The Trustee for Alan Homes Family Trust (Migration) [2019] AATA 6520 (8 November 2019)

Last Updated: 4 March 2020

The Trustee for Alan Homes Family Trust (Migration) [2019] AATA 6520 (8 November 2019)

DECISION RECORD

DIVISION: Migration & Refugee Division

APPLICANT: The Trustee for Alan Homes Family Trust

CASE NUMBER: 1803290

DIBP REFERENCE(S): BCC2017/2025038

MEMBER: Phoebe Dunn

DATE: 8 November 2019

PLACE OF DECISION: Melbourne

DECISION: The Tribunal affirms the decision under review to refuse the nomination.

Statement made on 08 November 2019 at 2:52pm

CATCHWORDS
MIGRATION – nomination – Temporary Residence Transition stream – training requirements – lack of evidence of staff training – did not submit additional documents by deadlines – training benchmark not met – purported issues with Accountant – decision under review affirmed

LEGISLATION
Migration Act 1958 (Cth), s 359(2)
Migration Regulations 1994 (Cth), r 5.19

STATEMENT OF DECISION AND REASONS
APPLICATION FOR REVIEW

1. This is an application for review of a decision made by a delegate of the Minister for Immigration on 18 January 2018 to reject the applicant’s application for approval of the nomination of a position in Australia under r.5.19 of the Migration Regulations 1994 (the Regulations).
2. The applicant applied for approval on 7 June 2017. The requirements for the approval of the nomination of a position in Australia are found in r.5.19 of the Regulations, which contains two alternative streams: a Temporary Residence Transition nomination (r.5.19(3)) stream and a Direct Entry nomination (r.5.19(4)) stream. If the application is made in accordance with r.5.19(2) and meets the requirements of either stream, then the application must be approved. If any of the requirements are not met then the application must be refused: r.5.19(5).
3. In this case, the applicant has applied for approval of a nomination, seeking to satisfy the criteria in the Temporary Residence Transition nomination stream.
4. The delegate refused the application on the basis the applicant’s nomination did not satisfy r.5.19(3)(f)(i) of the Regulations because the applicant failed to provide sufficient evidence to substantiate compliance with its training benchmark commitments and obligations under either Training Benchmark A or B, and further that it was not reasonable to disregard that failure under r.5.19(3)(f)(ii).
5. On 2 August 2019, the Tribunal wrote to the applicant. The letter invited the applicant to provide information to the Tribunal pursuant to s.359(2) of the Migration Act 1958 (the Act). Specifically, the Tribunal invited information to be provided demonstrating that the business currently met all relevant criteria in r.5.19(3), including but not limited to, the particular criteria that the Department had found were not met. The Tribunal provided a copy of r.5.19(3) for reference. The Tribunal requested that the information be provided by 28 October 2019, noting that an extension of time to respond could be requested but that this would need to be made by 16 August 2019. Finally, the Tribunal advised the applicant that if the requested information was not received by the due date (or by the extended due date, if an extension of time was requested and granted), then the entitlement to appear at the Tribunal hearing would be lost, and the Tribunal may proceed to make its decision on the available evidence without taking further steps to obtain the requested information.
6. By email sent on 16 August 2019 at 10.40pm, the applicant requested a two week extension to submit the requested information, noting that its accountant was ‘still preparing the requested documents’ and that it ‘is really busy tax time for company external accountants’. By letter dated 19 August 2019, the Tribunal granted an extension to 30 August 2019. On 30 August 2019, the Tribunal received an email sent at 9.32pm, responding to the request for information and attaching documentation.
7. By letter dated 2 September 2019, the Tribunal invited the applicant to attend a combined hearing with the nominee on 30 September 2019. In that letter the Tribunal requested the provision of additional financial information prior to the hearing, including finalised tax returns and financial statements for the financial years ending 2017, 2018 and 2019 (if available), quarterly business activity statements for 2019 and evidence of training benchmark expenditure.
8. The applicant, represented by Mr Mutlu Alan (referred to below as the applicant), appeared before the Tribunal on 30 September 2019 to give evidence and present arguments. The Tribunal also received oral evidence from Ms Garumuni Rachel Shauntale De Zoysa Wickramaratne, the nominee, whose review of a decision to refuse the related Subclass 186 visa application was heard at the same time, and Mr Polwatta Kalyanada, the applicant’s accountant.
9. The applicant was represented in relation to the review by its registered migration agent, Mr Kasun Gamlath.
10. At the hearing, the applicant provided the Tribunal with additional documentation, including:
    1. Draft financial accounts for financial year (FY) 2019;
    2. Quarterly business activity statements (BAS) for FY2018 for Q1 to Q4;
    100. Quarterly BAS for the first three quarters of FY2019; and
    4. ANZ Business Extra account statements for Alan Family Homes Pty Ltd for the period from 4 April 2019 to 3 June 2019 and from 4 June 2019 to 2 August 2019.
11. At the hearing, the Tribunal requested the provision of additional information from both the applicant and the nominee, required to enable the Tribunal to reach a decision on the review, by 15 October 2019. This included the following:
    1. Copies of the payroll summaries for the business for each year of the standard business sponsorship;
    2. A submission on the applicant’s training benchmark commitments and obligations, addressing how the applicant was seeking to establish compliance with the training benchmark requirements for the most recent standard business sponsorship, noting that this was at issue in the primary decision;
    100. Copies of the bank accounts of the business evidencing payment of the nominee for the two year period prior to lodgement of the application;
    4. Signed copies of the financial statements for FY2017 and FY2018;
    5. Copy of the trust tax return for FY2017; and
    6. Current WorkCover Certificate of Currency.
12. By letter dated 30 September 2019, the Tribunal wrote to the applicant requesting evidence of payment of superannuation entitlements for all employees for the 2017, 2018 and 2019 financial years to be provided by 15 October 2019, in addition to the documents and submissions requested during the hearing, detailed in paragraph 11 of this decision.
13. By email sent on 15 October 2019 at 4.51pm, the applicant requested a further two week extension to submit the required documents, on the basis that the ‘external accountant in process on arranging requested documents’ (sic). By letter dated 16 October 2019, the Tribunal granted an extension of time to provide the information, with the information now due by 25 October 2019, noting that if the Tribunal did not receive the information by 25 October 2019, the Tribunal may make a decision on the review without taking any further action to obtain the information.
14. As at the date of this decision, the Tribunal has received no response, and no further information or documentation has been submitted to the Tribunal since the hearing held on 30 September 2019.
15. For the following reasons, the Tribunal has decided to affirm the decision under review to refuse the nomination.

CONSIDERATION OF CLAIMS AND EVIDENCE

16. The issue in this case is whether the applicant meets the requirements for approval of the nomination under the Temporary Residence Transition nomination stream set out in r.5.19(3), which is extracted in the attachment to this decision. For the nomination to be approved, all the requirements must be met.
17. At the hearing, the applicant outlined in detail the current and historical nature of the business, and the nominee’s role. The applicant gave evidence that he bought the business in December 2013, and the nominee commenced working for the applicant around six months later. The applicant noted that he currently owns and operates two other cafes, under the same entity (the Trustee for the Alan Homes Family Trust) and the same Australian Business Number, but with different trading names: Krazy Kebabs in the Keilor Downs Shopping Centre, in Victoria; and a mixed grill restaurant in the same shopping complex as the Degani café in Roxburgh Park, Victoria where the nominee works.
18. The Degani café is open seven days a week, from 8.00am to 9.00pm. The applicant gave oral evidence at the hearing that he currently employs seven people at the café, and that his wife, son and daughter also work there, noting that while his son is on the payroll, his wife and daughter are not. Of these employees, three are currently full-time (cooks), and the remainder are part-time (two baristas and four floor-staff). The nominee is currently on maternity leave and her position is being covered under a casual hourly-rate arrangement at approximately 20-25 hours per week, with the applicant covering the remainder. The applicant noted that the casual employee has fewer responsibilities than the nominee.
19. In oral evidence, the applicant stated that the nominee has been on maternity leave for almost two years as she has had two children during that time, but is currently ‘helping out’ four to five hours every fortnight and will be returning in a full-time capacity in the new year. The applicant stated that the nominee is ‘one of the best employee’s he has ever had’. The applicant described the nominee’s tasks, including managing, ordering and checking stock, assisting with menus with the cooks, organising staff timetables, and managing the restaurant.
20. The applicant first met the nominee when he bought the business from the former owner. In oral evidence, the applicant advised that the nominee worked for the former owner in the same capacity, and when the applicant bought the business, the nominee continued to work for the former owner at a different location. In oral evidence, the applicant stated that he ran the café himself for the first six months. The applicant stated that he advertised all the positions, including the nominee’s, and interviewed three to four people, and she was the best candidate. The applicant advised that he would provide copies of the advertisements to the Tribunal. The Tribunal notes that these have not been received.
21. The applicant advised that the nominee is paid an annual salary of $54,000, and that this is consistent with what the nominee was paid by the former business owner. The applicant advised that the nominee worked six days per week Monday to Saturday, from approximately 10.00am to 8.00pm, depending on how busy the café was.
22. In oral evidence at the hearing, the nominee confirmed that she was granted a Subclass 457 visa on 10 January 2014 in the nominated position at the nominated location for the former employer. When he sold the business, the nominee advised that she went to work at the former owner’s other place of business as a café manager. The nominee could not recall whether there was any break in her employment at the time. The nominee confirmed that her current contract is dated 30 June 2017, providing for full-time employment in the position of café manager at an annual salary of $54,600 commencing on the grant of the Subclass 186 visa, and that she has been on maternity leave for the last two years. The nominee stated that for the past few months (since July) she has been working part-time approximately eight to 16 hours per week, under an hourly-rate, casual arrangement. The nominee stated that she fills in a timesheet, but hasn’t yet received payment, which was ‘coming soon’. The Tribunal requested copies of the timesheets and submissions from the nominee on her employment arrangements in the three years prior to the date of the visa application. To date no timesheets or submissions have been received.

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

23. Regulation 5.19(3)(f) requires the applicant to have fulfilled any commitments made relating to meeting training requirements, and complied with applicable obligations relating to training requirements, during the period of the applicant’s most recent sponsorship approval. These requirements may be disregarded if it is reasonable to do so.
24. The applicant’s most recent standard business sponsorship was granted on 30 June 2016 for a period of five years to 29 June 2021. The relevant instrument applicable to this application is IMMI 13/030, which requires that the applicant meet either Training Benchmark A or Training Benchmark B for the relevant period. Relevantly, Training Benchmark A requires the applicant to demonstrate recent expenditure to the equivalent of at least 2% of the payroll of the business to an industry training fund that operates in the same industry as the business, and Training Benchmark B, requires the applicant to demonstrate recent expenditure of the business to the equivalent of at least 1% of the total payroll of the business, in the provision of training to employees of the business who are Australian citizens and permanent residents, and which is related to the purpose of the business. The applicant is seeking to establish compliance with Training Benchmark B of IMMI 13/030, and no claims have been made regarding compliance with Training Benchmark A. Nonetheless, in assessing compliance with this requirement, the Tribunal has considered whether the applicant has met the requirements of either Training Benchmark B or Training Benchmark A.
25. At the hearing, the Tribunal raised the issue of compliance with training benchmark obligations and commitments in the period of the applicant’s most recent standard business sponsorship, noting that failure to establish compliance with the applicant’s training benchmark commitments and obligations in r.5.19(3)(f) was the basis of the refusal by the delegate. The Tribunal noted that there was insufficient documentation before it to make a positive determination on this issue and requested a submission from the applicant outlining how the applicant was seeking to establish compliance with its training benchmark commitments and obligations. To date the Tribunal has received no further submissions or documentation from the applicant.
26. In assessing compliance with the applicant’s training commitments and obligations during the period of its most recent standard business sponsorship, the Tribunal has had regard to the following relevant documents before the Tribunal:
    1. Document entitled ‘Training Attendees Register’ (signed by Mr Mutlu Alan on behalf of the Trustee for the Alan Homes Family Trust, undated), containing the details of attendees and their citizenship status for training undertaken in FY2016 and FY2017 (Tribunal file, folio 92);
    2. Tax invoice dated 22 June 2017 and associated receipt from Asia Pacific College Pty Ltd for invoice dated 22 June 2017, and paid 26 June 2017 ($4,000) (Tribunal file, folios 107 and 119); and
    100. Document entitled ‘Learning and Development Program Training Plan – Training Benchmark B’ by the Asia Pacific Training Advisory Group, undated (Tribunal file, folios 115 to 118).
27. The Tribunal has also had regard to the following documents submitted by the applicant to the Tribunal which fall outside the most recent standard business sponsorship, and as such are not evidence of compliance with the applicant’s training benchmark commitment and obligations during the most recent standard business sponsorship:
    1. Tax invoice dated 3 June 2015 from Asia Pacific College Pty Ltd for an amount of $1,500 (Tribunal file, folio 111);
    2. Tax invoice dated 14 September 2015 and associated receipt from Asia Pacific College Pty Ltd for invoice dated 14 September 2015, and paid 21 September 2015 ($1,500) (Tribunal file, folios 109 and 123);
    100. Tax invoice dated 13 January 2016 and associated receipt from Asia Pacific College Pty Ltd for invoice dated 13 January 2016, and paid 20 June 2016 ($1,000) (Tribunal file, folios 108 and 121); and
    4. Tax invoice dated 6 June 2016 and associated receipt from Asia Pacific College Pty Ltd for invoice dated 6 June 2016, and paid 14 June 2016 ($500) (Tribunal file, folios 110 & 106).
28. In oral evidence at the hearing, the applicant appeared confused as to the basis for the refusal of the nomination, initially believing it to be related to the financial capacity of the business. The Tribunal explained the basis of the refusal in this case related to compliance with training benchmark obligations, and specifically lack of evidence of payment for any training conducted. The Tribunal requested submissions from the applicant regarding compliance. In response, the applicant advised the Tribunal that he had issues with his former accountants to whom he had provided all the documents and that these documents had all gone. Further, the applicant stated that he had paid the invoices in cash, and that is why there was no record of payment. The applicant stated that the trainers would come to the café to conduct the training. The applicant stated he has tried to contact Asia Pacific Training but they are ‘not answering’.
29. The Tribunal notes that the method of payment for Asia Pacific College Pty Ltd as detailed in the tax invoices referenced in paragraphs 42 and 43 of this decision is by bank transfer. The Tribunal further notes that lack of evidence of payments, such as bank account statements evidencing payments, formed part of the basis for the delegate’s refusal. The applicant has not provided any independently verifiable records of the dates the training was delivered, the nature of the training, or who received the training. The Tribunal also notes that while information has been provided for the first year of the most recent standard business sponsorship, the Tribunal has no evidence before it on which to assess compliance with the applicant’s training commitments and obligations in the second year of the standard business sponsorship. At the hearing, the Tribunal requested further submissions from the applicant on this issue, and to date no further submissions or documentation have been received.
30. Based on the evidence before it, the Tribunal finds that it has insufficient information to establish compliance with the applicant’s training benchmark commitments and obligations for the period of the most recent standard business sponsorship under either Training Benchmark B or Training Benchmark A. As such, the Tribunal finds that the applicant has not established compliance with its training benchmark commitments and obligations under r.5.19(3)(f)(i) in the period of its most recent standard business sponsorship.
31. The Tribunal notes that a search of the ASIC register conducted on 1 November 2019, indicates that Asia Pacific College Pty Ltd was deregistered on 3 July 2019. In these circumstances, the Tribunal has had regard to whether it is reasonable to disregard the requirements in r.5.19(3)(f)(i) exercising the Tribunal’s discretion in r.5.19(3)(f)(ii). The Tribunal notes that the applicant submitted a copy of the primary decision record with the review application. As a result, the Tribunal observes that the applicant has been aware for over 22 months of the reasons for the nomination refusal. The Tribunal further notes that the applicant was given an opportunity to make further submissions to the Tribunal on this issue, and has not done so. Accordingly, the Tribunal finds that it is not reasonable to exercise its discretion to disregard the requirements under r.5.19(3)(f)(ii).
32. Accordingly, the Tribunal finds that r.5.19(3)(f) is not met.
33. It follows that r.5.19(3) is not met.

Future employment of the visa holder: r.5.19(3)(d)

34. Regulation 5.19(3)(d) only applies to certain nominees (those described in r.5.19(3)(c)(i)). For this class of person, the regulations require that the nominee will be employed on a full time basis for at least two years on terms that do not expressly preclude the possibility of an extension.
35. Given the Tribunal’s findings in relation to r.5.19(3)(f), the Tribunal is not required to consider the other requirements contained in r.5.19(3). Nonetheless, given the evidence provided by the applicant and the applicant’s accountant at the hearing, the Tribunal has given consideration to the requirements of r.5.19(3)(d), and specifically whether the applicant has the financial capacity to employ the nominee full-time in the position for at least the next two years.
36. At the hearing, the applicant noted that he had expanded rapidly, and that at one stage was running four businesses. He has since sold one of the businesses and feels that his finances are starting to improve.
37. At the hearing, the applicant’s accountant gave evidence that he has recently been appointed the applicant’s accountant this financial year, and that he is trying to put the accounts into a reasonable shape. The Tribunal notes the evidence of the accountant that the rapid expansion of the business impacted on profitability, and that the applicant is taking steps to rectify this on his recommendation, such as closing one of his businesses, reducing his expenses and implementing the Xero payroll system. The accountant gave evidence that while turnover has dropped, in his view, the business is ‘heading in the right direction, and that on a cash accounting basis (excluding depreciation) the applicant is now turning a profit, and that the accountant has not taken good-will into account. The accountant also gave evidence about the nature of the fines and penalties listed in the draft FY2019 financials, which related to overdue payments to the Australian Taxation Office (ATO), and that the applicant was on a payment plan with the ATO, which has now been finalised.
38. The Tribunal accepts the evidence of the accountant that the applicant’s finances are starting to improve. However, the Tribunal notes that, based on the unsigned financial statements before it, the applicant made a loss in FY2017 of $54,236 and in FY2018 a loss of $279,017, and is projecting a loss of $62,093 in FY2019, based on the draft financial statements. The Tribunal also notes Director’s loans totalling $514,862.40 in FY2019. The Tribunal notes that at the hearing, it requested copies of the signed financial statements for FY2017 and FY2018 and the trust tax return for FY2017, and the total payroll summaries for each of these years, but to date these have not been received. Accordingly, the Tribunal finds that it does not have sufficient information before it to assess whether the applicant meets the requirements of r.5.19(3)(d).
39. Given the above findings, the requirement in r.5.19(3)(d) is not met.
40. For the above reasons the Tribunal is not satisfied that the applicant meets the requirements of r.5.19(3)(f) or r.5.19(3)(d). The applicant has not sought to satisfy the criteria in the Direct Entry nomination stream, and as such has not met the requirements in r.5.19(4). Accordingly, the nomination of the position cannot be approved. Therefore, the Tribunal must affirm the decision under review.

DECISION

41. The Tribunal affirms the decision under review to refuse the nomination.

Phoebe Dunn
Member

ATTACHMENT - EXTRACTS FROM THE MIGRATION REGULATIONS 1994

5.19 Approval of nominated positions (employer nomination)

...

(2) The application must:

(a) be made in accordance with approved form 1395...; and

(aa) include a written certification by the nominator stating whether or not the nominator has engaged in conduct, in relation to the nomination, that constitutes a contravention of subsection 245AR(1) of the Act; and

(b) be accompanied by the fee mentioned in regulation 5.37.

Temporary Residence Transition nomination

(3) The Minister must, in writing, approve a nomination if:

(a) the application for approval:

(i) is made in accordance with subregulation (2); and

(ii) identifies a person who holds a Subclass 457 ... visa granted on the basis that the person satisfied the criterion in subclause 457.223(4) of Schedule 2; and

(iii) identifies an occupation, in relation to the position, that:

(A) is listed in ANZSCO; and

(B) has the same 4-digit occupation unit group code as the occupation carried out by the holder of the Subclass 457 ... visa; and

(b) the nominator:

(i) is, or was, the standard business sponsor who last identified the holder of the Subclass 457 ... visa in a nomination made under section 140GB of the Act or under regulation 1.20G or 1.20GA as in force immediately before 14 September 2009; and

(ii) is actively and lawfully operating a business in Australia; and

(iii) did not, as that standard business sponsor, meet regulation 1.20DA, or paragraph 2.59(h) or 2.68(i), in the most recent approval as a standard business sponsor; and

(c) either:

(i) both of the following apply:

(A) in the period of 3 years immediately before the nominator made the application, the holder of the Subclass 457 ...visa identified in subparagraph (a) (ii) has:

(I) held one or more Subclass 457 visas for a total period of at least 2 years; and

(II) been employed in the position in respect of which the person holds the Subclass 457 ... visa for a total period of at least 2 years (not including any period of unpaid leave);

(B) the employment in the position has been full-time, and undertaken in Australia; or

(ii) all of the following apply:

(A) the person holds the Subclass 457 ... visa on the basis that the person was identified in a nomination of an occupation mentioned in sub-subparagraph 2.72(10)(d)(iii)(B) or sub-subparagraph 2.72(10)(e)(iii)(B);

(B) the nominator nominated the occupation;

(C) the person has been employed, in the occupation in respect of which the person holds the Subclass 457 ... visa, for a total period of at least 2 years in the period of 3 years immediately before the nominator made the application; and

(d) for a person to whom subparagraph (c)(i) applies:

(i) the person will be employed on a full-time basis in the position for at least 2 years; and

(ii) the terms and conditions of the person’s employment will not include an express exclusion of the possibility of extending the period of employment; and

(e) the terms and conditions of employment applicable to the position will be no less favourable than the terms and conditions that:

(i) are provided; or

(ii) would be provided;

to an Australian citizen or an Australian permanent resident for performing equivalent work in the same workplace at the same location; and

(f) either:

(i) the nominator:

(A) fulfilled any commitments the nominator made relating to meeting the nominator’s training requirements during the period of the nominator’s most recent approval as a standard business sponsor; and

(B) complied with the applicable obligations under Division 2.19 relating to the nominator’s training requirements during the period of the nominator’s most recent approval as a standard business sponsor; or

(ii) it is reasonable to disregard subparagraph (i); and

Note Different training requirements apply depending on whether the application for approval as a standard business sponsor was made before 14 September 2009 or on or after that date.

(g) either:

(i) there is no adverse information known to Immigration about the nominator or a person associated with the nominator; or

(ii) it is reasonable to disregard any adverse information known to Immigration about the nominator or a person associated with the nominator; and

(h) the nominator has a satisfactory record of compliance with the laws of the Commonwealth, and of each State or Territory in which the applicant operates a business and employs employees in the business, relating to workplace relations.