1.2 Considering an application for fitness and propriety
When reviewing the application, the regulatory authority will consider:
- if the applicant is a fit and proper person to provide an education and care service
- the applicant’s history of compliance or criminal history
- whether the applicant is bankrupt or other financial or medical matters which may limit their capacity to meet their obligations under the National Law.
There may be other circumstances in which a person is considered not to be fit and proper.
Is the applicant a fit and proper person?
[ National Law, Section 12 ] Provider approval will not be granted unless the regulatory authority is satisfied the applicant, and/or each person with management and control, is fit and proper to provide an education and care service.
The head of a government department administering an education law is taken to be a fit and proper person.
[ National Law, Sections 14–15 ] The regulatory authority may ask the applicant for more information or make enquiries to assess whether they are fit and proper. This may be in relation to their history of compliance, criminal history or any other relevant matter. If more information is requested, the time taken to provide it is not included in the period for determining the application.
Regulatory authorities may require applicants to attend an information session or interview, or undertake an NQF knowledge test.
[ National Law, Section 25 ] Refusal or cancellation of provider approval under the Commonwealth Family Assistance Law (FAL) is grounds for suspension or cancellation of a provider approval under the National Law where the FAL refusal or cancellation relates to fitness and propriety or a breach of the NQF. For example, if FAL approval has been cancelled because of non-compliance with a law of the Commonwealth, the regulatory authority may decide to cancel the provider's approval under the National Law.
If the regulatory authority obtains information from a source other than from the applicant and is considering making a decision that will adversely affect the applicant, principles of natural justice must be taken into account. Decisions that adversely affect a person include refusing to grant provider approval or granting provider approval subject to conditions. For more information (see Good Regulatory Practice – Good decision-making).
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It is the applicant’s responsibility to identify each individual who will be in management or control (see Glossary). For companies, this will generally include directors, and for committees and associations it will usually include executive members. Generally, a person with management or control is someone:
Therefore, while a person – such as a centre manager or nominated supervisor – may have ‘day to day charge’ of a service, they may not be a person with management or control of a provider. |
History of compliance
[ National Law, Section 13 ] When determining whether a person is fit and proper, the regulatory authority must consider:
- the person’s history of compliance with any current or former education and care services law, children’s services law or education law
- any decision made under a former education and care services law, a children’s services law or an education law of any state or territory to refuse, refuse to renew, suspend or cancel a licence, approval, registration or certification issued to the person under that law.
If a person has been served with an infringement notice for an offence under the National Law and has paid the penalty, the offence cannot be taken into account when determining the person’s fitness and propriety (section 291).
The National Law does not specify a time period in relation to a person’s compliance history. When considering a person’s history of compliance the regulatory authority may consider:
- the severity of any issues and how recently they occurred
- the person’s willingness to comply, for example, whether escalation was required to resolve compliance issues. See also Good Regulatory Practice – Good decision-making.
Criminal history
[ National Law & Regulations, Section 13, Regulation 16 ] Regulatory authorities must consider the person’s criminal history when determining whether they are fit and proper to be involved in providing an education and care service. Because working with children/vulnerable people legislation differs between states and territories, the National Law includes two options for considering a person’s criminal history, set out below.
Matters the regulatory authority must consider about criminal history |
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| Option 1 | Option 2 |
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The regulatory authority must consider the below matters, to the extent that they may affect the person’s suitability to provide an education and care service:
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The regulatory authority must consider the person’s working with vulnerable people check. |
In some instances, a check may show information about a person’s criminal history that is not relevant to whether they are fit and proper. Regulatory authorities must not take into account irrelevant information which may lead to an unlawful decision (see Good Regulatory Practice – Good decision-making).
Financial matters
[ National Law, Section 13 ] Regulatory authorities must consider whether the applicant is bankrupt or has applied to take the benefit of any law for the relief of bankrupt or insolvent debtors. In the case of a body corporate, the regulatory authority must consider whether the applicant is insolvent under administration or an externally-administered body corporate.
Regulatory authorities may also consider whether the applicant’s financial circumstances may limit their capacity to meet their obligations under the National Law.
Applicant is bankrupt or insolvent
If the applicant is bankrupt or insolvent according to their declaration, the regulatory authority may consider:
- the period when bankruptcy is discharged
- past circumstances and changes of circumstances
- legal advice about whether the regulatory authority is bound by other law.
The National Personal Insolvency Index, maintained by the Australian Financial Security Authority (Australian Government), may have information about an applicant’s financial position and can be accessed at: www.afsa.gov.au.
Concerns about financial circumstances
Where there are concerns about an applicant’s financial circumstances, raised through the initial application, notification or other sources of information, the regulatory authority may ask an applicant to provide more information about their financial capacity, to determine the likelihood that they will be able to sustain ongoing operation of a service. For example, information about:
- liquidity
- cash flow
- asset sustainability
- capital structure and debt protection
- operating efficiency.
Regulatory authorities may make inquiries for more information to determine if a person is fit and proper. This includes seeking advice from an external expert, for example about the financial viability of an applicant to help analyse the applicant’s financial capacity.
Although there is a duty of confidentiality (section 273), a regulatory authority can disclose information when assessing a provider approval application.
Medical conditions
[ National Law, Section 13 ] The regulatory authority may consider whether the person has a medical condition that may limit their capacity to meet their obligations under the National Law.
Applicants are not required to provide medical information in their initial application. However, the regulatory authority can ask for information, such as an assessment by a medical practitioner if concerned about the applicant’s capacity. The regulatory authority will detail why the assessment is needed and give a description of the role, to guide the person doing the assessment. The regulatory authority may require a written report.
Management capability
The regulatory authority may consider whether the person has the management capability to operate an education and care service in accordance with the National Law and National Regulations.
Evidence of management capability does not need to relate only to education and care services, or qualifications in education and care. Evidence of management capability may be related to any previous expertise, experience or qualification in a leadership, governance, administrative or management role in:
- a business, or
- a not-for-profit organisation, or
- a sporting or social club, or
- a community-based committee.
This may include experience gained as a volunteer.
Actions taken under Family Assistance Law
In assessing an applicant's fitness and propriety, the regulatory authority may also take into account certain actions taken under Commonwealth Family Assistance Law (FAL), including sanctions and suspensions.
[ National Law, Section 25 ] Refusal or cancellation of provider approval under the FAL is grounds for suspension or cancellation of a provider approval under the National Law, where the FAL refusal or cancellation relates to fitness and propriety or a breach of the NQF.
Conditions on provider approval
[ National Law, Section 19 ] A condition is a requirement that the person holding the approval must comply with to avoid committing an offence under the National Law.
A provider approval is granted subject to the condition that the approved provider complies with the National Law. It may also be granted subject to other conditions imposed. For example, if there are concerns about an applicant’s management capacity, the regulatory authority may limit the number of services or size of services the applicant can operate.
A condition applies to the provider unless the condition expressly provides otherwise.
See Monitoring, Compliance and Enforcement – Conditions for more information about using conditions on a provider approval.
Determining an application
[ National Law, Section 16 ] The regulatory authority must give the applicant written notice of its decision and the supporting reasons, within seven (7) calendar days of making the decision (see Timeframe for assessing an application).
Granting provider approval
[ National Law, Section 20, Schedule 1, Clause 31 ] If granted, the regulatory authority must give the approved provider a copy of the provider approval, stating:
- the name of the approved provider
- if the approved provider is not an individual, the address of the principal office of the provider
- any conditions to which the approval is subject (see Conditions on provider approval)
- the date the provider approval was granted
- the provider approval number.
The National Law does not specify how much time the regulatory authority has to give the approved provider a copy of the provider approval but it must be done as soon as possible.
Refusing to grant provider approval
[ National Law, Section 15 ] The regulatory authority may refuse to grant provider approval if it is not satisfied that the grounds for granting provider approval are met and the applicant is fit and proper (see Considering an application).
Appeals
[ National Law, Section 190 ] A decision to refuse to grant a provider approval, or to grant provider approval subject to conditions, is a reviewable decision under the National Law (see Reviews).
After an application has been determined
Publication on the register of approved providers
[ National Law & Regulations, Sections 266, 270, Regulation 229 ] ACECQA must keep and publish a register of approved providers which includes the information set out below.
The regulatory authority may publish the name of the approved provider.
Information on the register of approved providers |
| The name of the approved provider |
| The postal address of the approved provider |
| Any conditions on the approval |
| The date the provider approval was granted |
| The provider approval number |
| The service approval numbers of all education and care services provided by the approved provider. |
Duration and effect of provider approval
[ National Law, Sections 17–18 ] WA A provider approval authorises the holder to operate an approved education and care service and an associated children’s service. It is valid nationally and is ongoing unless cancelled or suspended by the regulatory authority, or surrendered by the approved provider.
In Western Australia, a provider approval granted to an individual is also ongoing until the individual dies.
Reassessing fitness and propriety
[ National Law, Sections 21, 25 ] The regulatory authority may reassess an approved provider’s fitness and propriety at any time. This includes assessment of a person with management or control. If a person is no longer a fit and proper person, the provider approval may be suspended or cancelled (see Monitoring, Compliance and Enforcement).