ZYZ PTY LTD (Migration)

[2023] AATA 3474

ZYZ PTY LTD (Migration) [2023] AATA 3474 (10 October 2023)

DECISION RECORD

DIVISION:Migration & Refugee Division

APPLICANT:  ZYZ PTY LTD

REPRESENTATIVE:  Mr Yang Chen (MARN: 1687336)

CASE NUMBER:  2211159

HOME AFFAIRS REFERENCE(S):          OPF2021/7743

MEMBER:P. Maishman

DATE:10 October 2023

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 10 October 2023 at 3:44pm

CATCHWORDS

MIGRATION – action in relation to sponsorship – sponsorship bar – standard business sponsor – failure to satisfy sponsorship obligations and provision of false or misleading information – equivalent terms and conditions of employment – underpayment of one employee and non-payment of superannuation contributions to another – changeover from manual timekeeping and salary system to accounting software – director’s inexperience, mistyping and old data – documentary and clear oral evidence – failure to provide information about appointment of director – wife/previous director’s pregnancy, poor health and return to home country – necessity for director to run business – previously a shareholder with little direct involvement – no impact on any other person – COVID-related difficult trading conditions – actions done in good faith – bar period now passed – decision under review set aside

LEGISLATION

Migration Act 1958 (Cth), ss 140L(1)(a), 140M, 375A

Migration Regulations 1994 (Cth), rr 2.79(3)(b)(ii), (iii), (e), 2.84(6), 2.89(2), 2.90

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 23 June 2018. On 14 July 2022, the delegate decided to bar the applicant from sponsoring more people under the terms of its sponsorship until 14 January 2023 under s 140M on the basis that failed to satisfy its sponsorship obligations and provided false or misleading information.

2. The applicant’s Director, Mr Yang Song, appeared before the Tribunal on 10 October 2023 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

5. 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 16 August 2022. Documents on the Departments file shows Australian Border Force (ABF) commenced monitoring the applicant’s compliance with its sponsorship obligations on 8 June 2021 covering the periods 1 October 2019 to 31 December 2019 and 1 May 2021 to 31 July 2021. 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 24 May 2022 and the applicant responded with written submissions and various documents on 7 June 2022.

6. The applicant gave the Tribunal a copy of the delegate’s decision record with its application for review.

7. 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

8. The Tribunal sent the applicant a copy of the non-disclosure certificates on 31 August 2023 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.

9. 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.

10. 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

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

12. 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.

13. 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.

14. 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 satisfy its sponsorship obligations and provided false or misleading information.

    Failure to satisfy a sponsorship obligation: reg 2.89

15. 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.

    19.The delegate found the applicant paid its sponsored employee, Wei-Chi Lee, $11,260 in the 10 week period from 30 September 2019 to 8 December 2019 which is $217.69 less than an Australian equivalent worker on an annualised salary: reg 2.79(3)(b)(ii).

    20.The delegate found the applicant failed to pay superannuation contributions on time to its sponsored employee, Yuk Ming Wong, until after it issued its NOITTA. The delegate found Yuk Ming Wong’s employment conditions are less favourable than would be received by an equivalent Australian worker: reg 2.79(3)(b)(iii).  

    21.Mr Song does not concede he underpaid Wei-Chi Lee. Mr Song told the Tribunal he had agreed for Mr Lee to be paid $900 after-tax each week. This amount is verified in Mr Lee’s account statements obtained by the Department. Mr Song described the businesses salary and timekeeping system were manual until they implemented software called Xero. He prepared the response monitoring request for information relevantly using a template to overtype the payment slip details for Mr Lee. He inaccurately typed over details, and left existing data that did not apply. Mr Song states Mr Lee never worked extra hours and the amount of $68.18 is old data applicable to someone else. Mr Song stated his contract with Mr Lee was salary of $55,000 per annum. In order to pay Mr Lee $900 per week net is negotiated, the gross amount is $58,548 per annum.

    22.Mr Song gave evidence that Miss Wong’s superannuation amount was manually recorded incorrectly as being 9.5% despite being paid at 10%. Mr Song said he was unable to manipulate the computer systems when he first provided information has requested for the monitoring and he recorded the incorrect information manually. Miss Wong’s payslips, provided in response to the NOITTA, properly show that from the first pay period in 2021 her superannuation contribution by the employer was calculated at 10%.

    23.The Tribunal has considered the documents including the applicant’s initial response to the request to produce documents, its response to the NOITTA and the oral evidence at hearing. The Tribunal finds the applicant did not underpay Mr Lee in the period 30 September 2019 to 8 December 2019. The Tribunal finds miss Wong’s superannuation liability was correctly calculated.

    24.The Tribunal is satisfied the annual earnings of  Wei-Chi Lee and Yuk Ming Wong were no less than indicated would be provided at the time of their nomination; their earnings received are not less than what would be received by an equivalent Australian worker; and their employment conditions are no less favourable than would be received by an equivalent Australian worker.    

    Obligation to provide information to Immigration when certain events occur: reg 2.84.

16. The delegate found the applicant failed to provide relevant information to Immigration about the appointment of Mr Yang Song as a director: reg 2.84(3)(e).

17. Regulations 2.84(3)(e) and 2.84(6) require that the applicant must notify Immigration within 28 days if a new director is appointed.

18. The applicant gave the Department a copy of its ASIC company details. Mr Yang Song was appointed a director on 25 March 2020. Mr Song’s wife was the sole Director of the applicant from 25 April 2016 to 25 March 2020.

19. The applicant does not dispute he took over from his wife as the director of the business in March 2020 and did not tell the Tribunal within 28 days.

20. Having considered the documentary evidence and the applicant’s oral evidence the tribunal is satisfied the applicant failed to provide relevant information to immigration about them appointment of Mr song as a director contrary to the requirements of the obligation in reg 2.84(3)(e).

    30.Accordingly, the Tribunal is satisfied that the prescribed circumstance in reg 2.89 exists for the purpose of s 140M of the Act.

    False or misleading information: reg 2.90

21. One or more of the actions in s 140M may be taken if the sponsor has provided false or misleading information to Immigration or the Tribunal: reg 2.90(2).

22. Mr Song submitted he prepared a manual record of Ms Wong’s salary in response to the Department’s request for information related to its monitoring of the business. He prepared the response to the monitoring request using a template to overtype the payment slip details for Ms Wong because he didn’t understand how to efficiently use the Xero software system to create the details required. This ultimately led to the records he recorded being illogical. For example the payslip for the period 20 June 2021 records salary for 38 hours to be a total of $1250 which logically becomes $1126 as Ms Wong’s gross payment; the superannuation is indicated to be $106.97, calculated on the incorrect rate of $1126 suggesting Ms Wong is being underpaid her superannuation. The correct information contained in the automated payslips provided in response to the NOITTA trainers Ms Wong’s earnings are calculated to be $1250 per week gross and the superannuation amount is $118.75 (i.e. 9.5%). 

    33.The Tribunal accepts Mr Song’s explanation that he made an error when he manually transcribed Ms Wong’s weekly pay details. However the information given in his response was false information.

    34.Accordingly, the Tribunal is satisfied that the prescribed circumstance in reg 2.90 exists for the purpose of s 140M of the Act.

    Action to be taken

23. 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.

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

25. Mr Song told the Tribunal his wife ran the business and he was previously simply a shareholder with little involvement. During his wife’s pregnancy in 2019 he noticed her health was very poor and she was struggling. She was so unwell she returned to China for a time and her health did not improve after she gave birth. Mr Song was acquired to look after the business and became the director. It did not occur to Mr Song that he had to inform the Department of a change to the business’s Directorship as they were both shareholders and the business. Mr Song said that he was overwhelmed with the pressure of taking over the business. When the Covid 19 pandemic talk held 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 the businesses loss of turnover made it very difficult to keep the business liquid. Mr Song confirmed that he had been unable to initially meet the applicant’s superannuation contribution obligations and he has since taken out a loan to get the superannuation contributions up to date. Mr Song said he had registered the business for the superannuation guarantee surcharge imposed if an employer could not meet its superannuation obligations. 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.

26. The applicant failed to meet its reg 2.89 sponsorship obligation on one occasion when it failed to advise Immigration within 28 days of the appointment of a new Director.

27. 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 single instance which resulted from Mr Song endeavouring to protect his ill wife’s business interests. The failure to declare a new director has had no direct or indirect impact on any other person. The Tribunal accepts the applicant’s failure to satisfy the obligation was unintentional and occurred during the time of overwhelming pressure on Mr Song, as the new Director. The Tribunal is satisfied the applicant has cooperated with Immigration and informed Immigration of 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.

28. The applicant failed to meet reg 2.90 when it gave false information in seven instances in respect of Ms Wong’s payment slips, prepared in response to the Departments monitoring request for documents. The Tribunal observes the applicant replicated the same errors in its details for Mr Lee’s payslips, however the incorrect details overstate the amount paid to him and do not reflect a disadvantage to Mr Lee.  

29. The applicant gave the information in order to meet the monitoring requirements. The Tribunal accepts that Mr Song was endeavouring to provide all the information required by the Department. The Tribunal accepts the incorrect information was provided in good faith based on the incorrect information not providing a logical record of the salary details of Ms Wong. This is supported by the same errors being made on the information provided in respect of Mr Lee.

30. 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.

31. Although prescribed circumstances exist the Tribunal finds it would be unreasonable to take action to cancel the sponsorship or bar the sponsor. The Tribunal is satisfied the sponsorship failures are inadvertent, not designed to take advantage of migrant workers, not designed to disadvantage Australian workers, and not designed to obtain a commercial advantage. In the Tribunal’s view the Mr Song took over the applicant business to help his wife while she was unwell. Mr Song does not claim to have any experience running a business in the Tribunal accepts his actions on behalf of the sponsor were done in good faith.

    44.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

    45.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.

    …

    2.90   Provision of false or misleading information

    …

    (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 purpose for which the information was provided; and

    (b)    the past and present conduct of the person in relation to Immigration; and

    (c)     the nature of the information; and

    (d)    whether, and the extent to which, the provision of false or misleading information has had a direct or indirect impact on another person; and

    (e)     whether the information was provided in good faith; and

    (f)     whether the person notified Immigration immediately upon discovering that the information was false or misleading; and

    (g)     any other relevant factors.

    …