Reaction to NSW Proposal to Introduce Quality Star Ratings for Childcare Services

The Sector website have carried a story including reaction to the proposal and The Sydney Morning Herald published an opinion piece on the concept.

NSW to Introduce Quality Star Ratings for Childcare Services

The NSW Department of Education has announced the introduction, from 1 July 2020, of a new star ratings system to provide more information to parents about how services rate under the NQF.

ABC Online published more information on the system on its website.

Cancellation of Child Care Benefit Approval: Nouh Family Day Care Pty Ltd and Secretary, Department of Education

This case involves an application for review, to the Australian Administrative Appeals Tribunal, of the decision by the Commonwealth Department of Education (respondent) to cancel the Child Care Benefit Approval of Victorian provider Nouh Family Day Care Pty Ltd (applicant).

The Department cancelled the approval as it found that Nouh FDC had failed to comply with the requirements of the family assistance law in the following areas:

• fees in excess of maximum hourly rate – Nouh FDC had charged in excess of the maximum hourly fee for care provided to children who were eligible for the GCCB. As such, these sessions could not be considered sessions of care and no amounts of child care subsidy could be paid;
• child swapping – Nouh FDC had reported attendances when no child was eligible. This is because they had been involved in the practice referred to as child swapping where a Family Day Care educator or their partner receives child care subsidies from the Commonwealth for a session of care provided to their own child on the same day that they themselves provide care for another child;
•  children 14 years of age or older or who attend secondary school – under the family assistance law, parents of children who are 14 years or older or who apparently attend secondary school cannot receive Commonwealth child care fee assistance unless specific circumstances apply. As Nouh FDC had submitted insufficient documentary evidence to support that the Child Care Benefit (Children in respect of whom no-one is eligible) Determination 2015 (“No-One is Eligible Determination”) had been met, with the exception of one child, it had improperly received payments in relation to numerous children who were 14 years and older;
• failure to notify the Department – Nouh FDC had failed to notify the Department of the changes to key personnel or their address within the required 14 and 30 days, respectively;
• suitable person – Nouh FDC was not a “suitable person” to operate a child care service as it had poor governance arrangements and a record of non-compliance with both the family assistance law and the national laws and regulations. (para. 11)

The Tribunal comprehensively assessed the evidence and concluded:

The evidence before the Tribunal establishes a prolonged, repetitive and serious pattern of non compliance by Nouh FDC with its statutory obligations under the family assistance law, and in particular breaches of section 219N of the Old Administration Act. The Tribunal is satisfied that the following grounds of non-compliance had been established:

• overcharging of fees in excess of hourly rates breached section 12 of the Session of Care Determination in relation to the GCCB rate;
• Child swapping breached section 219N of the Old Administration Act and section 10A of the Eligibility Rules;
• Instances of 14 years older/children in secondary school breached section 9 of the No-One is Eligible Determination;
• Instances of an educator being overseas breached section 219N of the Old Administration Act;
• overlapping sessions of care breached section 219N of the Old Administration Act;
• absences before care commenced and after care ceased breached section 10 of the A New Tax System (Family Assistance) Act 1999;
• late attendance reporting care breached section 219N(5) of the Old Administration Act;
• care in own home breached section 11(1)(b) of the Session of Care Determination;
• instances where the CRN of educators were not provided breached the Eligibility Rules; 
• non-compliance with the educator to child ratio breached regulation 124(1) of the National Regulations;
• non-compliance with notification requirements breached section 19(1) and 19(2) of the Eligibility Rules.

Whilst the Tribunal found that Ms Hamieh had attempted to explain how the breaches had occurred and had not shied away from her willingness to adhere to strict compliance with the family assistance law, she had demonstrated a naiveté about the requirements of running a complex business.

The Tribunal was not satisfied by the explanations provided by Nouh FDC or its proprietor Ms Hamieh in respect of the significant and numerous breaches, which would provide doubt to the Tribunal that the breaches identified by the Respondent had not occurred. Additionally, Ms Hamieh attempted to explain that some breaches had occurred as a result of the former proprietor, software issues and educator and parent non-compliance. This demonstrated that she did not grasp and understand that she was ultimately responsible for ensuring the strict compliance with statutory requirements. The Tribunal found that this lack of understanding created serious doubt about Ms Hamieh’s suitability to operate an approved family day care service under the Administration Act.

Given the extensive evidence before the Tribunal, it is satisfied that Nouh FDC has demonstrated a significant and frequent history of non-compliance and misreporting, across numerous areas, resulting in a significant number of breaches of its obligations under the family assistance law, the National Law and National Regulations....

Nouh FDC’s breaches are not minor. The overcharging and misreporting of thousands of sessions of care is an extremely serious matter and demonstrates a lack of care and compliance with a number of legislative requirements under the family assistance law. Through its non-compliance with its conditions for continued approval, Nouh FDC received payments of public funding that it should never have received. Further to this, by breaching educator to child ratios, Nouh FDC provided child care in circumstances where it was not lawfully allowed to provide such care, thus giving rise to potential risks to the safety, health and wellbeing of children under its care.In the circumstances as outlined in its decision, the Tribunal is satisfied that cancellation is the appropriate sanction. The health and safety of children and the quality of the care provided is of paramount concern. Additionally, protection of government subsidies and the blatant disregard of the public purse cannot be ignored. If the Tribunal were not to cancel Nouh FDC’s approval, there is a risk that any child in its care may not be appropriately cared for, given the systemic failure of the service to oversee the level of child care that it held approval to provide. This is of particular concern in regards to the breaches concerning educator to child ratios. While the Tribunal acknowledges that Ms Hamieh was frank in conceding the breaches identified and has plans to address the issues in the future, these measures have not been tested. The breaches identified are egregious and highlight that Nouh FDC’s governance arrangements are systematically flawed or non-existent. For these reasons I find that cancellation of Nouh FDC’s approval to operate as a family day care service is appropriate. (paras. 112-115, 122-3).

Australian Childcare Regulation Book - NOW 25% OFF - Limited Time Only

Australian Childcare Regulation is now 25% off the normal price. It is only available for purchase from Lulu Publishing. At check out just type in this code ONEFIVE to get an extra 15% discount on top of the already 10% discount.

Victorian Legislation to Align Children's Services with National Law Requirements Passed by Parliament

Further to a previous post, the Children's Services Amendment Act 2019 has been passed by the Victorian Parliament and assented to on 6 November. The Act will come into effect when proclaimed but no later than 18 May 2020 (see section 2). Regulations supporting the legislative amendments are yet to be developed.

Prosecution of WA Educator Breaching Prohibitioon Notice

According to the Department of Communities website, on 21 August 2019, before the Fremantle Magistrates Court, Zoie Anne Fenner-Dale pleaded guilty to five charges of working as an educator while under a prohibition notice, 25 charges of providing the Regulatory Authority with documents she knew were false or misleading, one charge of obstruction and two charges of holding herself out as a certified supervisor when she did not hold a supervisor certificate. On 22 October 2019 she pleaded guilty to three charges of lying to her employing approved provider by declaring she was not subject to a prohibition notice. 

On 22 October 2019 a magistrate fined Ms Fenner-Dale a total of $14,500 for all 36 charges and also ordered her to pay costs of $1756.20. The Department also contacted all approved providers operating in Western Australia to advise them of the details of the prosecution.

Effect of Previous Sanctions: Chief Executive Officer, Department of Communities and OSHClub Pty Ltd t/as Treendale OSHClub

This is an interesting case as it raises the issue of matters that tribunals, at least in Western Australia, can have regard to when imposing sanctions under the National Law.

Before I go into the details of the case, a reminder that in WA such serious breaches of the National Law are generally heard as disciplinary matters, under sections 188AA-AC, National Law (WA), as opposed to prosecuted in Court as in other jurisdictions. For further information, see the article by David Oliver in The Sector that explains the process in detail. Normally the process is that the regulatory authority under the National Law (in WA this is the Department of Communities) and the approved provider agree to consent orders in relation to the appropriate sanction which is then usually endorsed by the tribunal (West Australian State Administrative Tribunal. In this case the tribunal refused to endorse the proposed orders agreed to by the two parties.
 
The alleged breaches relate to two services run by OSHClub Pty Ltd.  In relation to the Treendale OSHClub, the Department alleged that on 11 February 2019 the respondent, as the approved provider of an education and care service, contravened section 165(1) by failing to ensure that all children being educated and cared for by its service were adequately supervised at all times the children were in the care of its service. In relation to the Bicton OSHClub, it was allegeded that on two occasions on 8 and 13 February 2019 the respondent, as the approved provider of an education and care service, contravened section 165(1) by failing to ensure that all children being educated and cared for by its service were adequately supervised at all times the children were in the care of its service. 

The Tribunal in an earlier hearing in relation to this matter had queried whether the proposed consent orders (and fines) were appropriate in light of two findings made against OSHClub previously. The Department submitted to the Tribunal that, when it agreed to the proposed orders in the two consent orders, it had considered itself bound by the reasoning of the Tribunal in CEO and Camp Australia (see previous blog post). In particular, the Department had considered itself bound by the reasoning in that case that previous contraventions by the respondent of the same statutory provision should be of 'very limited weight in assessing an appropriate penalty' and that the impact of the respondent's 'prior contraventions on the seriousness of the conduct in the present matter is nominal'.  

However, in this case the Tribunal took a different view:

Therefore, having found to the extent that any principles can be elicited from CEO and Camp Australia (1) I respectfully decline to follow any such principles or reasoning, it follows that the Tribunal does not agree with many of the submissions advanced by OSHClub in both of these proceedings.

For example, the Tribunal does not agree with OSHClub's proposition that the CEO's submission is incorrect, that in light of the factual similarities of the current contraventions and the prior contraventions it cannot be said they are breaches of an entirely 'isolated nature'.  The Tribunal finds, where there are factual similarities of prior contraventions of the same provision of the National Law by the same approved provider (that is, OSHClub, not one of its individual services) that are proximate in time to the present contraventions these contraventions cannot be found to be of an isolated nature.  The Tribunal further finds that even if that approved provider is large, generally, such prior contraventions also cannot be found to be of an isolated nature.

Further, the Tribunal does not agree with OSHClub's submission that the factual similarities are limited to there being an incident where there was inadequate supervision and there are no prior contraventions involving the same service, which is the subject of the current contraventions.  Firstly, the incidents (both prior and present) are factually very similar in nature.  They all involve a child wandering off and away from supervision albeit for somewhat different periods of time.  Further, all but one incident involves the educators being unaware the child was missing.  The Tribunal finds, therefore, that the incidents (both prior and present) are not of an entirely isolated nature.

Secondly, the Tribunal finds that Treendale OSHClub and Bicton OSHClub are not wholly separate and unconnected services.  Both services, as do the services involved with the prior contraventions, exist within the 'legal umbrella' of OSHClub as the approved provider.  The 'person' (which at law includes a proprietary limited company) against whom the allegations of grounds for disciplinary action exist is OSHClub.  The 'trading as' component of the party name in each of the present proceedings is simply a descriptor of which service the proceedings relate to and does not alter the subject of the allegations that disciplinary matters exist.  The subject of the allegations is OSHClub.

The Tribunal further finds that it cannot agree with the submission from OSHClub that the CEO does not provide any basis or adduce any evidence which establishes elements of any commonality, having regard to the terms considered determinative by the Tribunal in CEO and Camp Australia (1) at [52].  To accept this proposition would result in a strange scenario that the evidence required to establish commonality of prior contraventions would be more onerous than the evidence required for determining final orders proposed by consent.  The Tribunal finds, in circumstances where the Tribunal has previously made final orders in accordance with annexed agreed facts, that generally those facts would be more than sufficient evidence for determining the relevance of prior contraventions to any present proceedings and the extent of any commonality.

The Tribunal finds it is relevant in determining the appropriate sanction that a provider of many services statistically is perhaps more likely to risk contravening s 165(1) of the National Law more often than a single service provider.  However, it is also relevant that a provider of many services is also more able to apply lessons learned from an incident at one service to the operations of its other services.  Moreover, the Tribunal finds that a provider of many services takes on the responsibility to ensure adequate supervision of the children being cared for across all its services as well as the risk, in circumstances where adequate supervision is not provided, that an allegation that grounds for disciplinary action exist may follow. (paras 52-7)

The Tribunal concluded that:

Based on the agreed facts, the Tribunal is satisfied, and so finds, that grounds for disciplinary action exist in both proceedings in that s 165(1) of the National Law was contravened on three occasions, namely the one incident at Treendale OSHClub and the two incidents at Bicton OSHClub where on all occasions OSHClub failed to ensure that all children being educated and cared for by the service were adequately supervised at all times the children were in the care of the service. The Tribunal will make orders to that effect relevant to each proceeding. (para. 59)

It referred the matter back to the parties and set a hearing date of 15 November.