PRO Group Pty Ltd and Australian Skills Quality Authority

[2020] AATA 100

PRO Group Pty Ltd and Australian Skills Quality Authority [2020] AATA 100 (31 January 2020)

Division:GENERAL DIVISION

File Number:          2017/7563

Re:PRO Group Pty Ltd

APPLICANT

AndAustralian Skills Quality Authority

RESPONDENT

DECISION

Tribunal:Mr A. Maryniak QC, Member

Date:31 January 2020

Place:Melbourne

The Tribunal affirms the respondent's decision of 30 November 2017, as notified by letter dated 7 December 2017, in so far as it relates to the applicant’s CRICOS registration under section 10 of the Education Services for Overseas Students Act 2000 (Cth).

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

Mr A. Maryniak QC, Member

Catchwords

VOCATIONAL EDUCATION AND TRAINING – rejection of application for registration as provider of courses to overseas students – where application now compliant with legislative regime, standards and national code – whether compliance on the papers demonstrates capacity to provide education of a satisfactory standard after numerous attempts at such compliance – risk management approach to considering registration – decision under review affirmed

Legislation

Administrative Appeals Tribunal Act 1975 (Cth)
Education Services for Overseas Students Act 2000 (Cth)

National Vocational Education and Training Regulator Act 2011 (Cth)

Secondary Materials

National Code of Practice for Providers of Education and Training to Overseas Students 2017

REASONS FOR DECISION

Mr A. Maryniak QC, Member

31 January 2020

INTRODUCTION

1. On 29 August 2019, the Tribunal made a decision by consent pursuant to section 42C(2) of the Administrative Appeals Tribunal Act 1975, setting aside the decision made by the respondent on 30 November 2017, by letter dated 7 December 2017, to refuse the applicant’s application for initial registration as a Registered Training Organisation (RTO) under the National Vocational Education and Training Regulator Act 2011 (the NVR Act). In substitution thereof, the Tribunal granted the applicant's application for registration under the NVR Act and pursuant to section 17(5) of the NVR Act, the period for which the applicant is registered is until 31 August 2021.

2. What remains in issue is that part of the applicant's application seeking review of the decision of the respondent made on 30 November 2017, by letter dated 7 December 2017, to reject the applicant's application for initial registration as a CRICOS (Commonwealth Register of Institutions and Courses for Overseas Students) Provider, providing vocational education and training to overseas students, under section 10(1) of the Education Services for Overseas Students Act 2000 (the ESOS Act). Such decision is reviewable and within the jurisdiction of the Tribunal (sections 169AB and 169AG of the ESOS Act).

   STATUTORY FRAMEWORK

3. The ESOS Act provides the legislative framework for the national regulation of vocational education and training provided to overseas students in Australia. Its principal objects (pursuant to section 4A) are:

   (a)to provide tuition assurance, and refunds, for overseas students for courses for which they have paid; and

   (b)to protect and enhance Australia's reputation for quality education and training services; and

   (c)to complement Australia's migration laws by ensuring providers collect and report information relevant to the administration of the law relating to student visas.

4. A provider may apply to be registered to provide a course or courses and the ESOS agency may register the provider if the provider meets the registration requirements (sections 9(1) and 10(1) of the ESOS Act). The respondent is such an ESOS agency.

5. Per section 10(2) of the ESOS Act, the ESOS agency for the provider must use a risk management approach when considering whether to register the provider.

6. Relevantly, by section 11 of the ESOS Act, a provider meets the registration requirements if:

   (b)the ESOS agency for the provider is satisfied that the provider is complying, or will comply, with:

   (i)the Act; and

   (ii)the National Code; and

   (iii)if the ELICOS (English Language Intensive Courses for Overseas Students) Standards or Foundation Program Standards apply in relation to the provider--those Standards; and

   …

   (d)the ESOS agency for the provider is satisfied that the provider has the principal purpose of providing education; and

   (e)the ESOS agency for the provider has no reason to believe that:

   (i)the provider does not have the clearly demonstrated capacity to provide education of a satisfactory standard…

7. Further, a provider wishing to commence providing vocational education and training (VET) to overseas students must be a registered VET provider under the NVR Act (see definition of “provider” in section 6E(1)(b) of the ESOS Act).

   BACKGROUND

8. On 3 November 2016, the applicant applied for initial registration as a CRICOS provider under the ESOS Act.

9. During February 2017, the respondent conducted its first audit of the applicant’s premises.  Non-compliance with Standards 1.1, 2.1, 14.1 and 14.2 of Part D of the National Code and Standards P3.1, P8.1(b), P4.1, P5.2 and P7.3 of the ELICOS Standards was determined.

10. On 5 May 2017, the respondent conducted a second audit, following receipt of further material from the applicant.  Non-compliance with Standard 14.2 of Part D of the National Code and Standard P7.3 of the ELICOS Standards was determined.

11. On 23 November 2017, following the receipt of yet further material from the applicant, the respondent prepared an Evidence Analysis Report as a result of a third audit.  Non‑compliance with Standard 14.2 of Part D of the National Code remained.  During April 2018, following the receipt of yet further material from the applicant; the respondent determined that non-compliance with Standard 14.2 of Part D of the National Code remained.

12. On 23 May 2018, the applicant again provided further material in an attempt to reach compliance with the National Code.  The respondent, on this occasion, determined that the applicant was compliant 'on the papers' with Standard 14.2 of the National Code. Standard 14 relates to core functions regarding staff capability, educational resources and premises.

13. By Standard 14.2, the registered provider must have adequate education resources, including facilities, equipment, learning and library resources and premises as required by the quality assurance framework applying to the course.  Where the course provided by the registered provider is not subject to an appropriate quality assurance framework, the registered provider must ensure it has adequate education resources, including facilities, equipment, learning and library resources, and premises, including ownership or tenancy arrangements for the premises, as are needed to deliver the registered course to the students enrolled with the registered provider.

    THE ISSUE

14. The Tribunal is to determine, based upon the material before it, whether the applicant's application, having now complied with the National Code, meets the registration requirements. Does the Tribunal, standing in the shoes of the respondent, have no reason to believe that the applicant does not have the clearly demonstrated capacity to provide education of a satisfactory standard, as required by section 11(e)(i) of the ESOS Act?

    THE APPLICANT’S SUBMISSIONS

15. The applicant submits that it is now compliant with the National Code and, in any event, no formal decision was ever made by the respondent on the basis of section 11(e)(i) of the ESOS Act, hence it says it is entitled to registration. In the alternative, the applicant submits that as a matter of statutory construction, the ESOS Act:

    (a)does not preclude the registration of start-ups with no prior history of implementation;

    (b)it is irrelevant that an applicant for registration is a start-up with no prior history of implementation;

    (c)for the purposes of section 11(e)(i), the respondent needs to show more than simply that the applicant is a start-up with no prior history of implementation;

    (d)conceding that a 'risk management approach' must be taken, such cannot mean that the respondent and hence the Tribunal must be satisfied that an applicant poses zero risk;

    (e)risk-based concerns about how other RTO's have operated are legally irrelevant to the exercise of the power in section 11(e)(i) to withhold registration; and

    (f)if risk-based concerns about how other RTO's have operated are relevant, then the applicant submits the respondent has not proved the evidentiary foundations of these concerns.

    THE RESPONDENT’S SUBMISSIONS

16. The respondent points to one of the principal objectives of the ESOS Act being to protect and enhance Australia's reputation for quality education and training services (section 4A) and an ESOS agency’s discretion to register a provider "if the provider meets the registration requirements" (section 10(1)). Particular emphasis is placed on section 10(2) which provides that a risk management approach must be used in considering registration.

17. The respondent submits it (and hence the Tribunal on review) must assess all the evidence going to the risk that an applicant may not have the capability to implement and deliver compliant training.  Furthermore, the risk to students, the public interest, the efficacy of the regulatory framework, the credibility of vocational education and training as an industry, and Australia's international reputation in this regard, must all be considered.

18. It is submitted that these aspects of the ESOS Act inform the powers, duties and responsibilities of a decision-maker under section 11 of the ESOS Act in that they must be satisfied that the applicant will comply with both the ESOS Act and the National Code. The Tribunal must have no reason to believe that the provider does not have the clearly demonstrated capacity to provide education of a satisfactory standard.

19. The respondent submits that these sections contemplate that on occasion there will be circumstances where mere compliance in accordance with the 'paper' evidence requirements of the National Code Standards will be insufficient for a decision-maker to determine satisfaction regarding the delivery of CRIOCS.  It is submitted that how the applicant conducts its initial application process is, in itself, a relevant consideration in reaching a determination on the risk profile of that particular applicant.

    CONSIDERATION

20. The Tribunal has considered the evidence before it, comprising the T Documents, affidavits lodged with the Tribunal, exhibits and the oral testimony of Arvid Yaganegi and Kylie Stafford, and the submissions of the parties. On balance, the Tribunal finds that the applicant's numerous attempts to get its application to comply with the National Code is a relevant consideration when making a determination, one way or the other, under section 11(e)(i) of the ESOS Act.

21. It was submitted that this matter was somewhat unique because as at the time of this Tribunal’s decision the applicant’s application for registration is compliant in form. Further, the respondent had not previously made a decision against the applicant on the basis of section 11(e)(i) of the ESOS Act in deciding against the applicant’s registration on 30 November 2017.

22. The Tribunal notes that the respondent originally rejected the application relating to the ESOS Act because “[a] review of reconsideration evidence submitted by [the applicant] on 23 November 2017 found the organisation remains non-compliant with… the [National Code] Part D Standard 14.2…”

23. Part 7A, Division 2 of the ESOS Act confers statutory rights of review and by this application for review to the Tribunal, the applicant sought review. The applicant points out that the earlier reason for rejection ‘fell away’ by July 2018 as the respondent had reached a state of satisfaction that the applicant had rectified the shortcomings in its application and was compliant in that regard.

24. The applicant submits that once it got its application in order, the respondent should have consented to its registration noting that the respondent has essentially done that in respect of its NVR Act application. However, the ESOS Act is a separate distinct Act governing the regulation of vocational education and training provided to overseas students.

25. On balance, the Tribunal is not satisfied that the applicant’s submission, as stated above, is the correct approach.  As the parties agree, the decision of this Tribunal is to be reached by way of the evidence and submissions before it at the time this decision is made, not as at July 2018.

26. The respondent is entitled to make submissions on other grounds. It is the task of the Tribunal to assess such submissions against the evidence before it of the history of attempts at getting to a compliant application for registration, even though the applicant is a start-up with respect to the ESOS Act.

27. Regardless of whether or not there were instances in the past of other applicants having made multiple attempts at getting to a compliant form of registration and then being granted registration by the respondent, whether or not in conjunction with a NVR registration, the respondent is entitled to make its risk management approach argument before the Tribunal.

28. The Tribunal is to make the correct or preferable decision on the submissions and evidence before it. The starting point is the relevant provisions of the ESOS Act. As set out above, one of the main objects of the ESOS Act is to protect and enhance Australia’s reputation for quality education and training services (section 4A(b) of the ESOS Act).

29. The respondent, and thus the Tribunal, has discretion as to whether or not it registers a provider if the provider meets the registration requirements (section 10(1) of the ESOS Act). It must use a risk management approach when making the registration decision (section 10(2) of the ESOS Act). That compulsory approach is discrete to the ESOS Act and is not a requirement of the NVR Act.

30. The Tribunal accepts, on balance, the respondent’s submission that consistent with the above-mentioned provisions, the Tribunal, standing in the respondent’s shoes, is to assess the risks which the applicant may pose to overseas students, the public and the quality and reputation of Australia’s vocational education and training industry.

31. Compliance with both the National Code and the Act is mandatory if an applicant is to meet the registration requirements. In this matter, it has taken the applicant five attempts to 'get its house in order' with respect to achieving an application in a compliant form. Such difficulties, on the part of the applicant, are clearly relevant and form part of the matters to be considered when undertaking a risk management approach to considering registration as is required by the ESOS Act. This is what is contemplated by the ESOS Act.

32. It is of valid concern that the applicant's application process has been an extended and difficult ordeal.  The applicant's inability to produce a compliant application without a history of such numerous non-compliant attempts gives this Tribunal little confidence that, if the applicant was to be granted registration, it will from that point demonstrate its capacity to provide education at a satisfactory standard.  The applicant's conduct during the application process is to be taken into account.

33. The risk management approach must be taken as is consistent with the requirement under the ESOS Act. The Tribunal must be satisfied that the applicant will comply with both the Act and the National Code (section 11(b) of the ESOS Act). On balance, on the evidence of non-compliance in its various attempts to simply get to an acceptable form of registration ‘on the papers’, the Tribunal is not so satisfied. Such history provides a proper foundation in assessing future risk.

34. Further, the history of the applicant’s registration attempts is a proper basis for a belief that the applicant, on such evidence, does not have the clearly demonstrated capacity to provide education of a satisfactory standard.  This is a relevant factor which the respondent and hence this Tribunal should take into account.

35. Such difficulties with the registration process by the applicant, whether intentional or not, display a pattern of behaviour inconsistent with any great confidence in the applicant complying in the future. The risk management approach, which is at least in part preventive and protective in nature, is consistent with the objects of the ESOS Act.

36. The Tribunal finds that the difficulties the applicant has had with the application process do constitute a reason to believe that this applicant does not have the clearly demonstrated capacity to provide education of a satisfactory standard.

37. The applicant submitted that on the evidence it got it nearly right on the first and second attempts and that its difficulties in complying with the National Code Standard 14.2 was a distraction from the extent to which the applicant was otherwise correct and compliant.  The Tribunal rejects this submission as the evidence shows it took numerous attempts to get it right ‘on the papers’ and the Tribunal is satisfied that registration should not be granted for the reasons discussed above.

38. The applicant has shown through its conduct that it has had substantial difficulty in putting together an application that is compliant. Such a history of non-compliance with the application process is clearly relevant to the respondent, and hence this Tribunal on review, in reaching a determination as to this applicant's prospects of being able to comply with the ESOS Act and the National Code. Furthermore, it provides a basis for the Tribunal’s belief that the applicant does not have a clearly demonstrated capacity to provide educational services of a satisfactory standard. The Tribunal finds that this applicant, on the material before it, has not satisfied the requirement of section 11(e)(i) of the ESOS Act.

39. The Applicant alternatively submitted that under the ESOS Act the registration of start-ups with no history of implementation is not precluded and hence as a stand-alone fact it cannot be relevant, let alone determinative, that an applicant for registration is a start-up with no prior history of implementation.

40. Whilst the Tribunal accepts that submission, such a fact is relevant for the purposes of considering section 11(e)(i) of the ESOS Act, particularly when combined with the evidence in this matter of the difficulties the applicant had in getting its application into a compliant form.

41. Further, although the Tribunal accepts the applicant’s submission that a ‘risk management approach’ cannot mean that an applicant must pose zero risk, the fact remains that the evidence before the Tribunal supports its finding that there is some risk associated with this applicant because of the prior difficulties it has had with its application, which it was the author of.

    DECISION

42. The Tribunal affirms the respondent's decision of 30 November 2017, as notified by letter dated 7 December 2017, in so far as it relates to the applicant’s CRICOS registration under section 10 of the ESOS Act.

I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for the decision herein of Mr A. Maryniak QC, Member.

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

Associate

31 January 2020

Dates of hearing:  15-16 August 2019

Solicitors for the Applicant:                GPZ Legal

Counsel for the Applicant:                 Mr Jeremy Whelen

Solicitors for Respondent:                 Mr Tim Lloyd, Legal Officer, ASQA