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CATCHWORDS: Review of business sponsorship rejection - temporary business entry scheme -

A Art Flooring Service [2003] MRTA 593 (31 January 2003)

A Art Flooring Service [2003] MRTA 593 (31 January 2003)
Last Updated: 29 April 2003

[2003] MRTA 593

CATCHWORDS: Review of business sponsorship rejection - temporary business entry scheme -

REVIEW APPLICANT: A Art Flooring Service

TRIBUNAL: Migration Review Tribunal



DEPT FILE NUMBER: OPF2001/4828; CLF2001/26577; CLF2001/26578

DATE OF DECISION: 31 January 2003

AT: Melbourne

DECISION: The Tribunal affirms the decision under review, finding that the review applicant does not meet the criteria for approval as a standard business sponsor.



1. This is an application for review of a decision made by a delegate of the then Minister for Immigration and Multicultural Affairs (the delegate). Kook Hyun SONG, who in partnership with Mi Hye SONG, trades as A Art Flooring Service (NSW BN97776875 - ABN 38 227 460 054) (the review applicant), applied for approval as a business sponsor on 15 March 2001 (D1, f. 1-68). This application was accompanied by nomination application and applications for temporary business visas. The delegate's decision to reject the sponsorship application for approval was made on 23 May 2001 (D1, f. 70-74). The visa applications were refused on the same day.


2. The review applicant lodged a valid application for review with the Tribunal on 19 June 2001 (T1, f. 1-12). The decision is reviewable by the Tribunal and the application for review has been validly made by a person with standing to apply for review.


3. The Migration Regulations 1994 (the Regulations), provide for approval of persons as business sponsors. This is part of a scheme called temporary business entry. This part of the scheme involves three stages:

A person (the employer) seeking approval as a business sponsor.

An approved business sponsor seeking approval of a nomination of an activity in which an individual is proposed to be employed in Australia.

A person applying for a temporary visa (subclass 457) on the grounds that the visa applicant proposes to be employed by an approved business sponsor in an activity that is the subject of an approved business nomination.

4. In conducting a review, the Tribunal is bound by the Migration Act 1958 (the Act), the various Regulations made under the Act, and written directions issued by the Minister under section 499 of the Act. Some matters may be the subject of policy, as found in publications such as the Procedures Advice Manual 3 (PAM3) and the Migration Series Instructions (MSIs), produced by the Department of Immigration and Multicultural and Indigenous Affairs (the Department). The Tribunal is required to have regard to policy and apply it unless there are cogent reasons for departing from policy.

5. The Tribunal has the power to affirm, vary or set aside a decision to refuse to approve a business sponsorship.

6. The criteria and policy immediately relevant to this review are:


Regulations 1.20A - 1.20D of the Regulations


PAM3: Division 1.4A - Temporary Business Entry: Sponsorship and Nomination

7. The Tribunal generally has regard to the Regulations as they stood at the time of lodgement of an application for approval. However, subsequent amendments may apply in some circumstances.


8. The Tribunal has the following documents:

T1 - MRT case file N01/03501, folio numbered 1-62.

T2 - MRT case file N01/03507, folio numbered 1-47.

T3 - MRT case file N01/03516, folio numbered 1-51.

D1 - Departmental case file OPF2001/4828, folio numbered 1-76.

D2 - Departmental case file CLF2001/26578, folio numbered 1-55.

D1 - Departmental case file CLF2001/26577, folio numbered 1-38.

9. The review applicant claimed to be a business operating as a provider of various flooring services, including installation of wooden floors, laying parquetry, sanding and polishing and sought entitlement to make two nominations of business activities within a 12 month period. The Tribunal is dealing with a separate application for review in relation to the refusal of a visa applied for by Jong Sik LEE. That visa application was based on the review applicant proposing to employ Jong Sik LEE as a floor sander on a salary of $32,000 plus superannuation (MRT file No. N01/03516). Another application for review by Seung Ju LEE (MRT file No. N01/03507) was withdrawn.

10. At the time of primary application, the business sponsor lodged various documents in support of the application, which included profit and loss statements and balance sheets for the periods from 1 July 1998 to 30 June 1999 and 1 July 1999 to 30 June 2000, and estimated profit and loss statements for the periods from 1 July 2000 to 30 June 2001 and 1 July 2001 to 30 June 2002. An outline of the history of the business, an organization chart, Certificate of Registration of Business Name dated 24 November 2000 and an ANZ bank account statement were also submitted with the application.

11. The delegate stated that the review applicant was not approved as a business sponsor on the basis that regulation 1.20D(2)(c) was not met. In particular the delegate found that there was no demonstrated commitment to training Australian citizens and permanent residents. The review applicant stated when lodging the application for review that the business has been operating since 1991 and has had a lot of employees but once an employee was hired and learned the basic skill of flooring and/or sanding they quit and established their own companies and became competitors. The review applicant stated that the sponsorship application to employ overseas skilled people is to overcome this because they could not quit their job without the Department's permission. The review applicant also submitted a one-page document headed "Training Plan".

12. The review applicant was sent a letter dated 17 October 2002 inviting the review applicant to provide additional information. The review applicant' agent responded by letter dated 20 November 2002 forwarding a copy of the business partnership's financial statements for 2001/2. The agent stated that the business "is suffering unprecedented slump due to the shortage of work force" and referred to "the company" being operated by the proprietors, Kook Hyun SONG and Mi Hye SONG, and to some casual workers being used. The agent stated that "the company could not provide any staff training records".

13. A hearing was held on 8 January 2003 by video conference with Mr. Kook Hyun SONG (Mr. Song). He told the Tribunal that A Art Flooring Service is a business name which has operated for about two years with himself and his wife, Mi Hye SONG, as a partnership. He said that the business operates from their home address. He said that he has been operating the same type of business for about eleven years but, up until about three years ago, did so as a company, Sunny Floor Sanding Pty Ltd, of which he was the director. He was asked who are the employees of the business and said that there is himself and one other person. He said that his wife looks after the administrative work while he does the management and also the physical work of sanding and flooring. He said that his son helped him in the work but will not be able to continue because of his studies. He explained the difficulty of obtaining staff and keeping them and so has had casual rather then permanent employees. He said that the earlier organization chart submitted was relevant at the time but not effective now. In respect to the Training Plan document he said that he had wanted to get experienced staff who could then teach beginners in the work.

14. Mr. Song was asked if the business introduced or utilised or created new or improved technology or business skills, to which he said that the flooring technology in Korea was more developed than in Australia and that the business would introduce new skills. He was asked if the business was any different to other such businesses in Australia and said that sanding requires much craftsmanship and creative ideas and special skills were needed to operate the machines. He said that there were some differences in the machines used by the business to those used in other businesses and that he had modified some machines. He said that the application was not about bringing someone from Korea to reside permanently in Australia but to have someone come to Australia for four years and improve skills and provide job opportunities in Australia.

15. It was pointed out that the profit and loss statements referred to only about $4,300 being expended on salaries in 2001/2 and $15,600 in 2000/1, to which he said that his son's help was very limited and he used a lot of casual staff. He said that it is difficult to find staff and so he has worked long hours himself and only employed temporary staff. He said that if he had more staff then he could spend $70,000 to $100,000 on paying employees.

16. It was also pointed out that the profit and loss statements did not show any expenditure on staff training and said that he just needed temporary staff urgently and so was not able to train staff on a regular business. He said that if he was given the opportunity to employ more staff he hoped gradually to establish better staff-training, including having trainees.

17. He was referred to the profit and loss statements and asked if the business could afford to meet the sponsorship commitments and said that he was confident he could and confirmed that it was proposed to employ two persons each on a salary of $32,000 plus superannuation. He said that the bank statement on the Department's file related to the only account of the business and explained the account going into debit as due to having to buy materials in a lump sum and said that the $10,000 then paid into the account was from his own resources. He said that his most difficult problem in operating the business was he had difficulty learning English and so found it easier to communicate with Korean staff. He said that it was a tough and demanding business and that it was difficult to find staff in Australia and so he sought staff from Korea.

18. A hearing was held on 23 January 2003 in which the applicant for an associated temporary business visa, Mr. Jong Sik LEE, gave evidence. The evidence given is set out in the Statement of Decision and Reasons in respect to his application.


19. To be approved as a business sponsor, the review applicant must meet the criteria set out in regulation 1.20D. Subregulation 1.20D(2)(c) requires that:

(c) the Minister is satisfied that the applicant for approval:

(i) will introduce to, or utilise or create in, Australia new or improved

technology or business skills; or

(ii) has a satisfactory record of, or a demonstrated commitment towards,

training Australian citizens and Australian permanent residents in the

business operations of the applicant in Australia;

20. Departmental policy as outlined in PAM is that subregulation 1.20D(2)(c)(i), in relation to new technology or business skills, caters only for leading edge technology or business skills. Apart from Mr. Song's comments in the hearing and the reference by Mr. Lee in the hearing on 23 January 2003 to oil-flooring, there are no claims in respect to new technology or business skills and, while taking into account those comments of Mr. Song and Mr. Lee, the Tribunal is not satisfied that there is sufficient evidence the review applicant meets the criterion under subregulation. 1.20D(2)(c)(i).

21. There is a lack of evidence of the review applicant employing of Australian citizens or permanent residents. The financial records indicate very modest expenditure on staff in the last two financial years and no expenditure allocation on training. In respect to subregulation 1.20D(2)(c)(ii) the business has been operating under its current structure for at least two years which ought to be sufficient time to establish a record of training but there is insufficient evidence to support the existence of such a record. In regard to finding a demonstrated commitment towards training Australians in the business operations, PAM 3 states

Under policy, a `demonstrated commitment' should be evidenced by a detailed training plan specifying the proposed number of persons (i.e. permanent employees) to be trained and the nature and duration of training to be offered. In other words, the training plan should be sufficiently detailed or "quantifiable" to enable an evaluation of progress to be made in the course of business sponsorship monitoring, as appropriate.

22. The Tribunal finds that the evidence presented, including the one-page Training Plan document submitted with the review application, is not sufficient to find that the review applicant has demonstrated a commitment towards training Australians in the business operations.

23. Whilst the Tribunal was impressed with Mr. Song's sincerity and his desire to develop further his business and appreciated the difficulties he has had in finding suitable employees, the Tribunal must consider the criteria under the legislation. On the overall evidence presented the Tribunal is not satisfied that the review applicant meets the criteria under subregulation 1.20D(1)(c).


24. As the review applicant does not meet the criteria for approval as a business sponsor, the Tribunal must affirm the decision under review.


25. The Tribunal affirms the decision under review, finding that the review applicant does not meet the criteria for approval as a standard business sponsor.
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