Weeding out dodgy operators: new legislation to further regulate vocational education and training providers

By Julian Hammond, Alexandra Lane and Caroline Sakinofsky

Stricter penalties for misconduct by vocational education and training (VET) providers, greater protection for students and an increase in the Australian Skills Quality Authority’s (ASQA) regulatory powers are some of the reforms introduced under the Federal Government’s new legislation that aims to further strengthen the quality of Australia’s higher education sector.

These reforms follow the Department of Education’s recent crackdown on onshore VET programs, which strengthened the existing fit and proper provider test under the Education Services for Overseas Students Act 2000 (Cth).^[1] Since this amendment, ASQA has stopped at least 28 VET providers from operating.

Given the Federal Government’s clear focus on reforming this sector, VET providers should be aware of the recent changes to ensure they do not expose themselves to surveillance, penalties and enforcement action.

In this article, we expand on the key aspects of the new legislation.

How do the reforms impact VET providers?

On 29 March 2024, Parliament enacted the National Vocational Education and Training Regulator Amendment (Strengthening Quality and Integrity in Vocational Education and Training No.1) Act 2024 (Cth) (the Act), which amends the National Vocational Education and Training Regulator Act 2011 (Cth).

The key changes under the Act focus on quality assurance, and include that:

• where a VET provider has not delivered training or assessments for a period of 12 consecutive months, its registration will automatically lapse unless an extension of time is obtained from ASQA.
• a VET provider is prevented from making changes to, or expanding, its course offerings within the first two years of its registration. This aims to ensure that VET providers can focus on delivering quality training in the segment of the market for which they were originally approved.
• a broader range of civil penalty provisions have been introduced for breaches of the law, and the maximum penalty units for those provisions have been increased. Critically, this includes:
  • expanding the range of areas for which VET providers may make false and misleading representations (including about all, or part of, a VET course, VET qualifications or a VET provider’s operations);
  • that an executive officer of a VET provider may be held personally liable for offences arising from any false and misleading representations;
  • a court may impose a penalty for false and misleading representations of up to $939,000; and
  • more broadly, financial penalties for offences have increased (up to five times the current financial penalty). By way of example, the civil penalty for issuing a VET qualification that is outside the provider’s scope of registration has increased from approximately $115,386 to $576,930.

These amended penalty provisions apply to offences that occur on or after 29 March 2024.

The Act aims to protect VET programs for students who genuinely wish to be enrolled rather than those pursuing alternate avenues for work in Australia. This aligns with the Federal Government’s broader migration strategy to reduce the net overseas migration to 250,000 by 2025-26.

ASQA’s increased powers

The Act also seeks to empower ASQA to take increased surveillance and enforcement action against VET providers to address integrity risks posed by education providers. The Act extends their regulatory powers by:

• expanding the period in which ASQA can conduct internal reviews of decisions from 90 to 120 days, to ensure they can adequately review complex applications; and
• allowing ASQA to place new applications from VET providers on hold while it investigates suspicious behaviour.

These amendments ultimately provide ASQA with greater flexibility in terms of how it prioritises, considers, and makes decisions in relation to applications.

Key takeaways for VET providers

• While the courts have complete discretion to determine the appropriate penalty amount (up to the maximum set under the Act), the Federal Government has emphasised that the purpose of the Act is to send a strong signal to non-genuine or unscrupulous VET providers. Accordingly, VET providers should heed the warning that a severe approach will be taken towards enforcement and that further legislative changes are coming. The Minister for Skills and Training, Brendan O’Connor, has recently said that:

‘This legislation is the next step in our reforms to strengthen quality and integrity in VET – and there is more to come. There is no place for dodgy providers in the sector who take advantage of students and undermine the sector…These measures support the majority of providers who do the right thing, and whose reputations are damaged by exploitative bottom-feeders.’ (emphasis added).

• Given the expansion of civil penalty provisions under the Act, VET providers should carefully consider any representations made to ensure these cannot be characterised as false or misleading. Examples to be on guard for include representations made in advertisements or online publications that describe or show images of training facilities or location, offerings for work integrated learning opportunities or otherwise provide fabricated testimonials or endorsements.
• VET providers should take steps to ensure they can effectively demonstrate to ASQA that their programs are active and their student records are up to date. Such steps will help to illustrate to ASQA that the VET provider is a genuine provider, while also avoiding the risk of its registration lapsing for failure to provide training or assessments.