6. Cancellation of service approval

What is cancellation of service approval?

Cancellation of service approval is a significant compliance action which permanently prevents an approved provider from operating a specific education and care service. Cancellation of a service approval includes any associated children’s services.

When can it be used?

[  National Law, Sections 31, 77 ]

The regulatory authority may cancel a service approval if:

• there is an unacceptable risk to the health, safety or wellbeing of a child being educated and cared for by the approved provider
• the approved provider is no longer considered fit and proper to operate an education and care service
• the service approval has been suspended and the reason for the suspension is not rectified by the end of the suspension
• the service approval was obtained improperly, a condition of the service approval has not been complied with, or
• the approved provider has been found guilty of an offence.

Along with prosecution, cancelling a service approval is a severe way to address non-compliance at the service level. When considering cancelling service approval under the National Law, the regulatory authority should consider the matters below.

How can it be used?

[  National Law, Section 101 ]

If the service is a family day care, the regulatory authority must consult the regulatory authority of each jurisdiction in which the family day care service operates before cancelling the service approval (see Applications and Approvals – Exercise of powers by another regulatory authority).

Cancellation of service approval for associated children’s service only

If the regulatory authority considers a service approval should be cancelled only in relation to an associated children’s service, it must refer the matter to the relevant children’s services regulator to determine appropriate action under children’s services law.

The children’s services regulator must notify the regulatory authority if it intends to conduct any investigation or inquiry into an associated children’s service.

The children's service regulator must notify the regulatory authority if it determines the service approval in relation to the associated children's service should be cancelled.

Show cause notice

[  National Law, Section 78 ]

If the regulatory authority is considering cancelling a service approval, it must first give the approved provider a show cause notice stating its intent to cancel the service approval and the reasons.

The notice must also inform the approved provider that they may, within 30 calendar days after the notice is given, provide a written response to the proposed cancellation.

[  National Law & Regulations, Section 79, Regulation 39 ]

After considering any written response from the approved provider (that is received within 30 calendar days) the regulatory authority may decide to:

• cancel the service approval
• suspend the service approval for up to 12 months, or
• take no further action.

Content of cancellation notice

[  National Law, Section 79 ]

The regulatory authority must give the approved provider written notice of its decision. The notice must set out the date on which the cancellation takes effect.

The National Law and Regulations do not say what else needs to be included in a notice of cancellation of service approval. However, the regulatory authority should make sure the notice includes the following additional information:

• The name of the approved provider to whom the notice is being given
• The name of the approved service to which the notice relates
• The name of the regulatory authority giving the notice
• The signature of the person issuing the notice
• Information about the right to external review (see Reviews).

When the cancellation takes effect

Cancellation takes effect at the end of 14 calendar days after the date of the decision, or at the end of another period specified by the regulatory authority.

The regulatory authority may specify a cancellation takes effect less than 14 calendar days after the date of the decision. However, the regulatory authority should ensure it has strong evidence this is necessary before deciding on a shorter period.

Can it be appealed?

[  National Law, Section 192 ]

A person can seek external review of a decision to cancel a service approval (see to Reviews).

What happens after it has occurred?

Notice to parents

[  National Law, Sections 35, 84 ]

The regulatory authority may require the approved provider, whether or not a show cause notice was given, to give parents of children enrolled at the service (and any associated children’s service) written notice of the cancellation and its effect.

If an approved provider fails to comply with the notice, the regulatory authority may consider taking further compliance action.

The maximum penalty which may be imposed by a court is $3,400, in the case of an individual; $17,200, in any other case.

[  National Law, Sections 35, 83 ]

If a show cause notice is given, the regulatory authority may require the approved provider to supply contact details for parents of all children enrolled at the service within seven (7) calendar days. The regulatory authority may notify parents of the cancellation, and cannot use this information for any other purpose.

The power of the regulatory authority to give notice to parents is intended to make sure parents will always be notified if service approval is cancelled, because this automatically results in the closure of the service.

Generally, the regulatory authority should only need to require the approved provider to give written notice to parents if they are concerned that this may not occur otherwise. If the regulatory authority is concerned that, even with a direction to the approved provider, parents may not be notified, the regulatory authority should exercise its power to request the approved provider give the contact details to the regulatory authority, so it can contact the parents.

Disclosure

The regulatory authority may publish specific information about cancellation of provider approval (see Publication of enforcement actions).

Operating a service with cancelled service approval

[  National Law, Section 103 ]

A person who operates an education and care service without service approval is committing an offence under the National Law and the regulatory authority may consider taking compliance action. The maximum penalty that may be imposed by a court for this offence is $22,900, in the case of an individual; $114,900 in any other case.

6.1 Suspension of provider approval

What is suspension of provider approval?

[  National Law, Section 30 ]

Provider approval is required to operate an approved education and care service under the National Law. A person whose provider approval is suspended is not considered an approved provider for the period of the suspension, and all service approvals held by the person are suspended for the same period. This includes any associated children’s services.

Suspension of provider approval is a way of preventing a person from operating any education and care service for a specific period of time.

When can it be used?

[  National Law, Section 25 ]

A regulatory authority may suspend a provider approval if one of the below matters applies to the approved provider.

The regulatory authority may also suspend a provider approval if they are taking compliance action (other than a compliance direction) in relation to more than one service operated by the approved provider.

The approved provider must notify the regulatory authority of any changes affecting their fitness and propriety (see Operational Requirements – Governance and leadership).

How can it be used?

The regulatory authority must consult the regulatory authority of each jurisdiction in which the approved provider operates an approved education and care service before suspending the provider approval (see Applications and Approvals – Exercise of powers by another regulatory authority).

Reassessing fitness and propriety

[  National Law, Section 21 ]

The regulatory authority may reassess an approved provider’s fitness and propriety to provide an education and care service at any time. This includes assessment of a person with management or control. If a person is no longer a fit and proper person to be involved in the provision of an education and care service, the regulatory authority may then consider suspending the provider approval. This information is also included in Applications and Approvals – Provider approval for information on assessing fitness and propriety.

Show cause notice

[  National Law & Regulations, Sections 26–27, Regulation 18 ]

The regulatory authority must give the approved provider a show cause notice before suspending provider approval. The notice must advise that the regulatory authority intends to suspend the provider approval for a specified length of time and include the reasons for the proposed suspension.

The show cause notice must also inform the approved provider that they have 30 calendar days to give a written response to the regulatory authority.

After considering any written response to the show cause notice, the regulatory authority may:

• accept a written undertaking (under section 179A) from the approved provider to take or refrain from taking certain actions, if the suspension was proposed because the approved provider has been charged with an indictable offence or may not be a fit and proper person to be involved in the provision of an education and care service
• suspend the provider approval for up to 12 months
• decide not to suspend the approval.

Suspension without a show cause notice

[  National Law, Section 28 ]

The regulatory authority may suspend a provider approval without giving a show cause notice if it is satisfied there is an immediate risk to the safety, health or wellbeing of a child or children at a service operated by the approved provider.

The suspension cannot exceed six (6) months.

Content of a suspension notice

[  National Law, Section 29 ]

The regulatory authority must give the approved provider written notice of a decision to suspend provider approval.

The written notice must set out the period of suspension and when it takes effect. The suspension cannot exceed 12 months.

The National Law and Regulations do not say what else needs to be included in a notice of suspension of provider approval. However, regulatory authorities should make sure the notice includes the following additional information:

• the name of the approved provider to whom the notice is being given
• the name of the regulatory authority giving the notice
• the signature of the person issuing the notice
• information about the right to internal review (if no show cause notice was given) or external review (if a show cause notice was given). See Reviews.

When the suspension takes effect

If a provider approval is suspended without a show cause notice, the decision to suspend takes effect when the notice is given to the approved provider.

If a provider approval is suspended after a show cause notice process, the decision to suspend takes effect at the end of 14 days after the date of the decision, or at the end of another period specified by the regulatory authority.

The regulatory authority may specify that a suspension takes effect less than 14 calendar days after the date of the decision. However, the regulatory authority should ensure it has strong evidence this is necessary before deciding on a shorter period.

Death of approved provider

[  National Law, Section 30 ]

A service approval is not suspended during any period that a person is approved to manage or control the education and care service in the event that the approved provider dies or becomes incapacitated. See Applications and Approvals – Approval of executor, representative or guardian as approved provider.

Can it be appealed?

[  National Law, Sections 190, 192 ]

A person can seek internal and external review of a decision to suspend a provider approval (see Reviews).

What happens after it has occurred?

Notice to parents

[  National Law, Section 36 ]

The regulatory authority may require the approved provider to give written notice of the suspension of their provider approval and its effect to parents of children enrolled at any or all services operated by the approved provider. The regulatory authority may require this whether or not a show cause notice was given prior to the suspension.

If the approved provider does not give the required notice to parents, the regulatory authority may decide to escalate the matter. The maximum penalty a court may impose is $3,400, in the case of an individual; $17,200, in any other case.

[  National Law, Section 35 ]

If a show cause notice is given, the regulatory authority may also request the approved provider supply the contact details of parents of all children enrolled at a service operated by the approved provider within seven (7) calendar days. The regulatory authority may notify parents of the suspension. The regulatory authority cannot use the contact details for any other purpose.

The powers of the regulatory authority on giving notice to parents are intended to make sure parents will always be notified if provider approval is suspended, because this automatically results in suspension of service approval and, consequently, their closure.

Generally, the regulatory authority should only need to require the approved provider to given written notice to parents if they are concerned that this may not occur otherwise. If the regulatory authority is concerned that, even with a direction to the approved provider, parents may not be notified, the regulatory authority should exercise its power to request the approved provider give the contact details to the regulatory authority, so it can contact the parents.

Transfer of suspended service approval

[  National Law, Section 30 ]

The regulatory authority may give permission for transfer of a service approval that is suspended. The suspension of the service approval ceases when the approval is transferred, unless the regulatory authority imposes a condition on its consent for transfer specifying a later date. See Applications and Approvals – Transfer of service approval.

Disclosure

The regulatory authority may publish specific information about suspension of provider approval (see Publication of enforcement actions).

At the end of the suspension

Once the period of suspension has concluded, the provider approval will be effectively reinstated.

Operating a service with suspended provider approval

[  National Law, Section 103 ]

A person who operates an education and care service without provider approval is committing an offence under the National Law and the regulatory authority may consider taking further compliance action. The maximum penalty that may be imposed by a court for this offence is $22,900 for an individual; or $114,900 in any other case.