Austech Institute for Further Education v Vocational Education and Training Accreditation Board

[2009] NSWADT 323

CITATION:	Austech Institute for Further Education v Vocational Education and Training Accreditation Board [2009] NSWADT 323
DIVISION:	General Division
PARTIES:	APPLICANT Austech Institute for Further Education Pty Limited RESPONDENT Vocational Education and Training Accreditation Board
FILE NUMBER:	093002
HEARING DATES:	1, 2, 3, 4 & 8 December 2009
SUBMISSIONS CLOSED:	8 December 2009
DATE OF DECISION:	24 December 2009
BEFORE:	Hennessy N - Magistrate (Deputy President); Burke T - Non-Judicial Member
CATCHWORDS:	Registered Training Organisation – cancellation of registration – cancellation of overseas student approval – review of decisions - Vocational Education and Training Act 2005
LEGISLATION CITED:	Vocational Education and Training Act 2005 Administrative Decisions Tribunal Act 1997
CASES CITED:	Lockwood v Commonwealth (1954) 90 CLR 177 Brown v West (1990) 169 CLR 195 Vaw (Kurri Kurri) Pty Ltd v Scientific Committee (established under s 127 of the Threatened Species Conservation Act 1995) [2003] NSWCA 297; (2003) 58 NSWLR 631
REPRESENTATION:	APPLICANT P Singleton, barrister RESPONDENT P Cribb, solicitor
ORDERS:	1. The decision of the NSW Vocational Education and Training Accreditation Board to refuse Austech Institute for Further Education Pty Ltd’s application for renewal of registration is set aside.In substitution for that decision, the following decision is made:Austech Institute for Further Education Pty Ltd’s application for renewal of registration is granted 2. The decision of the NSW Vocational Education and Training Accreditation Board to refuse Austech Institute for Further Education Pty Ltd’s application for approval to provide courses to overseas students is set aside.In substitution for that decision, the following decision is made:Austech Institute for Further Education Pty Ltd’s application for approval to provide courses to overseas students is granted 3. The applications of Austech Institute for Further Education Pty Ltd to:a) add new sites;b) increase maximum student capacity to 1,000;c) add new courses from the SIT07 Tourism, Hospitality and Events Training Package (SIT80807 Certificate III in Hospitality and SIT50307 Diploma of Hospitality) are granted 4. These decisions come into effect 7 days from the date of this decision.

REASONS FOR DECISION

Introduction

1 These proceedings concern various decisions of the NSW Vocational Education and Training Accreditation Board (the Board) including a decision to cancel the registration of Austech Institute for Further Education Pty Limited (Austech) as a Registered Training Organisation (RTO). Austech has applied to the Tribunal for a review of these decisions: Vocational Education and Training Act 2005, (VET Act), s 47.

2 The Board has functions including the registration of training organisations, the accreditation of vocational courses and the approval of persons to provide courses for overseas students: VET Act, s 6. On 11 December 2002 the Board registered Austech as an RTO for 5 years and accredited it to provide three courses: Certificate III in Hospitality (Asian Cookery); Diploma of Hospitality Management and Advanced Diploma of Hospitality Management. We refer to these courses as the ‘old hospitality courses’. As well as being registered, an RTO requires separate approval if it wishes to provide courses to overseas students. The Board approved Austech to provide the old hospitality courses to a maximum of 124 overseas students at sites in Blacktown and Parramatta. In June 2007, a few months before its registration was due to expire, Austech applied to renew its registration and approval and to amend the scope of its operations so that it could provide new hospitality courses, increase the number of overseas students and operate from additional sites.

3 On 7 September 2009 the Board decided to:

a) cancel Austech’s registration;
b) refuse Austech’s application for renewal of registration;
c) cancel Austech’s approval to deliver courses to overseas students;
d) refuse Austech’s application for renewal of approval to deliver courses to overseas students;
e) refuse Austech’s application to amend its scope of registration and approval to deliver courses to overseas students to:
(i) increase maximum student capacity to 2,384;
(ii) add new sites;
(iii) add the following courses which have superseded the hospitality courses: SIT 30807 Certificate III in Hospitality and SIT 50307 Diploma of Hospitality ( the new hospitality courses ).

4 We refer to the first four decisions as the ‘cancellation decisions’ and to the fifth decision as the amendment to scope decision.

Issues

5 The issue is whether the Board’s decisions are the ‘correct and preferable’ decisions: ADT Act, s 63. In determining that issue, the Tribunal must have regard to the material then before it, including any relevant factual material and any applicable written or unwritten law: s 63(1). The Tribunal ‘stands in the shoes’ of the Board and may exercise all of the functions that are conferred or imposed on the Board: ADT Act, 63(2). The Tribunal may affirm, vary or set aside the Board’s decisions. The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice: ADT Act, s 73(2).

Background

6 Austech’s registration and approval continued to have effect until the Board determined its renewal applications: VET Act, s 14(3). The Board conducted an audit in August 2007 to assess those applications. At that time Austech had 710 students enrolled and 211 pending enrolments. Its application to amend the scope of its operations included an application for approval to provide the new hospitality courses to 980 students over 4 shifts at a new site in Ashfield. Following the site audit, Austech provided the Board with further information. Despite indicating that a final audit report would be provided, the Board did not determine Austech’s applications for renewal or its application to amend the scope of its operations at that time. The Board did not provide an explanation to Austech or the Tribunal for that decision.

7 Between 2 and 4 September 2008, just over 12 months after the 2007 audit had been conducted, the Board conducted another audit. On 3 November 2008, the Board provided Austech with an interim audit report. After receiving further material from Austech, the Board conducted further desk audits. On 16 December 2008 the Board decided that Austech’s registration and approval to provide courses to overseas students would be subject to certain conditions. Those conditions, in summary, were: not to recruit or enrol any further students; to offer a deferment until 23 March 2009 to those students who had not commenced their studies by 24 November 2008; to refund fees paid in advance to those students who declined that offer; and not to collect fees from students who began their studies after 3 November 2008.

8 Austech agreed to comply with the conditions not to enrol more students and not to accept money except from those students who had commenced their studies by 24 November 2008. On 8 January 2009, the Tribunal heard an application from Austech for a stay of the other two conditions. On 13 January 2009 the Tribunal made a decision which had the effect that students with pending enrolments could commence their studies and no refund was required. However, Austech was not permitted to enrol new students (the ‘no new business condition’). The matter was adjourned to allow the Board to determine Austech’s application for renewal of registration and approval to provide courses to overseas students. On 16 March 2009 the Board provided Austech with a final audit report dated 27 February 2009. That report is the key evidence of the Board in these proceedings. Austech provided further material on 15 April 2009 and 16 June 2009 and the Board completed an updated summary of its findings and conclusions in August 2009. The Board found numerous serious non-compliances and made the decisions the subject of review in these proceedings.

9 Austech is currently operating from premises in Ashfield and from commercial kitchens in Liverpool. The old hospitality courses expired on 17 February 2009 and have been superseded by the new hospitality courses. If Austech is permitted to continue its operations, the last of the students enrolled in the old hospitality courses will complete their qualifications at the end of 2010.

Objects of the VET Act

10 The VET Act has the following objects (s 3):

(a) to establish a registration and accreditation framework for vocational education and training, in particular by applying nationally agreed standards,

(b) to ensure the quality and integrity of vocational education and training in this State,

(c) to provide for the approval by the Board of persons (other than official universities) to provide courses for overseas students (such approval forming the basis for registration under the Education Services for Overseas Students Act 2000 of the Commonwealth),

(d) to promote consistency of standards in vocational education and training,

(e) to encourage the recognition of vocational courses that are accredited under this Act.

Legislative basis for cancellation decisions

11 The legislative bases on which the Board made its cancellation decisions were as follows:

1. Cancellation decision and refusal to renew registration:

Section 12(3)(c)

The Board may register the applicant as a training organisation only if:
. . .

(c) the Board is satisfied that the applicant complies with the RTO standards.

Section 18(2)

(1) The Board may do any one or more of the following:
. . .
(d) cancel the registration of a training organisation that has been registered by the Board.

(2) The Board may only take action under subsection (1) in relation to an RTO on any one or more of the following grounds:
. . .
(d) the training organisation has failed to comply with the RTO standards or the registration and accreditation guidelines,
(e) the training organisation’s . . . ethical standards are such that they would not warrant the registration of the training organisation if it were now to apply for registration,
(g) the training organisation does not have the resources to competently provide the courses in respect of which it is registered,
(h) the resources of the training organisation do not comply with the RTO standards or the registration and accreditation guidelines,
(i) the training organisation has contravened this Act or a condition to which its registration is subject.

Section 13(6)

An RTO must not contravene a condition to which its registration is subject.

2. Cancellation of approval to deliver courses to overseas students

Section 34(7)

(7) The Board must not refuse an application for approval except on one or more of the following grounds:
. . . .
(b) that the applicant does not have the resources to provide the courses to which the approval relates competently,
(c) that the applicant’s . . ethical standards do not warrant the approval of the applicant,
(e) that the applicant or the applicant’s resources do not comply with the approval guidelines.

Section 35(3)

(3) The Board may not suspend or cancel an approval except on one or more of the following grounds:

(d) the approved provider has failed to comply with the approval guidelines,
(e) the approved provider’s . . . . ethical standards are such that they would not warrant the approval of the provider if it were now to apply for approval,
(g) the approved provider does not have the resources to competently provide the courses to which the approval relates,
(h) the resources of the approved provider do not comply with the approval guidelines,
(l) the approved provider has contravened this Act, the regulations or a condition to which the provider’s approval is subject.

12 The issues relating to these decisions can be summarised as follows:

1. Does Austech comply with the RTO standards?

2. Has Austech failed to comply with the approval guidelines adopted by the Board?

3. Has Austech failed to comply with the VET Act or a condition to which its registration is subject?

4. Does Austech have the resources competently to provide the courses to which the approval relates?

5. Do Austech’s ethical standards warrant registration and/or approval if it were applying now?

13 In relation to the third issue, the Board did not identify a separate provision of the VET Act or a condition with which Austech had failed to comply. The fifth issue involves a consideration of whether Austech’s behaved unethically in: allowing considerably more than the 124 overseas students for which it had approval to enrol; operating from sites for which it had not obtained approval; and misleading the Tribunal by suggesting that a consultant, Ms Briggs, would be given a 12 month contract and then not engaging her for that period.

14 After making findings on these questions, we must determine whether the cancellation decisions are justified. The decision to refuse to amend the scope of Austech’s registration and approval to add new courses, new sites and to increase the student numbers will be considered after we have decided whether the cancellation decisions are the correct and preferable decisions.

RTO Standards

15 The three RTO standards relate to: training and assessment; client services and management systems. The first standard is set out below:

Standard 1

The Registered Training Organisation provides quality training and assessment across all of its operations.

1.1 The RTO collects, analyses and acts on relevant data for continuous improvement of training and assessment.
1.2 Strategies for training and assessment meet the requirements of the relevant Training Package or accredited course and are developed in consultation with industry stakeholders.
1.3 Staff, facilities, equipment, and training and assessment materials used by the RTO are consistent with the requirements of the Training Package or accredited course and the RTO’s own training and assessment strategies.
1.4 Training and assessment is delivered by trainers and assessors who:

(a) have the training and assessment competencies determined by the National Quality Council or its successors,
(b) have the relevant vocational competencies at least to the level being delivered or assessed,
(c) continue to develop their vocational and training and assessment competencies to support continuous improvements in the delivery of RTO services.
1.5 Assessment, including Recognition of Prior Learning (RPL):
(a) meets the requirements of the relevant Training Package or accredited course,
(b) is conducted in accordance with the principles of assessment and the rules of evidence,
(c) meets workplace and, where relevant, regulatory requirements.

16 Nature of the standards. The AQTF Users’ Guide to the Essential Standards for Registration explains the standards in the following terms:

The standards focus on the quality of services and outcomes being achieved for clients. They allow RTOs some flexibility in demonstrating how they are meeting clients’ needs in the context of the scope and nature of their business. . . .

Each standard is supported by elements that provide more detail about achieving the outcome described in the standard.

In the context of Standard 1, this explanation suggests that the outcome of providing ‘quality training and assessment across all of its operations’ may be achieved by complying with each of the elements that support that outcome. Each standard commences with an element relating to continuous improvement.

17 The Introduction to AQTF reinforces this approach:

AQTF 2007 focuses on the quality of services and outcomes being achieved for clients rather than the inputs used to get there. This means that registered training organisations have more flexibility in demonstrating how their individual approaches provide quality training outcomes for their clients.

18 When determining whether an RTO ‘complies with the RTO standards’ the decision maker is being asked, among other things, to make an assessment about the degree to which the RTO is achieving the outcome expressed in each of the three standards based on an assessment of each element within the standard. Assessing compliance with those elements is not a straightforward task given their generality. In many cases there are no measurable criteria. Nevertheless, a judgement must be made.

The National Code

19 Every course which is approved to be provided to overseas students is registered on the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS). Only CRICOS courses can be offered to international students studying in Australia on a student visa. The National Code is a set of nationally consistent standards that protects overseas students. It is divided into four parts: Part A sets out the principles and guidelines that underpin the Code; Part B outlines the roles and responsibilities of the Australian and State and Territory Governments which share the responsibility for implementing the Code; Part C outlines the process and requirements for registration of providers and courses on CRICOS. It provides a general description of the registration process and specifies minimum requirements that apply to the registration process. Part D sets out 15 standards that providers must meet in their interactions with international students. The Standards that providers must meet are expressed as outcomes. As with the RTO standards, they are supported by specific elements. Grounds for cancellation of approval include an RTO failing to comply with the National Code: VET Act, s 35(3)(d). There is some overlap between the RTO Standards and the National Code.

20 When we refer in this decision to ‘the standards’, we are referring to both the RTO standards and the standards in Part D of the National Code.

Preliminary issues

21 Two preliminary issues arose in relation to the cancellation decisions:

a) whether the RTO standards include the entire document entitled Australian Quality Training Framework 2007 (AQTF) or just the three ‘Standards’; and

b) whether the Board has issued the National Code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students 2007 (The National Code) as an approval guidelines as permitted by s 40 of the VET Act .

22 Identification of RTO standards. There is no dispute that the Board may not register Austech as an RTO unless it is satisfied that it complies with the RTO Standards. That term is defined in s 4 to mean ‘the Standards for Registered Training Organisations under the AQTF.’ ‘AQTF’ is defined to mean ‘the document entitled Australian Quality Training Framework, as in force from time to time, that defines the criteria and standards for the registration of training organisations and the accreditation of courses in the vocational education and training sector.’ The standards in the AQTF document are described as “the Essential Standards for Registration”. The Essential Standards for Registration include:

a) three standards relating to: training and assessment, client services and management systems;

b) a set of quality indicators or data to be collected; and

c) a set of nine conditions of registration to be met while operating as a training provider.

23 Austech submitted that the term “RTO standards” relates only to the three standards and not to the other two components of the Essential Standards for Registration. The basis for that submission was that the VET Act refers only to RTO Standards and not to the ‘Essential Standards for Registration’. That situation came about, it was said, because when the VET Act was enacted the AQTF document had not been written. Austech submitted that as the VET Act imposes a stringent regulatory regime, its terms should be construed narrowly.

24 This analysis does not take into account that ‘AQTF’ is defined in the VET Act to mean the document that defines the ‘criteria and standards’ for the registration of training organisations. The inclusion of the word ‘criteria’ in that definition means that the ‘RTO standards’ include both criteria and standards. As the set of quality indicators and the nine conditions of registration in AQTF come within the ordinary meaning of the word ‘criteria’, the whole of that publication is relevant when determining whether Austech complies with the RTO standards.

25 Identification of ‘approval guidelines’. In order to be approved to provide courses to overseas students, Austech must comply with the ‘approval guidelines’: s 34(7)(e). The provision relating to these guidelines is s 40:

40 Approval guidelines

(1) The Board may from time to time issue guidelines to be adopted in relation to the approval of persons to provide courses for overseas students.
(2) Any such guidelines may relate to matters such as the following:
(a) approval procedures,
(b) the resources required to provide a course for overseas students in a competent manner,
(c) the financial requirements and ethical standards to be satisfied by approved providers,
(d) the conditions to be imposed on the approval of persons to provide courses for overseas students.
(3) Copies of each guideline issued under this section are to be kept at the office of the Board and are to be made available for public inspection free of charge, and for purchase, during ordinary office hours.

26 ‘Approval guidelines’ is defined in s 4 to mean ‘the guidelines issued by the Board under section 40.’ The Board has issued the National Code as an approval guideline but it mistakenly invoked s 32 as the source of its power to do so instead of s 40. The Board made the following resolution on 1 July 2009:

That under section 32 of the VET Act the Board ratify the out-of-session resolution to issue the Australian Quality Training Framework 2007 Essential Standards (AQTF 2007) and the National Code of Practice for Registration Authorities and Providers of Education and Training to Overseas Students 2007 (the National Code 2007) as Guidelines for the registration of training providers and approval of CRICOS providers in NSW with effect from 1 July 2007.

27 Section 32 is in similar terms to s 40 but relates to the issuing of guidelines in relation to the registration of training organisations and the accreditation of vocational courses, rather than to the approval of persons to provide courses for overseas students. The Board accepts that it should have invoked s 40 when issuing the National Code as a guideline but contended that that error or oversight could be remedied by the Tribunal.

28 In Lockwood v Commonwealth (1954) 90 CLR 177 at 184, Fullager J referred to the “settled principle that an act purporting to be done under one statutory power may be supported under another statutory power.” Similarly, in Brown v West (1990) 169 CLR 195 at 203, the High Court said:

. . . [T]he validity of the Tribunal’s determinations is unaffected by mistaking the source of the power to make them: Moore v Attorney-General (Irish Free State) [1935] AC 484; R v Bevan; Ex parte Elias and Gordon (1942) 66 CLR 452 at 487.

29 In Vaw (Kurri Kurri) Pty Ltd v Scientific Committee (established under s 127 of the Threatened Species Conservation Act 1995) [2003] NSWCA 297; (2003) 58 NSWLR 631, at 643, [53]-[54] Spigelman CJ determined after a comprehensive review of the authorities, that the issue must be determined by reference to the statutory scheme under consideration. In that case because there was an alternative source of power for the making of a particular determination, and there was no procedural or substantive difference depending on whether a matter was commenced in either of two alternative ways, the determination was valid. In this case, the Board had the power under s 40 to issue the National Code as a guideline for the approval of persons to provide courses for overseas students (CRICOS providers). It exercised that power. The fact that it either deliberately or inadvertently referred to the incorrect provision when exercising the power does not affect the validity of the determination. Consequently, the National Code is an approval guideline and the Board may cancel an approval on the basis that Austech has failed to comply with it: VET Act, s 35(3)(d).

Evidence

30 Witnesses and documents. The Board’s only witness was Ms Mawer. She was the author of the final audit report dated February 2009 and the revised report dated August 2009. Mr Banga, the Assistant Chief Executive Officer of Austech, also gave evidence. In addition, we had the benefit of evidence from three expert witnesses: Ms Briggs, Mr Feagan and Ms Lee. Each party provided the Tribunal with a considerable amount of documentary material. Apart from the Board’s audit reports and Ms Briggs’ report, among the most significant documents in that material were two letters from the Industry Skills Council for the Service Industry, Service Skills Australia, one dated 2 February 2009 and the other dated 13 August 2009.

31 Ms Mawer’s evidence. The audit reports prepared by Ms Mawer were the principal documents setting out the areas in which Austech was said not to be achieving the outcomes in the standards. These documents provided detailed evidence and analysis in support of her conclusions. Her view was that Austech was non-compliant with the standards in several key areas including:

a) training and delivery: length of practical component of training insufficient; course structure/sequencing inappropriate and inconsistent; implementation of learning and assessment strategies inconsistent information about course placement, industry consultation insufficient and not implemented
b) premises and student capacity: student capacity exceeded; insufficient capacity of kitchens to accommodate the number of students enrolled
c) staffing: trainers and assessors do not have appropriate qualifications or competencies; insufficient number of trainers and assessors; excessive trainer workloads; and key management and student support positions remain vacant
d) assessment and training resources: assessment methods do not meet Training Package requirements, principles of assessment and rules of evidence or learning and assessment strategies; inadequate training resources
e) recruitment and enrolment: marketing and advertising misleading, insufficient and inconsistent.

32 We note the Board advised during the course of the hearing that the following matters were not an issue: marketing and advertising, financial management including protection of fees paid in advance and Council approval for the kitchens in Liverpool.

33 Mr Singleton, representing Austech, maintained that the time allocated for the hearing did not give him the opportunity to cross-examine Ms Mawer on every aspect of her evidence. This matter was scheduled for 5 days of hearing. Mr Singleton’s cross-examination focused mainly on the ways in which Ms Mawer had structured the final audit report and the alleged shortcomings in that approach, rather than on the substance of her concerns about whether Austech was achieving the outcomes set out in the standards. In addition, her conclusions were questioned, most frequently, on the basis that the criticisms did not breach a ‘requirement’ of the standards to which she referred. While there are some aspects of the standards which can be regarded as ‘requirements,’ in general the elements of each standard are provided as guides to achieving the relevant outcome. Consequently, questioning which focused on whether particular factual evidence or information constituted a breach of a ‘requirement’ in the standards was not always relevant.

34 Nevertheless, Ms Mawer agreed that the factual material she relied on in the final audit report did not always relate to the standard under discussion. Ms Mawer accepted that in some instances her findings should be amended. Ms Mawer was also criticised for giving long, non-responsive answers to many of the questions. We see those answers as coming from a sense of frustration at being expected to give short answers to questions which required some explanation. While we accept that some of Ms Mawer’s conclusions were not based on a relevant or correct standard, we do not accept Mr Singleton’s submission that there were material deficiencies in the substance of the audit reports which undermines the reliability of the material on which Ms Mawer was cross-examined. We also reject the submission that, by implication, her conclusions in relation to the other parts of the report on which she was not cross-examined are unreliable. We found Ms Mawer’s evidence to be thorough and well considered. Both the final report and the revised report in August 2009 contain plausible summaries of evidence which related to her conclusions. We would have benefited from a summary of that evidence and Ms Mawer’s conclusions in the final submissions.

35 Ms Briggs’ evidence. Ms Briggs is a consultant who was previously employed by Service Skills Australia, as the Industry Specialist for Tourism and Hospitality. She is an acknowledged expert in this area and has a detailed knowledge of Austech’s operations. After working as a consultant to Austech in 2008 and early 2009, she conducted an audit of Austech’s operations at the request of Austech’s lawyers in October 2009. She was asked to provide her opinion on the areas of non-compliance identified by the Board and to evaluate the capacity of Austech to deliver the new hospitality courses. She produced a 44 page report dated November 2009 setting out her conclusions. In summary, her conclusion was that apart from the fact that the duration of the practical cookery component for the old hospitality courses was insufficient, Austech complied with the standards. Despite that general conclusion, Ms Briggs considered that several other areas of Austech’s operations could be improved. Those areas included trainer workloads, work based training, assessments, training resources and industry consultation.

36 Evidence of Ms Lee. Ms Lee was not required for cross examination. In the areas where Ms Lee was able to conduct an audit, her evidence was that Austech was not compliant in relation to student support services, course credit and recognition of prior learning. There were also defects in the complaints and appeals documentation.

37 Evidence of Mr Feagan. Mr Feagan is also a consultant. His report was shorter and less comprehensive than that provided by either Ms Briggs or Ms Lee. We found Mr Feagan’s opinions about compliance generally unpersuasive. Examples are noted throughout the decision. In areas where Mr Feagan did express a view, we have taken those views into account but have not accorded them as much weight as the views of Ms Mawer and Ms Briggs.

38 We turn now to discuss the Board’s main areas of concern when it made the cancellation decisions on 7 September 2009. We note that the Board did not change its view as to the correctness of those decisions despite the provision of further material after that date.

Number of overseas students

39 Part C, Standard 12 of the National Code states that:

As part of the registration approval process, the designated authority will decide whether to approve the maximum number of students that a provider can enrol. In making this decision, the designated authority will consider the capacity of the provider in terms of its premises, approved arrangements with other providers, facilities, resources, equipment, materials and ratio of staff to student numbers.

40 The Board did not submit that Austech would be contravening this standard if it allowed more than the approved number of students to be enrolled. Nor did the Board submit that a cap on student numbers constituted a condition pursuant to s 34(5). The only basis on which it was submitted that exceeding the maximum number of students was a ground for cancelling approval was that it reflected adversely on Austech’s ethical standards: s 35(3)(e).

41 The Board originally approved Austech to provide training to 124 overseas students on two sites. That number was later increased to 225. In 2006 Austech contacted the Board by facsimile advising them that 406 students would be enrolled. According to Austech, the Board did not respond to that communication. Mr Banga said that it was their understanding that they needed to inform the Board of any increase and seek their approval. In June 2007, Austech formally applied to increase capacity and to add qualifications and additional sites. During the September 2007 audit, Ms Jackson, an officer of the Board, advised them that there were more than 700 students enrolled when approval had only been given for 225 students. Despite that observation, Mr Banga said that Ms Jackson did not raise student numbers as an issue during the exit interview and the Board did not place a condition on Austech’s registration or take any other action to limit the number of enrolments. According to Mr Banga, the lack of any communication of that kind reinforced their understanding that as long as they told the Board, and there was no objection, they could exceed the limit provided they had the facilities for that number of students. Furthermore, Mr Banga’s understanding was that many other RTOs were exceeding their limits. On 29 February 2008 Austech wrote to the Board again requesting an increase in student capacity.

42 As at September 2007, Austech had 710 students studying and 211 pending enrolments. A little over a year later, on 31 October 2008, Austech had virtually doubled its enrolments to 1,398 students with a further 571 enrolled. This rapid expansion over a 12 month time period was one of the reasons the Board imposed conditions on Austech’s registration including the ‘no new business’ condition on 16 December 2008. As of 30 January 2009, there were 1,775 students enrolled, but because of the imposition of the ‘no new business’ condition, that number had fallen to 1,325 by 13 August 2009.

43 Mr Banga agreed that Austech profited from the fact that student numbers were considerably higher than the cap but his understanding was that the Board gave them tacit approval to increase the numbers by not directing them to comply with the cap even though they were fully aware of the situation.

44 Conclusion. Austech should not have acted unilaterally to enrol more students than it was approved to enrol. It did so because it considered it to be in its own interests to do so and it did not anticipate any negative repercussions. That conduct may be regarded as self-serving but it is not unethical in circumstances where the Board was fully aware of the situation and did not take any action until imposing the no new business condition in December 2008.

Additional sites and their location

45 Background. The Board has authority under Part C Standards 11.1 and 11.3 of the National Code to inspect premises. The relevant parts of those standards are:

As part of the registration approval process, the designated authority will conduct at least one inspection of the provider’s premises to ensure that the provider meets Standard 14 (Staff capability, education resources and premises). . .

Further inspections will be conducted by the designated authority as appropriate during the period of CRICOS registration. These further inspections may include unscheduled visits when the designated authority deems such a visit is warranted.

46 The Board did not submit that Austech would be contravening this standard if it operated from premises without an inspection having been carried out. Nor did the Board submit that it was a condition of approval that Austech seek approval from the Board before operating from alternative premises. The only basis on which it was submitted that such conduct was a ground for cancelling approval was that it reflected adversely on Austech’s ethical standards: s 35(3)(e).

47 Mr Banga understood that Austech needed to seek approval before operating from sites that have not previously been approved. In June 2007 Austech sought approval to use premises at Ashfield as its headquarters. In 2009, it also sought approval to use kitchens located in Liverpool for the practical component of its courses. The Board did not determine either of those applications. That failure has not been explained but it can be assumed that one of the reasons may have been that it was still engaged in the audit process. Austech nevertheless proceeded to operate from the new locations. The Board remains concerned that permission was not granted for the additional sites and that the distance between the sites is too great.

48 Locations of kitchens. The distance between Ashfield, where Austech has its main campus, and Liverpool where the kitchens are located, is about 23.5 kilometres. It takes approximately 35 minutes on average to travel between the two locations by car and about 45 minutes to travel by train between Ashfield and Liverpool railway stations. Mr Banga’s evidence was that students complete two days of practical teaching at the kitchens in Liverpool and one day of theory per week in the class rooms at Ashfield. Students are not required to commute between the two locations on the same day.

49 Conclusion. Although it is not ideal for training to be provided at locations which are so far apart, we are not satisfied that the distance between the two locations constitutes a contravention of any of the standards. In addition, in circumstances where Austech applied for approval to use additional sites and the Board did not respond until February 2009, its failure to obtain approval before operating from those sites is not unethical.

12 month contract

50 In a letter from Ms Briggs to Mr Banga dated 7 January 2009, Ms Briggs concluded by saying:

AIFE has demonstrated to me a keen desire to become compliant. They have offered me a 12 month contract which includes a monthly consultation and regular professional development sessions with staff. . .

I believe that AIFE has the capacity to deliver to existing students and new students already enrolled. If AIFE has to turn these new students away they would be in difficult circumstances as many are already in Australia. I am committed to working with AIFE and am happy with their level of commitment to improvement.

51 That letter was relied on before the Tribunal in the stay proceedings in January 2009. Ms Briggs confirmed that the offer of a 12 month contract did not go ahead and that her involvement ended in March 2009. Mr Banga did not agree that by tendering that letter, Austech had misled the Tribunal into thinking that Austech was engaging Ms Briggs for 12 months with a view to becoming compliant. Rather than engaging Ms Briggs for one or two days a month, Austech engaged her for a block of about three weeks in February 2009. Mr Banga said that Austech has done even more than it told the Tribunal it would do during 2009. In particular, other consultants were engaged and improvements were made to the assessment of all 52 units being offered, not just to the 7 or 8 units which were initially identified.

52 Conclusion. We are not persuaded that Austech deliberately misled the Tribunal by tendering the 7 January 2009 letter. Mr Banga’s explanation satisfies us that Austech contracted Ms Briggs on a different basis from that initially envisaged. There is nothing unethical about its conduct.

Trainer and assessor teaching hours

53 Background. Standard 1 requires the RTO to provide quality training and assessment across all of its operations. According to the Board, this outcome was not being achieved because most members of staff were employed to teach students, face-to-face for 40 hours per week. In the February 2009 audit, the Board identified 42 trainers employed in 2008, half of whom were part time, with full time trainers teaching 42 hours per week. By August 2009 the situation was that 60% of trainers were being allocated 6 shifts of 7 hours and 20 minutes each (44 hours of face to face teaching per week over 6 days). Ms Mawer expressed the view that such workloads are excessive, providing no time for preparation, marking of assessments, validation or professional development. In her view, that situation will inevitably lead to adverse impacts on the quality of teaching and assessment.

54 Service Skills Australia noted that Austech provided timetables indicating that 21 trainers were allocated 6 shifts of 7 hours 20 minutes for weeks 1-4 in Term 2, 2009. That results in trainers and assessors undertaking 44 hours of face to face training per week in that period. Service Skills Australia expressed the view that trainers need time to review and reflect on their approach to teaching and 44 hours of classroom time does not allow any time to do so. Trainers and assessors are expected to stay up to date on industry knowledge and to undertake professional development. Service Skills Australia also noted that NSW TAFE teachers have a teaching load of 20 hours per week and similar preparation time. In their view long working hours can result in a deterioration in outcomes for students and also constitutes an occupational health and safety issue for the employees.

55 Ms Briggs’ report noted that Austech has now implemented a new policy in which trainers are not employed for over 28 hours per week. She said most staff are casual and are now employed for 20 hours with 5 hours for administration, assessment and reporting. Cookery staff are employed for 28 hours to provide continuity to students. Despite that finding, her report recorded that four employees were still teaching 40 hours per week in October 2009. In her view, the issue of working hours is an industrial one and the standards do not specify maximum hours. She also said that whether or not 40 hours of face to face teaching per week is appropriate would depend on the nature of the units being delivered, the capacity of the teachers and assessors, the timetabling and location of classes and the amount of time allowed for assessment. Her personal view was that 40 hours could be excessive especially given the fact that most TAFE teachers teach for about 20 hours a week. In her opinion if teachers were teaching face to face for 40 hours a week that would probably have a negative effect on educational outcomes. In addition many teachers had been working six days a week.

56 Conclusion. We do not regard a survey of employees that Austech undertook in relation to their preferences and opinions about workloads as being particularly relevant or persuasive. We accept the view of the Board and Service Skills Australia, supported to some extent by Ms Briggs, that if trainers and assessors are teaching 40 hours or more a week face to face that is likely to impact negatively on the quality of training and assessment students receive. It is noteworthy that Austech did not change its practices in this area until very recently. Nevertheless there is nothing in Standard 1 which prevents Austech from allocating trainers to teach 40 hours or more a week.

Course duration

57 Background. Under Standard 7.1 in Part C of the National Code, the registration of a course on CRICOS must include the expected duration of the course. Other relevant standards in Part C relating to course duration are Standards 7.3 and 7.4.

58 When the Board approved Austech’s registration, it also approved it to provide the Certificate III in Hospitality (Asian Cookery) over 52 weeks. Course duration is based on a minimum of 20 scheduled contact hours per week. The duration was reduced to 40 weeks and then 30 weeks. The course was a 30 week course at the time of the Board’s 2005 audit. No indication was given to Austech at that time that it should apply to increase the duration of the course. In September 2007, Ms Briggs who was then employed by Service Skills Australia, advised that 30 weeks did not provide a sufficient period for the practical component of the cooking course to be delivered. She also recommended that fewer units be taught. According to the Board, the most significant issue in these proceedings is the fact that, since Sept 2007, Austech has been delivering the Certificate III course in circumstances where the length of the practical component of that course has been insufficient for the students to achieve the desired educational outcomes.

59 On 12 September 2007, Mr Wakeling, the principal of Austech, emailed an officer of the Board, Matthew Brash, to ask about the process for applying to reduce the number of units in the hospitality courses and lengthen the duration of the courses. On 27 September 2007, Mr Wakeling wrote again asking Mr Brash if he could ‘regard as urgent our previous request for approval to vary the length of time of our courses and to reduce the number of units for each course.’ He added that:

At the recent VETAB site audit we were strongly encouraged by the auditors to alter the structure of the Certificate III in Hospitality and Diploma of Hospitality. Our current students are being asked to do more units than is required. . . .At the request of the auditors we contracted Susan Briggs of Service Skills and she indicated that we must reduce the number of units and increase the time for Certificate III. Each day that goes by delays us from being compliant with the auditor’s suggestions and Sue Briggs’ recommendation.

60 On the same day Mr Brash responded saying that he needed to discuss the issue with management and the auditor. The following day, 28 September 2007, Mr Brash replied as follows:

Thanks for your email. I have spoken to your (auditor) Elaine Jackson. As Austech is presently going through an audit I believe the hospitality course issues raised in your email will be addressed as part of the audit process. After the audit process is complete you will need to submit a CRICOS course entry form (Please contact me at this time and I will send the form across) for the courses to be newly added to CRICOS with the appropriate duration.

61 The Board did not provide a copy of the audit report so Austech was never told that the process had been completed or that they should now make the application foreshadowed in Mr Brash’s email. According to Mr Banga, this email was the reason they did not change the course duration, not the fact that they had contracted with students to provide all three qualifications in two years or that it would be to their financial detriment to increase the course duration. Mr Banga said that despite never receiving a copy of the audit report from the Board, they nevertheless changed the course structure by adding two weeks of practical cookery within the 30 weeks. This was achieved by reducing the holidays to 4 weeks and increasing the practical component to 16 weeks.

62 The view of Service Skills Australia and Ms Briggs remains that the course length of the Certificate III course is insufficient to enable students to achieve competence or meet industry standards and that it puts pressure on assessment. Ms Briggs added that rather than offering all three qualifications (the Certificate III, the Diploma and the Advanced Diploma) over a period of two years, it is more realistic to offer just the Certificate III course and the Diploma course in that time. However, Ms Briggs’ conclusion was that this did not mean that Austech was not compliant with the standards.

63 The Board suggested that Austech was remiss in not re-applying for the course duration to be extended. We accept that Austech should have contacted Mr Brash again when it became apparent that an audit report would not be provided. However, the Board must also accept some responsibility for failing to advise Austech that it would not be providing an audit report and that it should nevertheless apply to extend the duration of the course. We agree with Ms Briggs that the course continued to be provided over 30 weeks because of the protracted audit process and the failure of either party to take the initiative. Ms Briggs added that the course duration cannot be altered for current students as it would require fundamental changes to the students’ expectations as reflected in their contracts with Austech.

64 Conclusion. We are satisfied on the basis of the evidence from Service Skills Australia, Ms Mawer and Ms Briggs that the course duration for the Certificate III Course was too short and that it should have been taught over a period of 52 weeks with an adequate component of practical training. However, we agree with Ms Briggs that this does not mean that Austech is not compliant, nor are we satisfied that Austech’s conduct in relation to this issue is unethical.

Course structure and sequencing

65 Background. It was our understanding that most students enrol in all three courses offered by Austech and complete those qualifications in 2 years. Each of these qualifications is divided into various modules and the modules are divided into units. The relevant training package for these courses identifies units which are pre-requisites to other units. While it is mandatory to complete these prerequisites prior to enrolling in the relevant units, the training package does not mandate the order in which particular units, modules or stages must be taught.

66 Sequencing of units. A criticism of Austech was that units from the Advanced Diploma stage were being taught before units from the Certificate III stage. For example, students were being taught management units before practical cookery units and consequently were not participating in practical training in a kitchen for up to 10 months after commencing their course. Mr Banga said that between 100 and 150 students fell into that category. When they were planning the timetable, it was assumed that as long as there were no prerequisites for particular units they had the flexibility to schedule units in that order. We understand that one of the reasons for scheduling the courses in this way was the unavailability of sufficient kitchen facilities.

67 Ms Mawer’s evidence was that even where the training package did not state that units were pre-requisites there was a logical and educationally sound order in which units should be taught. The delivery arrangements were said to seriously compromise the integrity of the qualifications offered and have an adverse impact on the quality of training and assessment outcomes for students. The deficiencies which the Board identified included: students not undertaking practical cookery subjects before they were required to understand hospitality management concepts; many students not learning practical cookery skills until 10 months into their course; many students undertaking Diploma units three months into their course without appropriate cookery experience or the completion of the remaining operational Certificate III units.

68 Service Skills Australia expressed the view in their letter of 13 August 2009 that the timetabling arrangements for the February 2009 intake of students did not reflect the new sequencing structure that Austech proposed. Their view remained that that course structure, where units packaged at the Diploma level were delivered prior to units at the Certificate III level, does not reflect industry’s expectations of skill development.

69 Ms Briggs’ evidence. Ms Briggs’ evidence was that the order in which the modules were listed on Austech’s website, rather than the order in which they were in fact being taught, was logical and she had a personal preference for the courses to be taught in that order. She agreed that it could be argued that the way Austech had sequenced units did not meet the best interests of students because they were required to understand hospitality management concepts without having experienced operational aspects. Further, that sequencing does not reflect the fact that people working in hospitality generally progress from hands-on job roles to supervisory or management roles. Ms Briggs’ view was that the poor sequencing of units resulted in pressure on assessment arrangements. However, it could not be said that the sequencing is inconsistent with competency-based principles, the RTO standards or the Training Package requirements, none of which provide guidelines on sequencing. It is not her view that the delivery arrangements ‘seriously compromise the integrity of the qualifications offered and have adverse impacts on the quality of training and assessment outcomes for students’ as suggested by the Board.

70 Conclusion. We are persuaded on the basis of all the evidence that as of February 2009 the way in which the course was structured and sequenced was likely to have a negative impact on the quality of training and assessment. However, we agree with Ms Briggs that this does not mean that Austech is not compliant with the standards. While Austech took too long to improve the course structure and sequencing, we note that it has now been improved so that it better meets industry needs.

Assessment

71 Background. Elements 1.3 and 1.5 of the AQTF Standards relate to assessment, including the recognition of prior learning. The February 2009 audit report found that assessment tools and sampled student assessments demonstrated significant non-compliance with the Training Package requirements, the principles of assessment and the rules of evidence. In particular, the evidence relating to practical skills in cookery and hospitality management was insufficient, making it difficult to determine how the students’ competence was judged. Ms Mawer said that there are still problems with assessment particularly because of the way units had been sequenced.

72 Ms Briggs agreed that Austech’s assessment did not comply with Element 1.5 in November 2008 but concluded that the assessments for both the old hospitality courses and the new hospitality courses she sampled now meet the standards. She acknowledged that minor improvements could be made to some units and provided details of those improvements. Mr Banga also conceded that the assessments were not compliant in November 2008 but said that while the Board identified problems with assessments in relation to 7 units, shortcomings have been rectified for all 52 units.

73 Conclusion. The examples provided by the Board satisfy us that as at February 2009 there were some deficiencies in assessment. We are also satisfied that throughout 2009 Austech has made efforts to improve assessment. Ms Briggs’ view is that assessment for both the old hospitality courses and the new hospitality courses meet the Training Package requirements, principles of assessment and rules of evidence. We accept that view.

Industry consultation

74 Standard 1.1 of AQTF requires that ‘strategies for training and assessment . . . are developed in consultation with industry stakeholders.’ The intent of this element, as set out in the Users’ Guide to the Essential Standards for Registration, is that ‘Industry engagement and support is evident in the development of all training and assessment strategies.’

75 Mr Banga says that Austech now realises that they should have had more involvement with industry in relation to the development of its training and assessment strategies. Currently, Service Skills Australia acknowledges that Austech has made an effort to engage industry. Ms Briggs echoed those views in her report saying that while previous industry consultation was limited, Austech has recently made significant improvements in order to be involved with industry. She emphasised that ongoing involvement of industry in the specific Learning and Assessment arrangements and assessment tools will be required. In relation to work placement she said that the industry consultation that has taken place will set in place arrangements for further expansion of work opportunities.

76 Conclusion. While there was initially insufficient consultation with industry, Austech is in the process of improving its links with industry. The nature and quality of that consultation needs to be the subject of strategies for continuous improvement. We are satisfied that if Austech continues on the path of industry consultation it will achieve the outcome in Standard 1.

Sufficiency and capacity of kitchens

77 Resources. Sufficiency of resources is emphasised in the VET Act and the standards. For example, it is a ground for cancelling an RTOs approval that it ‘does not have the resources to competently provide the courses in respect of which it is registered’: s 35(3)(g). In the February 2009 audit report, the Board concluded that Austech did not have sufficient kitchen facilities and there was insufficient capacity to accommodate existing and enrolled students.

78 We accept the view of the Board in February 2009, that the kitchen premises, equipment and facilities were inadequate. Austech now operates kitchen facilities from a specialized training centre in Liverpool. While the Board has not assessed these facilities, Ms Briggs did assess them. Her view was that there is sufficient kitchen capacity to accommodate the 351students currently undertaking the cookery courses. On 16 November 2009 another cohort of students finished their studies, leaving only 220 students to complete the practical cookery components. The Liverpool kitchens, with a capacity of 264 students per week, will be adequate to accommodate this group of students. For delivery of the new hospitality courses, Mr Banga informed Ms Briggs that they intend to use only the 3 kitchens in Liverpool as they plan to have a reduced number of students undertaking cookery courses. Those kitchens have a capacity of 528 students over one year based on 2 intakes of 20 weeks as proposed by the new hospitality courses. Ms Briggs said that there was no fundamental change in the way the existing hospitality courses and the new hospitality courses are taught and assessed. We accept that while the resources were insufficient in February 2009, they are currently compliant based on a maximum of approximately 1,000 students at any one time.

Qualifications of staff

79 In its February 2009 report the Board identified a number of trainers and assessors who did not have adequate qualifications. Mr Feagan, Ms Lee and Ms Briggs all assessed the qualifications of staff. Mr Feagan’s assessment was that the trainers and assessors are appropriately qualified for the level of training they provide.

80 Ms Lee’s report found that the person occupying the role of student welfare officer was not a qualified psychologist as set out in the job description. Mr Banga says that Austech has noted that finding and will take appropriate action. Ms Lee also made the point that sufficient personnel are in place to maintain basic operational functions of the organisation, however that would have to be reviewed if registration is renewed to ensure personnel numbers adequately meet projected student capacity.

81 Ms Briggs’ view was that as at November 2009 all staff currently employed had the relevant vocational competencies and experience in the field in which they are training and were undertaking professional development activities. We accept that view.

Conclusion

82 We do not consider the remaining issues identified by the Board to be of sufficient significance to deal with in any detail. That does not mean that Austech does not need to address them and it should do so as part of the continuous improvement process.

83 Despite widespread and legitimate concerns about non-compliance with the standards, Austech is now in the situation where its level of compliance is sufficient to allow it to continue to operate. Nevertheless, we note the concerns of Service Skills Australia that while the improvements made by Austech are to be supported, issues remain in the areas of course duration and sequencing and the workload of trainers and assessors. Again, these issues should be addressed through the process of continuous improvement. In relation to course duration and sequencing, we appreciate that the duration of the Certificate III course cannot realistically be changed for the students who will be completing that qualification in 2010. After that time, the new hospitality courses will be fully operational and if Austech complies with the Training Package, neither course duration or course structure and sequencing will be an issue. In relation to the workloads of trainers and assessors, the hours of the four trainers who are currently teaching 40 hours per week should be reduced as part of the continuous improvement process. Ms Briggs also made some adverse comments in relation to the assessments for the new hospitality courses and those comments should be addressed. However, in our view, based on all the evidence, the cancellation decisions should be set aside.

Amendment to scope decisions

84 Having made the cancellation decisions, the Board did not deal in any detail with the applications for amendment to scope. That application was to increase maximum student capacity to 2,384 (now amended to 1,000); add the new sites in Ashfield and Liverpool and add the courses which have superseded the now defunct hospitality courses. (SIT 30807 Certificate III in Hospitality and SIT 50307 Diploma of Hospitality). Ms Briggs has visited the sites in Ashfield and Liverpool. She concluded that the kitchens, equipment and facilities were adequate for current courses and students and compliant with the proposed SIT07 Training Package. In relation to numbers of students, it was Ms Briggs’ view that the three kitchens in Liverpool could accommodate approximately 528 students over one year and 1056 over two years including diploma students. We are satisfied on the basis of Ms Briggs’ evidence that the three application to amend scope (as amended) should be granted. That means that Austech can provide the new hospitality courses from the Ashfield and Liverpool sites. It also means that Austech now has approval to provide its courses to a maximum number of 1,000 overseas students. That number should not be exceeded without approval from the Board.

85 We anticipate that the Board may wish to conduct a site audit of the Liverpool premises and make its own assessment as to the suitability and capacity of the facilities at that site. Despite our decision, if it does inspect those premises, it is open for it, in due course, to come to a different view about the scope of Austech’s operations or, indeed, any other issue.

1. The decision of the NSW Vocational Education and Training Accreditation Board to refuse Austech Institute for Further Education Pty Ltd’s application for renewal of registration is set aside.

In substitution for that decision, the following decision is made:

Austech Institute for Further Education Pty Ltd’s application for renewal of registration is granted.

2. The decision of the NSW Vocational Education and Training Accreditation Board to refuse Austech Institute for Further Education Pty Ltd’s application for approval to provide courses to overseas students is set aside.

In substitution for that decision, the following decision is made:

Austech Institute for Further Education Pty Ltd’s application for approval to provide courses to overseas students is granted.

3. The applications of Austech Institute for Further Education Pty Ltd to:

a) add new sites;
b) increase maximum student capacity to 1,000;
c) add new courses from the SIT07 Tourism, Hospitality and Events Training Package (SIT80807 Certificate III in Hospitality and SIT50307 Diploma of Hospitality)

are granted.

4. These decisions come into effect 7 days from the date of this decision.