Walter Design & Development Pty Ltd (Migration)

Walter Design & Development Pty Ltd (Migration) [2023] AATA 4112 (28 November 2023)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  Walter Design & Development Pty Ltd
REPRESENTATIVE:  Mr Min Wang
CASE NUMBER:  2120150
HOME AFFAIRS REFERENCE(S):          OPF2021/10847
MEMBER:R. Skaros
DATE:28 November 2023
PLACE OF DECISION:  Sydney
DECISION:The Tribunal sets aside the decision under review and substitutes a decision to bar the applicant from sponsoring more people under the terms of the existing approval as a standard business sponsor for a period of 12 months from the date of the delegate’s decision.

Statement made on 28 November 2023 at 1:10pm

CATCHWORDS
MIGRATION – action in relation to standard business sponsorship – approval as sponsor cancelled for two years – failure to satisfy sponsorship obligations – equivalent terms and conditions – underpayment of worker – payroll system set up incorrectly using default setting – unpaid meal breaks – error corrected but worker not reimbursed – inconsistency in hourly rate – sponsored person working only in nominated occupation – electrical engineer sometimes working as construction supervisor because of COVID-related staff shortages – duties adjusted after department’s monitoring and notice – worker’s visa cancelled after sponsorship cancelled but set aside in separate review – adverse information will affect future applications – possibility that it would be reasonable to disregard such information – substituted shorter bar period now ceased – decision under review set aside

LEGISLATION

Migration Act 1958 (Cth), ss 140L(1)(a), 140M, 375A, 376
Migration Regulations 1994 (Cth), rr 1.13A, 2.79(3)(b), 2.83, 2.86(2), 2.89
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 to take an action under s 140M of the Migration Act 1958 (Cth) (the Act) in relation to the applicant’s sponsorship.

The applicant was most recently approved as a standard business sponsor on 27 May 2021 for a period of five years. On 10 December 2021, the delegate made a decision under s 140M of the Act to cancel the applicant’s approval as a sponsor and bar the applicant for a period of two years from making further applications for approval as a standard business sponsor and temporary activities sponsor.
The applicant’s Director, Mr Walter Lee, appeared before the Tribunal on 31 October 2023 to give evidence and present arguments on behalf of the applicant.
The applicant was represented in relation to the review. The representative attended the hearing.
The Department’s file included non-disclosure certificates issued under s 375A and s 376 of the Act. Copies of the certificates were provided to the applicant prior to the hearing. At the hearing, the applicant’s representative indicated that they had no submissions to make regarding the validity of the certificates. Having considered the reasons for the non-disclosure, as stated in the certificates, the Tribunal is satisfied that the certificates are valid. In any case, the Tribunal is satisfied the information contained in the documents covered by the certificate, which became relevant to the issues in the review, have been disclosed to the applicant and that the applicant has had an opportunity to comment on that information.
6.For the following reasons, the Tribunal has decided to set aside the decision under review and substitute a decision to bar the applicant from sponsoring more people under the terms of the existing approval as a standard business sponsor for a period of 12 months from the date of the delegate’s decision.
CONSIDERATION OF CLAIMS AND EVIDENCE
Sections 140K, 140L and 140M of the Act provide for the imposition of sanctions on approved sponsors in certain circumstances.
Under s 140M, if prescribed circumstances exist, the Minister (and the Tribunal on review) may take one or more of the following actions:
·cancelling the sponsorship approval in relation to a class to which the sponsor belongs;
·cancelling the sponsorship approval for all classes to which the sponsor belongs;
·barring the sponsor for a specified period from sponsoring more people under the terms of any existing approval; and
·barring the sponsor for a specified period from making future applications for sponsorship approval in relation to one or more classes of sponsor.
For these purposes, the circumstances are prescribed in the Migration Regulations 1994 (Cth) (the Regulations) at regs 2.89–2.94B and include circumstances in which the Minister, or Tribunal on review, is satisfied there has been: a failure to satisfy a sponsorship obligation; provision of false or misleading information; sponsorship application or variation criteria no longer met; a contravention of the law; unapproved changes to a program; a failure to pay additional security; a failure to comply with certain terms of an agreement; or a failure to pay medical and hospital expenses.
Where a prescribed circumstance has been found to exist, the Regulations prescribe criteria that must be taken into account when determining what action, if any, to take: regs 2.89–2.94B. These criteria, as they relevantly apply to the circumstances of this case are set out in the attachment to this decision.
Does a circumstance for the taking of an action exist?
11.In the present case, the delegate found that the applicant failed to satisfy a sponsorship obligation.
Failure to satisfy a sponsorship obligation: reg 2.89
The Minister may take one or more of the actions in s 140M if satisfied the sponsor has failed to satisfy a sponsorship obligation referred to in Division 2.19 of the Regulations: reg 2.89(2).
The applicant operates a business which provides architectural design and construction services in the greater Brisbane area. The applicant was initially approved as a standard business sponsor in February 2016. They were most recently approved as a sponsor on 27 May 2021 for a period of five years. Under the most recent approval the applicant successfully nominated Mr Yu Song Wen in the occupation of Electrical Engineer with a base salary of $76,024. Mr Wen was granted the corresponding Temporary Skill Shortage (Subclass 482) visa on 8 July 2021.
In August 2021, the Department commenced monitoring the applicant, and on 26 August 2021 Departmental officers conducted a site visit at the applicant’s business premises. During the visit, Australian Border Force (ABF) officers interviewed the applicant’s Director (Mr Lee) and the sponsored employee (Mr Wen).
On 7 September 2021, the Department issued a request to provide information and documents to the applicant under reg 2.83. The applicant provided the following documents in response to that request:
a.Signed contract of employment for Mr Wen.
b.Market salary data information, including Payscale dated 17 September 2021 indicating the salary range for an Electrical Engineer in Brisbane was between $58,000 and $132,000. It was submitted that, based on the qualifications and skills of Mr Wen, the salary offered to him was $76,000 plus superannuation.
c.Records to demonstrate the tasks performed in the position including task sheets, performance reviews, references and samples of written work including electrical plans and emails.
d.Pay records of gross and net salary provided through payslips and payroll advice.
e.Records of money paid to Mr Wen, including bank transaction history for Mr Wen and the company.
f.Records of hours worked as indicated by task sheets.
g.Payment summary information for the 2020 and 2021 financial years.
16.It was submitted that Mr Wen had not taken any annual leave or sick leave to date as indicated by the entitlement balance on the payslips provided. It was also submitted that the cost of recruitment and migration agent costs were paid by the applicant and that labour market testing was conducted via a recruitment company, for which supporting documents were provided.
On 28 September 2021 the Department issued the applicant with a Notice of Intention to Take Action (NOITTA). The delegate considered that the applicant had failed to satisfy the following sponsorship obligations:
·Regulation 2.79: Obligation to ensure equivalent terms and conditions of employment.
·Regulation 2.86: Obligation to ensure primary sponsored person works or participates in nominated occupation, program or activity.
18.In determining whether the applicant has failed to satisfy the sponsorship obligations as set out in the NOITTA, the Tribunal has considered the relevant evidence before it as follows.
Regulation 2.79: Obligation to ensure equivalent terms and conditions of employment
19.In relying on the payslip records provided by the applicant, the delegate considered that the applicant had not complied with their obligation to pay the applicant the approved nominated annual earnings of $76,024. The delegate had regard to the payroll activity which indicated that, on a fortnightly basis the applicant’s earnings and hours of work were as follows:
Gross wage:               $2,924
Net wage:                   $2,280
Hourly rate:                $36.55
Hours per fortnight      76 hrs
20.On the delegate’s calculations, 76 hours x $36.55 p/h equalled to $2,777.80 gross per fortnight, which was the equivalent of $72,222.80 per annum and less than the nominated salary of $76,024.
21.In their response to the NOITTA, the applicant provided a letter from their Accountant, dated 3 November 2021, payslips for the applicant and bank statements. The accountant explained that there was an internal error in the records due to the payroll system being set up incorrectly. It was explained that the accounting system was set up to indicate the working hours as 80 hours per fortnight instead of 76 hours per fortnight. It was submitted that the payroll had been corrected to fix the error and that the difference in the hours represented the unpaid meal breaks each fortnight, which totalled four hours and was consistent with the Electrical, Electronic and Communications Contracting Award 2020. Providing for this, and had the internal records been set up correctly, the hourly rate would have been adjusted to reflect the rate of $38.47 per hour.
22.The delegate did not accept the applicant’s explanation and found that the sponsored employee was being underpaid and had not been reimbursed.
23.On review, the Tribunal received further written submissions from the representative. It also had the opportunity to take oral evidence from Mr Lee at the hearing. It was submitted that the supporting letter from the applicant’s Accountant was verifiable evidence from a third party which has been providing payroll services to the applicant since January 2015. It was submitted that the administrative error was explainable and that there had been no underpayment of Mr Wen’s salary by the applicant. It was submitted that although the payslips had not recorded the numbers of a standard 76 hours worked by Mr Wen in each fortnight, the payslips had recorded the number of overtime hours worked, exceeding the 76 hours per fortnight, and that paid leave accrual was also recorded. It was submitted that the payroll system did have a few problems due to record keeping, which the applicant conceded should have been maintained at a high standard to satisfy the expectation for monitoring and audit purposes, however, such dissatisfaction should not be construed as evidence of the applicant having underpaid the sponsored employee.
24.In relation to the inconsistency in the hourly rate due to administrative errors, the submission referred to the accompanying payslips for Mr Wen for the period from 21 June 2021 to 30 January 2022 and drew attention to the following:
·In the two payslips for the period from 21 June 2021 to 18 July 2021, the hourly rate was recorded as $73.10. It was submitted that an administrative error occurred because during that period Mr Wen’s employment was on a part-time basis for 40 hours per fortnight which later changed to the full-time position, with 76 hours per fortnight, and the accountant did not input the correct working hours into the accounting system, which resulted in an error of the hourly rate. It was further noted that the actual base salary was $2,924 per fortnight.
·In the seven payslips for the period from 19 July 2021 to 24 October 2021, the hourly rate was recorded as $36.55, which led to the Departmental officer’s concern of underpayment. It was submitted that this was also due to the administrative error of the accountant, which the applicant had explained to the Department in their response dated 11 November 2021. The accountant had entered the working hours as 80 hours per fortnight which should have been 76 working hours plus four unpaid break hours per fortnight. It was submitted that the actual base salary was also $2,924 per fortnight and that there is no underpayment.
·In the seven payslips for the period from 25 October 2021 to 30 January 2022 the hourly rate was recorded as $38.47.
25.The Tribunal has also had regard to the screenshots of the MYOB payroll details recorded for Mr Wen, which the ccountant provided as part of their explanation that the hours recorded were due to a ‘careless administrative error’.
26.At the hearing, Mr Lee gave evidence that Mr Wen worked the contracted hours of 38 hours per week and that any additional hours were recorded as overtime. He said each fortnight Mr Wen received at least a gross base salary of $2,924 which is equal to the annual salary of $76,024. The Tribunal observed that the claimed error in the records, which appear to breach the obligation in reg 2.82 to keep records capable of being verified, resulted in the Department’s inability to be satisfied that Mr Wen was being paid the agreed salary for 38 hours of work per week. Mr Lee acknowledged the error but maintained that Mr Wen’s base salary is calculated based on a 38-hour work week. He said the error was due to a default setting on MYOB which was not updated by the accountant. He said they focused on inputting the correct salary, which adjusted the hourly rate automatically. He said once the error was brought to their attention it was promptly corrected by the accountant and it also gave them the opportunity to update the records for all their staff.
Consideration
The obligation in reg 2.79 requires a standard business sponsor (or former standard business sponsor) of a primary sponsored person, who holds (or last held) a Subclass 482 visa and was identified in a nomination made on or after 18 March 2018, to ensure that:
·the primary sponsored person’s annual earnings in relation to the occupation are not less than the annual earnings which the sponsor indicated would be provided to them when the nomination was approved;[1]
·the primary sponsored person’s earnings in relation to the occupation are not less than the earnings an Australian citizen or an Australian permanent resident earns, or would earn, for performing equivalent work in the same workplace at the same location;[2] and
·the employment conditions (other than in relation to earnings) that apply to the primary sponsored person are no less favourable than those that apply, or would apply, to an Australian citizen or an Australian permanent resident performing equivalent work at the same location.[3]
[1] Reg 2.79(3)(b)(i).
[2] Reg 2.79(3)(b)(ii).
[3] Reg 2.79(3)(b)(iii).
28.In relation to the obligation in reg 2.79(3)(b)(i), the annual earnings indicated in the approved nominations for Mr Wen was a salary of $76,024 based on 38 hours of work per week. The payslips indicate that Mr Wen’s gross fortnightly salary (excluding overtime hours) was $2,924. This is equivalent to an annual salary of $76,024. The Tribunal accepts the submissions that the base salary is based on 38 hours of work and that the error of the hourly rate shown on the payslip was due to an administrative error on the part of the accountant who did not update the default setting on MYOB. This finding is, in part, based on the spontaneous evidence given by Mr Lee during the site visit interview during which he informed ABF officers that Mr Wen works 38 hours a week. Further, the payslips indicate that Mr Wen’s annual base salary was $76,024 and the fortnightly amount of $2,924 (the net amount of which correspond to those received by Mr Wen) confirms that Mr Wen’s annual earnings were not less than what was indicated in the approved nomination.
29.Given the above, the Tribunal is satisfied that the applicant has complied with their obligation in reg 2.79(3)(b)(i).
30.In relation to the obligation in reg 2.79(3)(b)(ii), this requires the applicant to ensure that annual earnings of the sponsored persons, throughout their period of employment with the sponsor, were not less than an Australian performing equivalent work at the same location. According to the relevant Explanatory Statement (F2018L00262), ‘this means that the earnings of the visa holder or former visa holder must keep pace with any increases in the earnings that are provided, or would be provided, to Australian workers performing equivalent work’.
31.It was submitted that there were no Australian workers in the same workplace performing equivalent work as Mr Wen. It was also submitted that the annual salary for the nominated position was determined by reference to market data, such as job advertisements and Payscale surveys. This method of determining the annual market salary rate (and the sponsored person’s annual earnings) is specified in the relevant instrument,[4] however, it can only be relied upon where there is no Fair Work instrument, state industrial instrument or transitional instrument applicable to the nominated occupation. In this case, the applicant referred to the Electrical, Electronic and Communications Contracting Award 2020 in the context of unpaid meal breaks, however, this instrument appears to be in respect of electrical trade occupations and does not cover Electrical Engineers. In the circumstances, the Tribunal considers it appropriate to have regard to the market salary data provided by the applicant which indicates that, at the relevant time, the salary for Electrical Engineers in Brisbane was between $58,000 and $132,000, and that Mr Wen, based on his years of experience was paid $76,024. As Mr Wen’s salary falls within the salary range for an Australian equivalent worker, it follows that the obligation in reg 2.79(3)(b)(ii) has also been complied with.
[4] IMMI 18/033: Specification of Income Threshold and Annual Earnings and Methodology of Annual Market Salary Rate) 2018.
32.In relation to the obligation in reg 2.79(3)(b)(iii), there is no information before the Tribunal which suggests that any other employment conditions (not related to earnings) were less than those that would be provided to an equivalent Australian worker.
33.Having regard to all the evidence before it, the Tribunal is satisfied that the applicant has complied with their obligation in reg 2.79 to ensure equivalent terms and conditions of employment in respect of Mr Wen.
Obligation to ensure primary sponsored person works or participates in nominated occupation, program or activity
34.Regulation 2.86 requires an approved sponsor to ensure sponsored employees work in the nominated occupation: reg 2.86(2)(a), and do not work in an occupation unless they were nominated for that occupation and the nomination has been approved by the Minister under s 140GB of the Act: reg 2.86(2)(b).
35.The applicant nominated Mr Wen in the occupation of Electrical Engineer (ANZSCO 233311). According to the ANZSCO, Electrical Engineers design, develop and supervise the manufacture, installation, operation and maintenance of equipment, machines and systems for the generation, distribution, utilisation and control of electric power. The tasks involved in carrying out the position include:
·planning and designing power stations and power generation equipment
·determining the type and arrangement of circuits, transformers, circuit-breakers, transmission lines and other equipment
·developing products such as electric motors, components, equipment and appliances
·interpreting specifications, drawings, standards and regulations relating to electric power equipment and use
·organising and managing resources used in the supply of electrical components, machines, appliances and equipment
·establishing delivery and installation schedules for machines, switchgear, cables and fittings
·supervising the operation and maintenance of power stations, transmission and distribution systems and industrial plants
·designing and installing control and signalling equipment for road, rail and air traffic
·may specialise in research in areas such as power generation and transmission systems, transformers, switchgear and electric motors, telemetry and control systems
36.As noted above, ABF officers interviewed Mr Lee during the site visit of 26 August 2021. Mr Lee confirmed that Mr Wen (who is known in the office as ‘Eason’) is an employee of the business. When asked of Mr Wen’s whereabouts, Mr Lee informed the officers that Mr Wen was onsite conducting checks and supervising sites at Rochedale, Hope Island, Mango Hill and Pallara. Mr Lee explained that the business specialises in residential construction work and that Mr Wen visits all sites, then returns to the office to do more work.
37.In relation to Mr Wen’s position in the business, Mr Lee said that he is the Electrical Engineer and that his duties included supervising staff at construction sites, cooperating with tradespeople and checking that materials arrive correctly. Mr Lee informed the officers that Mr Wen works Monday to Friday, 38 hours, eight hours per day and that the roster is created by Senior Supervisor, Mark Chang, who provides instructions to Mr Wen.
38.When asked by the ABF officer if Mr Wen is only involved in the construction aspect of the business, Mr Lee said that Mr Wen only does construction-related work. He also stated that Mr Wen is a manager and that his duties also involve supervising construction works, smart home systems, CCTV, digital door locks, estimating and purchase orders.
39.ABF officers were shown photographs of some of the projects, which mostly related to construction project work, including roof plans, scaffolding, and edge protection. When asked if there was evidence of electrical engineering work, Mr Lee checked his computer, and of the 30 projects completed by the company, he identified one project, dated 16 December 2019, which showed electrical engineering work undertaken by Mr Wen.
40.Mr Wen arrived at the office and an interview was conducted with him by ABF officers. Mr Wen informed officers that his position is Electrical Engineer and that his duties include discussing electrical wiring, site supervisor, organising the welding, design wiring for residential projects and electrical power points and smart home systems. Mr Wen indicated that he has installed two smart home systems. Mr Wen agreed with officers that he works mostly in the construction side of the business.
41.Mr Lee showed officers further documents showing electrical works, which officers observed were from 2019 and 2020, which fell outside the monitoring period. Mr Lee showed the officers emails from 2020 and 2021 between Mr Wen and others (including an electrician) regarding quotes and installation of various items such as solar panels and hot water systems.
42.The above information was set out in the NOITTA, and the applicant was invited to provide a response. In responding, the applicant admitted that they had made a ‘partial mistake of work arrangement’ and that Mr Wen had been working more closely to the position of Site Supervisor instead of the position of Electrical Engineer due to staff shortages during COVID-19 circumstances. It was submitted that, to deal with the situation, Mr Wen was asked to do some jobs which overlapped with the site supervisor and electrical engineer roles since mid-July. It was submitted that after receiving the NOITTA, the sponsor started working on the support documents and after realising their work arrangement might be against the employment contract position description, they made immediate adjustments to Mr Wen’s work arrangements.
43.It was submitted that, because the sponsor was still dealing with the circumstances, the status of Mr Wen was important, indispensable, and essential to the sponsor and the building industry. It was requested that the Department consider the adjustments and improvements made by the applicant and give them an opportunity to correct the failures. Information was provided listing projects that were in progress or waiting to proceed, along with attached electrical plans, which the applicant claimed Mr Wen had been working on (as the designer of the electrical plans). It was contended that Mr Wen’s role as Electrical Engineer is still in great need within the company.
44.Prior to the hearing, the Tribunal received written submissions from the applicant’s representative. While the breach was acknowledged, it was submitted that there was some miscommunication between the applicant’s Director (Mr Lee) and ABF officers during the interview. It was acknowledged that the company had requested Mr Wen to perform some onsite works which overlapped with his duties as an Electrical Engineer. It was claimed that this situation only arose due to the crisis faced by the applicant during COVID-19. It was claimed that the applicant’s objective at the time was to survive and get through this period of extreme difficultly. It was submitted that the work performed by Mr Wen was immediately adjusted to being solely that of an Electrical Engineer upon receiving the NOITTA.
45.The representative also referred to the decision of the Tribunal (differently constituted), made on 10 November 2022, in relation to the Department’s decision to cancel Mr Wen’s visa. The present Tribunal has had regard to the findings made in that matter, including the evidence given by Mr Wen to the Tribunal in those proceedings.
46.The Tribunal in Mr Wen’s matter found that Mr Wen had breached condition 8607 (imposed on his Subclass 482 visa) which required him to work only in the occupation nominated as identified in the nomination referred to in his most recent application for the visa. In relying on the information gathered during the site visit and the admissions made by Mr Lee that the tasks undertaken by Mr Wen included those of a site supervisor, the Tribunal found that Mr Wen had not been working exclusively in the occupation of Electrical Engineer for the sponsor. In exercising its discretion, the Tribunal decided to set aside the cancellation of Mr Wen’s visa. The Tribunal found that there was a blurring of the tasks performed by Mr Wen, some which related to the occupation of Electrical Engineer and others that did not. The Tribunal nevertheless gave weight to the fact that the sponsor was operating a business during the pandemic and that Mr Wen was engaged in other work to assist the company. The Tribunal did not consider the failure to comply with the visa condition to be deliberate. The Tribunal accepted that Mr Wen, since the monitoring process, has been working only as an Electrical Engineer for the sponsor.
47.At the hearing before the present Tribunal, Mr Lee gave evidence that the company undertakes construction projects and that all workers, including the Electrical Engineer must have construction knowledge. The Tribunal observed that they had applied to nominate the position of Electrical Engineer and set out the tasks of that position and, notwithstanding the industry, the obligation is that the nominated person must undertake tasks consistent with the nominated occupation. Mr Lee stated that the contract (for construction works) included the electrical plans, and that Mr Wen was required to negotiate with contractors and had to go onsite to oversee what the contractors were doing. The Tribunal observed that the contemporaneous evidence, as set out in the record of interview, indicates that Mr Wen was undertaking tasks that were more consistent with that of a construction supervisor rather than an Electrical Engineer. Mr Lee said he admits this was the case, but they were trying to operate during the pandemic restrictions and were just trying to survive as a business.
48.The Tribunal noted that the position of Electrical Engineer was nominated by the company well after the commencement of the COVID-19 restrictions and that Mr Wen’s visa was granted in July 2021, so it may form the view that the company had nominated that occupation with the intention of using Mr Wen to perform other tasks not consistent with the nominated occupation. Mr Lee said that while it may appear like that, this was not the case. He said the situation with COVID-19 got worse after Mr Wen got his visa. They were experiencing skills shortages and had to rely on Mr Wen to go onsite and oversee the work undertaken by the contractors, which included electrical-related work. Mr Lee explained that Mr Wen had worked for the business part-time since 2018 and after he got his visa, in July 2021, they relied on him to undertake some of the tasks he used to do. Mr Lee said he understands the error they made and that since the investigation by ABF officers, which was more than two years ago, they have made sure that Mr Wen only works as an Electrical Engineer.
Consideration
49.Having carefully considered all the evidence before it, including the contemporaneous evidence obtained during the site visit and the admissions made by Mr Lee, the Tribunal finds that Mr Wen, during his employment with the applicant as the holder of a Subclass 482 visa, performed tasks that were not consistent with the nominated occupation of Electrical Engineer, such as being on project sites and supervising construction workers.
50.While the Tribunal is prepared to accept that some of the tasks undertaken, such as overseeing the installation of CCTV, smart home systems, hot water systems and electrical wiring broadly relate to electrical work, and may come within the scope of the ANZSCO task of ‘organising and managing resources used in the supply of electrical components, machines, appliances and equipment’, the Tribunal did not consider the work performed was at the higher-level tasks or complexity described in the ANZSCO. The Tribunal considers that only some of the tasks performed by Mr Wen were partially consistent with those of the nominated occupation of Electrical Engineer.
51.The Tribunal acknowledges Mr Lee’s explanation that Mr Wen was asked to do additional tasks due to the skills shortages and difficulties the business experienced during the COVID-19 pandemic and has taken this into account further below. However, for the purposes of assessing the applicant’s compliance with the obligation in reg 2.86, the Tribunal has formed the view, on the totality of the evidence before it, that the applicant has failed to ensure that Mr Wen does not work in an occupation for which he has not been nominated. For these reasons, the Tribunal finds that the applicant has failed to satisfy their obligation in reg 2.86(2).
52.Having found that the applicant has failed the sponsorship obligation in reg 2.86(2), the Tribunal is satisfied that the prescribed circumstance in reg 2.89 exists for the purpose of s 140M of the Act.
Action to be taken
53.For these reasons, the Tribunal is satisfied that a relevant circumstance for s 140L(1)(a) exists. Accordingly, it is necessary to consider whether one or more of the actions mentioned in s 140M should be taken.
54.In considering what action to take, the Tribunal has had regard to the prescribed criteria, as extracted in the attachment to this decision.
The past and present conduct of the person in relation to Immigration
55.Information before the Tribunal indicates that the applicant’s Director, Mr Lee, cooperated with ABF officers during the site visit and interview. The applicant responded to the request for information under reg 2.83 and responded to the NOITTA. There is no information before the Tribunal which suggests that the applicant has not been cooperative with the Department.
The number of occasions on which the person has failed to satisfy the sponsorship obligation
56.As found above, the applicant has failed to satisfy the obligation in reg 2.86.
57.Mr Lee contended that the sponsored employee’s duties ‘overlapped’ for a short period of a few months, being from the approval of Mr Wen’s Subclass 482 visa in July 2021, until the investigation (and subsequent issuing of the NOITTA) in October 2021. Accepting that the applicant has taken steps to ensure that Mr Wen works only in the nominated occupation, the Tribunal finds that the applicant has failed to satisfy the obligation in reg 2.86(2) over a period of three months.
The nature and severity of the circumstances relating to the failure to satisfy the sponsorship obligation, including the period of time over which the failure has occurred
58.The period over which the applicant has failed to comply with reg 2.86 was three months. The Tribunal considers the nature of the breach to be serious, in that it undermined the purpose of the temporary skills shortage program, which is to sponsor skilled workers to fill skills shortages in specified occupations.
59.The Tribunal has had regard to the circumstances relating to the breach, and while it acknowledges the claim that the business experienced skills shortages during COVID-19 and had to rely on Mr Wen to complete projects, in the Tribunal’s view, the circumstances did not justify the failure given that, at the time the applicant nominated the position, COVID-19 had been in existence for more than 15 months.
The period of time over which the person has been an approved sponsor
60.The applicant has been an approved sponsor since 11 February 2016. Their most recent sponsorship agreement was approved on 27 May 2021.
Whether, and the extent to which, the failure to satisfy the sponsorship obligation has had a direct or indirect impact on another person
61.The applicant’s failure to satisfy the sponsorship obligation has had a direct impact on Mr Wen, whose Subclass 482 visa was subsequently cancelled by the Department on 1 April 2022.
62.The failure to satisfy the obligation in reg 2.86, and any consequent action that may be taken under s 140M, will also come within the meaning of ‘adverse information’ in reg 1.13A and may impact future nomination applications that may be lodged by the applicant in respect of Mr Wen or another person the applicant may wish to nominate in future.
Whether, and the extent to which, the failure to satisfy the sponsorship obligation was intentional, reckless, or inadvertent
63.Mr Lee contended that the failure to comply with reg 2.86(2) was not intentional. He said he admits he made a mistake because he did not strictly ensure that Mr Wen worked only as an Electrical Engineer. He had not initially appreciated the seriousness, but it was a difficult time for the business and that Mr Wen and other employees of the business did additional tasks to get through the difficult COVID-19 period. Mr Lee said he quickly rectified the issue and that he expected to receive a warning rather than the harsh action taken by the Department to cancel the agreement altogether.
64.The Tribunal has had regard to the matters raised by Mr Lee, and while it is prepared to accept that the failure to comply was not intentional, it nevertheless considers that Mr Lee should have been more cognisant of the applicant’s obligations as an approved sponsor and of the importance of ensuring the applicant complies with those obligations.
Whether, and the extent to which, the person has cooperated with Immigration, including whether the person informed Immigration of the failure
65.The evidence before the Tribunal indicates that the applicant’s Director cooperated with the Department throughout the monitoring process.
66.The Department was not informed of the failure to comply with the sponsorship obligation by anyone, and only became aware of the failure during the monitoring process.
The steps (if any) the person has taken to rectify the failure to satisfy the sponsorship obligation, including whether the steps were taken at the request of Immigration or otherwise
67.Mr Lee gave evidence that as soon as he became aware that the overlapping tasks being performed by Mr Wen were in breach of their obligations, they promptly ensured that he stopped those tasks and focused only on working as an Electrical Engineer. Mr Lee said he admits his mistakes, he is willing to learn from them and he took immediate action to rectify his mistake. He said the Department could have first warned him and then conducted another investigation to check that he was complying. He said by cancelling the sponsorship agreement, he was not given an opportunity to rectify his mistake.
68.The Tribunal has had regard to Mr Lee’s evidence and accepts that he now understands the importance of complying with sponsorship obligations and that he has taken steps to ensure that the breach does not reoccur in future.
The processes (if any) the person has implemented to ensure future compliance with the sponsorship obligation
69.At the hearing, Mr Lee gave evidence that, since the ABF investigation, Mr Wen has only been performing tasks as an Electrical Engineer. Mr Lee acknowledged the importance of compliance with sponsorship obligations and said he will ensure that sponsorship obligations are complied with in future.
The number of other sponsorship obligations that the person has failed to satisfy, and the number of occasions on which the person has failed to satisfy other sponsorship obligations
70.Other than the sponsorship obligations found not to have been satisfied by the applicant, the Tribunal is not aware of any other sponsorship obligations that the applicant has failed to satisfy.
Any other relevant factors
71.At the hearing, Mr Lee raised the concern that cancellation of the sponsorship will mean the company has a bad record with Immigration. He said he hoped to get a chance to correct his error, he has learnt a lot from the process and wants the opportunity to demonstrate that the company can comply with its obligations.
72.The representative submitted that the Department’s decision will lead to the applicant having ‘adverse information’ which will affect all future applications, including the sponsorship of Mr Wen. He said the Department did not take into account that the company was operating at the time of the COVID-19 pandemic, that the applicant corrected the error, and that they are genuinely committed to complying with all the sponsorship obligations.
73.The Tribunal acknowledges that a finding of non-compliance with sponsorship obligations and any consequent action taken under s140M would come within the definition of ‘adverse information’ in reg 1.13A. The Tribunal notes, however, that when applying for approval of a nomination, where it is a requirement that ‘there is no adverse information known to Immigration about the person (an applicant) or a person associated with the person (the applicant)’, there is always the opportunity to satisfy the alternative criterion which provides that ‘it is reasonable to disregard any adverse information known to Immigration about the person or a person associated with the person’. If the applicant wishes to make any future applications for approval of a nomination, the Tribunal considers it open for the applicant to rely on the present Tribunal’s findings, some of which are favourable to the applicant, to make submissions and provide material in support of the alternative criterion as to why it would be reasonable to disregard the adverse information.
Conclusion

In determining what action, if any, to take, as provided for in s 140M, the Tribunal has carefully considered all the circumstances as discussed above. The delegate in this case decided to cancel the applicant’s approval as a standard business sponsor which, at the time of the delegate’s decision, still had four and a half years to run. The delegate also decided to bar the applicant for a period of two years from making applications for approval as a standard business sponsor and temporary activities sponsor. This decision was made on the basis of the delegate’s finding that the applicant had failed to satisfy the sponsorship obligation in reg 2.79(3) and reg 2.86.
The Tribunal has found that the applicant has failed to comply with their sponsorship obligation in reg 2.86(2). However, it was satisfied that the applicant had complied with their obligation in reg 2.79(3) to provide equivalent terms and conditions of employment to the sponsored employee. In the circumstances, the Tribunal considers it appropriate to set aside the Department’s decision and substitute it with another decision that more appropriately reflects the findings and considerations of the Tribunal as set out above.
The Tribunal sets aside the decision to cancel the applicant’s approval as a standard business sponsor. It also sets aside the decision to bar the applicant for a period of two years from making further applications for approval as a standard business sponsor and temporary activities sponsor. The Tribunal substitutes those decisions with another decision, being to take action under s 140M to bar the applicant for a period of 12 months (from the date of the delegate’s decision) from sponsoring more people under the terms of their most recent approval as a standard business sponsor. This means the bar ended on 10 December 2022.
DECISION
77.The Tribunal sets aside the decision under review and substitutes a decision to bar the applicant from sponsoring more people under the terms of the existing approval as a standard business sponsor for a period of 12 months from the date of the delegate’s decision.
R. Skaros
Senior Member

ATTACHMENT – Extract from the Migration Regulations 1994
2.89   Failure to satisfy sponsorship obligation
…
(3) For paragraph 140L(1)(b) of the Act, the criteria that the Minister must take into account in determining what action (if any) to take under section 140M of the Act in relation to the circumstance mentioned in subregulation (2) are:
(a)    the past and present conduct of the person in relation to Immigration; and
(b)    the number of occasions on which the person has failed to satisfy the sponsorship obligation; and
(c)     the nature and severity of the circumstances relating to the failure to satisfy the sponsorship obligation, including the period of time over which the failure has occurred; and
(d)    the period of time over which the person has been an approved sponsor; and
(e)     whether, and the extent to which, the failure to satisfy the sponsorship obligation has had a direct or indirect impact on another person; and
(f)     whether, and the extent to which, the failure to satisfy the sponsorship obligation was intentional, reckless or inadvertent; and
(g)     whether, and the extent to which, the person has cooperated with Immigration, including whether the person informed Immigration of the failure; and
(h)    the steps (if any) the person has taken to rectify the failure to satisfy the sponsorship obligation, including whether the steps were taken at the request of Immigration or otherwise; and
(i)    the processes (if any) the person has implemented to ensure future compliance with the sponsorship obligation; and
(j)     the number of other sponsorship obligations that the person has failed to satisfy, and the number of occasions on which the person has failed to satisfy other sponsorship obligations; and
(k)    any other relevant factors.
…

[2023] AATA 4112

28 November 2023

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