Vocational Education and Training sector update: spring 2021 – what do ASQA’s new corporate plan, regulatory changes and enforcement activities mean for you?

By Julian Hammond, Alexandra Lane and Gabrielle Fee

In the second edition of our series for clients in the Australian vocational education sector, we summarise ASQA’s 2021-2022 Corporate Plan, look at recommendations for providers transitioning out of the COVID-19 pandemic and ensuring there are no compliance breaches with ASQA, provide updates on extended transition periods for subjects, and summarise recent enforcement proceedings in Australian Competition and Consumer Commission v Productivity Partners Pty Ltd (trading as Captain Cook College) (No 4) [2021] FCA 752.

ASQA's 2021-2022 Corporate Plan

The Australian Skills Quality Authority (ASQA) has published its Corporate Plan 2021-22, which sets out the national vocational education and training regulator’s strategic direction for the next four years.

The plan also provides key activities and performance metrics for ASQA. In particular, the plan identifies six key strategic regulatory deliverables for ASQA. These comprise:

• a regulatory approach that promotes a culture of self-assurance and continuous improvement;
• a regulatory approach that is best practice, integrated, risk-based and proportionate;
• a regulatory approach that is transparent and accountable;
• to engage and partner with stakeholders constructively and with mutual respect;
• to add value and be efficient, effective, and continuously improving; and
• ASQA’s understanding of sector performance and promotion of self-assurance will contribute to quality VET and informed consumers.

Notwithstanding these key objectives, ASQA has stated that its regulatory program over the next year will target both provider risk (provider behaviour that can present a risk to the quality of student outcomes and the reputation of the VET sector) and systemic risks (risks likely to affect a significant proportion of providers or relate to a particular cohort of providers across the VET sector or specific industry sector). Accordingly providers should be aware that ASQA will be scrutinising any conduct which falls into these categories, as well as reviewing a sample of providers for which it has not identified any risk.

An example of ‘provider risk’ and a regulatory enforcement response from the ACCC is set out in our case note below.

As we move out of the COVID-19 suppression phase, and a mix of in-person and remote learning progresses, course developers and providers should be actively considering the risk of increased ASQA enforcement.

A copy of the ASQA 2021-2022 Corporate Plan can be accessed here.

Moving forward from the COVID-19 pandemic

Despite the significant setbacks COVID-19 and the various lockdowns have caused to the sector, providers will continue to move forward. The demand for change in the way courses are being facilitated has led to necessary adjustments to delivery modes, resequencing of training and the provision of different units of competency. Although some of these changes may only be temporary, the transition into spring is a great moment for providers to think innovatively about the format and the quality of the services that they are offering students.

It is important for providers to review how their operations have changed (or if they are required to change), and to ensure their course offering and information remains accurate.

By way of a practical example this may include where providers may have ceased training at some or all locations and moved to online platforms.

What happens when we ‘return to normal’ post COVID-19?

When a provider returns to normal operations, it is important to consider updating this information in the following places:

• ASQA
  • Remember to contact ASQA if you are reopening your training locations, moving from distance learning back to face-to-face training or beginning to operate after being in hibernation.
  • A simple way of updating these operational changes is by contacting ASQA at enquiries@asqa.gov.au.
• training.gov.au
  • Remember to check your information is correct on training.gov.au, including your head office address, name and contact information and scope of registration.
  • If you need to make any changes, you can do this through the asqanet portal.

What happens if you have made permanent changes?

A provider is also required to inform ASQA of any permanent changes that have occurred, including material changes or events, site change details or any third party arrangements. Given the extended hibernation that has occurred since March 2020, it is likely that many organisations will have gone through material changes.

Put simply, a ‘material change’ includes any changes of circumstance or events which relate to:

• registered trading names;
• key staff members or their contact details – this includes chief executive officers, principal executive officers, executive officers (including owners) or high managerial agents;
• principal place of business or delivery sites;
• financial administration status;
• legal name or type of legal entity;
• third-party agreements (entering into or cancelling);
• ownership, directorship or control (including the sale or merger of an RTO);
• organisation type;
• staff turnover (where significant or unexpected); and
• funding revenue sources (where significant).

If any changes have been made to the RTO’s principal place of business or delivery site, providers must notify ASQA via this form.

Finally, if you have entered into or cancelled a third party arrangement for training and assessment, marketing and recruitment, or any related educational and support services, notify ASQA via this form.

Extended transition periods

The Standards for Registered Training Organisations 2015 (Cth) (Standards) require that RTOs manage the scope of their own registrations. This means that RTOs must ensure that, within 12 months of publication on the national register, they transition any superseded training packages and transfer students across to new packages. During this transition period, both the superseded and the new training packages will remain on the scope of the RTO’s registration.

ASQA has the ability to extend transition periods for RTOs longer than those prescribed by the Standards. ASQA will only consider applications for longer transition periods for superseded packages where it can be shown that, if an extension was not granted, there would be genuine disadvantage to a cohort of students. If granted, then the extension applies to all RTOs which provide that training product across Australia.

ASQA has now extended transition periods for a wide range of training products. The full list of transition period extensions are detailed on ASQA’s website; however, a summary overview of recent extensions include:

• NWP30215 Certificate III in Water Industry Operations and NWP20115 Certificate II in Water Industry Operations until 31 December 2021.
• FNS30115 Certificate III in Financial Services until 31 March 2022.
• AHC30816 Certificate III in Arboriculture and AHC50516 Diploma of Arboriculture until 6 April 2022.
• Six qualifications from the ICT Information and Communications Technology Training Package to 30 June 2022.
• BSB50215 Diploma of Business until 1 July 2022.
• 53 qualifications from the CUA training package until 16 October 2022.
• BSB42315 Certificate IV in Environmental Management and Sustainability until 1 December 2022.
• 20 qualifications from the AUR Automotive Retail, Service and Repair Training Package until 10 December 2022.
• ACM30317 Certificate III in Captive Animals for existing learners until 30 December 2022.
• Early Childhood Education & Care qualifications from the CHC Community Services training package until 20 January 2023, including CHC30113 Certificate III in Early Childhood Education and Care, CHC50113 Diploma of Early Childhood Education and Care, CHC50213 Diploma of School Aged Education and Care, CHC30213 Certificate III in Education Support and CHC40213 Certificate IV in Education Support.
• CUA40313 Certificate IV in Dance Teaching and Management to 16 April 2023.
• CPC60115 Advanced Diploma of Building Surveying until 1 July 2023.
• HLT54115 Diploma of Nursing until 31 December 2023.
• MEM30705 Certificate III in Marine Craft Construction until 31 December 2023.

Providers should continue to monitor the list of transition periods to ensure that they do not miss any key dates.

Practical reminder

Given we have now reached the final quarter of the year, it is a timely reminder for training providers to maintain accurate and up-to-date provider information in asqanet. As readers would be aware, asqanet is ASQA’s online web portal for managing registration, applications and fee payment for RTOs and CRICOS providers.

It is a provider’s obligation under section 25 of the National Vocational Education and Training Regulator Act (2011) to ensure that asqanet is showing accurate records for:

• the physical address and postal address for the head office;
• the physical address of the organisation’s principal place of business;
• the physical address of the sites or campuses from which VET courses are delivered on a permanent basis (whether in Australia or offshore); and
• the provider’s website address.

For further information on how to update provider delivery information in asqanet, please see here.

Recent enforcement proceedings

Australian Competition and Consumer Commission v Productivity Partners Pty Ltd (trading as Captain Cook College) (No 4) [2021] FCA 752

In July 2021, the Federal Court ruled that Productivity Partners trading as Captain Cook College (College) engaged in unconscionable conduct in connection with its supply of online diploma-level courses. This case serves as a warning to providers of the risks associated with changing enrolment and withdrawal processes for students when the changes would significantly reduce protections for students.

The College was a provider of online VET FEE-HELP diploma courses.

Senior staff that worked at the College raised concern about the ability of students that had been recruited for the online courses, reporting that they had limited language and computer skills. The former Brisbane campus manager told the Court that students had been recruited outside Centrelink offices, and had been given the mistaken impression that courses and laptops offered to them were free.

Recruiters had allegedly targeted illiterate, elderly and intellectually disabled people for courses that they were unlikely to complete or benefit from. Students had been signed up to large student loan debts, and the College claimed $50 million over three months in VET FEE-HELP program for around 6,000 students.

The Australian Competition and Consumer Commission (ACCC) commenced legal action against the College in November 2018, alleging that it had engaged in misleading conduct since September 2015 when it removed consumer safeguards from its enrolment and withdrawal processes to improve financial performance.

The ACCC alleged that College and the other respondents had engaged in a system of conduct or pattern of behaviour which comprised the following:

• changing its enrolment and withdrawal process by replacing outbound calls, during which College staff would review students’ enrolment documents and suitability of applicants, with inbound calls, made by recruiters immediately after electronically submitting the prospective student’s enrolment documents. On these calls, College staff would follow a script which consisted principally of closed questions and did not consider the student’s suitability to be enrolled in the course;
• campus withdrawal procedures were removed, which previously gave students on-site assistance with withdrawal from courses prior to the census date and prevented them from incurring VET FEE-HELP debt (VFH debt) which arose upon the passing of a census date; and
• claiming and retaining the consequently increased revenue by way of payment from the Commonwealth in respect of VFH debts incurred by students.

The Court found that the College had changed its enrolment and withdrawal processes when it knew, or ought to have known, that the changes would significantly reduce protections for students, and would lead to a materially increased risk of both unsuitable students being enrolled in its online courses and of misconduct by its recruiters.

The result was that the College knew that its dramatic increase in revenue and turnaround in profits was substantially built on VFH revenue in respect of students who should not have been enrolled and yet who incurred very substantial debts to the Commonwealth as a result of their enrolment.

On 2 July 2021 the Court directed that the parties were required to bring in agreed or competing orders to reflect the finding, by way of penalty and costs. The Court found that it was appropriate that Cook, the founder and former CEO of the College, be disqualified from managing corporations for a period of three years and received a penalty of $250,000 pursuant to s 224 of the ACL. No determination has been made to date regarding the penalty to be incurred by the College.

This case represents the fourth time that a Court has now found that a VET FEE-HELP provider has engaged in misleading and unconscionable conduct. Accordingly, providers should be aware of the risks associated with engaging in this conduct and that this remains a clear area of focus for regulatory enforcement action.