Zachiz Pty Ltd Atf The Tom Stojanovski Family Trust (Migration)

Zachiz Pty Ltd Atf The Tom Stojanovski Family Trust (Migration) [2018] AATA 1924 (29 March 2018)
DECISION RECORD
DIVISION:Migration & Refugee Division
APPLICANT:  Zachiz Pty Ltd Atf The Tom Stojanovski Family Trust
CASE NUMBER:  1711032
DIBP REFERENCE(S):  BCC2016/2788402
MEMBER:Mark Bishop
DATE:29 March 2018
PLACE OF DECISION:  Melbourne
DECISION:The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.
Statement made on 29 March 2018 at 9:47am

CATCHWORDS
Migration – Nomination refusal – Direct Entry Nomination stream – Genuine need for paid employee – Motor mechanic – Requirements of r.5.19 are met – Decision under review set aside
LEGISLATION
Migration Act 1958, s 245AR
Migration Regulations 1994, rr 1.13A, 1.13B, 5.19
STATEMENT OF DECISION AND REASONS
APPLICATION FOR REVIEW

This is an application for review of a decision made by a delegate of the Minister for Immigration on 18 May 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).
The applicant applied for approval on 23 August 2016. 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).
In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in the Direct Entry Nomination stream.
The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19(4)(a)(ii) of the Regulations because the application for approval did not identify a need to employ a paid employee to work in the nominated position under the nominator’s direct control.
The applicant appeared before the Tribunal on 29 March 2018 to give evidence and present arguments.
The applicant was represented in relation to the review by its registered migration agent.
For the following reasons, the Tribunal has decided to set aside the decision under review and substitute a decision approving the
CONSIDERATION OF CLAIMS AND EVIDENCE
The issue in this case is whether the applicant meets the requirements for approval of the nomination under the Direct Entry nomination stream set out in r.5.19(4), which is extracted in the attachment to this decision. For the nomination to be approved, all the requirements must be met.
The application is compliant: r.5.19(4)(a)
Regulation 5.19(4)(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 need for the nominator to employ a paid employee to work in the position under their direct control.
The nominator lodged the application on 23 August 2016. It does not include a certification that the nominator has engaged in conduct that contravenes s.245AR(1). The nominator provided a statement, which expressly said his company was expanding, that expansion was limited by the company’s ability to attract skilled labour (motor mechanic) and the nominator provided an organizational chart that shows the nominee would report directly to the nominator and work under his direct control.
Accordingly, the requirement in r.5.19(4)(a) is met.
Nominator is actively and lawfully operating a business in Australia: r.5.19(4)(b)
Regulation 5.19(4)(b) requires that applicant is actively, lawfully and directly operating a business in Australia.
The applicant provided the following documentation:
·ASIC company details for Zachiz Pty Ltd registered 18 December 2007 with the company’s next review date being 18 December 2018;
·Activity statements from Australian Taxation Office (ATO) for August 2016, May 2017, August 2017 and November 2017 for The Trustee for the Tom Stojanovski Family Trust;
·Trust Tax Return for the Tom Stojanovski Family Trust for the financial year ended 30 June 2017;
·Current and Historical details for ABN 97 190 378 367 being details for The Trustee for The Tom Stojanovski Family Trust with the record extracted 16 February 2016;
The nominator actively and lawfully operates a business in Australia and directly operates the business.
Accordingly, the requirement in r.5.19(4)(b) is met.
Position is not labour-hire: r.5.19(4)(c)
Regulation 5.19(4)(c) applies to nominators whose business activities include those relating to labour hire to an unrelated business. In these cases, the nominated position must be within the business activities of the nominator.
The applicant provided a copy of a contract of employment between Zachiz Pty Ltd atf The Tom Stojanovski Family Trust as employer and Daniel Masih as employee and a schedule that stated the employee was to be employed as a full time motor mechanic, working 38 hours per week and reporting to the Director. The designated position was identified as being in the employer’s business.
Accordingly, the requirement in r.5.19(4)(c) is met.
Term of employment of the visa holder: r.5.19(4)(d)
Regulation 5.19(4)(d) requires the nominee to be employed in the nominated position for at least 2 years full time, and the terms and conditions of that employment do not expressly exclude the possibility of an extension. Schedule A to the Contract of Employment referred to in paragraph 16 above identified the term of the position as being 3 years and Cl. 2 of the Contract of Employment provides for an extension of the term of the contract. A company has to be viable to employ extra staff. Examination of the financial accounts is a strong indicator of the financial viability or otherwise of a company.
The company provided a letter from Corbetts, Chartered Accountants and Advisors dated 10 May 2017 that provided confirmation that the entity has the financial capacity to sustain full time employment and superannuation contributions to the nominee for a minimum period of two years as required by the regulations. The Tribunal gives this letter significant weight.
The nominator provided a copy of the financial statements for the FY2014, FY2015, FY2016 and FY2017. The financial statements were prepared by a firm of accountants, dated and signed by a Director. The Tribunal gives the statements significant weight. These statements showed the following:
·    Sales increasing from $424,797 in FY2014 to $619,367 in FY2017 an increase of $194,570 or 46% over a 4 year period from a base line of 2014 showing an expanding business;
·    Net profit in each year as FY2014 - $39,339, FY – 2015 $64,424, FY2016 - $79,845 and FY2017 - $92,309 showing growing profits;
·    Net profit as a % of sales increasing from 9.2% to 14.9% over the 4 year period showing the company is (arguably) more efficient and certainly growing in profitability;
·    Wages and superannuation as a % of sales increasing from 17% to 23% showing an increase but marginal at best and probably due in 2017 to an increase in employee numbers;
·    Expenses as a % of sales increasing from 34% to 41% due exclusively to an increase in 2017 of wages and superannuation expenses. Excluding this one-off increase in 2017 expenses as a % of sales actually declined from 34% to 32% which is an indicator of a company growing in profitability and having the capacity to employ extra labour if needed
The Tribunal inquired about the following matters:
·Reasons for the large increase in labour costs in FY2017; the nominator advised the company had retained a lot of extra clients. As a consequence there were increasing demands for work and general mechanical repairs of cars, trucks and machinery. This had been exacerbated during the fruit picking season.
·Staff numbers over the last 4 years had been reasonably steady at 3 full time persons supplemented by casual labour at busy times.
·Future plans for expansion; the nominator advised his shed (workshop) was almost at capacity at the moment and whilst he had plans to expand by extending the shed he was satisfied with current levels of work.
·Capacity constraints within existing premises.
·Capacity constraints within existing plant and equipment.
·Low value of non-current assets; the nominator explained they were replaced on an on needs basis, were regularly services and maintained and were generally long life. The main expense was consumer goods (oil etc., parts). There was little need for replacement machinery or additional machinery.
·High cash at bank figures; the nominator was unable to explain the large figure but did point to a similarly large figure in the balance sheet for trade and other payables.
·Reason for large unpaid trust distributions; Children are minors and the distribution will be done at an appropriate time after receiving advice from the accountant.
The nominee gave evidence he had been resident in Australia for more than 4 years, had spent a little in excess of 2 years studying at Certificate level in Automotive Mechanics, had lived in Shepparton all that time and had been employed as a mechanic with the nominator since October 2016. The nominee advised he had seen an advertisement for the job in a local paper. The nominee advised the Tribunal of his gross and net wage, payments of tax and superannuation.
The Tribunal has no reason to doubt the evidence of the nominator and the nominee. In critical respects it confirmed the written submissions and financial documentation provided by the nominator to the Tribunal. The Tribunal gives the evidence of the nominator and the nominee significant weight.
The company provided BAS quarterly statements for the calendar years 2016 and 2017. The Tribunal examined the BAS for the FY2017 (derived from the BAS for the two calendar years 2016 and 2017). The Tribunal could not detect any anomalies or discrepancies in these documents and the financial statements.
The company provided Trust Tax Returns for the FY2017. The Tribunal examined key fields (superannuation expenses, cost of sales, motor vehicle expenses, assets and liabilities current and non-current) in both the financial statements and the trust tax returns). The Tribunal could not detect any anomalies or discrepancies in the two different sets of documents.
In short the company started from a small base, has expanded significantly, has kept its costs under control and the critical figure of wages and superannuation as an expense has increased only marginally. The company has become more productive over time and more profitable. The Tribunal is of the view the company has the capacity to employ extra labour and (wisely) used, this extra labour will enable the company to continue shifting down the cost curve and become (even) more profitable over time. Critically the company provided the necessary financial documentation (signed, dated, authorised and attested where appropriate) so that the Tribunal could satisfy itself as to various requirements under the Regulations.
Accordingly, the requirement in r.5.19(4)(d) is met.
No less favourable terms and condition of employment: r.5.19(4)(e)
Regulation 5.19(4)(e) requires that the terms and conditions of employment applicable to the nominated position will be no less favourable than those that are, or would be, provided to an Australian citizen or permanent resident performing equivalent work in the same workplace at the same location.
The applicant provided extracts as follows:
·    from PayScale that showed the median Australian wage for an entry level Automobile Mechanic as being $42,766 at 10 October 2016;
·    from Seek that showed the salary of a mobile motor mechanic as being in the range of $45,000 to $54,000 as at 3 March 2017;
·    from Open Universities that showed the average salary of a motor mechanic as 10 October 2016 as being $42,000;
·    Multiple copies of pay slips in the name of the nominee that showed salary, hours worked payment into MTAA Superannuation fund gross and net wage.
Accordingly the requirements of r.5.19(4)(e) are met.
No adverse information known to Immigration: r.5.19(4)(f)
Regulation 5.19(4)(f) 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.
There was no evidence before the Tribunal concerning adverse information known to Immigration about the nomination or the person associated with the nominator.
Accordingly the requirements of r.5.19(4)(f) are met.
Satisfactory compliance with workplace relations laws: r.5.19(4)(g)
Regulation 5.19(4)(g) requires that the applicant 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.
There was no evidence before the Tribunal that suggests the applicant does not have a satisfactory record of compliance with workplace relations of the Commonwealth and the State of Victoria.
Accordingly the requirements of r.5.19(4)(g) are met.
Tasks of the position genuine need for the position and training requirements r.5.19(4)(h)
The Tribunal determines as follows:
·The position and business is located in Shepparton, Victoria.
·The nominator advised the Zachic Pty Ltd was a growing business that had recently moved to larger premises. The nominator outlined the detail of the mechanical services offered by the company. The nominator advised the business had grown consistently in recent years and provided appropriate financial documentation that supported that proposition. The nominator advised it needed to hire additional mechanics, there was a shortage of mechanics in the regional area and the company was unable to take more orders and consequently its growth was being limited.
·The nominator advised it had advertised for the position of motor mechanic in the classified section of the Shepparton news. The nominator only received one application for the vacant position that of the nominee and the nominator was unable to find any suitable Australian citizen or permanent resident for the position.
·The nominator provided a detailed position description for a motor mechanic. That position description addressed computer use, electronic scanning equipment, vehicle maintenance tasks, service and repair brake system tasks, cooling stem service and repair functions, repair of exhaust systems, tasks associated with the service and repair of the suspension system. It also addressed a comprehensive range of other functions carried out by a motor mechanic in the service, maintenance and repair of motor vehicles and their operating systems, engines and parts. The tasks performed in the position correspond to the tasks of an occupation specified by instrument.
·The nominator provided a signed Regional Certifying Body Advice Certificate from the Shepparton division of the Department of Economic Development, Jobs, Transport and Resources (DFDJTR).
·The nominator provided a further statement in 15 March 2018 that outlined the following;
oThe nominee had been employed with Zachiz Pty Ltd since 5 September 2016 as a full time employee;
oStaff numbers were 3 inclusive of the nominator and the nominee;
oThe company had advertised many times in the local area for a staff member with little success;
oMaintaining the nominee as a staff member will allow the company to grow, and service the needs of customers.
Accordingly the requirements of r.5.19(4)(h) are met.
CONCLUDING PARAGRAPHS
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
The Tribunal sets aside the decision under review and substitutes a decision approving the nomination.
Mark Bishop
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.
…
Direct Entry nomination
(4)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 need for the nominator to employ a paid employee to work in the position under the nominator’s direct control; and
(b)the nominator:
(i)       is actively and lawfully operating a business in Australia; and
(ii)      directly operates the business; and
(c)for a nominator whose business activities include activities relating to the hiring of labour to other unrelated businesses — the position is within the business activities of the nominator and not for hire to other unrelated businesses; and
(d)both of the following apply:
(i)       the employee will be employed on a full-time basis in the position for at least 2 years;
(ii)      the terms and conditions of the employee’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)       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
(g)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; and
(h)either:
(i)       both of the following apply:
(A)the tasks to be performed in the position will be performed in Australia and correspond to the tasks of an occupation specified by the Minister in an instrument in writing for this sub-subparagraph;
(AAA)the occupation is applicable to the person identified under subparagraph (a)(ii) in accordance with the specification of the occupation;
(B)either:
(I)the nominator’s business has operated for at least 12 months, and the nominator meets the requirements for the training of Australian citizens and Australian permanent residents that are specified by the Minister in an instrument in writing for this sub-sub-subparagraph; or
(II)the nominator’s business has operated for less than 12 months, and the nominator has an auditable plan for meeting the requirements specified in the instrument mentioned in sub-sub-subparagraph (I); or
(ii)      all of the following apply:
(A)the position is located in regional Australia;
(B)there is a genuine need for the nominator to employ a paid employee to work in the position under the nominator’s direct control;
(C)the position cannot be filled by an Australian citizen or an Australian permanent resident who is living in the same local area as that place;
(D)the tasks to be performed in the position correspond to the tasks of an occupation specified by the Minister in an instrument in writing for this sub-subparagraph;
(DA)the occupation is applicable to the person identified under subparagraph (a)(ii) in accordance with the specification of the occupation;
(E)the business operated by the nominator is located at that place;
(F)a body that is:
(I)specified by the Minister in an instrument in writing for this sub-subparagraph; and
(II)located in the same State or Territory as the location of the position;
has advised the Minister about the matters mentioned in paragraph (e) and sub-subparagraphs (B) and (C).

[2018] AATA 1924

29 March 2018

Key Legal Topics

Areas of Law

Immigration

Administrative Law

Legal Concepts

Judicial Review

Statutory Construction

Procedural Fairness

Jurisdiction