016	2017	2018	2019	Total
Total Payroll	136,005	179,013	169,721	178,779	227,422
Training Benchmarks B 1%	1,360	1,780	1,687	3,575	2,274	10,676
Training Benchmark B payments	2,946	2,318	2,600	2,000	2,500	12,364
Franchise Fee	31,769	42,827	53,214	54,426

1. The Tribunal has also identified the payment made to the Franchisor each year by the applicant. The Franchise Fee was specifically identified and referred to by the applicant as a percentage of the Franchise Fee is also used each year to train employees of the Franchisee as directed by the Franchisor.

2. The applicant further provided the Tribunal with a letter dated 22 April 2021 from the Franchisor Bonbons Bakery, which confirms the renewal of the applicant’s existing Franchise Agreement with Bonbons Bakery. It notes that the Franchise Fee includes support from a dedicated Training and Development Manager who will assist the Franchisee (the applicant) to, inter alia, develop and maintain standards of quality and service, which the applicant advised is an ongoing training program which all Franchisees must undertake and comply with.

3. On the basis of the evidence provided, the Tribunal is satisfied that the applicant has complied with the Training Benchmarks obligations.

1. Accordingly, the requirement in r.5.19(3)(f) is met.

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

2. 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 rr.1.13A and 1.13B. 

3. The Tribunal has reviewed the Department's records, including its Integrated Client Services Environment (ICSE) and has found nothing to indicate that there is any adverse information known to Immigration about the nominator or person associated with the nominator.

4. Accordingly, the requirement in r.5.19(3)(g) is met.

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

5. 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.

6. There is no evidence before the Tribunal of any breaches of the workplace relations laws of the Commonwealth or Victoria by the applicant.

7. Accordingly, the requirement in r.5.19(3)(h) is met.

8. Based on the findings above, the Tribunal is satisfied that the applicant meets the requirements of r.5.19 for approval of the nomination of the position in Australia.

   DECISION

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

   Susan Reece Jones
   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

   (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.