EEP v Secretary, Department of Education - [2021] NSWCATAD 34 - NSWCATAD 2020 case summary — Zoe

NSWNSWCATAD

EEP v Secretary, Department of Education

[2021] NSWCATAD 34

NCAT Administrative and Equal Opportunity|2020-09-24

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At a glance

Source facts

Court

NCAT Administrative and Equal Opportunity

Decision date

2020-09-24

Catchwords

(1992) 67 ALJR 170

Source

Original judgment source is linked above.

Catchwords

(1992) 67 ALJR 170

Judgment (31 paragraphs)

[1]

REASONS FOR DECISION

The Applicant is the Director of an incorporated company which provides, amongst other things, childcare services. The Applicant has 31 educators in its employ and 180 children under its care. The Applicant employs 4 staff members and is a registered approved provider able to operate an approved education and care service under the provisions of the Children (Education and Care Services) National Law (NSW) (National Law).
The Respondent pursuant to s 33 of the National Law has the power to cancel a provider approval and in this case is the relevant authority which cancelled the Applicant's provider approval.
Relevantly, the Respondent decided to cancel the provider approval commencing with a show cause notice being issued to the Applicant on 12 July 2019. The show cause notice was informed by inspections performed by officers of the Respondent on 22 May 2019 (22 May inspections). The Respondent identified a large number of alleged breaches by the Applicant during those inspections. The Applicant responded to those alleged breaches by letter of 9 August 2019. The Respondent's officers carried out further inspections on 9 October 2019 (9 October inspections). Whilst a number of alleged breaches were again identified, less than those identified in the 22 May inspections, on 31 January 2020, a delegate of the Respondent decided to cancel the Applicant's provider approval.
By application filed on 7 February 2020, the Applicant seeks this Tribunal to undertake a merits review of the decision of the Respondent, which was notified to the Applicant on 2 February 2020.
The Tribunal on 13 April 2020, stayed the 31 January 2020 decision, pursuant to s 43(3) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), pending further order of the Tribunal on certain conditions.

[2]

Background

The Applicant's childcare service has been operational since its incorporation in 2013. The incorporated entity, EEP, received provider approval pursuant to Part 2, Division 1 of the National Law in February 2014.
It is not in contest that on 22 May 2019, authorised officers of the Respondent conducted an inspection of the Applicant's principal office and various educators' residences, (the 22 May inspection). Following those inspections on 12 July 2019, the Respondent issued to the Applicant a show cause notice setting out numerous alleged breaches. Each alleged breach contained in the show cause notice is annexed to it. I do not intend to set out each and every alleged breach as some of them were remedied by the Applicant.
On 9 August 2019, the Applicant responded to the 12 July 2019 show cause notice. Following that response on 9 October 2019, a further inspection, the 9 October 2019 inspection, was carried out by authorised officers of the Respondent of the Applicant's principal office and various educators' residences.
Whilst the inspection identified fewer alleged breaches, the Respondent argues a significant number of alleged breaches remained, which then led to the cancellation of the Applicant's provider approval on 31 January 2020.
The Respondent submitted at the hearing that the alleged breaches identified during the 9 October 2019 inspection and on previous visits, in general, are of low to moderate individual seriousness. However, the cumulative effect of them raises serious doubt as to the extent to which educators employed by the Applicant take the requirements imposed by the National Law and the National Regulations seriously. The Respondent further argues that the willingness or capacity of the Applicant to monitor and support its educators to achieve compliance with the National Law is lacking.
The alleged breaches demonstrate, in the Respondent's view, systemic shortfalls in the compliance of educators with the National Law and National Regulations, such that a conclusion has been reached to cancel the Applicant's approved provider status.
Apart from the alleged breaches which have directly led to the cancellation of the Applicant's approved provider status (the 22 May and 9 October 2019 inspections), the Respondent also draws to the attention of the Tribunal two other occasions where inspections revealed alleged breaches committed by educators engaged by the Applicant. In that regard on 9 January 2019, an inspection of the office of the Applicant was conducted in the course of assessing an application by the Applicant to amend its service approval. A number of alleged breaches were identified relating to the failure of educators to conduct risk assessments in obtaining written authorisations. On 2 May 2019, an inspection was conducted at the principal office of the Applicant in the course of rating the service run by the Applicant in compliance with the National Quality Standard. During that inspection educators were identified as having failed to conduct a risk assessment prior to conducting an excursion.
The Respondent submits that, despite the actions the Applicant says it took on 27 January 2015, 23 June 2017 and on 9 August 2019, and assurances it had given the Respondent in relation to each of those occasions, alleged breaches of a similar nature continued to occur which, in the Respondent's view, support the cancellation of the Applicant's approved provider status.
The grounds for the cancellation of the Applicant's provider approval are outlined in s 31(e) of the National Law. The grounds are the same as those contained in the Respondent's 12 July 2019 show cause notice.
The Respondent provided the following reasons for the cancellation of the Applicant's provider approval, which include: Failing to comply with 19(2) of the National Law requiring the Applicant to adhere to both the National law and the Education and Care Services National Regulations (the Regulations).
In the opinion of a Delegate of the Respondent, the nature of the non-compliance poses a risk to the safety, health and wellbeing of a child or children educated and cared for by the Applicant. The following alleged breaches are relied upon: Failing under Regulation 100(1) regarding risk assessments to be conducted before an excursion. A breach of Regulation 102(1) and (4) to ensure a child being educated and cared for by the Applicant's service is not taken outside of the education and care service premises on an excursion unless a written authorisation has been provided under sub-regulation (4). A failure under Regulation 117(1) and (2) to ensure that any glazed area of the residence or approved family day care venue of the service complies with sub-regulation (2). A failure under Regulation 97(2) to ensure that a risk assessment is conducted to identify potential emergencies that are relevant to the service. A failure under Regulation 97(3) to ensure that the emergency and evacuation procedures are rehearsed every 3 months by each family day care educator and the children being educated and cared for by the family day care educators on that day, and that the rehearsals are documented. A failure under Regulation 97(4) to ensure that a copy of the emergency and evacuation floor plan and instructions are displayed in a prominent position near each exit at the education and care service premises, including a family day care residence and a family day care venue. A failure under Regulation 84 to ensure that the nominated supervisor and staff member at the service who worked with children are advised of the existence, application and obligations under the current child protection law. A failure under s175(3) of the National Law regarding the requirement to keep enrolment and other documents, in conjunction with Regulation 177(k) children's attendance records as set out in Regulation 158. A failure under Regulation 170(2) in taking reasonable steps to ensure that nominated supervisors and the staff members of, and family day care educators engaged by or registered with the service follow the policies and procedures required under Regulations 168 and 169. A failure under s167(1) of the National Law regarding protecting children from harm and hazards. A breach of s172 of the National Law in failing to ensure that prescribed information about the provider approval, the service approval and other matters are clearly visible to anyone at the main entrance to the education and care service premises. A breach of Regulations 173(1) and (2) of failing for the purposes of s172 of the National Law to display the provider approval number and the service approval number and a breach of s172(f) of the National Law requiring that the name and telephone number of the person at the education and care service to whom complaints may be addressed is displayed. A breach of Regulation 177 to ensure the keeping of prescribed enrolment and other documents are kept by the family day care educator in relation to each child being educated and cared for at the service. A breach of Regulation 89(1) for failing to ensure that first aid kits are kept in accordance with the sub-regulations (a) to (c). A breach of Regulation 97(1) requiring that emergency and evacuation procedures required under Regulation 168 set out (a) instructions for what must be done in the event of an emergency; and (b) an emergency evacuation floor plan. A breach of Regulation 185 in failing to ensure that a copy of the National Law and the Regulations are accessible at the education and care service premises at all times for use by the nominated supervisor, staff members, volunteers, parents of children enrolled at the service and any person seeking to make use of that service.
The delegate of the Respondent concludes by forming an opinion that as a result of these alleged breaches there is systemic non-compliance in respect to the operation of the service and that there are inadequate governance systems in place to satisfactorily address those issues which form the basis upon which the Applicant's provider approval was cancelled.
The Applicant submits that a significant number of the alleged breaches raised by the Respondent relate to what could be described as 'minor breaches'. The Respondent agrees that some of the alleged breaches are minor but some of those are also major breaches. The Applicant through its Director says that at all times there has been no unwillingness to comply. I have accepted her unchallenged evidence in this regard. The Applicant says that it cannot 'watch' its educators 24 hours a day. When an alleged breach has been identified a serious attempt and personal commitment to remedy the breach and improve the organisation's policies and procedures has taken place. The Applicant submitted that with appropriate policies and procedures in place and these being documented and provided to educators, then the Applicant's process of compliance and supervision is sufficient to ensure adherence with the National Law and its Regulations.

[3]

The Legislative Scheme

The National Law intends to promote the rights and interests of the children being educated and cared for at a 'family day care service'. It is not in contest that the Applicant falls within this definition.
The objects and guiding principles of the National Law are found in s 3 of the National Law, which include: (1) The objective of this law is to establish a national education and care service quality framework for the delivery of education and care services to children. (2) The objectives of the national education and care services quality framework are - (a) to ensure the safety, health and wellbeing of children attending education care services; … (d) to establish a system of national integration and shared responsibility between participating jurisdictions and the Commonwealth in the administration of the national education and care services quality framework; … (3) The guiding principle of the national education and care services quality framework are as follows - (a) that the rights and best interests of the child are paramount; … (f) that best practice is expected in the provision of education and care services.
The National Law seeks to achieve a number of its objects by creating a detailed and careful regulatory scheme for the provision of the 'education care services' and ensuring the accountability of those responsible for providing such services.
A key part of the regulatory scheme is to ensure that those persons operating an education care service hold a 'provider approval' for those services pursuant to s18 of the National Law. The National Law refers to such persons as an 'approved provider'.
Approved providers must not have been declared by the Regulations to be ineligible (s10 of the National Law) and they must be a 'fit and proper person' pursuant to the provisions of s 12 of the National Law.
The National Law contemplates that the approved provider would register and engage the educators responsible for providing the education and care services (see sections 3, 2 and 55A). The National Law requires a supervision component of the approved provider in the day to day running of the education service by the nomination of a nominated supervisor (sections 43(2), 44(1)(d)). The approved provider must also appoint a minimum number of family day care coordinators as prescribed by clause 123A (s 163) of the National Law.
The approval or a provider approval is granted subject to any conditions that may be imposed pursuant to s19 of the National Law. The Respondent has the power to cancel a provider approval pursuant to s 33 of the National Law. A decision in regard to cancelling a provider's approval can be made on any of the grounds as set out in s 31 of the National Law. Relevantly, s 31 provides: (a) the regulatory authority is satisfied that the approved provider or a person with management or control of an education and care service operated by the approved provider is not a fit and proper person to be involved in the provision of an education and care service; or (b) the regulatory authority is satisfied that the continued provision of education and care services by the approved provider would constitute an unacceptable risk to the safety, of any child or class of children being educated and cared for by an education and care service operated by the approved provider; … (e) the approved provider has breached a condition of the Provider Approval; …
The Respondent prior to cancelling the Applicant's provider approval must pursuant to s 32 of the National Law served a show cause notice. There is no issue that this has been done.
This Tribunal can review a decision of the Respondent pursuant to s 192(b)(ii) of the National Law and s 8(b) of the Children (Education and Care Services) National Law Application Act 2010. The decision made by the Respondent pursuant to s 33 is a reviewable decision within the jurisdiction of this Tribunal. This was not a matter in dispute.
In DBU v Secretary, Department of Education (2017) NSWCATAD 257 at [26], the Tribunal held that, although the Tribunal's power to review did not come from the Administrative Decisions Review Act 1997 (at [23]), the decision is nevertheless an 'administrative review' and principles analogous to those as set out in s 63 of the Act apply.
It means then that the Tribunal is to determine what is the 'correct and preferable decision' having regard to all of the material before it and the law. It is not in dispute that the Tribunal in reviewing the decision made by the Respondent pursuant to s 31(e) of the National Law, has available to it all the powers available to the Respondent. It is open to the Tribunal to affirm the decision on the same grounds or some other ground than relied upon by the Respondent. Equally so, the Tribunal can set aside the decision of the Respondent and make an alternative decision in its place see- (TwoQ Pty Limited v Secretary of the Department of Education NSW (2019) NSWCATAD 122 at [28]; Drake v Minister for Immigration and Ethnic Affairs (179) 24 ALR 577 at 589; Shi v Migration Agents Registration Authority (2008) HCA 31 at [30]-[38]; DBU at [26]).
I have considered, the Applicant contends that it does not follow from s 192(2) of the National Law that any non-compliance with the Regulations constitutes a breach of the condition that the approved provider comply with the National Law.
Clauses 100 to 102 of the Regulations deal with issues of authorisation and risk assessment for excursions. The Regulation provides that: (a) a risk assessment must be carried out before authorisation is sought for an excursion (although a risk assessment is only required every 12 months for a regular outing; and (b) a child must not be taken on an excursion unless written authorisation has been provided (although an authorisation is only required ever 12 months for a regular outing).
Clause 117 of the Regulations deals with the issue of glass safety. Essentially it provides that glazed areas in certain areas accessible to the children must be: (a) glazed with safety glass, if the Building Code of Australia requires this; or (b) in any other case: (i) treated with a product that prevents glass from shattering if broken; or (ii) guarded by barriers that prevent a child from striking or falling against the glass.
Clause 97 of the Regulations deals with issues of emergency and evacuation procedures. It provides, inter alia, that: (a) policies and procedures for emergency and evacuation must include: (i) instructions for what must be done in the event of an emergency; and (ii) an emergency and evacuation floor plan; (b) a risk assessment must be conducted to identify potential emergencies, for the purpose of preparing the procedures; (c) the emergency and evacuation procedures must be rehearsed every 3 months, the rehearsals documented; and (d) the floor plan and instructions must be displayed in a prominent position near each exit.
Clause 84 of the Regulations relates to awareness of child protection law. It provides that: The approved provider of an education and care service must ensure that nominated supervisors and staff members at the service who work with children are advised of - (a) the existence and application of the current child protection law; and (b) any obligations that they may have under that law. Penalty $1000.
Clause 175 of the National Law provides that certain prescribed documents must be available for inspection by an authorised officer.
Clauses 177 and 178 of the Regulations provide certain documents for the purpose of s 175, including (amongst other things) child enrolment and attendance records.
Clause 269 of the National Law requires a register be kept containing certain prescribed information in relation to personnel; clause 153 of the Regulations specifies the required information.
Clause 167 of the National Law requires reasonable precaution to be taken to protect children from any harm or hazard likely to cause injury. Clause 116 of the Regulations requires the approved provider of a family day care service to conduct an annual assessment of each residence.
Clause 170 of the Regulations provides that the approved provider of a family day care service must take reasonable steps to ensure the educators, supervisors and staff follow the provider's policies and procedures.
Clause 89 of the Regulations contains requirements for first aid kits.

[5]

The Evidence of the Applicant

The evidence of the Director of the Applicant is incorporated in Affidavits sworn 7 February 2020, 23 April 2020 and 18 June 2020. As at the date of swearing the Affidavit the Applicant had 31 educators in its employ, 180 children under its care and 4 staff members. The Director of the Applicant received the notice of cancellation the provider approval on 2 February 2020 and was to take effect on 17 February 2020.
The applicant operates its service in South Western Sydney and the majority of its families it caters to are first and second generation immigrants from a low socioeconomic background. The Director of the Applicant said that the cancellation of the Applicant's provider's approval will have a significant and detrimental effect on the Applicant and the families and children who obtain childcare services through it.
The Director of the Applicant refers to each of the significant non-compliance concerns raised by the Respondent, which I have adopted, as being:

a failure under Regulation 100(1) to ensure that risk assessments are concluded before an excursion (excursion risk assessments);
the failure under Regulation 102(1)(iv) to ensure that a child being educated and cared for by the service is not taken on an excursion without the consent of parents (parents' consent);
a failure under Regulation 167(1) to ensure that potential hazards such as poison, cutting, crushing and electrocution at the residence or approved family day care venue, and whether the services comply with subsection (1) (potential harm);
a failure under Regulation 167(1) to ensure that the wellbeing of the children at the residence or approved family day care venue of the service complies with sub-regulation (1) (medical risk minimisation and communication plan);
a failure under Regulation 117(1) and (2) to ensure that any glazed area at the residence or approved family day care venue of the service complies with sub-regulation (2) (glass compliance).

The Director of the Applicant states in relation to excursion risk assessments, the Applicant has reviewed all of its educator excursion risk assessments ensuring they are up to date. An error on the map on the excursion risk assessments concerning Educator A has been rectified. Educator B was issued a warning in respect of the obligation to undertake education excursion risk assessments and the Applicant has arranged for both Educators A and B to attend a risk assessment compliance refresher course.
Annexed at page 109 of the Applicant's Policies and Procedure Manual 2020 (page 236, Exhibit A1) is the excursion policy. Part of that policy identifies the educator undertaking an excursion risk assessment which reflects clause 101 of the National Regulation. The policy sets out what a risk assessment must include and the requirement for parent authorisation to be obtained in relation to such an excursion.
At page 113 of the Policy and Procedure Manual (page 267, Exhibit A1) is the chronology of the policy's inspection and review date. It is noted that the policy was first reviewed in January 2017 and has been reviewed each year thereafter. The Director of the Applicant deposes that this policy and procedure has always been part of the Applicant's excursion policy. She said Educator A was suspended by the Applicant due to her inability to comply with policies and procedures of the Applicant. The Applicant does not intend to re-employ her. An oral warning was given to Educator B to ensure that all steps are taken so that she is fully aware of her obligations under the National Law, including risk assessments for excursions, potential emergencies and medical conditions.
The Applicant has annexed to the Affidavit of 23 April 2020 copies of completed excursion authorities and risk assessments (page 981 of Exhibit A1) evidencing a number of risk assessments and routine excursion authorities completed by various educators.
The Director of the Applicant deposes that during February 2020, as part of the audit and inspections carried out by the Director and a coordinator, all educators' documents were reviewed on behalf of the Applicant ensuring that educators were aware of their responsibilities, including parents' consent before taking a child on an excursion as required by clause 102 of the National Regulation. Some of these documents are included in Exhibit D of the Affidavit of the Applicant's Director sworn 23 April 2020.

[6]

Concerns as to the risk to the health and safety children

The Respondent identified potential harm to the health risk and safety of children which included: exposed power points, power cord and antenna cord, recurrent breaches of Educator C not locking a shed door, a stray ginger cat being at the premises and poisons in the cupboard under a sink of Educator B.
In respect of Educator C the Respondent alleges that there were concerns raised over two shed doors in the outdoor area where children play not being locked. The Applicant says that Educator C has always been instructed to ensure the shed doors are locked at all times. It is the Applicant's policy to visit the educators three times each month for monitoring, supervision and support and in every visit, the coordinators observed that the doors to the sheds were locked.
In addition, there was a hazard identified by representatives of the Respondent that a bamboo fence was secured with hard plastic ties presenting as a risk to the eyes of school age children. The Applicant has provided two photographs of the plastic ties (Annexure B in the Affidavit of the Director of the Applicant 6 February 2020) which show the zip ties being at the ground and at the top of the fence. The Applicant says that the zip ties are soft plastic and do not form any hazard to children. The photographs do not sufficiently demonstrate whether they pose a risk in terms of the plastic used and I cannot make a positive finding in this regard. Similarly, the photographs do not enable a positive finding as to whether the zip ties are at the eye level of a child. I am unable to make a positive finding in this regard.
As it relates to the 'stray ginger cat' the Applicant has annexed at C of the same Affidavit, the Applicant's animal and pet policy which clearly sets out a process for assessing and managing risks concerning animals and the keeping of pets at residences. The policy appears on its face and according to the unchallenged evidence of the Director of the Applicant, to have been reviewed on a number of occasions since September 2018. The Applicant has no knowledge of any pet kept at the premises of Educator C, whether it be a permanent or a stray animal. I accept her evidence in this regard.

[8]

Concerns with regard to Educator A

The Respondent has raised concerns over a glass coffee table in Educator A's lounge room. The coffee table has a glass top and was identified as being a potential hazard. Ultimately, this proved not to be the case.
In relation to allegations that Educator A having unlocked cupboards in the backyard, the Director of the Applicant says that she has always instructed Educator A to keep the cupboards locked during hours at which children are at the residence.
Educator A has been suspended for, amongst other things, not having the appropriate glass certified in relation to glass used on a staircase.
However, in August 2019, the Applicant introduced and implemented a new system of reporting. That reporting system was amended to include the inspection and updated recent improvements of the service policies and procedures to give clear instruction. The report allows for clearer instructions to the coordinator to cite and record the names of all prescribed medications given to any child at a service.
The Respondent made allegations that educators in the employ of the Applicant did not have knowledge of child protection law and procedures. The Applicant has annexed a flow chart of the relevant child protection reporting requirements which is displayed at its centres. In addition, the Affidavit of the Director of the Applicant annexes evidence of a seminar Educator C undertook in July 2019 which was provided to the Respondent concerning a child protection workshop. The workshop notes relating to a number of other educators are included at Annexure N to the Affidavit of the Director of the Applicant of 7 February 2020.
The Affidavit of the Director of the Applicant of 23 April 2020 annexes an up to date copy of the Policy and Procedure Manual 2020. As part of that manual an FDC Compliance Report, Resident Safety Report and Daily Safety Checklist are contained. Completed compliance checklists for a number of educators are also annexed to that Affidavit. Evidence of emergency evacuation rehearsal records and the emergency evacuation rehearsal guide is included, together with a medical risk minimisation and communication plan. The Affidavit annexes children's medical documentation which for privacy reasons I will not recite in these reasons for decision. The Affidavit also contains child protection certificates for each educator from an external training provider indicating that the educator has fulfilled the requirements for a child protection workshop.
The resident safety report has been amended to ensure that certificates provided by all educators reflect that glass hazards in the premises comply with glazing minimum specifications.
In the Affidavit of the Director of the Applicant of 18 June 2020, she deposes that the Applicant has never received an assessment 'significant improvement required' in accordance with the National Quality Standards Ratings.
She disputes Ms Bishop's statement that on 2 May 2017 the Applicant failed to have in place policies for the assessment and approval of day care centres and annexes at A, page 3938 of Exhibit A1 and following. She says the policy and procedures were in place at that time, together with a screen shot indicating when the document was created, being 26 April 2016.
The Director of the Applicant annexes to her Affidavit sworn 23 April 2020 the policies and procedures manual. It is submitted, and was not challenged, that this policy and procedure manual had been collated over time and was not newly created as a result of the alleged breaches. The Applicant at page 495 of Exhibit A1 sets out the steps required of the monitoring and supervision of the Applicant's educators. In particular, at least two inspections are to be carried out every month to supervise educators, observe their interaction with the children in care and inspect their residences for health and safety issues. The evidence reveals that these inspections have been in place for some time and prior to the alleged breaches occurring. It was submitted that what has changed with regard to the Applicant's practices is that the Managing Director of the Applicant is now personally undertaking these tasks so as to ensure the level of scrutiny over and above the organisation takes place whereas previously the Applicant's supervisors were not adhering to this practice satisfactorily.
Annexure B of the Director of the Applicant's Affidavit of 23 April 2020 is the daily safety checklist required for each of the Applicant's educators. A compliance report at page 541 of that same Exhibit allows for the comment for overall improvement, notification and follow up. This document is completed by the coordinator undertaking the review of the daily inspections. The Director of the Applicant has included in her evidence completed reports at Annexures C and E evidencing implementation of the reporting procedures and monitoring of educators by the coordinator and the Applicant's Managing Director.
The Applicant's excursion policy is found at pages 109 to 113 of the Policy and Procedures Manual. Reference in that procedure includes a risk assessment for excursions. The Director of the Applicant rejects that this policy has only been put in place following the alleged breaches raised by the Respondent. I am satisfied that this is the case. I accept the Applicant's evidence that the policy is comprehensive. I am satisfied the Applicant had updated its forms, which include an audit of each residence for compliance with further improvements of the process. The Director of the Applicant has given evidence that the educators are aware of their responsibilities and given training upon commencing work in this regard. Following the Respondent identifying that Educators A and B were not complying with the policy I am satisfied that the Applicant arranged for further education for these Educators in respect of the same. In circumstances where educators have detoured and not complied in this area, I am satisfied the Applicant has taken appropriate steps to suspend and/or terminate those educators' employment.

[14]

Medical and First Aid

The Applicant's Policies and Procedures Manual at various stages includes the Applicant's policies concerning medical conditions, administration of medication, first aid, anaphylaxis, asthma management, control of infectious diseases, injury, illness, accident and trauma. The policies are clear and comprehensive. The Applicant has also included an additional document to deal with Covid specific policies.
I am satisfied that the evidence of the Director of the Applicant sets out that necessary steps are taken to ensure that all plans are kept up to date and implemented by its educators. The plans allow for the educators to have a checklist confirming the children's medical conditions and prescribed medications being kept at the educators' residences at all times.
The Director of the Applicant was cross-examined. In the majority her evidence was not disturbed. I accept that she is an honest and reliable witness. The witness conceded parts of her evidence, for example, when she was asked whether she agreed if there had been a lack of a risk assessment concerning emergency rehearsals and the floor plans being displayed. In that regard she agreed. The witness agreed that in 2019, some of the educators could not produce documents as required by the Respondent. She went on to admit that it was not until the inspection in 2019 that the Applicant took further steps to ensure that risk assessments for potential emergencies were carried out.
The Director of the Applicant conceded that it was her fault as an approved provider in having coordinators who could not communicate their role to educators. However, since detecting this, the Applicant has ensured that the coordinators are fully informed and she has taken over the main role of most of the coordination of the educators herself.
In re-examination the witness said that she recognises now that she should have visited residences herself rather than solely relying upon her coordinators who she is now aware were not undertaking their duties appropriately.

[15]

The Evidence of the Respondent

Ms Agnes Bishop, the Manager of Statewide Operations for the Early Childhood Education Directorate within the Department of Education filed a statement made 22 May 2020. Ms Bishop had an oversight role in relation to the decision to cancel the Applicant's provider approval on 31 January 2020. Ms Bishop has worked in the early childhood industry for over 40 years and of those 40 years she has experience in managing regulatory functions under the National Law and Regulations within New South Wales. Ms Bishop is an authorised officer pursuant to s195 of the National Law.
In that role Ms Bishop has authority, inter alia, to cancel a provider approval under s33 of the National Law.
Ms Bishop confirms the compliance issues that were detected by the Respondent prior to 2019 as referenced above. She confirms on 22 May 2019 the Respondent conducted a compliance monitoring visit at the principal office of the Applicant and 31 of the residences of its educators.
On 12 July 2019, the Respondent issued a Show Cause Notice, the terms of which are outlined above. The purpose of issuing the Show Cause Notice was to give the Applicant an opportunity to rectify breaches identified prior to the department taking regulatory action.
The Applicant responded to the Show Cause Notice on 12 August 2019.
On 7 October 2019, the Department completed a review of the Applicant's response to the Show Cause Notice. Following the review, a number of issues were caused in the Show Cause Notice which had not been addressed by the Applicant's response. The Department had concerns that some of the documents had been backdated or fraudulently signed. There was no evidence before me in this regard. The director of the Applicant was not cross-examined on this point.
On 9 October 2019, the Respondent conducted a further compliance monitoring visit to the principal office of the Applicant and 15 of the residences of its educators. Following that visit on 31 January 2020, the Secretary of the Respondent determined to cancel the Applicant's provider approval.
It is important to note in Ms Bishop's evidence the following: '37. The breaches identified during the most recent compliance monitoring visit on 9 October 2019 and on previous visits are, in general, of low to moderate individual seriousness. However, the cumulative effect of those breaches in my view raises serious doubts as to the extent to which educators employed by the approved provider take the requirements imposed by the National Law and the Regulations seriously, and the willingness or capacity of the approved provider to monitor and support its educators to achieve compliance with the National Law. 38. The compliance monitoring visits on 22 May 2019 and 9 October 2019, in my view, demonstrates systemic shortfalls in the compliance of educators within the National Law and Regulations. The number of educators identified in breach (12 and 4 respectively, from 31 and 15 visited), the number of breaches associated with each educator (with 3 exceptions, educators found to be in breach on each occasion and 5 or more separate breaches), the variety of types of breaches associated with each educator and the emergence of consistent problematic areas across educators would suggest to me that educators are on the whole receiving inadequate support and supervision from the Applicant.'
Ms Bishop goes on to set out the various alleged breaches which have been summarised above.
Ms Bishop identifies the individual significance of alleged breaches as follows: '46. The breaches identified during the compliance monitoring visits on 9 October 2019 and recorded in the Cancellation Notice also appeared to me to be of individual concern to the welfare of children in the care of the Applicant. The risks to children associated with some of those breaches are self-evident, including a lack of knowledge of child protection law, the failure to conduct regular emergency drills, a failure to display accurate emergency and evacuation information clearly, or a failure to ensure the safety of glass or other objects to which children have access.'
It is not in contest that the alleged breaches are in and of themselves of a serious nature.
Ms Bishop states in her Affidavit that there is particular concern raised given on at least four occasions since 2015 compliance monitoring visits of the Applicant have detected various alleged breaches of the Regulation. Ms Bishop remains concerned that despite action taken by the Applicant the Respondent continues to identify multiple breaches by educators on each successive visit.
It is on this basis that the Applicant's history of non-compliance has led the Respondent to form the view that the Applicant has systemic non-compliance issues and inadequate governance systems, which pose an unacceptable risk to the safety, health and wellbeing of children being educated and cared for by the Applicant's family day care service.
The Respondent has concerns that the responses of the Applicant in ensuring compliance of its educators appeared to be reactive, rather than proactive. An example of this is the inability for the Applicant to demonstrate pro-active support and enforcement of compliance of its educators. Ms Bishop is of the view that the fact that an educator no longer works for the Applicant does not demonstrate the Applicant's ability to proactively support and enforce the compliance of its educators.
I was not left in any doubt as to the truthfulness of Ms Bishop's evidence. I accept her as a reliable witness.

[26]

National Quality Standards

The Applicant commends clause 57 of the Regulations which prescribes five rating levels as being: 1. significant improvement required; 2. working towards national quality standard; 3. meeting national quality standard; 4. exceeding national quality standard; 5. excellent rating.
In this regard the Applicant says that services are assessed and rated against the national quality standard on this basis. At page 119 of the Respondent's filed materials the Applicant's rating certificate indicates that the Applicant has been rated as working towards national quality standard in each of the 7 quality areas, and with an overall rating of working towards national quality standard. The Applicant draws to my attention that it has not been rated as significant improvement required in any of the quality areas. It follows that given that cancellation is the most severe sanction that can be applied by the Respondent, it is surprising that the Respondent is seeking to apply this to the Applicant, in circumstances where the Applicant has been rated as working towards national quality standard and not the category of significant improvement required. I have considered this aspect below in determining the severity of cancellation of a provider approval.
Generally, the Applicant submits that it is not reactive rather than proactive in addressing issues which are the subject of this determination. The characterisation of the Respondent in this regard is rejected by the Applicant.
Whilst the Applicant accepts full responsibility for the actions of its educators, the focus of any decision to cancel a provider approval (or to apply some other sanction) must necessarily be focused on what a person in the position of the Applicant has done or can reasonably do.
The Applicant submits that ultimately a decision to cancel the provider approval effectively involves a finding that the provider is not capable of compliance with its obligations, such that the only appropriate response is cancellation. In this regard the Applicant raises the question as to what more can the Applicant reasonably do, which has not been identified by the Respondent.
The Applicant submits that it is continually refining its policies and procedures and developing a number of audit procedures to determine any issues that may arise from time to time. The Applicant has 31 educators. The issues raised by the Respondent relate to only a handful of educators and in the Applicant's submission is not reflective of its overall compliance. Those educators which have been in non-compliance of National Regulations are no longer in the employ of the Applicant.
In oral submissions I was taken to a document entitled 'Guide to the National Quality Framework', Exhibit A8. In particular, a pyramid diagram on page 585 of that document indicating that suspension or cancellation relates to an unwillingness or inability of a provider to comply which requires cancellation of approval. At page 535 of that document the cancellation of a provider approval is described as possibly having a significant impact on families using the services of the provider. The document sets out the following considerations when deciding to cancel a provider approval:

whether there are any alternative sanctions that might achieve a similar or better outcome, such as a condition on provider approval;
seriousness of the non-compliance;
cost of regulatory action;
effect on public confidence in the regulatory system;
actual or potential harm caused by the non-compliance;
the impact on the community and families using the service;
whether it is in the public interest;
history of non-compliance;
cooperation of the person and the likeliness they will continue to be non-compliant;
whether it will act as a deterrent to other providers.

The process of cancellation in the Guide to the National Quality Framework speaks of a graduated response when regulatory address has not worked. The Applicant submits that this has not happened in this case and the Respondent has moved directly to cancellation.
The alternatives to cancellation are described on page 585 of the Guide which include education, information and guidance, to direct and deter or issuing of warning letters. The Applicant submits that as a last resort suspension or cancellation should be considered.
The Guide to the National Quality Framework is a guide which is not based in the legislative framework. Whilst instructive as to the recommended process, I have given limited weight.
The Applicant submits that her evidence at paragraph 8 of her Affidavit should be accepted in that she has not received any support from the Respondent. The Applicant submits this was not challenged in cross-examination and her evidence should be accepted.
The Applicant submits that no sanction should be appropriate because of the compliance the Applicant has now undertaken in relation to the show cause letter. The Managing Director of the Applicant has not shown any unwillingness to comply and indeed the evidence suggests otherwise. The Applicant submits that the material documenting the compliance reports, audits of educators, risk assessments and the implementation of these was not challenged in cross-examination. There is no submission by the Respondent that the current procedure manual and keeping of records is any way deficient or non-compliant with the Regulations.

[27]

Respondent's Written Submissions

The Respondent has filed written submissions and relies upon the following grounds upon which the decision should be affirmed: (i) pursuant to s 31(e) of the National Law, due to alleged breaches of the National Law (which includes the Regulations) And in the alternative (ii) based upon the principles in TwoQ Pty Limited on the basis that the Applicant is not a 'fit and proper person' pursuant to s31(a) and (b) that the continued provision of education and care services by the approved provider would constitute an 'unacceptable risk' to the health safety or wellbeing of any child within the service.
The Respondent rejects any contention by the Applicant that in some way a breach of the Regulation pursuant to s31(e) is of less significance or importance. The Respondent contends that a breach of the Regulation is capable of giving rise to a valid decision to cancel.
In this regard the Respondent's primary submission is that the statutory conditions in s19(2) have been breached. The nature and number of those identified breaches have occurred over a long period of time and, in particular, the fact that the breaches are of a similar nature have continued to occur notwithstanding numerous opportunities accorded to the Applicant to remedy those breaches.
The Respondent identifies 3 potential factual maters for determination by the Tribunal. It concludes in that part of its submissions by stating that apart from those 3 matters which relate to the compliance of glass in an educator's home, an unprotected cord and unprotected power point, that there is no substantive factual dispute. Rather, the issue for the Tribunal is whether the Applicant has taken the responses it says it has taken to address the breaches and the adequacy of those responses.
I accept the Respondent's submissions in this regard and, given my conclusions below, I do not need to make any factual findings in relation to the 3 matters identified in the written submissions.
I accept the Respondent's submissions that despite individual alleged breaches that have been identified, at least during the 9 October 2019 inspections are relatively minor, they nevertheless represent potential failings of the Applicant to comply with matters with which it was obliged, by law, to comply. It follows that they should be taken into consideration when determining whether to cancel the Applicant's authorisation.
I find that a failure to cover a power cord or an antenna cord, power sockets or indeed the inability to have evacuation and emergency procedures rehearsed are self-evidently serious in the context of this matter. Similarly, the locking of cupboards containing cleaning chemicals or garden sheds containing tools or the need to maintain first aid equipment in a readily accessible location in my view potentially give rise to a risk to the harming of a child. I do not accept the Applicant has attempted to minimise the risks associated thereto.
I accept the Respondent's submission that a near miss or no safety incident occurring is not a precondition to the cancellation of a provider approval. I accept the National Law intends to prevent a risk of harm to children and with that objective harm to a child should not be required.
The Respondent submits that the history of non-compliance by the Applicant of alleged breaches is indicative of a systemic failure on its part to comply with the National Law and Regulations. This is of course a matter I have considered.
The Respondent sets out a history of those alleged breaches and the relevance of them. It is submitted that the Applicant as a result is unwilling or unable to provide the support, education and training to the educators to ensure that they, in turn, provide services in such a way as to ensure the safety of children. I am not convinced that the Applicant is so unwilling or unable to do so.
The Respondent seeks to draw to the Tribunal's attention that, whilst the Applicant has sought to address each breach individually, it is important not to lose sight of the number and history of those breaches when determining this matter.
The Respondent submits that the history of breaches suggests that the Applicant's latest assurances that the breaches have been rectified or to be treated with a degree of scepticism given the period of time over which the breaches have occurred and the number of breaches, which make it inherently more likely that the breaches will keep occurring in the future. In addition, it is submitted that the number and diversity of the breaches give rise to a possibility of more serious breaches occurring in the future. This is, in the Respondent's submission, indicative of systemic failings on the part of the Applicant.
The Applicant's submission that limited weight should be placed on historical breaches should be rejected. The Respondent submits that the Tribunal is required to make an assessment of the likelihood of the Applicant breaching again in the future and that the historical events are relevant in this regard.
The Respondent relies upon similar submissions regarding the Tribunal making a finding, in the alternative, that the Applicant conducts its business in such a way that there is an unacceptable risk having regard to the objects of the National Law, particularly the vulnerability of the children which the law aims to protect.
In relation to the question of whether the Applicant is a fit and proper person to hold a provider approval, the Respondent refers to a decision of the High Court in Hughes & Vail Pty Limited v New South Wales (No 2) (1955) HCA 28 as defining fit and proper person as 'fitness with respect to an office is said to involve three things, honesty, knowledge and ability'.
The Respondent submits that the number of breaches outlined above either demonstrate a lack of knowledge on the part of the Applicant as to its role under the National Law or a lack of ability to be able to discharge that law which suggests that it is not a fit and proper person.
The Respondent submits that the steps undertaken by the Applicant to address the breaches are inadequate for the following reasons: 1. the level of generality in the Applicant's evidence and early responses; 2. improving policies is not, of itself, a sufficient step; 3. the ineffectiveness of previous attempts to address breaches; 4. the steps that have been taken are reactive; 5. terminating educators is not, of itself, a sufficient step; 6. the Applicant's compliance with its reporting obligations ordered by the Tribunal pursuant to the stay has been inadequate; 7. the Applicant has had enough opportunities to fix the breaches.
The Respondent accepts that cancelling the provider approval will have some impact on the Applicant in terms of hardship. However, the Respondent submits that these hardships must be secondary to the very important objects of the National Law, namely, to protect the vulnerable children being educated and cared for at an education and care service. Where an approved provider is unable or unwilling to address a history of breaches, and those breaches may be shown to pose a risk of harm to children in the future, the scheme of the National Law is such that those matters must outweigh any hardship to an applicant.
In oral submissions Counsel for the Respondent submitted that the ultimate question for the Tribunal is how is responsibility delineated. The Respondent agrees that the National Law provides for a triparty responsibility, which includes the provider, coordinators and educators to achieve the objects of the National Law. However, s 43(2) of the National Law requires an approved provider to be responsible for the educators and the coordinators. The level of responsibility for the objects of the Act relate to the protection of children which cannot be overstated. Whilst the Respondent accepts that 24 hour supervision is not realistic, it is submitted that the provider can simply not say I did not know what was going on because the coordinators did not tell me. The Act requires a provider to take a more active role such as to identify any deficiencies with the coordinators or educators. It was submitted that what has now happened after June 2020 and what occurred in June 2020 should have been in place prior to threats of cancellation and a Show Cause Notice being issued.
In relation to the Guide to the National Quality Framework quality standards referred to in Exhibit A2, the Respondent submits that these are of little importance to the Tribunal for the following reasons: 1. The national standards is a different process from cancellation. 2. What is said in the guideline is not a rule of law and should not fetter the regulator. 3. What is said in the guide is a high level of generality. Cancellation is the most severe. How the generic principles are applied is set out in the Respondent's submissions. The Respondent maintains its view that the more severe step of cancellation was warranted because of the number of breaches and the type of breaches which show systemic failure of the Applicant. 4. Whilst education is recognised in the guide and that it is important there must be a limited process, it cannot be the case that there is an indefinite process of education. At some point education has to give way to regulatory processes.
Ultimately, the Tribunal must decide whether it can be satisfied that the services are being operated safely for the children within the Applicant's service. The Respondent maintains its view that the Tribunal would not be able to find that this is occurring.

[28]

The Tribunal's Consideration

The decision the Tribunal has to make is whether the original cancellation decision made by the Respondent is the correct and preferable decision at the time the Tribunal considers all the relevant matters or, in other words, to determine what 'the correct and preferable decision is having regard to the material then before it and according to law'. The original decision of the Respondent may be perfectly reasonable. The decision may still be seen as perfectly reasonable. However, the Tribunal must determine the correct and preferable decision as at the date of hearing.
There is no requirement on the Applicant to show the original decision was wrong; Re Control Investments Pty Limited v Australian Broadcasting Tribunal (No 2) (1981) 3 ALD 88.
The Tribunal itself may itself be a source of evidence; ALH Group Pty Limited v Dioceses Toowong Pty Limited (2002) QSC 396; (2003) 2 QDR 1. However, subject to the rules of natural justice, the Tribunal may act on its own knowledge; Carr v Simonovic (1980) 26 SASR 263; Maloney v New South Wales National Coursing Association Limited (1978) 1 NSWLR 161; Hall v New South Wales Trotting Club Limited (1977) 1 NSWLR 378; Collector of Customs (Tas) v Flinders Island Community Association (1985) FCA 232; (1985) 7 FCR 205. Subject to the same rules of natural justice, the Tribunal may make its own enquiries, whether of a factual or scientific matter, where a member of the Tribunal has the requisite expertise; New South Wales Bar Association v Muirhead (1988) 14 NSWLR 173 at 211; Bowen-James v Delegate of Director-General of Department of Health (1992) 27 NSWLR 457 at 481.
The objectives and guiding principles under the National Law are set out in subsections 3(2) and 3(3).
The rights and best interests of children are paramount in implementing the National Law. Having regard to s4 of the National Law, which requires an entity that has functions under the law to exercise those functions having regard to the objectives and guiding principles as set out in s3, the Tribunal is required to regard the rights and best interests of children as paramount in making a determination as to the correct and preferable decision in this matter.
Each of the allegations made with respect to the alleged breaches by the Applicant are serious. I note in the National Law and the Regulations, many of the alleged breaches include significant monetary policies should the Applicant be prosecuted and found to be in breach of the regulations. There is no evidence before the Tribunal that the Applicant was issued any infringement notice or found to have been in breach of the National Regulations.
The role of the Tribunal in determining this matter is to undertake an administrative review with the primary purpose of making findings to protect the safety and health and wellbeing of children in family day care. The Tribunal's role is not to determine any prosecution for breach of the relevant National Law or National Regulation.
I accept the Applicants submission that non-compliance with the National Regulations does not necessarily mean there is a breach of the National Law enabling cancellation pursuant to s33 of the National Law.
Neither party to these proceedings bears an onus of proof. The Tribunal should only be 'comfortably satisfied' of the facts in issue (see Kendrick v Secretary of Department of NSW (2009) NSWCATAD 45 at 32-38, Neat Holdings Pty Limited v Karajan Holdings Pty Limited (1992) HCA 66; (1992) 67 ALJR 170; (1992) 110 ALR 449).
I am not sufficiently satisfied that there have been breaches of the National Law and National Regulations as alleged.
I accept the Respondent's submissions that the Tribunal must decide whether it can be satisfied that the services provided by the Applicant operated safely for the children who attend family day care residences auspiced by the Applicant. Further, the Respondent submitted that I am required to determine whether the Tribunal is comfortably satisfied that the Applicant has taken the responses it says it has taken to address the alleged breaches and the adequacy of those responses.
The evidence reveals that the Applicant has reviewed and amended its policies and procedures prior to and following intervention by the Respondent. A significant amount of documentation exceeding three and a half thousand pages has been filed by the Applicant in support of this. At no stage during the cross-examination of the Director of the Applicant, or in submissions, was it established that the current policies and procedures produced by the Applicant were unsatisfactory.
I am comfortably satisfied that the Applicant has taken the responses it says it has taken to address the alleged breaches and that the responses are adequate.
I find based upon all of the evidence before me filed by both the Applicant and the Respondent that it is not established that it was appropriate in all the circumstances for the Applicant's provider approval to be cancelled.
My findings in this regard do not, however, negate the fact that the Applicant's business was not run in an ideal and perfect way. As accepted during her cross-examination, the Director of the Applicant conceded some failures in the supervision of its educators. However, I am satisfied that with the intervention of the Respondent the Applicant has reviewed the company's policies and procedures and has improved those in furtherance of the objectives and guiding principles under the National Law and the National Regulations.
The rights and best interests of a child who may receive the benefit of the service must be held paramount when determining the correct and preferable decision. This is to ensure the safety, health and wellbeing of children attending education and care services.
The objectives and guiding principles of the National Law and National Regulations are promoted where the operators of family day care and other services are familiar and comply with that legislative arrangement.
For the reasons set out above, I am not satisfied that the evidence establishes that the Applicant was in breach of each and every allegation raised by the Respondent. However, in the event that I am in error in this determination, I am also not satisfied that the conduct of the Applicant's business is such that warrants cancellation of the provider approval. Whilst not binding, I have taken into consideration the alternatives available to the Respondent before it cancels a provider approval. One of those alternatives is education. Cancellation is at the most extreme end of the spectrum in terms of intervention by the Respondent and in this matter I find that it is not the correct and preferable decision, having considered all of the evidence before me.
I am not satisfied that the Applicant now has systemic flaws in the way it conducted its business. I find that it, albeit more recently, has endeavoured to ensure that its operation complies with the National Law and the National Regulations.
I am not confined in determining this matter to the reasons identified in the original decision (see Frugtnient v Administrative Decisions Tribunal (Appeal Panel) & Anor (2005) NSWCA 257 at 45). I have had the benefit of examining the large volumes of evidence relied upon in these proceedings and the very detailed written and oral submissions of both the Applicant and the Respondent. I have taken into consideration the Applicant's evidence that she has agreed not to engage more than 30 educators in her business on the basis that in her view that is the maximum number of educators that she believes can be appropriately supervise in accordance with her current policies and procedures. I am therefore of the view that it is appropriate, having accepted this evidence, to impose a condition in relation to the provider approval pursuant to s 19 of the National Law s 58 of the NCAT Act in this regard.

EEP v Secretary, Department of Education

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Judgment (31 paragraphs)

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