Australian Trade Training and Assessment Pty Ltd and Australian Skills Quality Authority

[2019] AATA 231

Australian Trade Training and Assessment Pty Ltd and Australian Skills Quality Authority [2019] AATA 231 (25 January 2019)

Division:GENERAL DIVISION

File Number:           2018/7586

Re:Australian Trade Training and Assessment Pty Ltd (ATTA)

APPLICANT

AndAustralian Skills Quality Authority

RESPONDENT

DECISION

Tribunal:Ms Anna Burke AO, Member

Date:25 January 2019

Date of written reasons:        22 February 2019

Place:Melbourne

For the reasons given orally at the interlocutory hearing the Tribunal refuses the application for a Stay of the Australian Skills Quality Authority’s decision dated 4 December 2018.

[sgd]........................................................................

Ms Anna Burke AO, Member

CATCHWORDS

PRACTICE AND PROCEDURE – application to Stay decision of Australian Skills Quality Authority – decision to cancel registration – whether remedial action taken – prospects of success – consequences for Applicant – public interest – whether review would be rendered nugatory – public interest best served by not allowing the Applicant to continue to operate – Stay application refused

LEGISLATION

Administrative Appeals Tribunal Act 1975 (Cth)
National Vocational Education and Training Regulator Act 2011 (Cth)

CASES
Re Scott and Australian Securities and Investments Commission [2009] AATA 798
Re Trades College Australia Pty Ltd and Australian Skills Quality Authority [2018] AATA 1360

Metro College of Technology Pty Ltd and Australian Skills Quality Authority (unreported)

SECONDARY MATERIALS

Standards for Registered Training Organisations (RTOs) 2015

REASONS FOR DECISION

Ms Anna Burke AO, Member

22 February 2019

1. The Australian Trade Training and Assessment Pty Ltd (ATTA) seeks a Stay of a decision made by the Australian Skills Quality Authority (ASQA) on 4 December 2018 (to cancel the Applicant’s registration as a Registered Training Organisation (RTO) under provisions of the National Vocational Education and Training Regulator Act 2011 (Cth) (the NVR Act).

2. The application was heard via telephone on 25 January 2019. ATTA was represented by Mr Nick Galatas of GPZ Legal. Mr Tim Lloyd, Legal Counsel, appeared for ASQA.

3. The Tribunal provided an oral decision at the hearing, dismissing the application for a Stay on the basis of significant concern for the public interest. Mr Galatas, on behalf of ATTA, subsequently requested written reasons for the decision in accordance with s 43(2A) of the Administrative Appeals Tribunal Act 1975, (the AAT Act) and these are those reasons.

   BACKGROUND

4. ATTA is a registered training organisation (RTO) under the National Vocational Training Regulator Act 2011 (NVR Act). It has been registered since 22 April 2013, providing training in high risk units of competency within the construction sector including:

   ·licensed to erect, alter and dismantle scaffolding basic, intermediate and advanced level;

   ·prepared to work safely in the construction industry;

   ·enter confined space;

   ·conduct hazard analysis;

   ·gas test atmosphere;

   ·issue work permits; and

   ·enter and work in confined spaces.

5. On 30 May 2013 ATTA was authorised by WorkSafe Victoria as a license assessor to carry out in that state, competency assessment in relation to do the following high risk work:

   ·licensed to erect, alter and dismantle scaffolding – basic level;

   ·licence to operate a boom-type elevating work platform (boom length 11 m or more); and

   ·licence to operate a forklift.

6. On 25 September 2017, WorkSafe lodged with ASQA, a complaint notice in which it advised that it had cancelled the ATTA’s certificate of authorisation. WorkSafe also advised that it had charged ATTA and Mr Vincent Marion, a director of ATTA, with 14 criminal offences under the Occupational Health and Safety Act (Victoria) 2004 (OH&S Act). Pursuant to the compliance notice, WorkSafe also requested ASQA to investigate ATTA’s compliance as an RTO.

7. On 15 February 2018, WorkSafe provided ASQA with documents relating to its investigation and assessment of ATTA’s compliance with the conditions required by certificate of authorisation including:

   ·audit reports and investigator notes, copies of 93 student assessment records, internal operational records and notices issued to ATTA and their responses;

   ·copies of information about ATTA’s poor practices in New South Wales provided by SafeWork NSW; and

   ·documents related to the 14 criminal charges under the OH&S Act.

8. On 30 April 2018, ASQA produced a complaint of evidence analysis report (the compliance report) incorporating the findings of its review/assessment of the evidence provided by WorkSafe. ASQA determined that ATTA was non-compliant with clauses 1.1, 1.2, 1.8, 3.1, and 8.5 of the standards.

9. On 31 July 2018 ASQA advised ATTA it intended to cancel ATTA’s registration as an RTO, in accordance with s 37 of the NVR Act. ASQA then provided ATTA an opportunity to submit further evidence in response to the intention to cancel notice.

10. On 27 August 2018 ATTA’s legal representatives provided a response to the notice of intention to cancel.

11. On 4 December 2018 ASQA’s Chief Commissioner notified ATTA of its intention to cancel ATTA’s registration pursuant to s 39 of the NVR Act.

12. On 21 December 2018 ATTA’s legal representative lodged an application for review and a Stay application against the determination to cancel its registration. It sought a Stay of ASQA”s determination as:

    ·the application for its review and its outcome will be rendered nugatory because ATTA’s registration will be cancelled and it will cease to operate;

    ·ATTA’s business will be irreparably damaged thereby rendering the outcome of the appeal nugatory;

    ·ATTA’s prospects of success are not hopeless or fanciful but at least reasonable and the applications for review raise issues for determination by the Tribunal at final hearing; and

    ·the prejudice to ATTA if the decisions are not stayed is greater than any prejudice to the public interest, to the respondent or to any third party.

    LEGISLATIVE FRAMEWORK

13. The effect of s 41 of the AAT Act is that unless the Tribunal orders a Stay of the operation of a reviewable decision, which it has the power to do under s 41(2), the mere making of an application for a review of a decision does not affect the operation of the decision or prevent the taking of action to implement the reviewable decision; in this case being the cancellation of ATTA’s registration under the NVR Act.

14. Upon request by a party to an application, the Tribunal may order a Stay of the operation of the reviewable decision under s 41(2) of the AAT Act “if the Tribunal is of the opinion that it is desirable to do so after taking into account the interests of any persons who may be affected by the review”. The Tribunal may make orders “staying or otherwise affecting the operation or implementation of the decision…or a part of that decision as the Tribunal considers appropriate for the purpose of securing the effectiveness of the hearing and determination of the application for review”.

15. Then President Downes J in Re Scott and Australian Securities and Investments Commission [2009] AATA 798 set out a number of factors to be considered in deciding whether to grant a Stay under s 41(2) of the AAT Act, as follows:

    ·the prospects of success;

    ·the consequence for the applicant of the refusal of a Stay;

    ·the public interest;

    ·the consequences for the respondent in carrying out its functions depending upon whether a Stay is granted or not;

    ·whether the application for review would be rendered nugatory if a Stay were not granted; and

    ·other matters that are relevant, amongst which I would include the length of time that the ban had already been in place and the gap between date of these written reasons and the hearing of the application.

    EVIDENCE BEFORE THE TRIBUNAL

16. The evidence considered by the Tribunal comprised of:

    ·affidavits of the ATTA's Chief Executive Officer, Ms Elizabeth Walcott;

    ·affidavits of Mr Terence Bowden, Lead Regulatory Officer ASQA;

    ·affidavits of Ms Emma Stokes, Regulatory Officer ASQA; and

    ·ASQA’s submissions.

17. In Ms Wolcott’s affidavit of 17 January 2019 she states:

    ATTA’s scope of registration is made up primarily of High Risk Work courses. Our students are typically those seeking work using these qualifications. In order to gain employment, they require licenses. We were authorised by WorkSafe in Victoria and SafeWork in New South Wales to issue such licenses, as applicable in each State.

    Our WorkSafe license has been revoked.

    Our license under SafeWork New South Wales remains in force.

    ATTA challenge WorkSafe decision but WorkSafe implemented it nevertheless. While ATTA sought an injunction in the Supreme Court of Victoria against its implementation, pending the determination of its related application to the Supreme Court against WorkSafe’s decision, the injunction was not granted. Accordingly we decided it was uneconomic to proceed with our Supreme Court application and the WorkSafe decision to cancel our authority to issue licenses came into force.

    ATTA since applied for a new WorkSafe license but it has not been granted. Our current students in Victoria are fee-for-service.

    We have few employees presently.

    We have leases and hire agreements in place to help us deliver our training.

    Presently, we have very few enrolments as January is the quiet period. I projected for the first 9 months of 2019, if ATTA is permitted to remain registered, we will achieve approximately 40 enrolments per month which will total 360 students for the 9 months. I have been asked to nominate 9 months as the expected period by which this matter might come before the Tribunal for final hearing.

    The students would in enrol predominantly in the basic level scaffolding course at fees of $1,290 per student. It would be difficult to forecast enrolments in our other courses given the company’s present circumstances.

    Since our high risk work course operations in Victoria ceased by reason of losing our WorkSafe authorisation to issue licenses for high risk work, students had their licences cancelled in 2017 and we received very poor publicity on social and electronic media. As a result, ATTA has suffered very substantially financially.

    ATTA has not been audited by ASQA. WorkSafe took its action independently.

    …..

    In its statement of reasons, the letter states that ATTA has failed to demonstrate compliance with the following standards for RTO’s 2015 but then it does not list any standards.

    ATTA has provided its evidence of its policies, procedures and current course delivery materials which it presently applies. ASQA has made no findings of non-compliance in relation to any of them.

    If a decision comes into effect, we will have to cease operations immediately and the company would be unable to pay its debts.

    Given that the courses on our scope are short courses, which typically run for no more than a week, if we are not permitted to continue to enrol students, we will have no income between now and the hearing of this matter and we will be unable to continue with our Application for Review.

18. In Mr Terence Bowden’s affidavit of 21 January 2019 he states:

    Pursuant to the complaint evidence review I identified the following issues:

    ·the short duration of training/assessment activities and the failure to conduct proper assessment;

    ·subsequent issuance of certificates of compliance that could be used to gain high risk occupational licenses; and

    ·the failure to comply with state regulation and regulatory requirements

19. In Ms Emma Stokes’ affidavit of 21 January 2019 she states:

    I identified the following relevant issues:

    ·the Applicant had altered the WorkSafe National Assessment Instrument Papers that were used to conduct student assessment;

    ·unsafe assessment practices;

    ·incorrect or incomplete answers provided to knowledge and calculation assessment questions that were marked as correct;

    ·inadequate timeframes for students to practice and  master relevant skills prior to assessment; and

    ·additional information added to student’s assessment dances in different handwriting with no signature or comments made by the assessor.

    I then reviewed a sample of 93 student assessment records provided by WorkSafe.

    I found systematic Applicant issues and failures by the Applicant to ensure that assessment undertaken complied with the assessment conditions as outlined in each unit of the Units of Competency reviewed.

    I found that the Applicant was not implementing an assessment system that ensures assessment complies with the requirements of the training package.

    I found that the Applicant was not conducting assessments in accordance with the Principles of Assessment and the Rules of evidence required under Clauses 1.1, 1.2 and 1.8 of the Standards.

    Pursuant to my review and assessment of the student files sampled I also found:

    ·no evidence in the student files that the Applicant compliantly confirmed existing skills knowledge and experience prior to training and assessment;

    ·that students who identified as having no previous experience were not provided adequate time to practice and master the relevant skills prior to assessment;

    ·the Applicant’s Authorised Assessor marked some of the student’s work as complete although answers were clearly incorrect or incomplete; and

    ·that an issue of authenticity arose in relation to some student’s responses in that I identified additional answers information in different handwriting.

    My review of the file confirmed the findings of the WorkSafe Inspectors.

    CONSIDERATION

20. ATTA’s legal representative asserted that ASQA had not conducted its own investigation, relying instead upon the materials provided by WorkSafe into ATTA’s compliance for issuance of WorkSafe certificates, which was not relevant to a determination of compliance under the NVR Act, and as such ATTA’s registration should not have been cancelled.

21. ATTA’s legal representative strenuously argued that the material presented before the Tribunal does not support a submission that ATTA is currently non-compliant. Indeed, he was adamant that ATTA was now compliant. Additionally, he stated that ATTA had provided material to ASQA in August 2018 which clearly demonstrated its compliance. They asserted their client’s case had a significant prospect of success.

22. ATTA’s legal representative strenuously argued that not granting a Stay would render any review nugatory as the company would have to cease operating. He asserted that ATTA had significant financial exposures in respect of numerous leases for property and equipment, and that staff and students would be negatively impacted. He stressed that ATTA had operated successfully for many years and should not be placed in this untenable position.

23. ASQA’s legal representative submitted that ATTA had  breached the standards of two regulatory agencies, ASQA itself and WorkSafe, pursuant to significant deficiencies in the standard of training is has offered across high risk occupations. He submitted that there was no evidence before the Tribunal that ATTA is capable of quickly rectifying the non-compliance; and in any event WorkSafe considered ATTA’s conduct so grievous that it has commenced criminal proceedings.

24. ASQA’s legal representative argued the objectives of the NVR Act best serve the wider public interest. He submitted that concern for either business profitability or staff should not be at the expense of damage to the general public interest; arguing that the Act requires and the public demand vocational educational training institutions are operated by persons in whom there can be confidence at all times, as demonstrated by their professionalism, compliance with the law and ethical standards.

25. ASQA submitted that the protection of the public interest assumes even greater importance where the non-compliant training is directed into the areas of high risk construction work, health and safety. ASQA noted these work areas impact directly and significantly on the physical safety and wellbeing of the public. ASQA argued that it is apposite and relevant that the Supreme Court of Victoria refused the Applicant’s application for injunctive relief and that WorkSafe has rejected ATTA’s application for a new certificate of licence.

26. ASQA’s legal representative disputed the claims of ATTA, arguing ASQA had conducted its own thorough review, had offered ATTA the opportunity to respond to allegations and to rectify deficiencies, and as this had not been forthcoming, had cancelled ATTA’s registration as they were non-compliant with the standards. Additionally, he argued that scant information has been provided about the financial impact of not granting the Stay on the business or its impact upon full-time staff and students.

27. ASQA’s legal representative argued that allowing ATTA to continue to operate would mean it would be at significant risk of issuing qualifications based on non-compliant training. Training for students in Victoria would be superfluous as it cannot earn them a certification of authorisation as ATTA’s WorkSafe licence has been cancelled. This would be an unfair burden on students and employers as they would find the training undertaken was invalid. Students who undertook the training would be forced to undertake the training again, resulting in time lost and an additional financial burden on themselves and their employers. ASQA argued that ATTA’s had only commenced providing training in NSW after its Victorian WorkSafe authorisation was cancelled and that SafeWork NSW was currently reviewing ATTA’s operation, following complaints about its training provision in that state.

28. The Tribunal considered the Stay application based on the factors annunciated in the decision of President Downes J in Re Scott and Australian Securities and Investments Commission, noting they are not finite nor a compulsory checklist limiting the exercise of the discretion. The Tribunal determined on the evidence the following factors to be relevant in this matter.

    The prospect of success

29. As has been observed in several authorities, it is not the role of the Tribunal, in assessing the merits of a Stay application under s 41(2), to conduct a preliminary hearing (or sometimes referred to "a mini trial") of the evidence and issues to be raised subsequently at a final hearing, when evaluating an applicant's prospect of success. The task of the Tribunal in such an application is to consider whether facts and circumstances exist which would provide some basis for success.

30. Member Maryniak QC in Re Trades College Australia Pty Ltd and Australian Skills Quality Authority ("Re Trades College Australia")[19] observed:

    In the circumstances of a Stay Application one would expect a party to put their "best foot forward" by way of evidence to show that they were well on the way to substantial compliance with the Standards.

    The evidence of the Applicant does not show that the non-compliances have now been addressed despite the Applicant having been on notice of the majority of them since 11 April 2016. The Applicant's evidence is of a general nature and simply lacks specific detail as to any significant meaningful attempts at rectifying the non-compliances.

    On the basis of the current state of the evidence the Tribunal finds that the Applicant's prospects of success at final hearing are not good. After considering all the evidence the Tribunals finds that, despite having a clear opportunity to do so the Applicant has failed to adequately explain how to date its internal systems to ensure compliance have failed, nor has it successfully managed to explain how it will ensure any future repeat non-compliance, against a background of admitted non-compliance.

1. These comments of Member Maryniak appear equally apt in this matter, where ATTA has stated it has provided evidence of compliance by providing ASQA with copies of its policies, procedures and current course delivery materials which it presently applies; and is arguing that ASQA has made no findings of non-compliance in relation to any of them. ATTA did not present any evidence to the Tribunal that it had addressed or rectified any of the issues raised by either regulator, WorkSafe or ASQA.

2. Having considered all the evidence before it, the Tribunal is not satisfied that ATTA has produced sufficient evidence to demonstrate compliance with the applicable standards. It has failed to explain how it will prevent any further non-compliance, especially in light of the high risk nature of the training provided by ATTA. Additionally, it has failed to address serious breaches identified by WorkSafe which have resulted in criminal charges. The Tribunal cannot be satisfied on the evidence that ATTA has any prospects of a successful outcome at final hearing.

   Review would be rendered nugatory if a Stay were not granted

3. It is submitted on behalf of ATTA that if a Stay is not granted it will contribute to its closure and subsequent collapse, causing irrevocable financial losses and damages to the company and key staff.

4. The Tribunal accepted there was a real risk that ATTA may have to cease trading if a Stay was not granted but did concur with the ASQA argument that after 5 years of trading ATTA should have been able to generate a cash flow sufficient to cover any adverse contingences. There was insufficient evidence before the Tribunal to determinate the ability of ATTA to remain an ongoing concern if the Stay was not granted.

5. Regardless, the Tribunal was of the view that the public interest and concern with  ATTA being able to continue  to provide training in high risk areas  carried a greater weight than that of the business risks ATTA may be exposed to if the Stay was not granted. The Tribunal agrees  with the determination of the then Senior Member McCabe in Metro College of Technology Pty Ltd and Australian Skills Quality Authority:

   But there is also the question of the public interest. The regulatory system was devised to protect consumers of these courses, and to protect the good name of Australian educational institutions overseas. Many students travel long distances from overseas [...] The regulatory regime assumes there is a public interest in ensuring these programs are properly run according to recognized standards. Failures to adhere to standards – particularly where those failures suggest systemic problems, poor judgment or an unwillingness to comply with the law – must be taken very seriously.

   On balance, I am not satisfied it is desirable to order a Stay under s 41(2). I acknowledge that the Applicant may well not survive until the Hearing, which may be yet some time away. That would frustrate the review. I also accept the Applicant will be unable to recover its losses and reputational damage even if it is successful. I also acknowledge the hardship for teachers and the inconvenience of students. I am conscious that the Applicants case is not devoid of merit. But I am troubled by the important questions of public interest that have been raised. If the decisions are affirmed, the students who are still enrolled, or who may enrol, will rightly feel their qualifications have been undermined. That may undermine the confidence in the regulatory system and the integrity of the Australian vocational education and training sector.

   Public Interest

6. The Tribunal must take "into account the interests of any persons who may be affected by the review" and in this matter it is the general public who could be affected by this review if ATTA continues to provide training in high risk units. Counsel for ATTA contented that the Tribunal could take comfort in this regard, as to date no person had been injured and no individual accredited by ATTA had caused an injury on a construction site. The Tribunal was not comforted by these assurances. Instead, the Tribunal noted that the issue of OH&S criminal charges laid and pending against ATTA were germane to this request for a Stay application. The Tribunal notes that any other issue raised on the evidence was overshadowed by the Tribunal’s need to ensure that the public interest was preserved by this decision.

7. After considering all the evidence before the Tribunal, it finds that ATTA poses a real and continuing risk to its current students and future students, clients of the 'qualified' students who may be affected by defects in the qualifications of the students, the reputation of a major export industry (VET education sector) in Australia, and the general public. It is important that the students be protected, that the integrity of accredited training and assessment in Australia be guarded, and that the general public’s safety is not placed at any risk.

8. The Tribunal finds that the Australian public and the students are entitled to the protection of ASQA's decision, pending review by this Tribunal.

9. The Tribunal finds that the public interest in the circumstances outweighs the interests of the ATTA and its employees, pending hearing of the substantive application for review.

   DECISION

10. The Tribunal refuses the application for a Stay of the Australian Skills Quality Authority’s decision dated 4 December 2018.

I certify that the preceding 40(forty) paragraphs are a true copy of the written reasons for the decision of Ms Anna Burke AO, Member

[sgd]........................................................................

Dated: 22 February 2019

Date of hearing:	25 January 2019
Applicant:	Mr Nick Galatas GPZ legal
Advocate for the Respondent:	Mr Tim Llyod Legal Officer, ASQA