V.H International Holding Pty Ltd (Migration)

[2020] AATA 3106

V.H International Holding Pty Ltd (Migration) [2020] AATA 3106 (19 May 2020)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  V.H International Holding Pty Ltd

CASE NUMBER:  1727349

DIBP REFERENCE(S):  BCC2017/1683243

MEMBER:Ian Berry

DATE:19 May 2020

PLACE OF DECISION:  Brisbane

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

Statement made on 19 May 2020 at 12:30pm

CATCHWORDS
MIGRATION – Employer Nomination – approval of nominated position – Temporary Residence Transition nomination stream – Maintenance Planner – financial capacity to maintain visa holder’s employment – terms and conditions of employment – applicant’s financial position – decision under review set aside

LEGISLATION
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 20 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 applied for approval on 11 May 2017. 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 because the nominator could not sustain the employee for 2 years full time because of its financial statements.

5. The applicant appeared before the Tribunal on 18 October 2019, by its managing director Mr Vincent Huang, to give evidence and present arguments. The Tribunal also received oral evidence from the applicant’s accountant Mr. Juan Danga of Williams Hall Chadwick, and Mr. Lorenzo Boccabella of Counsel, instructed by Ms Aozhang Gu of C & C Legal appeared for the applicant.

6. 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

7. 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)

8. 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.

9. The Tribunal has no reason to believe otherwise than that the application for approval was made in accordance with regulation 5.19(2). There is not any information on the Department’s file to indicate that the approval application was not made other than in accordance with r.5.19.

10. The applicant’s nomination included the certification pursuant to s.245AR confirming it not receiving a benefit in return for the occurrence of a ‘sponsorship-related event’ as defined by s.245AQ of the Act.

11. The nomination identifies the occupation of listed in ANZSCO code the 4-digit code 3129 ‘Other building and Engineering Technicians’ and specifically Maintenance Planner ANZSCO 312911.

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

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

13. 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.

14. The applicant is identified as the sponsor of the identified nominee Mr Wei Che Chuang (the nominee) who is employed as a full-time maintenance planner and has been so employed since September 2012.

15. The applicant’s sponsorship started 14 February 2014 and ended 2 February 2016 and entitled the applicant to sponsor two nominees.  The nominee has been identified as the holder of a 457 visa in a nomination made under s.140GB.

16. The applicant is actively and lawfully operating a business in Australia.  The nature of the business operated by the applicant is using a process to convert lead from car batteries to a neutral lead carbonate which is a substance able to be sold both in Australia and overseas.  The applicant applies this led carbonate to an Australian smelter Glencorp and has two smelters in South Korea. The applicant’s director Mr Huang was impressive in expressing the growth of his company and the environmentally sound solution to finding a means to convert lead to a neutral form thus permitting it to be exported to other countries, which otherwise could not be exported.

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

    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. The applicant has employed the nominee since September 2012 and continues to be employed.  The employment has been full-time and he has continued to carry out the tasks of the nominated position ‘Maintenance Planner’ ANZSCO code 312911.  That position requires the nominee to develop maintenance planning strategies, schedules and continuously monitoring of the maintenance of all plant equipment.  The applicant’s business is highly automated.  The applicant’s director Mr Huang illustrates the importance of the position in that the nominee has had his income increased from $70,000-$90,000.

20. 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)

21. 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.

22. The applicant has provided the employment agreements dated 17 July 2014 and 24 April 2017.  As previously confirmed the nominee has a salary of $90,000 per annum with the last employment agreement confirming that he is to be employed for at least 2 years in that position of maintenance planner.  The terms and conditions of the nominee’s employment does not have any provision which expressly excludes the possibility of extending that period of employment.

23. The Minister’s delegate, on information available, was not satisfied the applicant and the financial capacity to employ the nominee for 2 years.  The applicant’s representative Mr Vincent Huang, with corroborative evidence from the applicant’s accountants Hall Chadwick Chartered Accountants, through its representative Mr Juan Danga stated that it had been acting for the applicant.  He had this to say about the applicant’s financial position:

    ‘I am a Director of the firm [Hall Chadwick Chartered Accountants & Business Advisors] and a member of the Institute of Chartered Accountants of Australia and New Zealand.

    We have acted as taxation accountants and business advisors to the company since September 2010.

    As of the date of this letter, it is in my opinion that the Company is in a very strong cash flow and net financial asset position.  I attach a copy of the financial statements of the Company as at 30 June 2018 to substantiate its profitability, positive net asset position.

    The Company operates in the recycling industry and has over the years developed and patented a technology capable of handling recycling the hazardous material in used batteries.  In fact the Company has been granted by the Australian government the only license to handle such hazardous material in Queensland.

    In the early stages of the Company, it was in Research & Development (R & D) phase where much of its time and resources were spent testing and developing said patented technology.  Throughout the years, we have assisted the company to prepare and lodge R&D eligible grants with the ATO in recognition and support of its activities.

    In the financial years 2013/2014, 2014/2015 and 2015/2016, the Company had operated at a tax loss.  These losses are after appreciation of its capital intensive machinery.

    For accounting purposes the cost of the capital investment is written off to match the cost of its useful life to it revenue earning capacity on an annual basis.  Please note, the depreciation of the capital assets in this manner is a non-cash expense item on the profit and loss statement.

    …

    In the financial year 2016/2017, the Company has posted a net profit of $1,678,373 and has an income tax liability of $332,453.  This is after the eligible R&D grant.

    In the financial year 2017/2018, the Company has posted a net profit of $1,794,173 and an expected income tax liability of $493,397.57.’

24. The financial soundness of the applicant to employ the nominee for at least 2 years is best answered by the summary of the applicant’s financial position from 30 June 2017 to 31 May 2019:

Particulars	Year ending 30 June 2017	Year ending 30 June 2018	1 July 2018 – 31 May 2019
Gross income	$6,587,189.33	$8,555,499.08	$9,128,175.45
Expenditure	$4,908,816.61	$6,761,275.19	$7,116,992.27
Net operating profit before income tax	$1,678,372.72	$1,794,173.89	$1,851,573.22
Net operating profit after income tax	$1,345,909.95	$1,794,174.08
Retained profits	($992,884.85)	$353,025.10
Total available for appropriation and retained profits at the end of the financial year	$353,025.10	$2,147,199.18
Current assets	$3,530,101.42	5,018,942.91	$5,202,133.46
Total assets	$6,930,426.54	$9,439,269.97	$9,422,392.56
Current liabilities	$1,112,996.29	$1,019,296.64	(1,162,889.48)
Total liabilities	$6,862,253.86	$7,466,384.35	$4,230,681.74
Net assets	$68,172.68	$1,972,885.62	$5,191,710.82
Total equity	$68,172.68	$1,972,885.62	$5,191,710.82

1. 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)

2. 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.

3. The terms and conditions applicable to the position of Maintenance Planner are no less favourable than the employment conditions that would be provided to an Australian citizen or Australian permanent resident performing equivalent work in the same workplace and at the same location.

4. The nominee now earns at the least $90,000 per annum plus superannuation. Because the applicant’s factory environment is substantially automated, the position calls for the nominee’s position. The evidence provided by Mr Huang supported by the documents corroborates the applicant has provided that the position is no less favourable than would be provided to an Australian citizen or permanent resident.

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

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

6. 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.

7. The training commitments and obligations by this applicant was a substantive issue for this Tribunal. That issue was whether the applicant complied with its obligations, choosing to satisfy benchmark B. The issue arose from the applicant purchasing machinery from Taiwan, which was accompanied by a training fee to train employees on that purchased machine. Training was provided by the supply company the price of which was a part of the purchase contract, though specifically referred to as a training component. Evidence that the monies paid by the applicant was for the benefit of employees who were Australian citizens or permanent residents was less convincing. Though the Tribunal is satisfied the training did involve at least one Australian citizen or permanent resident.

Salaries component	2015/2016	2016/2017	2017/2018
Wages	$934,084	$1,149,521	$1,220,672
Wages – bonus	Nil	Nil	$23,068
Super contribution	$88,752	$108,171	$109,228
Contractors	Nil	$74,773	$14,165
Total employee expenses	$1,022,836	1,332,464	$1,367,133
Training benchmark B requirement at 1%	$10,228.36	$13,324.64	$13,671.33
Training expenditure	$15,000	$15,715	$15,265

1. The applicant’s submission is that to 4 the training year of 2 February 2016 to 1 February 2017 a senior engineer of the supply company Water Power Technology Corp, provided training at the applicant’s premises from 14 June 2016 to 19 June 2016. Corroborative evidence was provided. Employees who undertook the training was a factory leader as well as the nominee. While a statutory declaration was provided by the nominee the Australian citizen employees did not. However, the Tribunal accepts that the applicant has complied with its obligations and notes that, it has a discretion in r.5.19(3)(f)(ii)to disregard the training benchmark criteria, should the applicant falls short of the information required.

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

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

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

4. The Tribunal does not have any information relating to the applicant which it is adverse.  The departmental and Tribunal files do not disclose any adverse information concerning the applicant or the nominee.

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

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

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

7. There is no information or evidence on either the departmental or Tribunal files relating to the applicant having recorded any information which would be unsatisfactory record of compliance with the laws of the Commonwealth, the states or territories in operating its business and employing employees, that relate to workplace relations.

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

9. 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

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

    Ian Berry
    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.