ZYZ Investments Pty Ltd (Migration)

[2024] AATA 1066

ZYZ Investments Pty Ltd (Migration) [2024] AATA 1066 (2 May 2024)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  ZYZ Investments Pty Ltd

REPRESENTATIVE:  Mr Yang Chen (MARN: 1687336)

CASE NUMBER:  2211160

HOME AFFAIRS REFERENCE(S):          OPF2021/7637

MEMBER:P. Maishman

DATE:2 May 2024

PLACE OF DECISION:  Perth

DECISION:The Tribunal sets aside the decision under review and substitutes a decision not to take one or more of the actions specified in s 140M of the Migration Act 1958 (Cth).

Statement made on 02 May 2024 at 3:37pm

CATCHWORDS

MIGRATION – sponsorship cancellation or bar – failure to satisfy a sponsorship obligation – unintentional minor underpayment refunded to the nominee – employer’s family health issues – decision under review set aside  

LEGISLATION

Migration Act 1958, s 140
Migration Regulations 1994, rr 2.79, 2.89-2.94

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.

1. The applicant was approved as a standard business sponsor on 13 March 2019. On 19 July 2022, the delegate decided to bar the applicant from sponsoring more people under the terms of its sponsorship until 19 January 2023 under s 140M on the basis that the applicant failed to satisfy its sponsorship obligations.

2. The applicant’s Director, Mr Yang Song, appeared before the Tribunal on 9 April 2024 to give evidence and present arguments.

3. The Tribunal hearing was conducted with the assistance of an interpreter in the Mandarin and English languages.

4. The applicant was represented in relation to the review.

   6.For the following reasons, the Tribunal has decided to set aside the decision under review and substitute a decision not to take one or more of the actions specified in s 140M.

   CONSIDERATION OF CLAIMS AND EVIDENCE

   7.The Tribunal had before it a copy of the Departments file. Attached to the file is a non-disclosure certificate issued pursuant to s 375A of the Act dated 17 August 2022. Documents on the Departments file shows Australian Border Force (ABF) commenced monitoring the applicant’s compliance with its sponsorship obligations on 4 June 2021 covering the periods 1 October 2019 to 31 December 2019. On 30 July 2021, the delegate required the applicant to provide records and information to which the applicant responded on 12 August 2021. The ABF issued the applicant a notice of intention to take action (NOITTA) on 10 June 2022 and the applicant responded with written submissions and various documents on 24 June 2022.

   8.The applicant gave the Tribunal a copy of the delegate’s decision record with its application for review. The Tribunal received written submissions and supporting documents on 2 April 2024.

   9.Mr Song’s oral evidence was clear and unequivocal. Mr Song recounted the circumstances in which he became a director of the business and his inexperience in undertaking the role, the challenges the business faced because of the impact of the Covid 19 pandemic, and   his concerns for his wife’s health and a subsequent decline in his own health. The Tribunal is satisfied Mr Song’s evidence was truthful and to the best of his recollection. The Tribunal finds Mr Song is a witness of credit and accept his evidence on that basis.

   Non-Disclosure Certificates – s 375A

5. The Tribunal sent the applicant a copy of the non-disclosure certificates on 7 February 2024  and invited the applicant to comment on its validity. The applicant submitted the protected documents should be handled with the highest procedural fairness. The applicant submits the rationale behind nondisclosure should be clearly and comprehensively substantiated, and emphasis should be placed on elucidating how the release of particular information genuinely jeopardises the public interest.

6. The Tribunal has had regard to the submission. The Tribunal notes that the information sought to be protected is part of the Department’s internal procedures, and while it contains information that is relevant to the issues in this review, the Tribunal is satisfied that, to the extent that it is relevant, the information was disclosed to the applicant in the Notice of Intention to Take Action (NOITTA) and that the applicant had an opportunity to respond to that information.

   12.The Tribunal is satisfied that the s 375A certificate is valid as it provides a valid public interest reason for the non-disclosure. The Tribunal is also satisfied that the information relevant to the issues in the review have been disclosed to the applicant by the Department.

   Legislation

7. Sections 140K, 140L and 140M of the Act provide for the imposition of sanctions on approved sponsors in certain circumstances.

8. 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.

9. For these purposes, the circumstances are prescribed in 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.

10. 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?

    17.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

11. 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).

    Obligation to ensure equivalent terms and conditions of employment: reg 2.79.

12. The delegate found the applicant paid its sponsored employee, Wei-Ling KANG, at an hourly rate equivalent to $28.24 in the period 10 June 2019 to 5 January 2020, which is less than $28.34, being the hourly equivalent of the nominated annual salary of $56,000.

    20.The applicant told the Tribunal not adhering to the nominated salary was a simple error. His reputation is important to his business and if he would not risk his reputation over .10c per hour. The applicant said he calculated an underpayment of $197 and gave the Tribunal evidence he repaid the nominee $1541.16 on 30 June 2022 to make amends for his mistake and because his managers had secured a pay rise during the period.

    21.The Tribunal has calculated the annual salary the nominee would receive based on an hourly rate of $28.24 for a 38 hour week for 52 weeks is $55,802 which is less than the nominated annual salary of $56,000. Notwithstanding the minor quantum of the hourly discrepancy, the Tribunal is satisfied the nominee’s annual earnings were less than the annual earnings indicated when the nomination was approved contrary to reg 2.79(3)(b)(i).     

    22.Accordingly, 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

13. 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.

14. In considering what action to take, the Tribunal has had regard to the prescribed criteria, as extracted in the attachment to this decision.

15. Mr Song told the Tribunal his wife’s health was very poor and she was struggling during her pregnancy in 2019. She was so unwell she returned to China for a time and her health did not improve after she gave birth. It did not occur to Mr Song that his nominee was getting short paid and it is very important to him to maintain his reputation in the community as a good employer. When the Covid 19 pandemic took hold internationally, some of his staff returned to their countries of origin leaving him short staffed. He tried his best to look after the staff he retained but business losses made it very difficult for the business to remain liquid. Mr Song further said he had engaged lawyers and an accountant to ensure that the legal aspects of his business especially in relation to sponsoring migrant workers were properly met.

16. The applicant failed to meet its reg 2.89 sponsorship obligation by miscalculating the hourly salary rate for its nominee.  

17. The applicant has not previously been subject to monitoring. There is no suggestion before the Tribunal that the applicant has not cooperated with the Department in relation to his past and present dealings. The applicant’s failure to meet its reg 2.89 obligation was a simple miscalculation.

18. The Tribunal accepts the applicant’s failure to satisfy the obligation was unintentional and occurred during the time of overwhelming pressure on Mr Song.

19. The Tribunal is satisfied the applicant has cooperated with Immigration and corrected its failure after becoming aware. The applicant has engaged lawyers to rectify its failure in relation to sponsorship obligations and to develop processes to ensure future compliance.

20. The Tribunal considers the information about Mr Song’s and his wife’s health difficulties, Covid related difficult trading conditions, and attempts to keep the business afloat for his family and for his employees are relevant factors in deciding the action to be taken.

21. Although a prescribed circumstance exists, the Tribunal finds it would be unreasonable to take action to cancel the sponsorship or bar the sponsor. The Tribunal is satisfied the sponsorship failure is inadvertent, not designed to take advantage of migrant workers, not designed to disadvantage Australian workers, and not designed to obtain a commercial advantage.

22. In the Tribunal’s view the Mr Song made an error in calculating the hourly rate of pay and has made full restitution for his error. The Tribunal accepts his actions on behalf of the sponsor were done in good faith.

23. Considering the totality of the circumstances, and having regard to the prescribed criteria the Tribunal finds that none of the actions under s 140M should be taken.

    DECISION

    34.The Tribunal sets aside the decision under review and substitutes a decision not to take one or more of the actions specified in s 140M of the Migration Act 1958 (Cth).

    P. Maishman
    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.

    …