Refusal to Grant Provider Approval (s.12): CYU v Secretary, Department of Education

This case is similar to that heard by the same Tribunal (NSW Civil and Administrative Tribunal) recently: CZR v NSW Department of Education (see my blog post). However, the case raises some questions about the lawfulness of compulsory assessment sessions for approvals under the National Law.

The case involved a review of a decision by the NSW Department of Education (NSW Regulatory Authority under the National Law) to not grant provider approval to the applicant, CYU. Following the participation in a complusory assessment process, conducted by the Department, the individual, who was to manage or control the applicant’s family day care service (“Mr M”), was assessed not a fit and proper person to be involved in the provision of an education and care service.

During the Tribunal hearing the issue was raised as to whether the Department had power to require Mr M to undergo an assessment and therefore use the assessment results. The Tribunal found that the assessment was not authorised by sections 14 or 261, as submitted by the Department. Those provisions did not allow for such coercive powers to be exercised by the Regulatory Authority in relation to applicants and also that the Department did not have power to impose a fee for such assessments:

It follows... that I am of the view that the evidence of Mr M’s assessment results was unlawfully obtained by the respondent. At the very least, it was improperly obtained. This then raises the issue of whether the evidence should be admitted and, if so, what weight should be given to it (para.32)

In this case the Tribunal exercised its discretion, on public policy grounds, to allow the evidence of the assessment to be used:

In determining whether to admit the evidence of Mr M’s assessment responses and assessment results, I have given great weight to the guiding principles that the rights and best interests of the child are paramount and that best practice is expected in the provision of education and care services. In accordance with these principles, I find that the public policy considerations which favour admission of the evidence outweigh the public policy considerations against admitting it. This includes the public policy of protecting the applicant from unlawful and improper conduct (Southern Equities Corp Ltd (in liq) v Bond (2001) 78 SASR 554; [2001] SASC 70 at [113]). Whilst the unlawful conduct of the respondent is concerning, this is not a case where there has been “a serious and deliberate infringement of legal rights” to use the language of Phoenix Eagle Company Pty Ltd v Tom McArthur Pty Ltd [2017] WASC 130. Further, I anticipate that the administration of justice will be protected by the respondent seeking advice about the issues raised in this decision and taking appropriate action in respect of the procedures the Secretary adopts in the future (para.72)

Based on the assessment of the evidence, the Tribunal decided to uphold the decision of the Department to not grant provider approval to CYU:

The applicant has not satisfied me that Mr M is a fit and proper person to be involved in the provision of an education and care service (within s 12(2)(a) of the National Law). This is because Mr M’s assessment results indicate that he has a deficient knowledge and understanding of the National Law and National Regulations and is therefore not “fit” for such involvement. In these circumstances, I am required, by s 15(2) of the National Law, not to grant the applicant a provider approval (para.74)

It should be noted that the difference between this case and CZR v Secretary, Department of Education, is that the issue of the legality of a compulsory assessment process for applicants was not raised in CZR. This case has significance as it raises the issue of the lawfulness of such compulsory assessment processes. The Tribunal found that the National Law and Regulations did not give the Department authority to require applicants for provider approval to undertake a compulsory assessment of their knowledge and understanding of the National Law and the Regulation.

Childcare Service Paperwork

The Daily Telegraph recently ran a story on a recent Australian Childcare Alliance survey and guidance material published by ACECQA in relation to the revised National Law and Regulations.

Safe Sleep and Rest Practices

The Herald Sun newspaper have reported on the change in the National Regulations requiring services to have policies on sleep and rest (new regulation 168(2)(a)(v)) from 1 October 2017 (except in WA). A more accurate summary of the change is provided by the Red Nose organisation itself and ACECQA.

South Australia Implements National Law Changes

South Australia, by regulation, has implemented the changes to the National Law due to come into effect on 1 October 2017, see Education and Early Childhood Services (Registration and Standards) (Amendment of Education and Care Services National Law Text) Regulations 2017. Consequential amendments have also been made under the Education and Early Childhood Services (Registration and Standards) Variation Regulations 2017.

National Amendment Regulations 2017

ACECQA released information from the Education Council regarding the revised National Regulations which come into effect on 1 October 2017.

Mandatory Procedures For Attendance of Sick Children at Childcare

The Daily Telegraph carried a story on the call for mandatory, consistent procedures governing the attendance of sick children at childcare.

Amendment to National Regulations - Commencing 1 October 2017

NSW has published the amendments to the National Regulations on its legislation website which are to come into effect on 1 October in parallel with the changes to the National Law (see previous blog). The regulations are known as the Education and Care Services National Amendment Regulations 2017 and can be found from this link. These amendments will be adopted by the other jurisdictions (except WA) to come into effect on 1 October 2017.

Proposed Victorian Child Information Sharing Legislation

The Victorian Department of Health and Human Services has published a consultation paper in relation to proposed legislation to enable organisations (prescribed by the legislation) to share information with other organisations who work with children and young people, to facilitate prevention of harm or early intervention.The model proposed is similar to that which operates in NSW. As well as facilitating exchange of information amongst government bodies it is proposed information could be shared with people such as childcare providers, nurses and doctors.

It is proposed that in order for information to be released under the scheme:

•      Both the provider and the recipient of the information must be prescribed entities. A prescribed organisation may also share information with a child, a person with parental responsibility for a child, or a person with whom the child is living, if the prescribed organisation reasonably believes that the provision of the information to that child or person is necessary to manage a risk to the child’s safety

•      A three-part test must be met for information to be released -

–    the information promotes the safety or well being of a child or group of children

–    there is a reasonable belief that the information may assist another prescribed entity to undertake specified activities relating to that well being or safety

–    there is a reasonable belief that the information is not excluded information (as detailed in the legislation).

Refusal to Grant Provider Approval (s.12): CZR v NSW Department of Education, Early Childhood Education and Care Directorate

This is a very significant case as it is the first review by an administrative body of a decision by a Regulatory Authority to not grant a provider approval to an applicant under section 12 of the National Law. It is also significant as the tribunal examined the breadth of the definition of "fit and proper person" under section 12 (the only other time this was considered was in CYD v Secretary of the NSW Department of Education, see my blog post).

The case, involved a review by the NSW Civil and Administrative Tribunal (NCAT) of a decision by the NSW Department of Education to not grant provider approval to the applicant, CZR. In brief, CZR participated in a compulsory assessment process conducted by the Department and assessed CZR as not demonstrating an adequate knowledge and understanding of the requirements of the National Law. It therefore concluded CZR was not a fit and proper person under section 12 and refused the application. The assessment process involved giving applicants one hour to complete two scenario questions under supervised examination conditions. CZR raised several issues about the the fairness of the process and its implementation. NCAT looked at the purpose of the legislation and the responsibilities of approved providers and concluded that: 

The Tribunal agrees with the respondent’s submission and finds that a ‘fit and proper person’ for the purposes of s.12 of the National Law must demonstrate detailed and accurate knowledge and understanding of the National law and the Regulation. While a knowledge of National Law is not expressly contemplated in s.13(1) and (2) of the National Law in determining ‘a fit and proper person”, s.13(3) of the National Law makes it clear that factors not expressly listed may be taken into account in determining whether a person is a fit and proper person. This construction is based on a detailed knowledge and ability being directly correlated to the well-being and safety of children and the other objects and guiding principles of the National Law. That is, the National Law and Regulations is the regulatory framework for family day care services. It sets out requirements for children’s health and safety issues, the physical environment, supervision of children, staff qualifications and training, staffing arrangements, record keeping, emergency and evacuation procedures, reporting, offences and compliance. This is not an exhaustive list. Any failure by an operator to acquire and possess this requisite knowledge and ability places children at risk. 
To the extent that the CZR did not demonstrate a sufficient knowledge of the National Law and Regulations, she is not a fit and proper person under section 12 of the National Law. This of course, does not prevent her from making a further application to the respondent for a provider approval in the future (paras. 37-39).

In relation to determining the scope of what a "fit and proper person" encompasses under the National Law, NCAT specifically said:

..."The expression “fit and proper person” “takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities”. Australian Broadcasting Tribunal v Bond (1980) HCA 33 170 CLR 380. 
In Hughes v Vale Pty Ltd v NSW (No.2) (1955) 93 CLR 127 the High Court considered that “fitness” had three components; honesty, ability and most relevantly, ‘knowledge’ in the sense of knowing what ought to be done (paras.35-36)

Issues with Vaccination Requirements in Childcare

The Herald Sun carried a report on issues with vaccination requirements, in particular, the granting of exemptions by doctors.

NSW Parlament Passes New Vaccination Legislation

The NSW Parliament recently passed legislation to amend the Public Health Act to introduce stronger vaccination requirements for families enrolling children into childcare centres. Reports were carried in The Sydney Morning Herald , The Australian and SBS Online.

NSW Childcare Centre Waivers for Outdoor Space

The Daily Telegraph recently ran a story about the number of NSW education and care services granted service waivers from the outdoor space requirements of the National Regulations.

Child Care Benefit Fraud and Regulation

There have been a number of articles in the media recently on child care benefit fraud and the regulatory system under the National Law. The Herald Sun carried a story on Commonwealth Government actions against Victorian family day care providers for fraudulently claiming benefits. ABC Online carried a similar story focussing on NSW, as did The Daily Telegraph confusing State and Federal regulatory functions and powers.

And the Commonwealth Government has been critical of State Regulators, particularly of South Australia, for their lack of quality assessments, according to ABC Online.The Advertiser carried a similar story.

Cancellation of Service Approval (Breach of Condition): 3 Angels Family Day Care Pty Ltd v Secretary, Department of Education

This is another NSW case where a family day care provider has sought review by NSW Administrative and Civil Tribunal (NCAT) of the decision of the NSW Regulatory Authority under the National Law (Department of Education) to cancel its service approval for breach of condition. In this case the name of the service has been published. Normal practice of NCAT in the past has been to not publish approved provider details.

The full decision can be found here. In January 2016 the approved provider (3 Angels Family Day Care Pty Ltd) was granted service approval to operate a service in NSW. In February 2017, the Department contacted the approved provider and was told that the service was not currently operating as it had not been given Child Care Benefit (CCB) approval by the Commonwealth Government. In March 2017 the Department gave notice that the service approval would be cancelled. The approved provider responded that they could not operate without CCB approval. In April 2017, the service approval was cancelled under section 79(1)(a)(i) of the National Law. The ground for the cancellation was that a condition of the service approval under s.51 had not been complied with, being the requirement to commence ongoing operation within six months (s.77(d)). At the hearing the approved provider argued that they had commenced operating the service. The Tribunal found that the care that was being provided for children was a "personal arrangement" under s.5(1) of the National Law:

The evidence indicates that the applicant “intends” to provide education and care on a regular basis to children under 13 years of age, by offering services to other children. I am satisfied, on that basis, that it is an “education and care service” as defined. However, given that it is currently providing education and care in a way that does not meet the definition, I do not consider that it has commenced operation. 
I note also that the applicant is required by the condition in s 51(3) of the National Law to commence “ongoing” operation within six months. The Tribunal may, in some circumstances, find that the correct and preferable decision is to allow an applicant which has commenced ongoing operation at the time of the hearing to continue to do so, even if the applicant failed to comply with the condition in s 51(3). In this case, after only four days of the applicant providing services, it is too soon to be persuaded that the applicant has commenced ongoing operation (paras. 23-4)

The Tribunal affirmed the decision of the Department to cancel the service approval: 

The failure to commence operation for about nineteen months is a breach of the condition of the service approval. The respondent was entitled to cancel the service approval on this ground (National Law, s 77(d)). Further, for reasons given above, it has still not commenced ongoing operation. 
If I am wrong about this, I would nevertheless decline to exercise my discretion to allow the service to continue operating. 
The two matters referred to above, the lack of evidence that Ms Kattar’s [director of approved provider] mother has an applicable Working With Children Check clearance, and the lack of evidence that the neighbour providing care has commenced studying a relevant course, are both concerning. They indicate a lack of compliance with the National Law and the regulations which compounds the failure to comply with the condition requiring the applicant to commence ongoing operation of the service within six months. They also indicate a lack of understanding of the high standards which it is necessary for the applicant to meet in order to comply (paras. 29-31)

 

Inadequate Supervision (Section 165, National Law): Chief Executive Officer of the Department of Local Government and Communities and Camp Australia Pty Ltd

As mentioned in previous blogs, in Western Australia rather than prosecute in a court (as is the case with other States and Territories) certain breaches of the National Law may be heard instead by the WA State Administrative Tribunal (WASAT) as a disciplinary action under s.188B of the Schedule to the Education and Care Services National Law (WA) Act 2012). Normally, consent orders are agreed between the parties. However, in the following two cases, both involving Camp Australia Pty Ltd as the approved provider, the approved provider contested the proposed sanction sought to be imposed by the State Regulatory Authority (Department of Local Government and Communities). 

In Chief Executive Officer of the Department of Local Government and Communities and Camp Australia Pty Ltd [2017] WASAT 109, Camp Australia agreed it had breached section 165 but disputed the penalty sought to be imposed by the Department. The agreed facts of the case are set out in para.10 of the decision and related to the Coogee Primary School OSHC Service. Before the Tribunal, the Department sought the imposition of a fine as well as a supervision risk assessment be undertaken of all Camp Australia services in WA, in light of previous contraventions of s.165 by Camp Australia. Camp Australia agreed that a fine was appropriate but that the Tribunal had no power to order a supervision risk assessment. The Tribunal regarded the case before it as being in the lower order of seriousness in that the 5 year old left the service supervised, but did not leave the school grounds and the child was located after having been outside the supervision of the service between five and 10 minutes. However, a consideration in determining the penalty was also the prior contraventions by Camp Australia (paras 52-53):

There are some factual similarities between the current matter and the other three incidents (particularly that in each case the education and care service was operated by the same corporate entity and in each case a child was unsupervised to the extent that it was able to leave the premises). However, the applicant has not tendered evidence of any other commonality. There is no evidence tendered of commonality of staffing, contravention of procedures, failure of equipment, or otherwise. The applicant has not tendered evidence of any specific systemic issues, or any pattern of neglect or systemic disregard for rules, systemic problems with supervision or management, or any other factors common. In the absence of facts of this nature, the Tribunal does not accept, as maintained by the applicant, that the facts are sufficiently similar or linked in a way that suggests the respondent's contraventions are not isolated instances.
For these reasons, the Tribunal is satisfied (and so finds) that the respondent's other contraventions of s 165(1) of the National Law were isolated incidents. There is no basis on the evidence before the Tribunal to find that such contraventions negatively impact upon the respondent's worthiness or reliability to provide education and care services in the future. Accordingly, the Tribunal considers that the respondent's disciplinary history to be a matter of very limited weight in assessing an appropriate penalty. The Tribunal does not accept the applicant's submission that, in the present case, the contraventions significantly increase the objective seriousness of the respondent's contravening behaviour. The impact of the respondent's prior contraventions on the seriousness of the conduct in the present matter is nominal.

The Tribunal decided to impose a $7,000 fine and in relation to the supervision risk assessment it said the following (paras. 58-9, 66):

In a matter involving a finding that an education and care service contravened s 165(1) of the National Law by failing to ensure that all children were adequately supervised, it would be open to the Tribunal, upon being satisfied of the necessary facts, to order a person linked to a WA service to take certain actions, or refrain from taking certain actions, to comply with the law. Such actions might include, in appropriate circumstances, an order that the approved provider conduct an audit of the education and care service to ensure that its practices and procedures and the physical parameters of the service as they relate to supervision reflect the guiding principles of the national education and care services quality framework.
Such facts have not been established in the present matter, however. Although the respondent admits that it failed to ensure that a child was adequately supervised, the SAF [Statement of Agreed Facts] is silent as to how or why this occurred. The SAF is silent on why, as a matter of fact, a written supervision risk assessment is reasonably necessary to ensure the future safety, health and wellbeing of children attending the Coogee Service, particularly in light of the facts agreed at paragraph 2.10 of the SAF....
The Tribunal's view is that it is not fair or reasonable to impose orders requiring the respondent to take action to ensure compliance with s 165(1) of the National Law at any of its 87 services without evidence of some relationship between the action required and the contravention alleged or established.

In Chief Executive Officer of the Department of Local Government and Communities and Camp Australia Pty Ltd [2017] WASAT 111, Camp Australia agreed it had breached section 165 but disputed the penalty sought to be imposed by the Department. The agreed facts of the case are set out in para. 10 of the decision and related to the Jandakot Primary School OSHC Service. Similar arguments were made as in the Coogee service case (above). In fact both decisions were handed down by the same Tribunal member on the same day. In this case the Tribunal imposed a fine of $8,500 and costs of $6,027 and also regarded it as an isolated incident. For the same reasons given in the Coogee decision, the Tribunal did not think it appropriate to impose a supervision risk assessment of all Camp Australia Services.