Top Cap Investments Pty Ltd (Migration)

[2019] AATA 6574

Top Cap Investments Pty Ltd (Migration) [2019] AATA 6574 (27 December 2019)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  Top Cap Investments Pty Ltd

CASE NUMBER:  1726118

DIBP REFERENCE(S):  BCC2017/1027435

MEMBER:Susan Reece Jones

DATE: 27 December 2019

PLACE OF DECISION:  Melbourne

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

Statement made on 27 December 2019 at 10:48am

CATCHWORDS
MIGRATION – nomination – Temporary Residence Transition stream – Chef – financial information provided – training expenditure requirements met – niche business – decision under review set aside

LEGISLATION
Migration Regulations 1994 (Cth), rr 1.13, 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 12 October 2017 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, TOP CAP INVESTMENTS PTY LTD, applied for approval on 11 March 2017. The requirements for the approval of the nomination of a position (Chef, ANZSCO code 351511) 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) of the Regulations because the nominator, has not demonstrated the it would have the financial capacity to provide the nominated employee with full-time employment for at least the next two years. The delegate noted that while the documents submitted in support of the application did show aspects of the operations of the business, they held little weight in demonstrating the overall financial capacity of the business. In addition, the delegate noted that the 2016 Company Tax return was a client copy and not one lodged with the Australian Tax Office.

5.    The Tribunal received the review application, which was lodged online on 25 October 2017.  It was signed on behalf of the applicant by its sole director, Mrs Claudette D’Cruz, and was accompanied by a copy of the delegate’s decision.

6. On 28 August 2019, the Tribunal wrote to Mrs D’Cruz, pursuant to s.359(2), to invite her to provide updated and current information demonstrating that the applicant met all of the criteria in r.5.19(3). The Tribunal provided examples of the kinds of information that would assist it to assess the criteria in r.5.19(3) and noted that all of the criteria had to be met in order for the Tribunal to set aside the refusal decision and substitute a decision to approve the nomination.

7.    On 11 September prior to the hearing, and then later on 15 November 2019 and            19 November 2019 following hearing, the applicant provided the following material:

Financials and status of the Company:

• ASIC Extract - Business Name

• ASIC Extract - Company Office Holders details

• 2O17 Financials

• 2018 Financial Statements

  • 2017 Tax Return
  • 2018 Tax Return

Lodged Business Activity Statements for:

• September 2016  
• December 2016
• March 2017
• June 2017
• September 2017
• December 2017
• March 2018
• June 2018
• September 2018
• December 2018
• March 2019
• September 2019
• Applicant business bank statements NAB for 2017, 2018, 2019
• Various emails regarding the  operations of the  business
• Distribution expansion to Supermarkets chain - emails
• Business growth plan prepared by Adam Hamilton
• Accountant's “comfort letter”  confirming financial capacity of the applicant  

Employment matters

• Organisation Chart   
• Agreement/ Employment Contract (on going & issued in 2015)
• Updated Employment Agreement dated 15 October 2019
• Position Description
• Proof of Employment - 2017 Payroll summary
• Proof of Employment - 2018 Payroll summary
• SEEK ad for full-time Chef
• INDEED advertisement for casual Chef
• GUMTREE advertisement for full time Chef
• Employee bank statements 
• Employee superannuation statements

Training Expenditure

• 2016 – 2019  - Victoria University Scholarship fund contribution (Training Benchmark A, 2% of payroll)

8.    On behalf of the applicant, Mrs D’Cruz appeared before the Tribunal on 15 November 2019 to give evidence and present arguments. The applicant was not represented at the hearing by a registered migration agent.   The nominee did not attend the 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

1. 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)

1. 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.

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

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

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

1. 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.

2. The Department’s records indicate that Top Cap Investments Pty Ltd was approved as a standard business sponsor between 11 March 2014 – 11 March 2017. The Tribunal is satisfied that the company was the standard business sponsor who last identified the nominee, Ms Phuong Anh Bui, and nominated her for a subclass 457 visa. The Tribunal is further satisfied that the company did not meet certain criteria relating to the operation of a business overseas in its most recent sponsorship approval.

3. The applicant operates a spice business branded and marketed as ‘No Worries Curries’. The applicant commenced business as a sole proprietor in 2005 with cooking classes and sales of products through the Melbourne markets and has over time, developed an extended range of packaged dry and wet curry and spice products which are now distributed through supermarkets throughout Australia.

4. In relation to whether the applicant is actively and lawfully operating a business in Australia, the Tribunal is satisfied from the financial documents provided including Business Activity Statements for various quarters from 2016 to 2019 and Company Tax Returns. In addition, the applicant provided evidence of its current ABN and ASIC registrations and its business bank accounts for 2017, 2018 and 2019 that establish that the applicant is actively and lawfully operating a business in Australia.

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

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

1. 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.

2. The Tribunal has reviewed the occupations specified in IMMI 13/067 for the purposes of the second dot point above, and is satisfied that the nominated occupation of Chef is not included in it. Accordingly, the applicant must meet the requirements of the first dot point above.

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

   • the nomination was made on 11 March  2017 for the position of Chef;
   • the nominee was initially employed by the applicant on a casual basis in 2012 and as a permanent employee on 20 February 2015;
   • the nominee applied for a subclass 457 visa on 10 April 2017 on the basis of her nomination by the applicant as Chef, and was granted a bridging visa A on that date;
   • she had therefore worked for the applicant in the nominated position on a full time basis for approximately 2 years prior to the nomination, and for 3 years in the 3-year period immediately prior to the nomination application being lodged.

4. 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)

1. 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.

2. The delegate found that the evidence provided by the  applicant was insufficient to demonstrate that the business had in 2017, the capacity to offer the nominee employment on a full-time basis in the position for at least 2 years as required. The delegate noted that the total remuneration package for the nominated position was stated as $59,500 and that the evidence provided held little weight in demonstrating the overall financial capacity of the business.

3. As noted above, the applicant has provided significant additional verifiable evidence, which is accepted by the Tribunal that whilst the business is small, it has over the past two years, paid the nominee the stated salary and continued to expand and develop its niche business.

4. Analysis of the financial documentation of the applicant shows as follows:

2016	2017	2018
Total income	189,175	167,923	167,317
Gross profit	160,793	157,651	157,436
Total assets	59,345	89,334
Total liabilities	145,417	145,555
Net assets	(79,853)	(60,222)

1. The applicant told the Tribunal at hearing that the business continues to focus on expanding its distribution base, which is a continuing and costly investment. Of the total liabilities (2018), $142,681 is a loan to the applicant’s director, Mrs. D’Cruz. Further, the applicant advised, the business at the end of the 2019 financial year has no debt.

2. The applicant undertook in its application to pay the nominee $54,794 p.a. plus super. The applicant provided the Tribunal with its NAB bank statements and those of the nominee (CBA Bank).

3. The bank statements show that the applicant has paid the nominee each month as obligated since 2015. Also provided to the Tribunal are the nominee’s super statement (Rest Industry Super) which show regular quarterly deposits from the applicant:

2015	2016	2017	2018	2019
ATO Notice of Assessment	38,921	53,580	54,400	54,304	54,644
Super Employer contributions	3,422	5,340	5,177	5,177	5,226

1. As the applicant has provided financial statements, and a letter from their accountant attesting to the financial position of the business (and its capacity to meet all employment obligations in regards to employing the nominee for a period of at least two years), and has paid the nominee as obligated for the past three years, the requirement in r.5.19(3)(d) is met.

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

1. 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.

2. The Tribunal accepts evidence from the applicant that the organisation consists in effect of only the applicant’s director, Mrs D’Cruz, and the nominee. Two Australian citizens are noted on the organisation chart; however, they are employed on a causal and very intermittent basis to do graphic design and social media for the applicant.

3. It was apparent from the evidence provided to the Tribunal that the applicant’s business is entirely reliant on the role and commitment of the nominee who is clearly integral to the business operation. The Tribunal accepts that there is no Australian citizen or permanent resident performing equivalent work in the same workplace at the same location as the nominee.

4. The Tribunal is also satisfied that the terms and conditions of employment applicable to the nominated position are 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.

5. The nominee’s contract of employment for the nominated position was originally dated 1 March  2015 and provided that the nominee’s salary was $52,000 per year plus superannuation.  An updated employment Agreement dated 19 October 2019 confirmed that the nominee’s contract is ongoing and that her salary is now $54,794 (as evidenced by her PAYG summary statements and bank statements) plus super.

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

   ·advertisements for various full time Chefs in all of Melbourne listed on Seek.com.au as at 21 December 2019 where a salary range is given:

   oFull-time Chef (40-45 hours at a café) $50,000 - $59,999 (plus super) (advertised 19 December 2019);

   oRetail cook at William Angliss: $ 50,896 (plus super), advertised 19 December 2019.

7. The Tribunal finds that the nominee’s role is unique and a comparative role and its salary is hard to assess. The Tribunal accepts that the nature of the specialised position may attract a higher salary; however, given the applicant’s is a very small business, when assessing a nominated position for this occupation, the Tribunal accepts that the salary will depend on the size, scope and nature of the business.

8. In this case, the Tribunal is satisfied that the applicant company is small and operating in a niche area.  Under these circumstances, and on balance, the Tribunal accepts that the nominee’s salary would be no less favourable than that which would be offered to an Australian employee for undertaking the same work in the same location.

9. The Tribunal is further satisfied that the original and updated contracts of employment as noted above for the nominee have standard provisions relating to leave and termination that are consistent with those in the Fair Work Act 2009 (Commonwealth) and National Employment Standards (NES). 

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

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

1. 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.

2. The training requirements applicable for an established business with approval as a standard business sponsor in that period in the applicable period were 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 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.

3. IMMI 13/030 provided that 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

1. However, it does not include expenditure on training that is:

   • delivered on-the-job, other than on the job training which meets the requirements outlined above under the heading ‘expenditure that can count towards this benchmark’
   • confined to only one or a few aspects of the business’s broader operations, unless the training is in the primary business activity
   • only undertaken by persons who are not Australian citizens or permanent residents
   • only undertaken by persons who are principals in the business or their family members
   • only relating to a very low skill level having regard to the characteristic and size of the business.

2. The Tribunal notes that the applicant’s approval as a standard business sponsor was From 11 March 2014 to 11 March 2017.  The Tribunal has reviewed the evidence provided about the applicant’s payroll expenditure and training expenditure for the relevant financial years below:

2015	2016	2017	2018	Total
Wages	$38,921	$53,580	$56,500	$54,575
Super	$3,422	$5,178	$5,368	$5,051
Subtotal payroll	$42,343	$58,758	$61,868	$5,966
Staff training	$2,964	$43	$5,753
Training Benchmark A (2%)	$846	$1,175	$1,237	$1,192	$4,450
Victoria University  Fund Training Benchmark A payments	$1,100	$1,100	$1,100	$1,100	$4,400

1. The Tribunal’s calculations in relation to the payroll figure for the applicant include wages and superannuation paid to employees of the applicant. As the applicant’s financials are not available for 2014, the Tribunal has considered the payments in the context of the 2015 financial year onward.

2. Policy is to assess compliance on an annual, rather than pro-rata, basis.[1] While the obligation commences on the day of approval,[2] which may suggest a pro-rata assessment is possible, the better interpretation appears to be that the obligation cannot be assessed until at least 12 months have elapsed, given the requirement anticipates a need for it to be met for the entire period, it does not arise unless and until a primary person is sponsored, and as the instruments specifying training requirements refer to expenditure equal to a specified proportion of payroll in the last financial or calendar year.

   [1] Policy > Migration Regulations – Divisions, Div 2, 11-2, 13 Sponsorship compliance framework: Sponsorship obligations > Assessment of regulation 2.87B.

   [2] r.2.87B (4).

1. The nominator must have complied with the applicable obligations relating to the nominator’s training requirements during the period of the nominator’s most recent approval as a standard business sponsor. The most relevant training obligations are contained in r.2.87B(2) and (3), which provide that if, during the 12 months from the day the person is approved as a standard business sponsor or within 12 months commencing on an anniversary of that day and the nominator sponsored at least one primary person, it must comply with requirements relating to training specified in an instrument for that 12 month period.  

2. The applicant only claimed to satisfy Training Benchmark  A, not Training Benchmark  B. The applicant has provided documentation, which the Tribunal has verified that the applicant made the required contributions to the Victoria University Foundation Scholarship Fund, which is an acceptable form of training expenditure as per IMMI 13/030 outlined above. The Tribunal does note however, that the payment of the Training Benchmark A obligation was not paid in full until recently and after the sponsorship approval date ceased.

3. In considering whether it is reasonable to disregard the requirements in r.5.19(f)(i), the Tribunal has first had regard to the evidence received from the applicant Mrs D’Cruz at the hearing. She advised the Tribunal that she thought that the payments to the Training Benchmark A fund (the Victoria University Foundation Scholarship Fund) were in complete compliance in paying the training contributions although at that time, the Tribunal had no verifiable proof of those payments. Verification was subsequently provided to the Tribunal.

4. The above financial review establishes that the Training Benchmark A requirement has been fundamentally met although calculations show there maybe a $50 variation as to what the sum of the obligation should be – ie $4,450 or $4400. As the Training Benchmark A 2% obligation is reliant on the financial accounting and as the applicant has provided verifiable proof to show payment of $4,400 to the Victoria University Foundation Fund, the applicant has met with  all other obligations including payment of salary and superannuation to the nominee Tribunal is prepared to accept the applicant has complied with its obligations.

5. The Tribunal also notes that the applicant had undertaken additional training as specified in submitted financial statements. However, the Tribunal has given no regard to these contributions because of the verified payments of contributions to the Victoria University Foundation Scholarship Fund.

6. The Tribunal accepts that the applicant has made efforts to pay the training commitments and the Tribunal gives weight to the fact that the required contributions have been made. In considering the evidence overall, the Tribunal considers it is nevertheless reasonable in the circumstances of this case to disregard the requirements in r.5.19(f)(i). Whilst there may (or may not) be a variance of $50 in the calculations of what payment is required by the applicant under Training Benchmark A, and the Tribunal notes that not all of the payments were made in the relevant period, it is Tribunal’s view that the applicant has demonstrated an ongoing commitment to training expenditure

7. On balance, given the evidence of training contribution payments by the applicant, the Tribunal considers the requirement in r.5.19(3)(f) is met.

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

1. 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.

2. 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.

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

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

1. 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.

2. There is nothing in the Department’s records or otherwise to indicate that the applicant does not have a satisfactory record of compliance with the laws of the Commonwealth or of Victoria relating to workplace relations.

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

4. 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

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

S. Jones
Member

ATTACHMENT  -  EXTRACTS FROM THE MIGRATION REGULATIONS 1994

5.19Approval of nominated positions (employer nomination)

…

1. 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

1. 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.