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.