The Trustee for the Fandi Family Business Trust (Migration)

[2018] AATA 4132

The Trustee for the Fandi Family Business Trust (Migration) [2018] AATA 4132 (5 September 2018)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  The Trustee for the Fandi Family Business Trust

CASE NUMBER:  1707683

DIBP REFERENCE(S):  BCC2016/2628588

MEMBER:Cathrine Burnett-Wake

DATE:5 September 2018

PLACE OF DECISION:  Melbourne

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

Statement made on 05 September 2018 at 12:24pm

CATCHWORDS
MIGRATION – Employer nomination – approval of nomination – business activity statement – Department’s failure to interpret financials – financially viable – letter of guarantee – salary – accountant’s letter – training benchmark met – decision under review set aside

LEGISLATION
Migration Act 1958 (Cth), s 245AR
Migration Regulations 1994 (Cth), 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 Immigration on 4 April 2017 to reject, The Trustee for the Fandi Family Business Trust trading as Fandi Scissorhands’, 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 9 August 2016 for the position of Hair and Beauty Salon Manager (ANSCO 142114). The requirements for the approval of the nomination of a position in Australia are found in r.5.19 of the Regulations which contains two alternative streams: a Temporary Residence Transition nomination (r.5.19(3)) stream and a Direct Entry nomination (r.5.19(4)) stream. If the application is made in accordance with r.5.19(2) and meets the requirements of either stream, then the application must be approved. If any of the requirements are not met then the application must be refused: r.5.19(5).

3. In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in the 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)(i) of the Regulations. The delegates decision stated:

   ‘The BAS provided indicate that the business costs are continuing to outweigh sales. No explanation has been provided in regard to this Documents such as tax returns lodged with the Australian Taxation Office (ATO) which may have been better depicted the financial standing for the business, were not provided. Given the discrepancies and inconsistencies noted above and the evidence currently before me, I find that there is insufficient evidence to indicate that the business will have the financial capacity to meet all employment obligations in respect of employing the nominee on a full-time basis for a period of at least the next two years.

   Therefore, I find that the appointment will not provide the employee with full-time employment for at least two years.’

5. Mr Mohamed Fandi on behalf of The Trustee for the Fandi Family Business Trust appeared before the Tribunal on 18 June 2018 to give evidence and present arguments. The Tribunal also received oral evidence from: Claude Penco, who is the applicant's accountant. The Tribunal hearing was conducted with the assistance of an interpreter in the Arabic (Lebanese) and English languages.

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

7. 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

8. 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)

9. 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.

10. On the basis of the information in the Department's file, the Tribunal is satisfied that the application was made on the relevant form and was accompanied by the prescribed fee. The relevant s.245AR(1) certification was also provided in the application form.

11. The application for approval identifies Karamjit Kaur GILL, the nominee who, according to Departmental records, held a Subclass 457 visa from 24 July 2014 that was granted based on satisfying subclause 457.223(4) of Schedule 2.

12. The occupation identified in the application is that of ‘Hair or Beauty Salon Manager (ANZSCO 142114)’. The Tribunal is satisfied, based on the employment documents for the nominee, that the occupation identified is the same occupation as that carried out by her as the holder of a Subclass 457 visa. The Tribunal is accordingly satisfied that this occupation carries the same 4-digit code (1421) as the occupation carried out by the nominee whilst she held the Subclass 457 visa.

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

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

14. 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.

15. Departmental records confirm that the nominator was the standard business sponsor who last identified Ms GILL, the nominee, in a nomination made under s.140GB of the Act. The nominator was not granted the most recent business sponsorship on the basis of meeting either r.1.20DA, r.2.59(h) or r.2.68(i).

16. During the hearing, Mr Fandi outlined that the business was a chain of hairdressing salons in high traffic shopping areas around Adelaide. The Tribunal conducted an internet search of the business, which confirms Mr Fandi’s evidence.

17. The Tribunal is satisfied on the basis of the material before it, including: the business' registration documents; financial statements; business activity statements; payroll activity information; and other information about the business' activities that the nominator is actively and lawfully operating a business in Australia.

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

18. 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.

19. In this case, r.5.19(3)(c)(i) is the relevant provision. The nomination was lodged on 9 August 2016. The nominee was granted the Subclass 457 visa to work in the nominated occupation of Hair or Beauty Salon Manager ANZSCO 142114 on 24 July 2014.

20. The Tribunal has had regard to the payroll activity statements on file, the nominees individual tax assessment notices, which confirms the nominee's employment with the nominator, along with the verbal evidence provided by Mr Fandi at hearing, where he discussed in detail the nature of the nominee’s work and how she was an integral part of their business.

21. During the hearing, Mr Fandi confirmed the nominee’s employment in addition he confirmed for the Tribunal the role and duties of the nominee, which were consistent with that of Hair or Beauty Salon Manager (ANZSCO 142114).

22. 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)

23. 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.

24. The primary application was refused by the delegate on this requirement because it was found that there was insufficient evidence to indicate that the business will have the financial capacity to meet all employment obligations in respect of employing the nominee on a full-time basis for a period of at least two years.

25. On 28 May 2018, the Tribunal received a letter from Mr Claude Penco of CP&A Accountants. Mr Penco acts as the accountant for the applicant. The letter breaks down the delegate’s decision, part-by-part, and describes how the delegate had not understood nor correctly interpreted the BAS provided, therefore ultimately reaching an incorrect decision. The letter states in part:

    ‘According to the case officers above calculations, she concluded that since June 2015 the business has accumulated losses of $124,840. In reaching this figure the case officer added up Capital Purchases, Non-Capital Purchases and Wages for each respective quarter and concluded that these figures represented total expenses for the period.

    With respect to the case officer, she has not understood nor correctly interpreted the BAS provided. The case officer has failed to appreciate and take into consideration the following;

    ·Non-Capital Purchases amounts in the BAS already included net wages paid. Therefore, only wage PAYG instalments should be shown in the above Wages column. The case officer has counted Wages expenses twice in reaching total expenses for the relevant period.

    ·Capital Purchases include the purchase of motor vehicles which were financed by loans and not purchased from the business account or by cash. These items are assets not expenses. The amount of $83,506 and $42,660 for the June 2016 and Dec 2016 quarters respectively are not expenses. The loan repayments on these vehicles are expenses and are not included as Non Capital Purchases…

    …When properly understood and interpreted, it is clearly evidence from the BAS that the business has not accumulated loses since June 2015 to the date of Nomination application refusal, but has in fact made a $220,308 profit for this period.

    The case officer failed to grasp the information on the relevant BAS. The BAS is a document that the ATO requires for the efficient and correct compliance reporting of the GST collected and paid by the business. It is also a means by which the employee gross wages and PAYG tax instalments are reported for the business. To ascertain a cash flow profit or loss for a business, there are accounting assumptions to be made. The case officer simply took all the figures as positives and negatives to arrive at an incorrect conclusion. It seems the case officer did not have a true grasp of accounting principles and application when interpreting the financial data…

    …I have reviewed the historical and current financial position of the business and have determined it is viable and can meet all its liabilities and commitments.

    The business is a going concern and has the financial capacity to meet all employment obligations for the employment of all staff, including Karamjit Kaur Gill, for a minimum period of 2-years…’

26. The Tribunal has considered Mr Penco’s letter and the submissions made regarding the case officers interpretation of the BAS and overall financial viability of the business. It has also reviewed the financials for the year ending 30 June for both 2016 and 2017 along with interim financials up until 31 March for the 2018 financial year. The Tribunal has also reviewed the Tax returns submitted for the year ending 30 June 2016 and 2017. The Tribunal notes that for the year ending 30 June 2016 the net profit for the business was $144,434. Further, that for the year ending 30 June 2017 the net profit for the business was $121,985 and that as of 31 March 2018 was sitting at $36,035 with still a quarter of the financial year to go. The Tribunal agrees with Mr Penco, that the case officer failed to correctly interpret the financial data in line with accounting principles, which ultimately led to a flawed finding. It is evident based on the financials and tax returns that the business is financially viable, and turning a net profit.

27. The Tribunal has had regard to the signed offer of employment and the letter of guarantee, confirming the nominee will be employed on a full-time basis for at least 2 years; and that her employment contract does not expressly exclude the possibility of extending the period of employment.

28. The Tribunal is satisfied on the totality of the evidence that the nominator has the financial capacity to maintain the nominee's employment as they have done since her 457 was granted in 2014.

29. The Tribunal is satisfied on the material before it that the nominee will be employed on a full-time basis for at least 2 years on terms that do not exclude the possibility of extending the period of employment.

30. 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)

31. 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.

32. The employment contract and primary application form indicates that the nominee's base salary is $56,000 plus superannuation. It was noted in the application form that there is no Australian performing equivalent work at the same location. This was also confirmed by Mr Fandi at hearing.

33. Salary surveys and other salary data, including from Payscale.com and Jobsoutlook.gov.au, indicate that the base salary for a Hair or Beauty Salon Manager, depending on experience, is between $40,987 and $61,697. The Tribunal is satisfied on the basis of this information that the nominee's base salary is within the appropriate range of that normally paid to a Hair or Beauty Salon Manager in Adelaide.

34. The Tribunal is satisfied that the terms and conditions applicable to the nominated position 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

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

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

36. 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.

37. The Tribunal has been provided with a letter from the nominator’s independent accountant, which explicitly states they can confirm that training benchmarks have been met, and that at least 1% has been spent on training during the period of the most recent sponsorship approval. The Tribunal places significant weight on this letter of support and accepts its contents.

38. The Tribunal is satisfied on the evidence before it that the applicant has fulfilled commitments made relating to meeting the training requirements during the relevant period.

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

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

40. 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. 

41. There is no information before the Tribunal to indicate that there is adverse information known to the Department about the nominator or an associated person.

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

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

43. 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.

44. There is no information before the Tribunal to suggest that the applicant does not have a satisfactory record of compliance with workplace relations laws.

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

46. 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

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

    Cathrine Burnett-Wake
    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.