Site Skills Group Pty Ltd and Australian Skills Quality Authority
[2019] AATA 1870
•12 July 2019
Site Skills Group Pty Ltd and Australian Skills Quality Authority [2019] AATA 1870 (12 July 2019)
Division:GENERAL DIVISION
File Numbers: 2018/2310 & 2018/2311
Re:Site Skills Group Pty Ltd
APPLICANT
AndAustralian Skills Quality Authority
RESPONDENT
DECISION
Tribunal:Deputy President R I Hanger QC
Date:12 July 2019
Place:Brisbane
The Respondent’s application to amend the stay order is refused. The current unrestricted stay order of 21 May 2018 continues.
Adjourn further hearing to a date to be fixed.
...............................[SGD]........................................
Deputy President R I Hanger QC
Catchwords
STAY APPLICATION – Registered Training Organisation – Audit - Identified non-compliance with Registered Training Organisation Standards – stay application – consent of the parties - whether stay order should be amended – applicant for amended stay order refused.
Legislation
Administrative Appeals Tribunal Act 1975 (Cth)
National Vocational Education and Training Regulator Act 2011 (Cth)
Standards for Registered Training Organisations (RTOs) 2015
Cases
Australian International College Pty Ltd v Australian Skills Quality Authority [2018] FCA 2097
Australian Tertiary Academy Pty Ltd and Australian Skills Quality Authority [2018] AATA 4875
Australian Vocational Learning Centre Pty Ltd and Australian Skills Quality Authority [2018] AATA 4725
Austwide Institute of Training Pty Ltd and Secretary, Department of Education and Training [2016] AATA 266
Daily Update Pty Ltd and Australian Skills Quality Authority [2014] AATA 118
Productivity Partners Pty Ltd and ASQA [2018] AATA 4878
Re Anthony Scott and Australian Securities and Investments Commission [2009] AATA 798
Secondary Materials
Australian Government, Department of Education and Training, Quality of assessment in vocational education and training – Discussion Paper, January 2016
REASONS FOR DECISION
Deputy President R I Hanger QC
12 July 2019
INTRODUCTION
This decision is concerned with whether or not the Tribunal’s stay order made by consent on 21 May 2018 continues in its current form, or whether the condition sought by the Respondent is imposed.
The application before the Tribunal is complex. The Tribunal is concerned with both a merits review application from the Applicant, and an amended stay application from the Respondent. While a significant portion of the evidence has been presented before the Tribunal at the hearing held between 15 and 24 May 2019, the decision for the merits review application cannot be considered until the outcome of a Federal Court appeal is known.[1] It is highly unusual for a substantive body of evidence to be presented to the Tribunal for a stay application.
[1] Site Skills Group Pty Ltd v Administrative Appeals Tribunal & Anor, number QUD233/2019.
BACKGROUND
The Applicant, Site Skills Group Pty Ltd (“SSG”), has held registration as a Registered Training Organisation (”RTO”) since 3 April 2012.[2] On 23 December 2016, SSG applied for renewal of its registration.[3] In response to a renewal application, the Australian Skills Quality Authority (“ASQA” or “the Respondent”) as the national regulator for vocational education and training in Australia, conduct an audit before determining the Applicant’s application. The audit for SSG was conducted between February 2017 and April 2018.
[2] Exhibit 4, T Documents, T5, pages 60 – 71, Provider Profile.
[3]On 18 April 2018, the Respondent made a decision regarding the Applicant’s renewal application (“the decision”). Delivered to the Applicant on 20 April 2018, the decision rejected the Applicant’s application for:
(a)renewal of registration as a National Vocational Education and Training (“VET”) Regulator RTO under the National Vocational Education and Training Regulator Act 2011 (Cth) (“NVR Act”); and
(b)a change of scope to the Applicant’s registration as a RTO under the NVR Act.[4]
[4] Exhibit 4, T Documents, T37, pages 4060 – 4094, Letters notifying outcomes of renewal application and change of scope application dated 20 April 2018.
Based on the audit report the Respondent determined that the Applicant was “critically non-compliant” with the VET Quality Framework, and a number of identified clauses as per the Standards for Registered Training Organisations (RTOs) 2015 (“the Standards”).[5] Following review of the Applicant’s rectification/remedial action, the Respondent concluded the Applicant “remain[ed] critically non-compliant” with the Standards.[6] The resulting effect of the Respondent’s decision was that the Applicant’s registration as an RTO would expire on 25 May 2018.
[5] Specifically the Respondent found the Applicant non-compliance with clauses 1.1, 1.2, 1.7, 1.8, 1.9, 1.10, 1.11, 1.13, 1.16, 2.4 and 4.1 of the Standards.
[6] While the Respondent determined the Applicant had complied with some of the original non-compliant clauses, as at 18 April 2019, the Applicant was still considered non-compliant with clauses 1.1, 1.2, 1.7, 1.8, 1.9, 1.10, 1.11, and 2.4 of the Standards.
On 24 May 2018, the Applicant applied to the Tribunal for both a stay order, and a merits review of the Respondent’s decision.[7]
[7] The stay application was permitted under section 199 NRV Act; section 41(2) of the Administrative Appeals Tribunal Act 1975 (Cth) (“AAT Act”). The merits review application is permitted under section 203(2) of the NRV Act; section 29(1) AAT Act; Exhibit 4, T Documents, T1, pages 1 – 40, Application for Review of Decision to reject application for renewal, dated 24 April 2018; Exhibit 4, T Documents, T2, pages 41 – 50, Application for Review of Decision to reject application for change of scope, dated 24 April 2018.
The stay application
On 21 May 2018, the Tribunal granted the Applicant’s stay order regarding registration as an RTO at the consent of the parties. No conditions, restrictions or limitations were imposed. Nor did the Respondent submit that the Tribunal should impose a restriction of any kind. The stay order did not extend to the Applicant’s second application being a change in scope as an RTO. Effectively, the Applicant continued with the status quo.
Since 21 May 2018 the Tribunal’s stay order remained unchanged. On 24 May 2018, the Respondent advised the Tribunal, in writing, that it would not ask for any reporting conditions to be imposed on the Applicant in respect of the stay order. The Respondent has had every available opportunity to apply to the Tribunal for a re-consideration and variation of the stay order. In December 2018, the Respondent advised in a different matter before the Tribunal that if the proceedings in that matter were stayed, it would “seek for [the Applicant’s] stay order to be set aside”.[8] In January 2019, the Respondent requested an expedited hearing before the Tribunal on the substantive application. In March 2019, the Tribunal set the matter down for an eight-day hearing in May 2019.
[8] Productivity Partners Pty Ltd and ASQA [2018] AATA 4878, at [41].
Despite the stay in the above mentioned proceedings being granted,[9] the Respondent did not make any such request or application to the Tribunal in regards to this application until 5 April 2019, when it lodged an application to impose the following condition on the stay order:
During the period of operation of the stay from the date of this order, SSG is not to enrol any students or advertise for new students until the Tribunal makes a decision on review under s 43(1) of the Administrative Appeals Tribunal Act 1975 (AAT Act).
[9] Productivity Partners Pty Ltd and ASQA [2018] AATA 4878, at [44].
The Applicant contends the Tribunal’s 21 May 2018 order should continue on the basis: [in the Applicant’s opinion] the merits review application has good prospects of success; the harm suffered (financial and reputational); the interests of others (e.g. students and employees); and there is no risk to the public or current or future students.[10]
[10] Applicant’s Outline of Written Submissions relating to the Stay, dated 23 May 2019.
The parties requested the Tribunal hear and determine the stay application prior to the hearing of the merits review application. Given the stay order had already been in place for close to 12 months before the Respondent sought to have a condition imposed, the Tribunal was of the view that it would be prudent to deal with the amended stay application request during the course of the hearing, when the relevant evidence would be presented and for the Tribunal to then hand down its decision.
The Federal Court appeal
An important consideration in relation to this matter and the reason why it is only part-heard is owing to an appeal before the Federal Court.[11] On 13 March 2019, I gave leave to the Respondent to make submissions with respect to fit and proper person considerations as part of the merits review application. The Respondent contended that the Chief Executive Officer (“CEO”) of the Applicant does not meet the fit and proper person requirements under the Standards on account of his conduct in another subsidiary.[12] The Respondent also contended that an RTO, at all times, must not have an executive officer, who was an executive officer of another RTO at the time their registration was cancelled.[13] To be clear, at the time the Respondent handed the Applicant its 20 April 2018 decision, the Applicant was not found to be “non-compliant” with respect to clause 7.1 of the Standards. The other subsidiary had its registration as an RTO cancelled, is currently not trading and it is also currently the subject of a consumer protection proceeding before the Federal Court.[14]
[11] Site Skills Group Pty Ltd v Administrative Appeals Tribunal & Anor, number QUD233/2019.
[12] Standards Schedule 3.
[13] Standards clause 7.1; Schedule 3 (b).
[14] Australian Competition and Consumer Commission v Productivity Partners Pty Ltd (Trading as Captain Cook College) ACN 085 570 547 & ORS, number NSD2059/2018.
The Applicant contended that the evidence before the Tribunal on the fit and proper person requirements will involve evidence that is to a large extent the same evidence as will be heard in the Federal Court and therefore may have a prejudicial impact.
Regardless, I was entitled to find concern with the behaviour of a person who is involved with the operation of the RTO in this matter and the tribunal would be derelict in its duty by failing to take into account the behaviour of that person in another RTO given the objectives of the NVR Act, and that the public are entitled to have confidence in the education sector and those who are involved in this sector. This issue may be relevant and ultimately the merits review may be affected by the outcome of that appeal.
However, with a view to using the hearing time that had been allocated the parties agreed to isolate the issue that is the subject of appeal and proceed with the hearing focusing on the identified non-compliance with the Standards, and in particular on the application in relation to the stay so that after the outcome of the appeal the merits review matter could be determined promptly. It meant that the Tribunal was better informed by hearing lengthy evidence and detailed submissions to determine the stay application. This decision relates to the Respondent’s application to impose the condition outlined above at [9] on the stay order.
ISSUE
The issue in the current matter is whether the Tribunal should amend the stay order granted on 21 May 2018 and impose the proposed condition on the Applicant’s registration as an RTO.
LEGISLATIVE FRAMEWORK
Principles relating to stay applications
In Re Anthony Scott and Australian Securities and Investments Commission [2009] AATA 798, Downes J, then President of the Tribunal, stated the relevant considerations on an application for a stay under section 41 of the AAT Act:
(a)the prospects of success on the review;
(b)the consequences for the applicant of the refusal of the stay (which in this case is the consequences of the revocation or variation of the stay);
(c)the public interest;
(d)the consequences for the respondent in carrying out its functions;
(e)whether the application for review would be rendered nugatory; and
(f)the time between the hearing of the stay and the hearing of the application.
The same considerations apply in deciding whether to revoke or vary the stay under section 41(3) of the Act.[15]
The Legislation
[15] Australian Vocational Learning Centre Pty Ltd and Australian Skills Quality Authority [2018] AATA 4725 at [10], [13]; Daily Update Pty Ltd and Australian Skills Quality Authority [2014] AATA 118, in which an application to various stay order made by consent was refused.
The objects of the NVR Act
In introducing the Bill that gave rise to the NVR Act, the Minister referred to a desire to ensure a coordinated response to quality issues in the educational training sector; to strengthen confidence in the quality and consistency of training outcomes; and the need to sanction low quality providers.
The objects set out in section 2A of the NVR Act give effect to that. Section 2A provides as follows:
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.
The importance of proper regulation of RTO’s cannot be overstated. The proper training of people to work is of vital importance to the country. The public rely on the integrity of the sector to properly educate people entering the workforce; to ensure that the work they perform is of a high standard; that they know what they are doing; and that in performing their work they do not present a danger to themselves or to members of the public who rely on the quality of the work performed. Furthermore, it is important that there is a minimum standard required to receive a particular qualification; that there is a rigorous assessment process; and that there is consistency in those standards throughout the country. To this end, the Minister for Industry made a legislative instrument under subsections 185(1) and 186(1) of NVR Act specifying a comprehensive set of standards for RTO’s.
The Standards
It is unnecessary to refer to all of the standards which are quite lengthy. I set out those on which the Respondent principally relies.
Standard 1 provides: “The RTO’s training and assessment strategies and practices are responsive to industry and learner needs and meet the requirements of training packages and VET accredited courses. To be compliant with Standard 1 the RTO must meet the following:
1.1.The RTO’s training and assessment strategies and practices, including the amount of training they provide, are consistent with the requirements of training packages and VET accredited courses and enable each learner to meet the requirements for each unit of competency or module in which they are enrolled.
1.2.For the purposes of Clause 1.1, the RTO determines the amount of training they provide to each learner with regard to:
a)the existing skills, knowledge and the experience of the learner;
b)the mode of delivery; and
c)where a full qualification is not being delivered, the number of units and/or modules being delivered as a proportion of the full qualification.
…
1.7.The RTO determines the support needs of individual learners and provides access to the educational and support services necessary for the individual learner to meet the requirements of the training product as specified in training packages or VET accredited courses.
1.8.The RTO implements an assessment system that ensures that assessment (including recognition of prior learning):
a)complies with the assessment requirements of the relevant training package or VET accredited course; and
b)is conducted in accordance with the Principles of Assessment contained in Table 1.8-1 and the Rules of Evidence contained in Table 1.8-2.
Table 1.1-1: Principles of Assessment
Fairness The individual learner’s needs are considered in the assessment process.
Where appropriate, reasonable adjustments are applied by the RTO to take into account the individual learner’s needs.
The RTO informs the learner about the assessment process, and provides the learner with the opportunity to challenge the result of the assessment and be reassessed if necessary.
Flexibility Assessment is flexible to the individual learner by:
· reflecting the learner’s needs;
· assessing competencies held by the learner no matter how or where they have been acquired; and
· drawing from a range of assessment methods and using those that are appropriate to the context, the unit of competency and associated assessment requirements, and the individual.
Validity Any assessment decision of the RTO is justified, based on the evidence of performance of the individual learner.
Validity requires:
· assessment against the unit/s of competency and the associated assessment requirements covers the broad range of skills and knowledge that are essential to competent performance;
· assessment of knowledge and skills is integrated with their practical application;
· assessment to be based on evidence that demonstrates that a learner could demonstrate these skills and knowledge in other similar situations; and
· judgement of competence is based on evidence of learner performance that is aligned to the unit/s of competency and associated assessment requirements.
Reliability Evidence presented for assessment is consistently interpreted and assessment results are comparable irrespective of the assessor conducting the assessment.
Table 1.8-2: Rules of Evidence
Validity The assessor is assured that the learner has the skills, knowledge and attributes as described in the module or unit of competency and associated assessment requirements. Sufficiency The assessor is assured that the quality, quantity and relevance of the assessment evidence enables a judgement to be made of a learner’s capacity. Authenticity The assessor is assured that the evidence presented for assessment is the learner’s own work. Currency The assessor is assured that the assessment evidence demonstrates current competency. This requires the assessment evidence to be from the present or the very recent past. The RTO implements a plan for ongoing systematic validation of assessment practices and judgements that includes for each training product on the RTO’s scope of registration:
a)when assessment validation will occur;
b)which training products will be the focus of the validation;
c)who will lead and participate in validation activities; and
d)how the outcomes of these activities will be documented and acted upon
For the purposes of Clause 1.9, each training product is validated at least once every five years, with at least 50% of products validated within the first three years of each five year cycle, taking into account the relative risks of all of the training products on the RTO’s scope of registration, including those risks identified by the VET Regulator.
For the purposes of Clause 1.9, systematic validation of an RTO’s assessment practices and judgements is undertaken by one or more persons who are not directly involved in the particular instance of delivery and assessment of the training product being validated, and who collectively have:
a)vocational competencies and current industry skills relevant to the assessment being validated;
b)current knowledge and skills in vocational teaching and learning; and
c)the training and assessment qualification or assessor skill set referred to in Item 1 or 3 of Schedule 1.
Industry experts may be involved in validation to ensure there is the combination of expertise set out in (a) to (c) above.
…
1.13.In addition to the requirements specified in Clause 1.14 and Clause 1.15, the RTO’s training and assessment is delivered only by persons who have:
a)vocational competencies at least to the level being delivered and assessed;
b)current industry skills directly relevant to the training and assessment being provided; and
c)current knowledge and skills in vocational training and learning that informs their training and assessment.
Industry experts may also be involved in the assessment judgement, working alongside the trainer and/or assessor to conduct the assessment.
…
1.16.The RTO ensures that all trainers and assessors undertake professional development in the fields of the knowledge and practice of vocational training, learning and assessment including competency based training and assessment.”
Standard 2 provides: “The operations of the RTO are quality assured. To be compliant with standard to the RTO must meet the following:
…
2.4.The RTO has sufficient strategies and resources to systematically monitor any services delivered on its behalf, and uses these to ensure that the services delivered with comply with these Standards at all times.”
Standard 7 provides: “The RTO has effective governance and administration arrangements in place. To be compliant with Standard 7 the RTO must meet the following:
7.1.The RTO ensures that its executive officers or high managerial agent:
a) are vested with sufficient authority to ensure the RTO complies with the RTO Standards at all times; and
b) meet each of the relevant criteria specified in the Fit and Proper Person Requirements in schedule 3.”
…
Schedule 3 sets out 11 criteria for suitability for the fit and proper person requirements.
Of particular importance in the Standards is the integrity of the quality of assessment. The Commonwealth Department of Education and Training discuss this issue in Quality of assessment in vocational education and training – Discussion Paper in January 2016.[16]
[16] Australian Government, Department of Education and Training, Quality of assessment in vocational education and training – Discussion Paper, January 2016.
The paper outlines on page 21:
In dealing with assessment issues, the regulatory framework must strike a balance between the costs of regulation, both for RTOs and for the regulator, and the importance of ensuring that issued VET qualifications reflect a person’s competencies as rigorously tested through robust assessment processes. An incompetent graduate that is deemed competent can have a negative impact on employers and the workplace, and could endanger an individual, the community or seriously affect public safety. Such flawed qualifications may also have a broader impact on public confidence in nationally accredited training and the reputation of Australia’s VET sector.
It further outlines on page 26:
A key feature of Australia’s VET system is that employers should be able to expect national consistency of qualifications, and graduates should expect their qualifications to have national portability.
In Austwide Institute of Training Pty Ltd and Secretary, Department of Education and Training[17] Senior Member O’Loughlin said “[q]uality of assessment is a matter that goes to the heart of the regulated VET system…”.
[17] [2016] AATA 266 at [97].
In Australian Tertiary Academy Pty Ltd and Australian Skills Quality Authority,[18] Deputy President McCabe also referred to the framework as prioritising the integrity of the assessment processes in the issue of qualifications.
THE APPLICANT
[18] [2018] AATA 4875 at [96].
The persons and entities involved
SSG is a wholly owned subsidiary of Site Group International (“SGI”) which is a publicly listed company. Mr Vernon Wills is, and has been, Managing Director and CEO of SGI. He is a shareholder with approximately 17% interest in SGI and is currently one of three directors. Prior to March 2019, Mr Wills was the sole director and CEO of SSG.
From 29 May 2017, Mr Peter Jones has been a director of SGI and since 30 June 2018 the chair of SGI. From March 2019, Mr Jones has been the sole director of SSG.
Mr Jones is also the chair of SGI’s Risk and Audit Management Committee.
SGI operates several businesses carried on through subsidiaries. The subsidiaries include a number of RTO’s that operate or have operated under the NVR Act. SSG is one such subsidiary.
In October 2016, Mr Michael Wallace was appointed CEO of Site Skills Training (a business of SSG). SSG reports to SGI. Mr Wallace said that as CEO of Site Skills Training between October 2016 and March 2019 he reported to Mr Wills as CEO of SSG and he agreed that Mr Wills was directing SSG with input from himself. The strategic plan was set by Mr Wills as CEO of SSG and implemented by Mr Wallace. He agreed that in March 2019 his role changed because he became CEO of SSG. He then reported through the Board of SSG to Mr Wills in SGI. He agrees that up until March 2019, the key person in giving instructions in relation to the current proceedings was Mr Wills.
The core clients of SSG are primarily corporate/industry clients within the oil, gas, energy and construction sectors across all Australian states and territories and individuals from diverse backgrounds and levels of experience. Those individuals may be unemployed learners with no prior experience, learners undertaking school-based training, and experienced workers seeking short duration upgrade training.[19] The client mix of corporate/industry to individuals varies across states and territories and seasonally. At the time that the audit described below was conducted the client mix comprised approximately 50% individual and 50% corporate clients in Queensland and 20% individual and 80% corporate clients in Western Australia.[20]
[19] Transcript, page 155.
[20] Exhibit 4, T Documents, T28, pages 1861 – 1888, Audit Report: Site Skills Group Pty Ltd, date report created: 23 May 2017, date report updated: 28 June 2017.
The kind of courses being offered by SSG are generally short courses which can be completed in a few days or weeks, although there are some longer courses. The kind of person undertaking such courses is quite likely to not have English as a first language,[21] or may possibly have been unemployed for some time.[22] The students are likely to not have a high standard of education. SSG deals with about 20,000 students per year.[23] Between 28 June 2017 and 20 April 2018, the Applicant delivered 30,000 standalone units of competency to students across all training products.[24]
THE AUDITS
[21] Transcript, page 129.
[22] Transcript, page 155.
[23] Exhibit 4, T Documents, T17, page 683, Correspondence from Site Skills to ASQA dated 20 June 2017.
[24] Exhibit 3, Applicant’s Material, Tab 75, page 3391, Fifth Affidavit of Michael Wallace, dated 7 May 2019, [23].
History
On 23 December 2016, SSG applied to renew its RTO registration for seven years. On
16 February 2017, the Respondent notified SSG that it would conduct an audit in response to the application for renewal. The Respondent identified pre-audit evidence required from SSG including information to allow the respondent to administer a student survey. On 1 March 2017, the pre-audit evidence was provided. Further pre-audit evidence was requested and provided.
A site audit was conducted by the Respondent on 19 and 20 April 2017. The lead auditor was Mr Anthony Sheppard. The initial scope of the audit was in respect of two certificate level courses and two single units of competency but the scope was amended during the site audit based on evidence of non-compliance in relation to other training products. The final sample was based on six qualifications and 10 units of competency.[25]
[25] Exhibit 9, Respondent’s Material, Tab 1, pages 1 to 15, Affidavit of Anthony Sheppard, dated 7 September 2018.
On 23 May 2017, the Respondent provided SSG with its interim audit report and it notified SSG that it was “critically non-compliant” and provided an opportunity for the organisation to become compliant by 20 June 2017. SSG was invited to contact Mr Sheppard to discuss any of the issues raised. It did not do so.
On 20 June 2017, Mr Wallace provided a response with 45 attachments. It included 56 MB of information. The large quantity of information provided was reviewed by
Mr Sheppard and while he noted compliance with certain of the standards he found “critical non-compliance” continuing with a number of others.
Necessary rectifications were identified by Mr Sheppard.[26] The second report by
Mr Sheppard contains the following note:
·“The purpose of this audit activity is to assess the organisation’s application for registration renewal following five-years of operation and there is an expectation that ongoing compliance should be evident as embedded practice.
·Trainer assessor interviews and analysis of completed learner assessments formed part of the audit process to verify current assessment practices.
·Non-compliance identified within the organisation’s assessment practices were systemic across all training products analysed, in particular concerning sufficiency, validity and reliability of practical assessment.
·While the organisation has been obligated to validate its assessment systems, practices and competency decision at least since commencement of the Standards for Registered Training Organisations 2015 more than two-years ago, it was evident that validation planning and implementation had only recently become a priority.
·The systemic nature of assessment non-compliance and apparent previous lack of focus on validation is of concern, particularly considering the organisation’s size and significant geographical and industry reach and the high-risk nature of much of the organisations scope of registration.” [27]
[26] Exhibit 4, T Documents, T28, pages 1861 – 1888, Audit report: Site Skills Group Pty Ltd, date report created: 23 May 2017, date report updated: 28 June 2017.
[27] Exhibit 4, T Documents, T28, pages 1861 – 1888, Audit report: Site Skills Group Pty Ltd, date report created: 23 May 2017, date report updated: 28 June 2017.
On 13 December 2017, the Respondent by email, pursuant to section 26 of the NVR Act, required the Applicant to provide records in respect of 25 students. That demand was met. Those particular files were files that had been reviewed on site during the course of the audit by Mr Sheppard. As set out hereunder they were later provided to Ms Ruth Walker for audit and expert opinion.
Mr Sheppard was not called to give evidence because he was out of the country at the time of the hearing, but provided affidavit material and prior to the commencement of the hearing the Respondent advised the Applicant that it would be relying on his evidence and reports. One of the reasons given at the time was that Ms Walker, whom the Respondent intended to call as an expert witness, had reviewed the same 25 student files that were reviewed by Mr Sheppard and could be cross-examined about them.
Mr Sheppard deposed to the fact that on 16 April 2018 he finalised an audit outcome decision and recommended that the application for renewal of registration be rejected and that the application to change the scope of registration be rejected. His recommendation was accepted by the Respondent. On 20 April 2018, by way of correspondence dated
18 April 2018, the Applicant was notified of the decision and provided with a copy of the final audit report.
Mr Anthony Sheppard’s report
In his affidavit Mr Sheppard refers to clause 1.7 of the Standards which requires the RTO to determine the support needs of individual learners and to provide access to educational and support services necessary for that person.
He says that it is important to understand that the obligation to determine support needs and to meet those needs rests with the RTO rather than the student. The particular plan that he examined placed responsibility on the learner to identify their needs and contained no suggestion of what the applicant might be able to provide by way of support. Most learners may not require additional education and support and would be expected to successfully complete their courses. The students who do not complete their courses are of concern where the Applicant has failed to proactively identify support needs. Such a course of conduct is contrary to the learner support mandated by clause 1.7.
Mr Sheppard’s view was that even after the issues were drawn to the attention of the Applicant, as at September 2018 SSG had no mechanism to determine learner needs or about how access to support.
Mr Sheppard also considered that the applicant had a fundamental problem with training and assessment. A training and assessment strategy is essentially a business plan for how an RTO will deliver a particular course. It guides the RTO in identifying the student cohorts that it will teach and train; determine the resources required for each cohort; and establish the amount of training each learner will require to enable them to complete the course. The Applicant’s training and assessment strategies were presented in such a way that he was unable to even determine how they actually intended to roll out the training. He says that the Applicant unjustifiably assumed that the learners have existing skills and knowledge that would justify provision of course content in a short duration. By way of an example he refers to one of the training products audited: Certificate 3 in Surface Extraction for Experienced Learners. The course has a four week delivery but requires 324 hours of training, which equates to 81 hours of training per week. Although there is a course delivery plan for less experienced learners for the same course, the course is still delivered over a four week period. The audit determined that the Applicant had been delivering the full qualification in 13 days with no rationale as to why such an unduly short duration was appropriate. He says that that sort of thing presents significant risk to students and the members of the public because of the nature of the training. The courses involve training in the use of heavy machinery or equipment, electric technology, gas supply or gas wells and so on. These pose inherent risks of injury or damage to property if learners are not properly trained. I regard that as a very serious matter.
Clause 2.4 of the Standards requires systematic monitoring of services delivered by third parties. After considering rectification evidence from SSG, the Respondent determined in its final audit report, that although some evidence of monitoring was provided the breadth of monitoring remained unclear. That posed a problem because of the delivery of high-risk training products which involved the use of heavy machinery or equipment, working in confined spaces or mines. Such courses necessitated proper monitoring.
Mr Sheppard remained of the view that there was not proper compliance with clause 2.4 in September 2018.
The first audit by Ms Ruth Walker 27 September 2018
On 6 August 2018, Ms Ruth Walker was briefed by the Respondent to provide an audit report in respect of the Applicant’s business. She was asked to provide an opinion by reference to the Standards, specifically commenting on: the training and assessment methodology; whether the assessments were appropriate for the course level; and whether the completed assessments demonstrate competence at the requisite level by reference to Standards 1.1, 1.2, 1.7, 1.8 and 5.1. She provided her first report on
27 September 2018.[28]
[28] Exhibit 9, Respondent’s Material, Tab 2, pages 16 – 65, Audit Report of Ruth Walker, dated 27 September 2018.
It should be noted that this is approximately five months after the notification of the refusal to grant the application.
She reviewed the files of 97 students in 17 training products and concluded:
“The non-compliances demonstrated represent significant risk to students and current or prospective employers and the wider VET system.
Many of the courses in which poor training and assessment practices are evident represent high risk roles in industry such as electrotechnology, workplace health and safety, working in confined spaces, operating machinery and mechanical resources trades.
Many of the students subject to poor training and assessment practices come from vulnerable groups such as jobseekers, those with low levels of language literacy and numeracy and young people (VET in schools).
One of the courses in which poor training and assessment practices are evident is Certificate IV in Training and Assessment. This is the course that teaches individuals to become trainers and assessors within the VET system and as such is pivotal in determining the quality of the VET into the future. Poor practice in this qualification is not only detrimental to the individuals enrolled and their potential employers but to the VET system as a whole.”[29]
[29] Exhibit 9, Respondent’s Material, Tab 2, pages 16 – 65, Audit Report of Ruth Walker, dated 27 September 2018.
She discusses clauses 1.1 and 1.2 of the Standards and says that in her opinion SSG has not implemented pedagogically sound training practices. The RTO routinely implemented courses of short duration with an amount of training insufficient to enable learners to achieve the level of knowledge and skills required by industry. That observation applied to 11 of the 17 training products reviewed and represented systemic poor practice.
She referred to the Australian Qualifications Framework which provides guidelines for the volume of learning, the amount of time it takes to achieve competence and be assessed as competent at a particular qualification level. For instance a Certificate III level qualification requires one to two years (1200-2400 hours) to successfully achieve the necessary outcome. Many of the courses provided by SSG represented a significant variation from the recommended volume of learning with insufficient rationale being provided for the variation.
She found that in 10 out of the 17 training products reviewed, SSG demonstrated practices that did not support students in making wise enrolment choices and/or did not support students to achieve the outcomes of the courses in which they are enrolled.
Clause 1.8 of the Standards relates to quality assessment to ensure that valid and justifiable assessment decisions are made. This is obviously an extremely important aspect of the Standards because it ensures that people with the relevant qualification actually can be trusted to know what they are doing. She said that assessment materials were provided for 15 of the 17 training products reviewed and in her opinion 12 of the 15 training products and assessment materials did not meet training package requirements and did not ensure that assessment was conducted in accordance with the principles of assessment (fair, flexible, reliable and valid) and the rules of evidence (valid, sufficient, current and authentic).
Ms Walker was cross-examined at some length and it is clear that in some instances she had overlooked some matters in the voluminous material and in other instances I formed the opinion that some of the problems she described were very minor. Others were not.
The audit by Ms Narelle Duncan
Ms Narelle Duncan was called as an expert by the Applicant. Her initial audit report was provided to SSG on 17 July 2018.[30] Her report refers to the evidence that she sighted, her findings and the rectification that she thought should be implemented.
[30] Exhibit 3, Applicant’s Material, Vol. 8, Statement of Narelle Gail Duncan, Exhibit NGD-02, pages 3466 - 3509.
She opined that SSG was non-compliant with the VET Quality Framework, specifically the Standards, she found critical non-compliance in 11 of 13 qualifications and in the following areas:
·training and assessment strategies;
·assessment;
·identification and provision of a learner support;
·industry engagement; and
·assessment validation.
In her evidence she agreed that to summarise the basis of the critical non-compliance it would be fair to say that there was critical non-compliance because the foundational documents setting out an appropriate training and assessment strategy and delivery plan were simply not available or were found to be inconsistent in respect of each one of the eleven qualifications. She agreed with the suggestion that that was a damning indictment of an RTO that has been operating for seven years.
The first rectification report of Narelle Duncan dated 13 August 2018
Ms Duncan provided a rectification report on 13 August 2018. In this report she was examining what had been done to rectify the matters raised in her July 2018 audit report. She found certain matters to now be compliant but continued to identify non-compliance against clauses: 1.1, and 1.2 (for 11 qualifications, noting that she had found four qualifications were now compliant); 1.8 (for 9 qualifications, noting that she had found five qualifications were now compliant); and 2.1; and 2.3 of the Standards. Ten, rather than 11, of the qualifications examined remained non-compliant. Once again she identified the rectification action required to comply with the Standards.
The second rectification report of Narelle Duncan dated 23 August 2018
Ms Duncan provided a second rectification report dated 23 August 2018.[31] She then identified that all outstanding non-compliances had been rectified. She added an obvious qualification to that report to the effect that all training products had not been audited. She stated:
“It is expected that Site Skills Training will put into place strict measures to apply rectification/improvement activities for all training products across its scope of registration and ensure that its assessment activities and practices:
oAre conducted in accordance with the standards for RTOs 2015
oComply with training package requirements
oAre consistently implemented across its scope of registration
oComply with the Principles of Assessment and Rules of Evidence
Site Skills Training provided a range of strategies/processes to support its training and assessment practices including strategies for identification of learning needs and providing ongoing support and monitoring of learners, engagement with industry and validation of assessment. While the strategies and processes appear sound, Anntek[32] was unable to, as part of this process, confirm implementation. Therefore, responsibility rests with Site Skills to ensure that these are consistently implemented and followed by all staff, particularly training and assessment staff. The RTO has confirmed that all changes have or will be communicated across the business”.
[31] Exhibit 3, Applicant’s Material, Vol. 8, Statement of Narelle Gail Duncan, Exhibit NGD-05, pages 3557 – 3703.
[32] Anntek is Ms Duncan’s business name.
In cross-examination before the Tribunal she said that at the time she wrote the report she understood that the rectification proposals that were provided to her would be implemented. She has not however, since the time of the report, been engaged to audit the implementation and therefore cannot confirm that the proposed rectification work has in fact been implemented.
The second report of Ruth Walker dated 19 November 2018
Ms Walker was briefed with the three reports of Ms Duncan and asked to provide analysis and expert opinion in relation to the validity of the findings detailed in those reports.[33] She asserts that the second rectification review took a reductionist approach, looking only at the rectification made in response to specific non-compliances identified in the previous report. It therefore overlooked other non-compliances that existed in the evidence. She expressed the opinion that the evidence provided to Ms Duncan for her last report demonstrates significant and systemic non-compliance.
[33] Exhibit 9, Respondent’s Material, tab 3, pages 66 – 101, Report of Ruth Walker, dated 19 November 2018.
She referred to the fact that in her opinion the RTO had routinely implemented courses of short duration with an amount of training that was insufficient to enable learners to meet training package requirements.
She said that assessment materials did not meet unit requirements and did not ensure that assessment is conducted in accordance with the principles of assessment and the rules of evidence. This amounted to a failure to comply with clause 1.8 of the Standards.
Having looked at student samples from completed assessments she found that: incorrect or incomplete answers were marked as correct; assessment materials had not been administered according to tool instructions; and insufficient evidence was gathered and yet a result of competence was recorded. This again amounted to a failure to comply with clause 1.8 of the Standards.
Narelle Duncan’s further report dated 30 January 2019
Ms Duncan provided this report by way of a response to the report by Ms Walker.[34] She says that the RTO has worked diligently to rectify the issues raised throughout the audit process and that while there remain some issues of concern they are of a relatively minor nature. She says that there are a number of issues raised by Ms Walker’s report that required clarification. One was that at the initial audit the RTO was unable to demonstrate that it had in place a succinct strategy for engaging with industry particularly in relation to the development of training and assessment strategies. The RTO was unable to provide adequate evidence to support the engagement that it had conducted with industry. Email trails may have existed but it was agreed that the process was at best ad hoc and did not support compliance with clauses 1.5 and 1.6 of the Standards. Therefore, she determined that rather than presenting evidence of engagement that had been conducted, the RTO should provide strategies that it will use for the future. She said that she did not know if the strategy had been implemented.
[34] Exhibit 3, Applicant’s Material, Vol. 8, Statement of Narelle Gail Duncan, Exhibit NGD-06, pages 3635 – 3667.
Other points raised in her report are very largely based on matters that she is told, rather than on matters that are proved to her satisfaction. In other words, she is assuming that what she is told is correct or in other instances says that non-compliances are minor and could easily be rectified.
Conclusion on the expert evidence of Ms Walker and Ms Duncan
I was impressed by the integrity and reliability of both Ms Walker and Ms Duncan. At the end of the day there is not a great deal of evidence on which they differ and the differences are not great. Neither of them lacked impartiality. It is unnecessary for me to determine that one should be preferred over the other. On matters of small detail it is inevitable that there will be some differences. It is clear that to his credit, Mr Wallace, CEO of the Applicant, was trying to respond quickly and positively once he received
Ms Duncan’s reports. The defects in compliance identified by Ms Walker after the rectifications specified by Ms Duncan were minor and not of great significance. However the final report of Ms Duncan relies on Mr Wallace implementing a number of matters that he says will be implemented. Mr Wallace said that there were internal audits conducted to review the implementation of the processes recommended by Ms Duncan.[35] I accept that evidence. Given the very poor record of compliance with the Standards up until that time, one would have expected some evidence being led to show that the matters that he said would be implemented, have in fact been implemented by the newly appointed employees.
[35] Transcript, page 147.
Applicant’s Executive Officers
Up until March 2019, Mr Wills was the sole director and CEO of the Applicant. He has not given evidence for specific reason and as referred to in paragraphs [13]-[14] above. I accept that up until March 2019 he was the person who giving instructions in relation to these proceedings.
Mr Wallace has been CEO of SSG since March 2019. In 2015, he had been appointed as CEO of Site Institutes; a business unit within SSG and in October 2016 he became CEO of Site Skills Training a second business unit of SSG. He affirmed six affidavits.
Having received the first audit report in late May 2017 a prompt response was manifested by the appointment of a training resources and support officer on 30 May 2017, a lead validator was appointed on 10 July 2017, an assistant validator appointed on
29 November 2017 and a trainee to support the assistant validator appointed on 3 April 2018.[36] He said that there were three more compliance officers appointed in May, June, and August 2018.[37]
[36] Transcript, page 139.
[37] Transcript, page 139.
In the present case, the Applicant was given two months’ notice by Mr Sheppard of the intention to conduct an audit. If it was aware of the deficiencies it had time to rectify them. However, there is no evidence that any action was taken other than to comply with requests made by the Respondent. When Mr Sheppard had completed his audit and found that there was critical non-compliance he gave the Applicant one month to respond to his findings. When a massive quantity of material was provided to Mr Sheppard on
20 June 2017 he continued to find critical non-compliance with the standards. I do not place a lot of weight on the findings by Mr Sheppard for the reason that he was overseas at the time of the hearing and was therefore not subject to cross-examination. However the fact that Mr Sheppard refers to systemic non-compliance should have put the Applicant on notice that it was confronting significant problems. Mr Wallace obviously was concerned because he appointed extra staff as I have outlined above. What they were doing we do not know as none of them were called to give evidence of attempts made or action taken to rectify the issues raised.
Despite the concerns that were obviously engendered by Mr Sheppard’s audit and the appointment of the extra staff, when on 27 September 2018 Ms Walker provided her report having reviewed the files of 97 students in 17 training products, she found that the extent of non-compliance demonstrated significant risk to students and current or prospective employers.
Ms Duncan in her first audit report of 17 July 2018 audited 17 of 39 clauses and found that SSG was non-compliant with 14 out of those 17. She agreed that was a damning indictment of an RTO that have been operating for seven years.
The reports of these two auditors came more than a year after Mr Sheppard had provided his interim audit report. While the Applicant attempted to rectify the non-compliance that had been identified and to a large extent succeeded, it must be remembered that these are non-compliance in the particular products that were being audited. The extent of the non-compliance shows that they are systemic. One must take account of the fact that SSG has been operating in the field for five years at the time of its first audit. Furthermore, SSG is not the only RTO of SSI. It has had a long time to ensure that its offerings fully comply with the Standards and it would expect that the executive personnel operating SSG would be familiar with the Standards in order to demonstrate compliance. One might be inclined to be more sympathetic to it if it had no or little experience in the field, but here that is not the case.
That said it does not appear to me that the non-compliance is in any way dishonest as distinct from arising from ignorance or incompetence. Attempts have been made to rectify matters when they have been identified but there are two matters which are at present unclear. The first is whether or not the recommendations of Ms Duncan have actually been put into practice and implemented. The second is whether, given the extent of non-compliance, an effort has been made across the board rather than in respect of the specific matters raised on audit, to address compliance issues.
The Applicant’s attitude towards the audit process
ASQA has a difficult role. It is in effect charged with ensuring that the parts of the education system in Australia for which it has responsibility deliver education of the highest standard. It must ensure that Australia continues to maintain its reputation for providing a high standard of education for people who come here to study from overseas. Furthermore, Australian citizens and Australian employers must continue to be reassured that people with particular qualifications are well skilled and can be relied upon to perform a task, in respect of which they hold the qualification, to the required standard.
The task is made even more difficult by virtue of the fact that there are hundreds of courses in which ASQA has a supervisory/compliance/auditing role. While the course provider determines how to teach the course, ASQA must ensure that the Standards across all providers are satisfactory and consistent in both terms of what is covered and how it is assessed. That is difficult. It therefore applies a set of standards, at times rigidly. To this end it employs auditors who are experts at auditing and compliance but are not necessarily experts in the field in which they are conducting the audit. It follows that at times opinions differ as to whether a particular trainer, course provider or courses comply with the Standards. It is to be hoped that in such situations, differences can be sorted out by frank discussion. By way of an example, during the hearing of this matter, it was suggested that in respect of the teaching and then the practical assessment of a task of ‘maintaining chainsaw’s’ should have a clear delineation between the theory, the practical component and then the assessment.[38] It is hard to imagine that it is necessary that for a task of such a particular nature, to have the theory/practical elements taught on one day and then the assessment completed on another to ensure the student isn’t led through the process. I may be wrong about this and reasonable minds may differ, but matters of this nature should be resolved by discussion and not in this tribunal.
[38] Transcript, page 354.
However, what has caused me some concern throughout the review of this matter, is the Applicant’s attitude towards the audit process overall. As has been previously stated, several times, the Applicant is an RTO that has been in operation for seven years and is part of a larger corporation that operates a number of other RTO’s. Given the Standards are industry wide, it would be expected that the executive personnel at both SSI and SSG are somewhat familiar with:
(a)a basic understanding of the Standards;
(b)the requirements to comply with the Standards; and
(c)the fact that it is necessary to put measures in place to ensure compliance with the Standards.
It is noted the Respondent stated in its Notice of Decision to the Applicant dated 20 April 2018, that a consideration listed in the reasons for the decision that:
“…the organisation responded almost universally that it did not believe its actions had any impact on its learners and did not, in its opinion, require remedial action.”
The Respondent did not expand on that statement in the reasons for the decision. However, it can be inferred that the level of non-compliance and repeated inability by the RTO to demonstrate compliance with clauses 1.1, 1.2, 1.7, 1.8, 1.9, 1.10, 1.11, and 2.4, despite numerous audits by ASQA and independent auditors, led to such statement being made.
The Applicant has available to it a number of resources it can draw upon in order to put systems and processes in place to demonstrate compliance with the Standards. As a starting point, it has numerous audit reports which clearly identify how the RTO is non-compliant with the specific clauses. While it is acknowledged the Applicant has taken steps to rectify these issues, and that some of the identified issues of non-compliance are relatively minor, one would expect that if the Applicant were to be audited again in the near future, its level of compliance would be of a much higher standard.
APPLICATION OF PRINCIPLES APPLICABLE TO GRANT OF A STAY
The Applicant’s prospects of success
The Applicant has reasonable, although certainly not assured prospects, of success.
While a great deal of evidence has been given the Applicant has not established that it has successfully put into practice the recommendations made by Ms Duncan. The principles applicable to a stay require the tribunal to take into account the effect on the organisation of the grant or refusal to grant a stay.[39] The principles applicable to final relief may be more restrictive.[40]
[39] See eg, Scott and Australian Securities and Investments Commission [2009] AATA 798.
[40] Australian International College Pty Ltd v Australian Skills Quality Authority [2018] FCA 2097.
The consequences if the condition sought is imposed on the Applicant
The Respondent seeks to prevent the Applicant advertising for the taking in of new students.
Mr Dawson gave evidence that the primary source of the Applicant’s revenue is from the delivery of accredited training courses and that without the income from those courses the Applicant would not be able to operate.[41] He said that in the last financial year the company either “broke even, so zero profit, or a slight loss”.[42] The Applicant employs 64 people across Queensland, Western Australia, and in the Northern Territory. If the Respondent’s amended stay application is successful, the Applicant would have to make 64 employees redundant at a cost of roughly $700,000. Mr Dawson said that the Applicant would not be able to survive commercially if the stay was not continued in its current format. I accept that evidence. There is unfortunately no guarantee as to when this matter can be finally determined. If one takes into account the possibility of appeals, it may take several years.
[41] Exhibit 3, Applicant’s Material, Vol. 7, Affidavit of Craig Anthony Dawson, dated 7 May 2019, page 3433.
[42] Transcript, page 328.
The Public Interest
It is apparent from the objects of the NVR Act set out earlier that the public has a great interest in ensuring that our RTOs are properly regulated. The way RTO’s behave affects the reputation of the nation in the education sector, a large export industry. The public has an interest in ensuring that people who hold a qualification have been properly trained to a high standard. The purpose of the Standards is to ensure that training organisations maintain high standards by enabling them to be audited by the respondent. The initial audits left a great deal to be desired in this case.
Having been found by the respective auditors to be non-compliant with Standards, the Applicant has only now made serious efforts to become compliant. It has largely done so and has appointed extra staff to ensure that in areas where it has not been audited, it is taking appropriate steps to ensure compliance with the relevant standards. The public has an interest in the continuation of an organisation that is complying with the standards.
The consequences for the Respondent in carrying out its functions
There are no consequences for the Respondent arising out of this decision. As mentioned earlier, the Respondent was content to consent to a stay pending the final determination of this matter. It changed its mind, as it is entitled to do, because of events that occurred in the other proceedings. In these proceedings, the Respondent suggested that there had been a change in circumstances in that Mr Wallace had sworn an affidavit that was false by asserting that the Applicant was “fully compliant” in his affidavit dated 14 May 2018.
I do not accept that the affidavit was deliberately misleading, although there is no doubt that it was misleading. Nor am I satisfied that it was that assertion by Mr Wallace that motivated the Respondent to consent to a stay.
Whether the application would be rendered nugatory
The amended stay application, if successful, would be rendered nugatory because the Applicant would in all probability have no remaining business.
The time between the hearing of the stay and the hearing of the application
As mentioned above the time between the hearing of the stay and the hearing of the application could be a matter of years.
DECISION
The Respondent’s application for an amended stay order is refused. The current unrestricted stay order of 21 May 2018 continues.
Adjourn further hearing to a date to be fixed
95. I certify that the preceding 94 (ninety-four) paragraphs are a true copy of the reasons for the decision herein of Deputy President R I Hanger QC
......................[SGD]..............................
Associate
Dated: 12 July 2019
Date of hearing:
15 to 21 May 2019; 23 to 24 May 2019
Counsel for the Applicant:
Mr Scott McLeod QC
Mr Matthew Wilkinson
Solicitors for the Applicant:
Hopgood Ganim
Counsel for the Respondent:
Ms Madeline Brennan QC
Ms Sarah Wright
Solicitors for the Respondent:
Australian Government Solicitor
Exhibit 4, T Documents, T4, pages 52 – 59, Application to renew RTO registration, submitted
23 December 2016.
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