Re Ivy Education Group Pty Ltd and ASQA
[2013] AATA 138
[2013] AATA 138
Division GENERAL ADMINISTRATIVE DIVISION File Number
2012/4382
Re
Ivy Education Group Pty Ltd
APPLICANT
And
Australian Skills Quality Authority
RESPONDENT
DECISION
Tribunal Deputy President RP Handley
Date 14 March 2013 Place Sydney The decision under review to cancel the Applicant’s registration as a Registered Training Organisation is affirmed. The cancellation will take effect 30 calendar days from the date of this decision.
......................[SGD]......................................
Deputy President RP Handley
CATCHWORDS
EDUCATION, EMPLOYMENT AND WORKPLACE RELATIONS – National Vocational Education and Training Regulator Act 2011 (Cth) – Registered Training Organisation – Standards for NVR Registered Training Organisations (RTO) (the Standards) – Non-compliance by RTO with the Standards – Registration of RTO cancelled prior to the time it could apply for renewal of its registration – Application to the Administrative Appeals Tribunal for review of the decision of the Australian Skills Quality Authority – Decision under review affirmed
LEGISLATION
Administrative Appeals Tribunal Act 1975 (Cth)
National Vocational Education and Training Regulator Act 2011
National Vocational Education and Training Regulator (Transitional Provisions) Act 2011
Occupational Health and Safety Act 2011
CASES
Freeman v Secretary, Department of Social Security (1988) 19 FCR 342
Re Lobo and Department of Immigration and Citizenship (2010) 116 ALD 639
Security Training and Tactics Pty Ltd v Australian Skills Quality Authority [2012] NSWADT 178
Shi v Migration Agents Registration Authority (2008) 235 CLR 286
SECONDARY MATERIALS
Standards for NVR Registered Training Organisations 2012
REASONS FOR DECISION
Deputy President RP Handley
14 March 2013
Ivy Education Group Pty Ltd (IEG) (the Applicant) has applied for the review of a decision of a delegate of the Australian Skills Quality Authority (ASQA) (the Respondent) made under the National Vocational Education and Training Regulator Act 2011 (Cth) (the NVR Act) to cancel its registration as a NVR (National Vocational Education and Training Regulator) Registered Training Organisation (RTO).
BACKGROUND
IEG, trading as Ivy Business College (Ivy College), was first registered as a RTO on 11 June 2009 by the (then State regulator) New South Wales Vocational Education and Training Accreditation Board (VETAB). On 30 October 2009, it was registered on the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS). Ivy College was approved to provide students with vocational education and training (VET) courses leading to business and accounting qualifications. Ivy College has approval to enrol 279 overseas students and currently has about 270 students enrolled. I understand a further 165 students have sought to enrol.
On 19 August 2010 and again on 5 April 2011, VETAB conducted audits of Ivy College’s operations and found it to be non-compliant with the National Vocational Education and Training (VET) Quality Framework including the standards for RTOs. On 19 April 2011, VETAB imposed a condition on IEG’s registration as an RTO specifying that:
copies of all student assessments completed to the end of 2011 be maintained for review at a future audit. Assessments should include all evidence and tools that assessors have used to make the judgment that students are competent.
Following receipt of further evidence from IEG on 23 May and 30 May 2011, VETAB prepared a report dated 2 June 2011. The Report identified that “[t]he most significant issue identified is student attendance” but also identified the need to check other matters. VETAB therefore decided to impose the following condition on the Applicant’s registration as an RTO:
a monitoring audit take place within the next 12 months to check specifically on student attendance. In addition, the audit will also check the implementation of customised training and assessment materials, the records management systems, intervention strategies and completed assessments.
The NSW VETAB ceased operations on 30 June 2011 and, from 1 July 2011, ASQA became the National Vocational Education and Training Regulator (National VET Regulator) for referring States. It thereby assumed responsibility for the registration and oversight of the operations of NVR RTOs (hereafter referred to as RTOs).
On 6 September 2011, Ivy College was purchased by IEG, being a company established for that purpose and owned by Mr James Tse and Ms Rong Hu. Mr Karri Reddy was appointed as its new Chief Executive Officer (CEO).
On 12 February 2012, ASQA conducted a further site audit at Ivy College’s premises in response to an application by IEG to add further qualifications to the ‘scope’ of its registration and in order to monitor Ivy College’s operations. (The ‘scope of registration’ of a RTO is defined in s 3 of the NVR Act as meaning “the things that an organisation is registered to do”, including providing training and assessment for VET qualifications.) In a report dated 2 March 2012, ASQA again found Ivy to be non-compliant. By letter dated 23 April 2012, ASQA notified IEG of its proposed intention to cancel IEG’s registration as a RTO and to refuse its application to add further qualifications to its scope, a decision made by the Commissioners on 20 March 2012.
In response to ASQA’s invitation to respond, IEG submitted evidence of its rectification of the identified areas of non-compliance which was considered by the ASQA auditors on 20 July 2012. By letter dated 25 September 2012, ASQA notified IEG of the decision made by the ASQA Commissioners on 8 August 2012 to cancel IEG’s registration as a RTO.
On 2 October 2012, IEG applied to the Tribunal for a review of this decision and for a Stay of its implementation which the Tribunal granted on 12 October 2012. At the commencement of the hearing on 18 February 2013, the Tribunal was informed that Mr Reddy had resigned as CEO of Ivy College and Mr Tse had stepped in as interim CEO pending the appointment of a suitable replacement. When Mr Tse acknowledged that he had no experience in vocational education and training or of managing a VET college, I expressed my concern for the welfare of the students who, at that time, had recently commenced the new academic year, particularly given the lack of relevant experience on the part of the other owner of IEG, Ms Hu, and the apparent lack of any other responsible person with educational experience managing the College.
In response to my expression of concern, Mr Tse and Ms Hu appointed a former Director of Studies of Ivy College (who had worked at Ivy College from September 2011 to July 2012), Mr David Farrington, to the position of “Principle Executive Officer” (sic), and I was provided with a copy of his contract of employment dated 20 February 2013. This states that he reports to the CEO, Mr Tse, and that his functions include “[m]anaging the day to day academic and related activities of the RTO CRICOS Program and staff” and working “with the CEO and Director to ensure that the College implements SNR, VET Quality Framework & National Code standards relating to the Courses and attendance”. Relevantly, Mr Farrington has an Advanced Accounting Diploma (with Distinction) and a “Certificate IV in Training and Assessment TAA40104 (upgrading to TAE40110)”.
THE RELEVANT LEGISLATION
ASQA has power to regulate RTOs under the National Vocational Education and Training Regulator (Transitional Provisions) Act 2011 (Cth) (the Transition Act) and the NVR Act. Prior to 1 July 2011, the power to regulate was State based and, as the Applicant was based in NSW, it was subject to review by VETAB.
Section 17 of the NVR Act states:
Section 17: Registration
Grant of application for registration
(1) The National VET Regulator may grant an application for registration.
(2) In deciding whether to grant an application, the National VET Regulator must consider whether the applicant complies with:
(a) the VET Quality Framework; and
(b) the applicable conditions of registration set out in Subdivision B of this Division.
(3) When considering the application, the National VET Regulator may conduct an audit of any matter relating to the application.
(4) The National VET Regulator may charge a registration assessment fee for considering the application.
Period of registration
(5) If the National VET Regulator grants an application, the Regulator must also determine the period for which the applicant is registered. The period must not be more than 5 years.
Note: For renewals of registration, see section 31.
Conditions of registration
(6) If the National VET Regulator considers it appropriate to do so, the Regulator may impose one or more conditions under subsection 29(1) to which an organisation's registration is subject.
Note: An NVR registered training organisation is also subject to statutory conditions, see Subdivision B of this Division.
The statutory conditions to which RTOs are subject are contained in Part 2, Division 1, Subdivision A of the NVR Act. Pursuant to s 21 of the NVR Act, a RTO must comply with the VET Quality Framework; satisfy Fit and Proper Person requirements; satisfy the Financial Viability Risk Assessment Requirements; notify the National VET Regulator of material changes; provide such information as the Regulator requests for the purposes of the NVR Act; cooperate with the Regulator (at least to the extent it is necessary for the Regulator to perform its functions, or it is necessary to facilitate the Regulator’s performance of its functions); and comply with any general directions given by the National VET Regulator.
Section 22(1) provides that the VET Quality Framework includes a requirement that RTOs must comply with the Standards for RTOs. Section 185(1) empowers the Minister, by legislative instrument, to make standards for RTOs. On 26 June 2011, the Minister issued the Standards for NVR Registered Training Organisations 2011 (SNRs).
The National VET Regulator has power to impose administrative sanctions on a RTO under s 36 of the NVR Act, subject to the natural justice requirements set out in s 37. Section 36 states:
Sanctions
(1) This Subdivision applies if:
(a) after natural justice requirements have been satisfied, the National VET Regulator is satisfied that it is appropriate to impose one or more sanctions on an NVR registered training organisation; or
(b) in exceptional circumstances, the National VET Regulator is satisfied that it is appropriate to impose one or more sanctions on an NVR registered training organisation without satisfying natural justice requirements.
(2) The National VET Regulator may do one or more of the following:
(a) give a written direction to an NVR registered training organisation requiring the organisation to rectify a breach of a condition on the organisation's registration;
(b) give a written direction to an NVR registered training organisation requiring the organisation to notify its VET students, in writing, of a matter set out in the direction;
(c) shorten the period of an NVR registered training organisation's registration;
(d) amend an NVR registered training organisation's scope of registration;
(e) suspend all or part of an NVR registered training organisation's scope of registration under section 38;
(f) cancel an NVR registered training organisation's registration under section 39.
(3) In determining what action to take in relation to an NVR registered training organisation, the National VET Regulator may have regard to:
(a) the organisation's conduct, or circumstances existing, before the Regulator had cause to consider imposing a sanction on the organisation (including before the commencement of this section); and
(b) if section 37 applies--the organisation's conduct, or circumstances existing, since the Regulator gave the organisation a written notice as mentioned in that section.
Section 37 states:
Natural justice requirements
(1) For the purpose of paragraph 36(1)(a), before making a decision to do any of the things mentioned in subsection 36(2) in relation to an NVR registered training organisation, the National VET Regulator must give the organisation a written notice:
(a) stating that the Regulator intends to make a decision to do a thing mentioned in that subsection and the reasons for the proposed decision; and
(b) inviting the organisation to give the Regulator a written response to the notice:
(i) if the Regulator considers that the circumstances require urgent action--within a period specified in the notice, which must be at least 24 hours; or
(ii) in any other case--within a period specified in the notice, which must be at least 72 hours.
(2) After considering any response received within that period, if the National VET Regulator still considers that the decision should be made, the Regulator:
(a) may make the decision; and
(b) must give the NVR registered training organisation concerned written notice of the decision.
Section 39 sets out the National VET Regulator’s power of cancellation:
Cancellation
(1) The National VET Regulator may, by notice in writing, cancel an NVR registered training organisation's registration in any circumstances that the Regulator considers it appropriate to do so, including for failure to pay a registration fee.
Note: Details relating to an NVR registered training organisation whose registration is cancelled are included on the National Register, see section 216.
(2) An organisation whose registration is cancelled under this Act must return its certificate of registration to the National VET Regulator within 10 days of the day the cancellation takes effect.
Note: Failure to return a certificate of registration is a contravention of a civil penalty provision, see section 112.
(3) An organisation whose registration is cancelled under this Act may not apply for registration as an NVR registered training organisation for 2 years, or such shorter period as the National VET Regulator considers appropriate, after the day the cancellation takes effect.
The substantive issue for the Tribunal is whether IEG’s registration as a RTO should be cancelled. This requires a consideration of whether IEG is non-compliant with the SNRs identified by ASQA and, if so, whether cancellation is the correct or preferable decision. There are, however, two preliminary issues raised by the Respondent which must first be addressed.
JURISDICTIONAL ISSUE
The Respondent raised as a preliminary issue whether the Applicant had made a valid application for review. Section 29(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) states that an application to the Tribunal for a review of a decision must contain (at paragraph (c)) “a statement of reasons for the application”. Ivy’s application for review, completed by Mr Reddy, stated as the reason for the application “I want to apply behalf (sic) of IVY Education Group Pty Ltd accordance (sic) with section 25 of the Administrative Appeals Tribunal Act 1975 (the AAT act) Appeal (sic) against notice of cancel (sic) our registration from ASQA”.
I agree that this is not a clear statement of the reason for the application. However, given that prior to the application for review being lodged, there had been a considerable period during which Ivy’s compliance with various SNRs had been in contention, I am satisfied that implicit in the statement of reasons for the application was ongoing disagreement over whether IEG complied with the those SNRs and whether, if it did not, this warranted the cancellation of Ivy’s registration as a RTO. Moreover, it became abundantly clear in the course of the pre-hearing conferences and directions hearings that this was the reason for application. I also note this issue does not appear to have been raised by the Respondent until the hearing.
I am satisfied, therefore, that this issue does not undermine the Tribunal’s jurisdiction to entertain Ivy’s application for review.
CURRENCY OF THE EVIDENCE BEFORE THE TRIBUNAL
The Respondent contended that there is a temporal element associated with the grant of and maintenance of registration as a RTO under the NVR Act and that, as a result, the point in time at which compliance with the provisions of the SNRs must be considered is, in this case, the date of cancellation of registration and not the date of the Tribunal hearing. Mr Lloyd, for the Respondent, contended that the context of the cancellation decision in the NVR Act is analogous to that identified in the decision in Freeman v Secretary, Department of Social Security (1988) 19 FCR 342 (Freeman). He submitted that ASQA’s cancellation decision falls within the exception to the general approach that the Tribunal makes the correct or preferable decision standing in the shoes of the decision-maker and taking into account all the relevant evidence available to it at the time of making its decision: see, for example, Kirby J in Shi v Migration Agents Registration Authority (2008) 235 CLR 286 (Shi), at [33-51].
In Shi, the High Court, while recognising the need for the Tribunal, in most cases, to take into account evidence of relevant supervening events between the time of the decision and the time of the hearing, also recognised that “the particular nature of the ‘decision’ in question may sometimes, exceptionally, confine the Tribunal’s attention to the state of the evidence as at a particular time” (per Kirby J at [46] and see also Kiefel J at [142-143]). As Deputy President Forgie pointed out in Re Lobo and Department of Immigration and Citizenship (2010) 116 ALD 639, at [39], the High Court decision in Shi indicates that unless there is a temporal element in the legislation requiring a contrary conclusion, the Tribunal should address the issues arising from the decision under review rather than the specific decision itself.
Regard to the particular nature of the cancellation decision to identify any temporal element requires a consideration of the context of the NVR Act and the SNRs, non-compliance with which are relied upon by ASQA as the reason for its decision.
The objects of the NVR Act are stated in s 2A:
Objects
The objects of this Act are:
(a) to provide for national consistency in the regulation of vocational education and training ( VET ); and
(b) to regulate VET using:
(i) a standards-based quality framework; and
(ii) risk assessments, where appropriate; and
(c) to protect and enhance:
(i) quality, flexibility and innovation in VET; and
(ii) Australia's reputation for VET nationally and internationally; and
(d) to provide a regulatory framework that encourages and promotes a VET system that is appropriate to meet Australia's social and economic needs for a highly educated and skilled population; and
(e) to protect students undertaking, or proposing to undertake, Australian VET by ensuring the provision of quality VET; and
(f) to facilitate access to accurate information relating to the quality of VET.
Note 1: The standards-based quality framework mentioned in paragraph (b) consists of instruments made by the Ministerial Council, the Minister or the National VET Regulator.
Note 2: These objects are subject to the constitutional basis for this Act (see Division 3)
Of significance for the purposes of a cancellation decision are the objects of regulating vocational education and training, protecting and enhancing quality, flexibility and innovation in VET and Australia’s reputation for VET nationally and internationally, and protecting students. I note that s 2A was inserted in the NVR Act pursuant to the National Vocational Education and Training Regulator Amendment Act 2011 and took effect on 17 May 2012. The Explanatory Memorandum for the National Vocational Education and Training Regulator Amendment Bill 2011 refers to a report of the Senate Standing Committee on Education, Employment and Workplace Relations into the NVR Act (in its draft form) which noted that “several major players in the sector noted the lack of an objects clause in the bill”. While the Committee’s report acknowledged that the relevant intergovernmental agreement did include objects and that an objects clause is not always necessary, it also considered that the lack of objects in the public domain either through the NVR Act or the intergovernmental agreement was “unfortunate”. Section 2A was intended to address this concern and was drafted “following circulation of a consultation paper to stakeholders and meetings held with stakeholders in April and August 2011”.
Section 36(2) of the NVR Act (see above at paragraph 15) enables the National VET Regulator (ASQA) to apply a range of sanctions to non-compliant RTOs. Cancellation is the most extreme of these sanctions. The decision to apply sanctions is a discretionary one and s 36(3) provides that the National VET Regulator may have regard to the RTO’s conduct and circumstances in considering whether to impose sanctions. Section 37 (see above paragraph 16) imposes natural justice requirements on the National VET Regulator in the exercise of these powers involving giving the RTO notice of its proposed intention to impose sanctions and of its reasons for doing so and inviting the RTO to respond. The National VET Regulator must take into account any response from the RTO in making its decision. Thus, the Act contemplates submissions being made by RTOs in response to a notice received from ASQA and it is foreseeable that ASQA might decide to impose a lesser sanction as a result. Thus, the Act contemplates interaction between the parties before a final decision is made by ASQA.
The series of audits which were undertaken in Ivy College’s case in the period leading up to the cancellation decision and in the period since then are a reflection of the contemplated interaction between ASQA and RTOs and, in my view, in line with the objects of the NVR Act which, amongst other things, seek to enhance the quality of VET. Providers of education should always be looking for improvements in the quality of their services. The way in which education is delivered is constantly changing as ideas about delivery and content change. It should not ever be static. An examination of the SNRs appears to recognize this. The standards seek to promote continuous improvement: see SNR 15.1, 16.2 and 17.2.
A cancellation decision made by ASQA should be distinguished from a decision, for example, to cancel a pension where, at issue, is whether the person had an entitlement to a pension at a particular point in time: see Freeman. An ASQA decision is not about a RTO’s qualification for registration. It is about whether the RTO complies with the relevant standards, and the process leading up to a decision to impose sanctions permits a RTO to address the non-compliance issues raised in the notice of intention to impose sanctions. In the same way, on a review by the Tribunal, a RTO will inevitably make submissions as to why it is now compliant with the relevant standards having provided evidence that it has addressed the non-compliance issues identified by ASQA.
In my view, the provisions relating to sanctions in the NVR Act appear to be focused on issues rather than on the particular timing of the decision and I am not satisfied that there is a temporal element necessitating a contrary approach in reviewing a reviewable decision. Thus, the Tribunal should take into account all relevant evidence available to it at the time of the hearing. I note that while there are also civil penalty provisions set out in s 111 of the NVR Act for breach of a condition of registration (including, pursuant to s 22, a breach of the SNRs), breach of a condition of registration does not necessarily trigger a cancellation decision as the Administrative Decisions Tribunal recognized in Security Training and Tactics Pty Ltd v Australian Skills Quality Authority [2012] NSWADT 178.
EVIDENCE FROM THE TRAINERS
The Applicant provided statements from three trainers, Anna De Sisto (statement dated 29 January 2013), Mohammed Raihan (statement dated 29 January 2013) and Ranajit Bhuiyan (statement dated 4 February 2013). Mr Bhuiyan told the Applicant he was unable to attend to answer questions by way of cross-examination by the Respondent because he was unwell and unavailable for the four days of the hearing. This was unfortunate since he was the focus of an allegation by one of ASQA’s auditors, Kaye Watkins, in her statement dated 14 February 2013, that at the time of the spot audit conducted on 12 February 2013, Mr Bhuiyan had been conducting a class combining different units. There were also issues raised in relation to the students attending his classes. I have not included reference to Mr Bhuiyan’s statement because of his unavailability for cross-examination.
The Respondent also provided a statement from a further trainer, Keith Meyer, dated 24 January 2013.
Anna De Sisto
Ms De Sisto provided a statement dated 29 January 2013 and gave evidence at the hearing. Ms De Sisto has worked as a trainer at Ivy College since September 2011. She teaches courses for the Diploma of Business. Ms De Sisto holds a Diploma in Business Management and a Certificate IV in Training and Assessment. She said her industry experience over the past five years comprises her visiting a hairdressing salon in Caringbah on a six to eight monthly basis where she conducts some training with staff, and helps them with working out their business methods and such matters as how to undertake extra advertising. In total, this involves one and a half to two weeks a year, often on Saturdays or during the break between terms. In the past, Ms De Sisto owned and ran her own hairdressing salon which she sold in about 1995. She ha also undertaken training for other colleges for about seven or eight years before being engaged by Ivy College.
Ms De Sisto said there have been continuous improvements in the operation of Ivy College since the new owners took over in September 2011, for example in the moderation and validation of assessments, and in available resources. She said she marks students as being in attendance at a class at the time when they join the class and, if a student fails to attend, she notifies the College administration. It is for the College’s administration to contact the student about non-attendance. Ms De Sisto denied, during cross-examination, having marked a student as present when, in fact, the student was absent.
Ms De Sisto said that on the day of the spot audit carried out by ASQA auditors (Tuesday 12 February 2013) there were only five students present at the commencement of her class out of 28 enrolled. A sixth student came in late. She was unable to explain the small number of students attending but said this was very unusual and could have been because the students were celebrating the Chinese New Year. She acknowledged that she also did not have attendance of 80% of the students in the class on Wednesdays. Her guess was that about 60% of students were meeting the requirement to attend 80% of classes.
Ms De Sisto said the College asks for feedback from students at the completion of each unit. She also said that trainers have in the past been evaluated by the Principal of the College. She has been evaluated once since joining the College in September 2011.
Ms De Sisto acknowledged that some of the students are not ‘work ready’ on completion of their courses. She said “most of these students … don’t want to be studying, they’re here because they have to … a lot of them are looking for PR” in Australia (meaning permanent residency).
Ms De Sisto was referred to an exchange of emails with Mr Meyer on 21 and 22 February 2012 in which she referred to a proposal made to combine Diploma and Certificate IV classes in the College. She said there was a meeting at which she expressed the view that this should not happen and, as far as she is aware, it did not happen. Ms De Sisto said “[t]hings have improved” since then, and that if she was not happy, she would not be working there now.
It was apparent from Ms De Sisto’s evidence that she has no recent experience of managing meetings (although she said she takes the minutes of Ivy College meetings), has little experience of document design and development, and little experience of planning and reviewing administrative systems or managing projects, all of which are units of the course she teaches. Ms De Sisto was aware of the need to demonstrate industry currency but did not, in my view, meet this requirement.
Mohammed Raihan
Mr Raihan provided a statement dated 29 January 2013 and gave evidence at the hearing. Mr Raihan has a Bachelor of Business Administration from Dhaka University and a Master of Arts in Accounting from Macquarie University. He is an Associate of CPA Australia, the professional body representing Certified Practising Accountants. Mr Raihan said that between 2001 and 2005, he worked as an executive in a large multinational company. He worked as an assistant accountant for Kargar and Associates periodically from July 2009 and in 2010 and, since July 2010, he has worked casually during “the tax season” for H&R Bock for a couple of days a week preparing tax returns. Mr Raihan said he has worked as a trainer for Ivy College since March 2010. Currently, he teaches units for the Diploma of Business.
Mr Raihan said he was asked to prepare a statement for these proceedings by Mr Reddy and agreed to do so because he thought it might be useful. He said he discussed with Mr Reddy the sort of things he might say in the statement, but did not discuss this with any of the other trainers.
Mr Raihan was asked about his ‘industry currency’. Although his work as an assistant accountant and Associate of CPA Australia involves him considering all sorts of business scenarios, he acknowledged that, in the past five years, he has had no industry experience in various units that he teaches, such as advertising, writing, managing a payroll, general administration and human resources management. Mr Raihan also acknowledged that he is not fully aware of the Australian Quality Framework and Guidelines.
Keith Meyer
Mr Meyer provided an affidavit dated 24 January 2013. He said that on 6 February 2012, he was engaged by Ivy College as a casual trainer for a period of six months to teach evening classes for the Certificate IV in Business Administration. The class roll for his class had 30 names on it but only five Course Manuals were available for the class and there was only one computer in the classroom he was allocated, which he was told was for the trainers’ use. During the two weeks Mr Meyer ultimately taught at the College, the greatest number of students who attended a class was 10. With students often arriving late or leaving early, there were often only three or four students in the class. Because of the shortage of Course Manuals, he photocopied some of the modules to provide to the students but was asked by Mr Reddy to limit his copying because he was using a lot of paper.
Mr Meyer said “I was also very concerned by the fact that three (3) Asian students had been enrolled in the class and they spoke no English”. He had to enlist the help of another student to translate for them. Mr Meyer said that when he raised this with Mr Reddy, Mr Reddy shook his head and walked away.
Mr Meyer also had a dispute with Ivy College over the terms of his engagement, Ivy College stating that he was a contractor and Mr Meyer claiming that he was a casual employee. Mr Reddy subsequently terminated Mr Meyer’s engagement because, Mr Reddy said, Mr Meyer was overqualified for the position. Mr Meyer described the College as poorly run and a “shemozzle”.
MR REDDY’S EVIDENCE
Mr Karri Reddy, the former CEO of Ivy College, said he is currently unemployed. He resigned as CEO on 31 January 2013 and is no longer involved in the management of the College. Mr Reddy said he experienced heart problems on 7 January 2013 and was taken to Concord Hospital where he spent three days undergoing tests. He has seen a heart specialist and is to undergo further tests. He also consulted a psychiatrist and is receiving treatment for stress and attending relaxation classes.
Mr Reddy said he has a Master of Business Administration (MBA) and spent three years studying for a PhD before discontinuing. He was formerly the CEO of another RTO, HiTech Labs Australia Pty Ltd, trading as Australian College of Education and Training, which relinquished its registration after it received notice of VETAB’s intention to propose cancellation of its registration. Mr Reddy said that this was because of financial matters and non-compliance issues.
Mr Reddy said he was not aware of the condition on IEG’s registration as a RTO concerning student attendance at the time he was involved in the purchase of the business. He was asked about complaints made about overseas student attendance when he was managing the Australian College of Education and Training and questions about whether it genuinely engaged in vocational training. Mr Reddy said he absolutely denied that the same allegations were now being made about Ivy College.
Mr Reddy was asked about engaging Mr Meyer as a trainer. He said that on two occasions when he was at Ivy College’s premises in the evening, Mr Meyer came to him to complain about the students not speaking English and asking why the students came to this country. Mr Reddy said all students coming to the College have to pass an English test. He said that perhaps Mr Meyer was frustrated teaching the Certificate IV course because it was a very basic level of qualification and Mr Meyer’s resume indicated that he was highly qualified. Mr Reddy also said that perhaps some of the students’ English was not good enough for them to understand what Mr Meyer was teaching, and perhaps Mr Meyer could not communicate effectively with overseas students. Mr Reddy said Mr Meyer was only working on the evening shift and so would not have known how the College was operating.
Mr Reddy said all staff of Ivy College are contractors and he told Mr Meyer this at the time he signed the contract of engagement. Mr Reddy said that when he sent Mr Meyer an email stating why he was terminating his contract, Mr Meyer accepted this.
THE DIRECTORS’ EVIDENCE
The Tribunal heard evidence from the two directors of IEG, Mr James Tse and Ms Rong Hu, who were summonsed to give evidence by the Respondent. IEG is owned as to 70 ordinary shares by Sydney Education Group Pty Ltd, which is wholly owned by Mr Tse and of which Mr Tse is the sole director, and as to 30 ordinary shares by Sydney Education Academy Pty Ltd, in which Mr Tse, Ms Hu and Mr Reddy are shareholders and Mr Tse and Ms Hu are directors.
Mr Tse, who was born in Hong Kong, said he trained as a chef in Asian cuisine and has spent of most of his working life – over 30 years - in the catering business, from which he is now semi-retired. He wanted a more sedentary life and sought to invest in a steady business with reasonable returns. Mr Tse, who has been involved in the financial management of Ivy College, acknowledged that he has no academic or technical qualifications, and had no vocational educational training experience before purchasing Ivy College. However, he does not take an active involvement in the educational operation of the College.
Ms Hu, who was born in China, said she holds a Bachelor’s degree from a Chinese university and a Diploma in Information Technology from the University of Ballarat. She worked as a District Court judge in the criminal division while living in China. In Australia, Ms Hu worked from 2003-2004 at the Sydney campus of the University of Ballarat as an administration officer after graduating. From 2007 to 2010, she worked as a student agent. Ms Hu said she is the Marketing Manager of Ivy College – seeking to promote the College through student agents – and has not been involved in the financial management of the College or in its educational operations. Like Mr Tse, Ms Hu said her objective was to run a good, respectable business making reasonable profits.
Mr Tse and Ms Hu said they both knew Mr Reddy several years before purchasing Ivy College. They knew he had previously been involved in running a college, and purchased Ivy College on Mr Reddy’s recommendation believing Ivy College to be “clean”. They were not aware at the time of purchase of the condition on IEG’s registration. Ms Hu said she only learned of the condition on the previous day of the hearing.
On completion of the purchase of Ivy College in September 2011, Mr Tse, Ms Hu and Mr Reddy were issued with shares in IEG and were appointed directors of IEG. Mr Reddy was also appointed to the position of Chief Executive Officer (CEO) of Ivy College. Mr Tse said it has been IEG’s policy to only employ contractors to undertake the teaching because this saves on a lot of expenses such as workers compensation insurance. However, he relied on Mr Reddy to hire and manage the staff. Mr Tse and Ms Hu said that they would generally attend the College about every other day and be there for about three to four hours, sometimes longer. On these occasions they would meet with Mr Reddy on an informal basis but would also sometimes have formal board meetings. Since Mr Reddy’s resignation, Mr Tse has taken over as CEO of the College.
Mr Tse said he had never heard of the SNRs, the VET Quality Framework, the NVR Act or any other legislation governing Ivy College, including the Occupational Health and Safety Act 2011. He acknowledged that he knows absolutely nothing about vocational education and training, and relied totally on Mr Reddy in relation to those matters. Ms Hu said she has heard of the SNRs from Mr Reddy but nobody has explained these to her and she has not read the SNRs or studied the NVR Act.
Both Mr Tse and Ms Hu said they had not been involved in engaging consultants such as Mr Nigel Charig, Mr Chris Stephens or Ms Susan Briggs to assist in the College’s operations and with compliance problems. They were aware of a Mr Schofield being engaged by Mr Reddy to conduct an internal audit of the College’s operations but have never seen a copy of his report.
Ms Hu said that Mr Reddy looked after student welfare at the College. She has “no idea” if the College has an association with a doctor.
THE APPLICANT’S AUDITORS
I have found it extremely difficult to summarise the evidence of Chris Stephens and Susan Briggs, who are vocational education and training consultants, because the course of cross-examination did not flow neatly from one SNR to another and some of the questions posed and the answers given did not give rise to an explicit outcome in relation to whether Ivy College complies with particular SNRs. I have therefore done my best to summarise the main thrust of the evidence as I interpreted it. Mr Stephens and Ms Briggs acknowledged that Ivy College is non-compliant across a significant number of SNRs. They were, however, at pains to point out that the College has been engaged in an auditing process for over 12 months during which significant improvements have been made in the way in which the College operates.
In late January 2013, Mr Stephens and Ms Briggs were asked by Mr Tse to prepare an audit report on Ivy College’s compliance with the SNRs for the purpose of the hearing. Both Mr Stephens and Ms Briggs had some previous involvement with Ivy College. Mr Stephens became involved with Ivy College at the time of its application to the Tribunal for a review of the ASQA decision. He was engaged by a fellow consultant, Nigel Charig, whom Mr Stephens has known for about 10 years and who had been undertaking work on compliance issues for the College. Mr Stephens said his role was to prepare documents for the proceedings in the Tribunal and, initially, to act as a “mouthpiece” for IEG in the pre-hearing process. He did not have a consultancy agreement with the College although he was paid by the College for his work.
Ms Briggs said she had some intermittent prior involvement with Ivy College in 2012. In May 2012, at the request of Mr Reddy, she compiled evidence on a submission to ASQA on the rectification of certain identified non-compliances. In September 2012, she assisted in the upgrading of assessment tools, and in November 2012 she conducted a professional development workshop for staff of Ivy College. Ms Briggs therefore agreed that her report should not be viewed as an expert witness report. She said she has been engaged as a consultant in other proceedings in the Tribunal involving issues of non-compliance identified by ASQA.
Mr Stephens and Ms Briggs’ audit report prepared for these proceedings is dated 31 January 2013 (the Stephens/Briggs Report). Both Mr Stephens and Ms Briggs were asked about various findings in the Report. At the time the Report was prepared and on the days they visited Ivy College, there were no students present because the term had not yet commenced.
Mr Stephens was asked about Ivy College’s website. He said when he and Ms Briggs visited the College, the website was not active and had no functional links. Mr Stephens acknowledged that this was contrary to documentary evidence provided by Mr Lloyd which indicated that the website was active on 17 February 2013. With regard to governance, Mr Stephens said he was not aware of Mr Reddy’s association with the Australian College of Education and Training whose registration had been cancelled, but noted that a former Director of Studies, David Farrington, had agreed to be appointed as the Principal Executive Officer of the College following Mr Reddy’s resignation.
Mr Stephens and Ms Briggs gave evidence separately and were asked about whether Ivy College complied with SNRs 15 to 20. Taking these in turn, SNR 15 states:
SNR 15 The NVR registered training organisation provides quality training and assessment across all of its operations, as follows:
15.1 The NVR registered training organisation collects, analyses, and acts on relevant data for continuous improvement of training and assessment.
15.2 Strategies for training and assessment meet the requirements of the relevant Training Package or VET accredited course and have been developed through effective consultation with industry.
15.3 Staff, facilities, equipment and training and assessment materials used by the NVR registered training organisation are consistent with the requirements of the Training Package or VET accredited course and the NVR registered training organisation’s own training and assessment strategies and are developed through effective consultation with industry.
15.4 Training and assessment is delivered by trainers and assessors who:
(a) have the necessary training and assessment competencies as determined by the National Quality Council or its successors; and
(b) have the relevant vocational competencies at least to the level being delivered or assessed; and
(c) can demonstrate current industry skills directly relevant to the training/assessment being undertaken; and
(d) continue to develop their vocational education and training (VET) knowledge and skills as well as their industry currency and trainer/assessor competence.
15.5 Assessment including Recognition of Prior Learning (RPL):
(a) meets the requirements of the relevant Training Package or VET accredited course; and
(b) is conducted in accordance with the principles of assessment and the rules of evidence; and
(c) meets workplace and, where relevant, regulatory requirements; and
(d) is systematically validated.
Mr Stephens said that he and Ms Briggs only had one day to conduct the audit and essentially focused on the non-compliance issues identified by ASQA and they relied on the documentation provided by Ivy College in addressing the non-compliance issues.
With regard to SNR 15.1, the Stephens/Briggs Report refers to Ivy College’s ‘Continuous Improvements Register’ indicating the enhancement of training and assessment. Mr Stephens said he and Ms Briggs inspected the minutes of meetings of the trainers but, in answer to a question in cross-examination, he was unable to give an example of a trainer giving feedback to the College management which was implemented. My review of his oral evidence indicates that he implicitly acknowledged that Ivy College is non-compliant but believes considerable improvements have been made. Ms Briggs said that when she did some work for Ivy College in May 2012, she found deficiencies in the assessments used and developed a pro forma template for them which was compliant. She agreed that Ivy College is not compliant with SNR 15.1. However, she said there is a system for continuous improvement in place which is operating, albeit with deficiencies.
With regard to SNR 15.2, both Mr Stephens and Ms Briggs acknowledged that Ivy College is not compliant because there is no consultation with industry or relevant professional associations.
With regard to SNR 15.3, the Stephens/Briggs Report states that the number staff, venue, training and assessment materials and facilities are adequate, despite the complaints about this made by Mr Meyer. Mr Stephens considered the number of computers available for students to use – 64 – was adequate given that the College operates three shifts of approximately 90 students during the course of the day. However, I note that the training and assessment strategies have not been developed through effective consultation with industry.
With regard to SNR 15.4, Mr Stephens acknowledged in oral evidence that there are three trainers who do not have industry currency and some of the trainers do not have the relevant competency to teach the units they are currently teaching. Mr Stephens said he had asked the College to prepare a more detailed data mapping of the trainers’ competencies with the units taught.
With regard to SNR 15.5, the Stephens/Briggs Report states that assessment tools have not been routinely used at Ivy College until recently, and while these have been developed, they have not yet been validated. Mr Stephens said once this has been done, there may need to be further changes.
My assessment of Mr Stephens and Ms Briggs’ evidence in relation to SNR 15 is that steps have been taken to improve Ivy College’s processes and the assessment regime, but the College may not yet be compliant and, in relation to industry links, there has been no effective consultation and at least three of the seven trainers do not have industry currency.
Turning to SNR 16:
SNR 16 The NVR registered training organisation adheres to principles of access and equity and maximises outcome for its clients, as follows:
16.1 The NVR registered training organisation establishes the needs of clients, and delivers services to meet these needs.
16.2 The NVR registered training organisation continuously improves client services by collecting, analysing and acting on relevant data.
16.3 Before clients enrol or enter into an agreement, the NVR registered training organisation informs them about the training, assessment and support services to be provided, and about their rights and obligations.
16.4 Employers and other parties who contribute to each learner’s training and assessment are engaged in the development, delivery and monitoring of training and assessment.
16.5 Learners receive training, assessment and support services that meet their individual needs.
16.6 Learners have timely access to current and accurate records of their participation and progress.
16.7 The NVR registered training organisation provides appropriate mechanisms and services for learners to have complaints and appeals addressed efficiently and effectively.
With regard to SNR 16.1, Mr Stephens acknowledged Ms Hu’s evidence that she does not hold the position of ‘Student Services, Welfare Student Counsellor, Administration’, as he and Ms Briggs stated in their Report, and that nobody holds such a position in the College. Moreover, the administrative staff are engaged as ‘teachers’ under independent contractor contracts, and not as employees as he had thought. Mr Stephens agreed that Ivy College is non-compliant and Ms Briggs confirmed this.
With regard to SNR 16.2, Mr Stephens said the continuous improvements register shows improvements have been made but he cannot say whether student services have improved. Ms Briggs acknowledged Ivy College is non-compliant.
With regard to SNR 16.3, the Stephens/Briggs Report states that “All student files contained Letters of Offer and a Student Agreement”. In cross-examination, Mr Stephens acknowledged that given that he and Ms Briggs had one day to complete the audit, he had only looked at a random sample of four student files, which were all compliant.
With regard to SNR 16.4, Mr Stephens agreed Ivy College is not compliant. Ms Briggs agreed and said the answer in their Report in relation to this SNR is a mistake. Mr Stephens also agreed that the College is non-compliant with SNR 16.5.
Turning to SNR 17:
SNR 17 Management systems are responsive to the needs of clients, staff and stakeholders, and the environment in which the NVR registered training organisation operates, as follows:
17.1 The NVR registered training organisation’s management of its operations ensures clients receive the services detailed in their agreement with the NVR registered training organisation.
17.2 The NVR registered training organisation uses a systematic and continuous improvement approach to the management of operations.
17.3 The NVR registered training organisation monitors training and/or assessment services provided on its behalf to ensure that it complies with all aspects of the VET Quality Framework.
17.4 The NVR registered training organisation manages records to ensure their accuracy and integrity.
Mr Stephens said Ivy College has been in crisis management reacting to the ASQA audit process since February 2012. In relation to SNR 17.2, he said that Ivy College has made improvements to its policies and procedures with Mr Charig’s assistance. However, he agreed that management of Ivy College was essentially in one person’s hands until recently (Mr Reddy’s) – and the two other directors had no idea of their responsibilities. In relation to SNR 17.4, Mr Stephens agreed that he was not in a position to assert that the College complies because he had not been supplied with samples of the validation of assessment to demonstrate that the process was robust and met the rules of evidence.
Ms Briggs said Ivy College does have an effective record keeping system and there are policies and procedures in place in key areas of operation. However, because the College was in crisis mode, some proactive steps that might have been taken were put on hold. Nevertheless, and acknowledging it could have been better, Ms Briggs said there is a continuous improvement system in place. She agreed that the management of Ivy College was in the hands of one person and that the two remaining directors knew very little about its operation.
Turning to SNR 18:
SNR 18 The NVR registered training organisation has governance arrangements in place as follows:
18.1 The NVR registered training organisation’s Chief Executive must ensure that the NVR registered training organisation complies with the VET Quality Framework. This applies to all of the operations within the NVR registered training organisation’s scope of registration, as listed on the National Register.
18.2 The NVR registered training organisation must also explicitly demonstrate how it ensures the decision making of senior management is informed by the experiences of its trainers and assessors.
Mr Stephens agreed that at the time of audit, Ivy College did not comply with SNR 18.1. However, he noted that a new PEO, Mr Farrington has been appointed. Mr Stephens agreed that the minutes of trainers’ meetings do not satisfy SNR 18.2.
SNR 20 states:
SNR 20 Compliance with legislation
20.1 The NVR registered training organisation must comply with relevant Commonwealth, State or Territory legislation and regulatory requirements relevant to its operations and its scope of registration.
20.2 The NVR registered training organisation must ensure that its staff and clients are fully informed of legislative and regulatory requirements that affect their duties or participation in vocational education and training.
With regard to SNR 20.1, Mr Stephens agreed that Ivy College is not currently compliant with the NVR Act. He was also “not confident” that Ivy College satisfied SNR 20.2. Ms Briggs agreed that the evidence heard in the Tribunal indicated that the College is not compliant with either SNR 20.1 or 20.2.
The Stephens/Briggs Report also states that the SNR 21 requirement that the RTO must hold public liability insurance was not audited. In relation to SNR 22, which addresses issues of financial management, Mr Stephens acknowledged that he was not fully confident that the College complied with the required standards.
Mr Stephens concluded by saying that for a college to be told it is under audit has a “diabolical” effect and it is difficult for a college to operate as normal. It will need an opportunity to bed down its remedial action and consolidate on its processes rather than reacting to one audit report after another. However, Mr Stephens agreed that when Mr Tse and Ms Hu purchased Ivy College in September 2011, they should have been on notice of the condition on the College’s registration requiring a monitoring audit within a year. He agreed that due diligence would have revealed this condition and that the history of the College was not good. Proper due diligence was apparently not undertaken by the purchasers. Mr Stephens agreed that Ivy College has not demonstrated compliance with all the required standards and, “In terms of the literal interpretation of the legislation, the ASQA decision was appropriate.”
Ms Briggs said the new owners “had bought a poisoned chalice” having not undertaken due diligence. She concluded by agreeing that “speaking holistically”, Ivy College was not compliant with the VET Quality Framework. In re-examination, she said there are some areas where the College is compliant but other areas where a lot of improvement is required. However, she said that, in her view, it would take about three months to implement the necessary measures to make the College compliant.
THE RESPONDENT’S AUDITORS
The two auditors employed by ASQA who were involved in the recent audits of Ivy College, Jane Connors and Kaye Watkins, gave evidence at the hearing.
Ms Watkins, who provided a statement dated 14 February 2013, is a ‘Principal Auditor’ with ASQA, said that on 12 February 2013, she and Ms Connors conducted a “minimal notice audit” of Ivy College at its premises in Burwood, arriving at 9.45am. The purpose was to see how the College was operating. They were present for about an hour and 15 minutes. There were three administrative staff and two trainers present but Mr Tse was not present. The auditors were initially told that Mr Tse was expected at about 11.00am, but were told later that he could not come to the College because he was attending another meeting. There were only two classes in progress when the auditors arrived at 9.45 am.
Ms Watkins said that in one classroom there were five students present from a nominal roll of 27. Another student was seen to arrive and join the class at 10.00 am but had been marked as present from 9.00 am by the trainer. The attendance record for this class for the previous week - Week 1 - showed 20 students present on the first day of class, eight present on the second day and one present on the third day; in the week the audit was undertaken - Week 2 – 17 students were present for the first day and 6 for the second day.
Ms Watkins said that in another classroom there were nine students present at 10.00 am and another student arrived at 10.45 am. The class had a nominal roll of 28 although a check against PRISM data indicated that only 23 students were enrolled in this class. The attendance record for this class for the previous week - Week 1 - showed 14 students present on the first day of class, 14 present on the second day and none present on the third day, although it later transpired that the trainer was sick on this day; in the then current week - Week 2 – 16 students were present on the first day and 10 on the second day. However, Ms Watkins said there were other anomalies in the roll of students which indicated to the auditors that this was, in fact, a class combining students enrolled in two different courses.
Ms Watkins said most of the students in the classes were ongoing students and would have been studying in Australia for some time. The percentage of new students was probably very small.
Ms Connors provided a statement dated 23 January 2013 and two statements dated 14 February 2013. She is a ‘Principal Compliance Auditor’ with ASQA. Ms Connors stated that she was a co-auditor of the site audit conducted at Ivy College’s premises on 10 February 2012. She was also co-author of the resulting audit report dated 2 March 2012. She did not, however, assess the rectification evidence provided by Ivy College in response to the audit report although she proof read the findings made by her co-auditor.
Ms Connors stated, in her affidavit dated 23 January 2013, that Ivy College has significant non-compliances with all but two components (data provision and insurance) of the VET Quality Framework:
16. The Applicant’s non-compliances demonstrate that:
(i)in breach of Standard (“SNR”) 15 it does not provide quality training and assessment in qualifications;
(ii)in breach of SNR 16 it does not adhere to the principles of access and equity and maximise outcomes for its students;
(iii)in breach of SNR 17 it does not have management systems that are responsive to the needs of clients, staff and stakeholders, and the overseas student environment in which the Applicant operates;
(iv)in breach of SNR 19 it does not have adequate governance arrangements in place;
(v)in breach of SNR 20.2 it does not fully inform staff of legislative requirements;
(vi)in breach of SNR 22.2 it does not provide consistent information on fees to students; and
(vii)in breach of SNR 23 it does not issue qualifications that meet Australian Qualifications Framework requirements.
17. In my judgment, the Applicant’s significant current non-compliances relating to governance, training and assessment strategies, educational resources and premises, staff capability and assessments; are too extensive to be remedied in the short term.
18. It is my professional view that to be compliant against the VET Quality Framework the Applicant must provide detailed evidence of, (but not limited to):
(i) training and Assessment Strategies developed to guide trainer/assessors to deliver training to the Applicant’s student cohort and informed by industry consultation;
(ii) sufficient training resources and student amenities;
(iii) a sufficient number of qualified trainers for its student cohort; and
(iv) assessment tasks that have been validated and are consistent with its own Training and Assessment strategies; all of this evidence is required for four qualifications. Furthermore, the Applicant has already been unable to meet any of these areas of non-compliances in rectification evidence that it has supplied to ASQA.
Ms Connors stated that, to date, Ivy College has provided no evidence that the identified non-compliances have been remediated.
In cross-examination, Ms Connors acknowledged that the assessment validation tool developed for Ivy College by Mr Charig was a good validation tool but, she said, there is no evidence that the College has acted on it: there should be a process in place for its implementation and no evidence has been provided of this. Ms Connors also said she saw student surveys and summaries of those surveys, but no evidence of any action taken in response or of any system/process in place for responding to issues raised. Similarly, with regard to trainers, and SNR 18.2, Ms Connor stated:
… there’s no evidence of trainer and assessment discussion that took place in a meeting, there’s no evidence of management meetings where that trainer and assessor discussion is incorporated into the RTO’s operations, so there’s no evidence that the college is compliant with that standard.
In her affidavit dated 14 February 2013 in which she commented on the Stephens/Briggs Report, and in her longer affidavit of the same date in which she recorded ASQA’s response to the additional evidence provided by Ivy College to demonstrate rectification of the non-compliances identified in the ASQA audits reports of 2 March 2012 and 20 July 2012, Ms Connors said that Ivy College remains non-compliant with SNRs 15.1, 15.2, 15.3, 15.4, 15.5, 16.1, 16.2, 16.5, 17.1, 17.2, 17.4, 18.1, 18.2, 19.1, 23.1, and 23.4. She disagreed with the comment that it is acceptable practice to allow RTO owners time to demonstrate compliance with the VET Quality Framework. With regard to Ivy College’s governance, Ms Connors commented that Ivy College’s management “has consistently demonstrated a gross incapacity to implement appropriate actions to meet compliance with the VET Quality Framework”.
In view of the explicit or implicit admissions made by Mr Stephens and Ms Briggs, referred to above, that Ivy College is non-compliant with SNRs 15.1, 15.2, 15.3, 15.4, 15.5, 16.1, 16.2, 16.4, 17.2, 17.3, 18.1, 18.2, 20.1 and 20.2, I have not referred to Ms Connors’ specific comments on each of the SNRs, which are contained in her report dated 14 February 2013 on Ivy College’s current non-compliances.
COMPLAINTS TO ASQA
ASQA’s Manager of Complaints, Shona Tannock, provided an affidavit dated 13 February 2013. She said ASQA has received three complaints about Ivy College, one from Keith Meyer and two others referred by the Department of Immigration and Citizenship, dated 27 August 2012 and 12 December 2012 respectively. The second and third complaints alleged that overseas students were not required to attend classes and were marked as attending when they were not, raising concerns that the College is not reporting students for non-attendance or lack of course progress as required by the SNRs. Ms Tannock said the second and third complaints were not referred to the ASQA Compliance Unit because the procedure to cancel Ivy College’s registration was already in progress.
DISCUSSION
As stated above, the issue for the Tribunal is whether IEG’s registration as a RTO should be cancelled. ASQA has identified a number of SNRs with which it contends that IEG is non-compliant. I am satisfied from the evidence to which I have referred above – in particular the evidence of the Applicant’s witnesses, Mr Stephens and Ms Briggs, and the evidence of the Respondent’s witness, Ms Connors - that IEG is non-compliant with a significant number of SNRs despite having had a number of opportunities to respond with evidence of rectification over a period of about 12 months. IEG is therefore in breach of s 22(1) of the NVR Act which requires RTOs to comply with the SNRs.
Having made such a finding, the Tribunal must consider the appropriate administrative sanction to impose on IEG, drawn from the range of sanctions set out in s 36(2) of the NVR Act, the most serious being cancellation of registration as an RTO under s 39 of the Act. Clearly, in deciding on what administrative sanction is appropriate, regard must be had to the extent and significance of the RTO’s non-compliance. As the evidence indicates, including that of IEG’s witnesses, IEG is non-compliant with a significant number of SNRs and the extent of that non-compliance is also significant. I am particularly concerned about the governance of Ivy College and the lack of any depth of understanding on the part of the owners of IEG, Mr Tse and Ms Hu, of the requirements of vocational education and training. I expressed concern at the commencement of the hearing when it became apparent that Ivy College was without an appropriately qualified CEO, and it was only at my instigation that the owners took steps to appoint Mr Farrington to the position of Principal Executive Officer, Mr Farrington having previously acted as the College’s Director of Studies, albeit apparently as an independent contractor on a casual basis.
Having heard evidence from the owners and from the previous CEO, Mr Reddy, and with reference to the recent history of Ivy College and of these proceedings, I am not confident that the issues of non-compliance can be easily fixed. In my view, there have been sufficient opportunities for this to have occurred over the course of the past 12 months. Three consultants have been engaged by IEG to address areas of non-compliance and, while some improvements have been made, given the extent of the continuing non-compliance, I am not confident that IEG would be likely to achieve compliance in the short term.
In terms of the objects of the NVR Act stated in s 2A (see paragraph 25, above), a relevant consideration is the need to protect the interests of the students of Ivy College, both current and prospective, in terms of the quality of the vocational education and training provided (subparagraph (e) of s 2A) and, in the case of current students, the effect on them if sanctions are imposed. The standards with which IEG is non-compliant lead me to conclude that IEG is not meeting the best interests of students: for example, the lack of industry currency or relevant experience on the part of some of the trainers, the lack of consultation with industry in developing vocational education and training, the lack of appropriate welfare services for students, the lack of evidence of management response to student feedback, and the lack of knowledge on the part of the owners of the College and its staff of the legislative and regulatory requirements to which the College is subject. While current students will, in the short term, undoubtedly be adversely affected by a decision to cancel the registration, they should have an opportunity to enrol in similar courses in other colleges.
A further consideration is the broader public interest in ensuring that VET colleges operate at the required standard and that Australia’s reputation, both nationally and internationally, as a provider of high quality VET is maintained (subparagraph (c)(ii) of s 2A). This requires that colleges which remain significantly non-compliant after they have had a proper opportunity to rectify the areas of non-compliance, should not be allowed to continue as registered RTOs. Such is the case here.
I have therefore concluded that the appropriate sanction in this case is that IEG’s registration as a RTO should be cancelled. There needs to be an orderly process for the shutdown of the College to enable the students, of whom there are about 270, to apply to transfer their enrolments elsewhere and continue their education in Australia should they wish to do so. I am satisfied that a period of 30 days to facilitate this from the date of the decision is reasonable and I have therefore framed the terms of my decision accordingly.
DECISION
The decision under review to cancel the Applicant’s registration as a Registered Training Organisation should be affirmed. The cancellation will take effect 30 calendar days after the date of this decision.
I certify that the preceding 105 (one hundred and five) paragraphs are a true copy of the reasons for the decision herein of Deputy President RP Handley.
..........................[SGD]...............................
Associate
Dated 14 March 2013
Date(s) of hearing 18, 19, 20, 21 February 2013 Counsel for the Applicant Ashok Kumar Solicitors for the Applicant Jonathan Lu, Ren Zhou Lawyers Solicitors for the Respondent Tim Lloyd, Australian Skills Quality Authority
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