According to the explanatory memorandum to the Amending Act, the amendments are designed to improve the efficiency and effectiveness of the Act by strengthening the regulatory framework to ensure that the Australian Skills Quality Authority (ASQA) has the necessary powers to encourage and promote a quality vocational education and training (VET) system to benefit students and the sector.
The amendments to the Act arise from the recommendations in the following reports:
Both reports made recommendations intended to strengthen regulation of the VET sector in order to improve the quality of VET delivery and ensure students are protected and informed.
The Amending Act introduces a broad range of amendments to the Act, including changes that are technical or clarifying in nature, such as the alignment of terminology in the Act with terminology used in the sector and changes that are likely to impact registered training organisations (RTOs) going forward. ASQA's summary of the amendments can be reviewed on ASQA's website. A concise summary of some of the significant amendments likely to impact RTOs are included below.
Review of decisions made by a delegate of ASQA
The Amending Act introduces two significant changes to the process by which a RTO can have a decision made by a ASQA delegate reconsidered or reviewed, both which may have very serious and unintended consequences.
The Act now provides that, where an application is made for ASQA to reconsider a reviewable decision made by an ASQA delegate, ASQA may stay the operation of the decision pending the outcome of the reconsideration and determine any conditions that such a stay may be subject to following receipt (see sub-sections 200(6) and 200(7) of the Act). Under this amendment, ASQA's decision in relation to a request to stay the operation of the decision is not a reviewable one.
Prior to the Amending Act, ASQA regularly amended the effective date of the decision pending the outcome of the internal review, which had the practical effect of staying the decision under review. ASQA had a practice of communicating its willingness to take this step well ahead of the due date for the provider to make its application for reconsideration.
Now, in accordance with the amendments to section 200 of the Act, ASQA takes the position that it will no longer consider such a request until the applicant submits its application for reconsideration. This amendment has the potential to cause uncertainty for RTOs (and its staff and students), particularly in circumstances where the effective date of a decision is in close proximity to the deadline for submitting an application for reconsideration.
Tthe Amending Act has removed the right of a person affected by a reviewable decision made by a ASQA delegate to request a review of that decision by the Administrative Appeals Tribunal. The Act now specifies that only decisions of ASQA can be subject of an application to the Administrative Appeals Tribunal for review (see section 203 of the Act).
A particularly serious, and perhaps unintended, consequence of the above amendments is amply demonstrated in relation to a decision made by a delegate to cancel a RTO's registration. If ASQA uses its new powers to refuse to stay a decision to cancel a RTO's registration pending the outcome of the reconsideration, the RTO may be required to shut its operations (including releasing all of its students) ahead of the reconsideration being determined,. This would have the practical effect of removing a RTO's right to seek merits review of that decision by the Administrative Appeals Tribunal. In these circumstances, a RTO may have no option but to seek urgent relief from the Federal Court.
It is currently unclear whether ASQA will exercise its powers in relation to the stay of decisions made by a delegate in this way and the sector will need to wait and see how the powers are applied in practice. If issues around ASQA's use of these powers arise, a more fulsome alert in relation to this issue will follow
Audit reports
The Act now requires that ASQA prepare an audit report whenever an audit is conducted, including for those conducted in relation to applications for registration or renewal of registration (see section 17A of the Act) and compliance monitoring audits (see sub-sections 35(1A) to (1D) of the Act).
Although issuing audit reports to RTOs has been the usual practice of ASQA for some time, the Act now requires that audit reports comply with the 'audit report rules', which is a legislative instrument by the Minister under the newly inserted section 231B of the Act. The amendments to the Act envisage that the audit report rules will prescribe, at least, the form of the audit reports and any requirements relating to publication of the report.
The publication of ASQA's audit reports has the potential to cause significant reputational and financial harm to RTOs, especially if publication occurs prior to RTOs exercising their right to respond to a notice of intention to make a decision issued by ASQA or apply for internal or external review of ASQA's decisions.
Currently, no audit report rules have been made by the Minister. The audit report rules will be drafted during a consultation period between ASQA and stakeholders of the VET sector throughout 2020.
ASQA has expressed that a range of issues will be considered, including the mitigation of adverse outcomes which may arise from the publication of audit reports.
Conditions on registration
The Act now contains a new condition on RTO's registrations under the Act, requiring RTOs to 'demonstrate a commitment, and the capability, to deliver quality vocational education and training'.
The explanatory memorandum to the Amending Act focuses on the application of the condition to new entrants to the VET sector and it is unclear how ASQA will measure compliance with this new statutory condition by existing RTOs.
ASQA has provided some guidance in relation to how RTOs can demonstrate their commitment and capability, including by 'ensuring their governance and systems are working to provide quality training outcomes' and through responding to audit findings of non-compliance with the Standards for Registered Training Organisations (RTOs) 2015 (RTO Standards). However, in circumstances where RTOs are already required to comply with the RTO Standards by way of statutory condition (see section 22(1) of the Act), it is unclear how the new condition (and measuring compliance with the new condition) will differ in practice.
Material change notifications
The Amending Act has broadened the circumstances under which an RTO is required to notify ASQA of a material change, to include:
- where an event is 'likely to occur' that would significantly affect an RTO's ability to comply with the VET Quality Framework; and
- where there is likely to be substantial changes to the operations of the organisation.
These changes bring the Act into alignment with requirements to notify of material changes set out under the Education Services for Overseas Student Act 2000 and, for higher education providers, under the Tertiary Education Quality and Standards Agency Act 2011.
It is unclear how ASQA will interpret this change, however in the higher education sector there has been an expectation that providers will notify the Commonwealth regulator of proposed changes to their ownership, prior to the change taking effect but at a stage of the proposed transaction where there is a likelihood it will proceed.
Requests to produce documents
The Amending Act has clarified ASQA's powers with respect to requesting RTOs to produce documents. The Act now clearly requires RTOs to produce documents to ASQA as ASQA requests and in the manner in which ASQA requests, by notice in writing (see sub-sections 26(3) and 26(4) of the Act). This requirement contains a qualification whereby the RTO is not required to comply with such a request where the RTO is incapable of doing so (the explanatory material explains that the RTO will not have to produce a document if it does not have the document or it is not in a producible form).
Further, the Act now provides ASQA with the power to make and retain copies of the documents or extracts of the documents produced to ASQA by the RTO. ASQA may retain the documents produced for as long as is reasonably necessary, subject to requirements for ASQA to provide certified copies of those documents to persons entitled to possession (see sections 26A and 26B of the Act).
Enforceable undertakings
The Act now allows for ASQA to accept a written undertaking from a person in connection with any matter relating to the Act (see sub-section 146(1A)). Prior to the Amending Act, ASQA could only accept a written undertaking given by a person if ASQA considered that the person had committed an offence or contravened a civil penalty provision contained in the Act. This is a welcome amendment, as enforceable undertakings can be a useful tool to achieve positive regulatory outcomes in the early resolution of disputes with regulators.
