RTO v ASQA – Preparing for Review at the Administrative Appeals Tribunal

RTO v ASQA — Preparing for Review at the Administrative Appeals Tribunal

In this article, I provide an overview of what Registered Training Organisations (RTOs) need to know if they are preparing to lodge applications to the Administrative Appeals Tribunal (the AAT) for review, and also for a stay of the regulator’s decision. My main focus will be on the stay application, due to the fact that in many matters without a stay, the RTO will find it difficult to survive until the date of the substantive hearing.

I then connect the steps in the process and address some of the potential pitfalls and challenges experienced by RTOs during the process. I draw on experiences from my professional practice as a lawyer, RTO consultant/auditor, relevant case law and applicable legislation.

This article assumes that internal reconsideration with the regulator has already occurred with no compromise and that parties are therefore heading to the AAT.

Obligations of RTOs

The Australian Skills Quality Authority (ASQA) is the national regulator for the vocational education and training (VET) sector. The RTO must meet its obligations under the National Vocational Education and Training Regulator Act 2011 (Cth) (NVR Act), the Standards for Registered Training Organisations 2015 (the Standards), and associated legislative instruments, and/or if registered on the Commonwealth Register of Institutions and Courses for Overseas Students (CRICOS), the Education Services for Overseas Students Act 2000 (Cth) (ESOS Act) and the National Code 2018. The RTO must also meet obligations with relation to state and federal VET funding contracts (if these contracts are in place).

Merits Review at the AAT

The merits review undertaken by the AAT involves the capacity of the AAT to ‘step into the shoes’ of the regulator. This means that if the regulator’s decision is found to be incorrect, the AAT may then remake the administrative decision based on the merits of the individual matter.

The application process begins with the RTO completing and lodging two forms with the AAT; namely, the ‘Application for Review of Decision’ and ‘Request for Stay Order’. When lodging these applications, the RTO should inform the AAT that the matter is urgent. The time limit for lodging an application for a review of a decision is usually 28 days after receiving the decision, and so the timeframe for preparing and filing applications to the AAT for a review of decision and a stay are quite short.

Once a stay application is lodged, the ASQA has 14 days to consent or not to the stay. If they do not consent then an interlocutory hearing will be listed, where parties will have a chance to make submissions. In relation to a stay application, the AAT may or may not make an order suspending the decision while the review is taking place. There have been many matters where the AAT has refused a stay application. In this article I have outlined a few of the reasons why stay applications have been refused (see end of article).

While waiting for the AAT substantive hearing the parties are given the opportunity to attend an alternative dispute resolution (ADR) conference. The ADR process will help the parties identify the issues and try to come to a resolution. The matter may in fact be resolved at this stage.

Steps and Considerations in the Process

1. Get the Team Together and Brainstorm the Rectification Process

The RTO should immediately sit down with its key staff and discuss the findings of the performance assessment and potential actions by the regulator. They should brainstorm the remedial actions needed to alleviate the ASQA’s concerns. A rectification schedule should be developed, which should include the list of non-compliance(s), actions required, timelines, responsible team member and manager signoff, etc.

2. RTO Lawyers and RTO Consultants

The next step is for the RTO to retain an experienced RTO lawyer to assist it with the preparation of the applications to the AAT for a review of decision and a stay (for the decision to be suspended while the review is taking place) and associated matters, including an ADR and negotiations with ASQA.

The RTO should also retain an experienced RTO consultant to help with immediate rectification tasks. An experienced RTO consultant will be of significant help to the RTO in supporting it with rectifications.

2.1. Risk When No Representation

The RTO may consider handling the AAT process alone without the support of a RTO lawyer. However, there are many reasons why the RTO should retain an RTO lawyer; for example, the ASQA is represented by a lawyer, the AAT member is a lawyer, and although AAT is not a court it is tantamount to a court. Therefore, the process is not dissimilar to that of a court, and as such will be legalistic to some extent. Nevertheless, this is a decision for the RTO to make.

3. Immediately Begin the Rectification Process

Once the RTO has received the regulator’s performance assessment report identifying alleged non-compliances the RTO should immediately begin the rectification process. In this way, by the time the parties reach the AAT substantive hearing the rectification process should have been completed. Importantly, the AAT can take into account events that have occurred between the time of original decision and the review hearing.[1]

Under section 33(1)(c) of the Administrative Appeals Tribunal Act 1975 (Cth) (the AAT Act) the AAT may inform itself in any way it thinks fit. As the RTO works its way through the rectification process, they must provide the ASQA updates in relation to their evidence of compliance (describing the rectification action taken to comply); obviously, supporting evidence must be supplied. In essence, if the RTO completes all rectifications there may not be the need for a substantive hearing.

4. Lodge Forms to the AAT

As described above, two forms need to be completed and filed with the AAT. As time is of the essence, the RTO must lodge these forms within set timeframes. Affidavits will also need to be prepared and lodged. These must provide evidence to the AAT as to why it should grant a stay. The process can be very complex, depending on the particular circumstances.

The regulator will file its own response, including affidavits from the ASQA auditors.

5. Granting a Stay

It must always be remembered that making an application to the AAT for review of a decision does not affect the operation of the decision or prevent taking action to implement a decision unless the AAT has made an order staying or otherwise affecting the operation or implementation of a decision under review. This is why a stay application is so important. The applicant does not have an automatic right to a stay.

Obviously, in most matters it would appear that where a stay is not granted, the RTO would suffer great hardship by the time of the substantive hearing. The RTO may in fact be unlikely to be able to restore itself to its previous status and position, having presumably lost clients, students, trainers and support staff.

In deciding whether to grant a stay of ASQA’s decision pending the outcome of the AAT’s final decision, the AAT considers all relevant matters including the time between the application and the hearing of the application.

5.1. The Stay Only Assesses the Merit of a Stay

The stay application is only assessing the merits of a stay application; it is not the substantive hearing and ‘is not seeking to determine in any detail the merits of any case which might be argued at a later stage in appeal proceedings’.[2] Additionally, in Technical Education Australia Pty Ltd v Australian Skills Quality Authority [2018] AATA 3047 Senior Member Cameron summarises (at [68]) the requirement of this consideration as follows:

'It is not the role of the Tribunal, in assessing the merits of a stay application under section 41(2), to conduct a preliminary hearing… The task of the Tribunal in such an application is to consider whether there exists facts and circumstances which would provide some basis for success.'

Therefore, the submissions for a stay application must be clear and succinct, outlining the order sought and grounds for request.

5.2 Principles in Granting a Stay

In drafting their applications, the RTO must consider the below well-established principles applied in Scott v Australian Securities and Investments Commission [2009] AATA 798 (Scott). The AAT has a wide range of considerations permissible to inform the exercise of stay power. In Scott, President Downes J set out a number of factors to be considered in determining whether to grant a stay under subsection 41(2) of the AAT Act, as follows:

1. The prospects of success;

2. The consequence for the applicant of the refusal of the stay;

3. The public interest;

4. The consequences for the respondent in carrying out its functions, depending on whether a stay is granted or not;

5. Whether the application for review would be rendered nugatory if a stay were not granted;

6. Other matters that are relevant, amongst which I would include the length of time—in that case, it was the ban—that had already been in place and the gap between today and the hearing of the application.

The above factors have been applied in many matters post Scott. Submissions based on the above principles should be aligned with the RTO’s particular circumstances.

The stay application must be persuasive; if it is not then the stay may be refused. The member will go through the relevant considerations to establish if they are satisfied that it is desirable to order a stay under s 41(2) of the AAT Act. If they do not order a stay, the substantive hearing may in fact (for obvious reasons) be a waste of time.

5.3 Supporting Evidence: The Affidavit

An affidavit is a sworn statement put in writing. Therefore, what is placed in an affidavit is a claim that the information within the document is true and correct to the best of the writer’s knowledge. Affidavits may be sourced from consultants, staff, students, employers and industry, among others.

The RTO’s lawyer will need to review each affidavit to ensure it is clear, succinct, not contradictory or inconsistent and is relevant to the matter. For example, the RTO’s consultant should not state, ‘The RTO is now compliant’, as this is a bold statement and would certainly need to be backed up with evidence of the fact. In contrast, they might state, ‘The reason the non-compliance occurred was ……., this will not happen again because the RTO has developed new policies, retrained staff, and completed xx rectifications as outlined in my rectification schedule. I have attached the rectification schedule, dated XX August 2022 at annexure “A”’.

6. Substantive (Final) Hearing

It is important to note that the AAT decision is based on the RTO’s level of compliance at the date of the final hearing. This is why it is imperative that the RTO takes remedial action once issues of non-compliances are drawn to their attention. Notwithstanding, it is always better to resolve a dispute than go to a hearing.

At the substantive hearing, the ASQA has the opportunity (as does the RTO) to present the evidence, cross-examine witnesses and make submissions based on an appropriate sanction. It will be very difficult for the RTO to manage this process without the support of a professional team.

7. Why Have RTOs Failed the Stay Application?

The following is a brief list of some of the reasons given by the AAT in matters as to why applicants have failed the stay application:

• Due to the level of non-compliance, the public interest is best served by not granting a stay;
• The stay application relied on insubstantial and unpersuasive grounds;
• The stay application did not provide any financial statements;
• The stay application did not provide proper financial statements, accounts and/or tax returns;
• The stay application was incomplete;
• The rectification reports indicated that rectifications had not been completed;
• The financial statements did not accurately reflect the true position of the company;
• The financial viability risk assessment requirements does not show compliance with the NVR Act; and
• The applicant filed materials outside the date upon which the AAT had ordered their production.

Conclusion

This article has discussed several important facts that an RTO should consider in preparation for lodgement of applications to the AAT for review and a stay of the regulator’s decision. My main focus has been on the stay application. It is important for the RTO to not rest on their laurels but to take immediate action, including retaining services of a professional and experienced support team.

Disclaimer: The material contained in this article is general in nature and is based on the law as of the date of publication. It does not purport to, nor is intended to constitute in any way, in relation to your particular circumstances legal advice. Markus Earl Legal make no representations or warranties as to the accuracy of any of the information contained herein. Legal advice should be sought before relying on the content of this article.

By: Raymond M Earl
DipQA, DipVET, DipTDD, LL.B (Hons), GDipLP, MEI, M.Ed
Principal, Markus Earl Legal
RTO Lawyers www.markusearllegal.com.au
M: 0432 661 986

RTO Consultants: www.skyneteducation.com.au
M: 0409 855 986

My Experience in VET (in short)

I have worked in the VET sector (part-time and full-time) for over 20 years. My roles have included CEO of two RTOs, RTO consultant/auditor and senior manager at both public and private providers. I am also a qualified lawyer specialising in the VET sector.

Qualifications: Master’s degree in Education, Master’s degree in Entrepreneurship & Innovation, Graduate of Diploma of Legal Practice, Bachelor of Laws (1st Class Honours), Diploma of Vocational Education and Training, Diploma of Quality Auditing, Diploma of Training Design and Development, Certificate IV in Training and Assessment, Certificate IV in Government Investigations and Certificate IV in Real Estate.

I am a member of the Law Institute of Victoria, Australian Institute of Administrative Law, Law Council of Australia—Family Law Section and the Institute for Learning Practitioners.