Clause 7.1—Authorised officers

Ensure authorised executive officers are in place and meet Fit and Proper Person Requirements.

Clause 7.1

The RTO ensures that its executive officers, high managerial agents and any persons who exercise a degree of control or influence over the management or direction of the RTO:

a) are vested with sufficient authority to ensure the RTO complies with the RTO Standards at all times; and

b) are assessed by the RTO as being fit and proper persons, having regard to the Fit and Proper Person Requirements, prior to being appointed to the relevant positions; and

c) remain, in the opinion of the RTO, throughout their time occupying relevant positions, fit and proper persons, having regard to the Fit and Proper Person Requirements.

What clause 7.1 means for your RTO

RTOs are responsible for:

ensuring authorised officers are in place and vested with sufficient authority to ensure compliance
ensuring authorised officers meet Fit and Proper Person Requirements.

To operate effectively, managers must have authority to ensure that their RTO complies with the Standards at all times. If your RTO is part of a larger organisation, it is particularly important that the people actually managing the RTO are able to make decisions that ensure compliance.

All executive officers (defined by the National Vocational Education and Training Regulator Act 2011 (NVR Act) as anyone who has a role in managing the RTO or who owns more than 15 per cent) and high managerial agents (defined by the NVR Act as anyone with responsibilities that may represent the organisation) of your RTO must meet all relevant criteria of the Fit and Proper Person Requirements at all times as outlined in Schedule 3.

You must also meet this requirement if you exercise a degree of control or influence over the management or direction of the RTO.

A ‘fit and proper person’ declaration, including any relevant disclosures, is to be provided in accordance with ASQA’s requirements, when:

you apply for initial registration or to renew registration as an RTO
you engage a new manager or agent (on either an employment, contract or volunteer basis)
a person procures more than 15 per cent of the RTO’s ownership (either directly or through their ownership of another corporation)
you engage with any new persons who exercise a degree of control or influence over the management or direction of the RTO.

In your annual declaration on compliance, you will also be required to testify that:

all executive officers, high managerial agents and persons with control or influence have been reported to ASQA
that they continue to meet the Fit and Proper Person Requirements.

Based on information disclosed in fit and proper person declarations and any other information available or accessible to ASQA, ASQA will assess whether your organisation satisfies the Fit and Proper Person Requirements for initial or continued registration.

You also need to advise ASQA if anything happens that means one or more people may no longer meet the requirements.

A guide to compliance

Evidence that shows compliance will vary depending on the structure of the organisation:

If you are a sole trader or the sole shareholder/director, it is obvious that the relevant authority is in place and no evidence would be required.
If your RTO is larger, with multiple influential managers and agents, you might demonstrate that managers and agents have sufficient authority by providing organisational charts, position descriptions, duty statements and delegation documents.

Evidence would usually be provided with applications for initial registration, renewal of registration, or when you notify ASQA of any new managers, agents, or persons who exercise a degree of control or influence over the management or direction of the RTO. ASQA's registration and notification processes provide guidance to RTOs about any evidence required at that point. These processes can be accessed on ASQA’s website at https://www.asqa.gov.au/news-publications/forms-guides

Be aware that under ASQA’s proactive risk-based approach to regulation, ASQA may request evidence at any time.

Disclosure that a manager or agent has reportable history against the fit and proper person criteria does not necessarily mean the RTO does not satisfy the requirements. Likewise, removal of a manager or agent who has reportable history does not necessarily mean the RTO does satisfy the requirements.

ASQA makes decisions about whether an RTO satisfies the Fit and Proper Person Requirements through a holistic assessment. This assessment considers multiple factors including officers’ disclosures, known information, provider cooperation and potential risk exposure.

Case Study: Reviewing Fit and Proper Person Requirements at the onboarding stage
ABC Training is recruiting a Compliance Manager and Frank is the preferred candidate. As this position exercises a degree of control over the RTO, Clause 7.1 of the Standards requires the RTO to ensure that Frank meets all Fit and Proper Person Requirements. To demonstrate ongoing compliance ABC Training have incorporated a National Police and Bankruptcy Register check into their standard hiring process. Through conducting these checks, it is revealed that Frank has a criminal record and would fail to comply with the Fit and Proper Person Requirements for the position. Upon further investigation Frank confirmed the criminal record, and acknowledged the nature of the offence compromised the Fit and Proper Person Requirements for the role. As a result, ABC Training was unable to employ Frank as a Compliance Manager.

Case Study: Reviewing Fit and Proper Person Requirements at the onboarding stage

ABC Training is recruiting a Compliance Manager and Frank is the preferred candidate. As this position exercises a degree of control over the RTO, Clause 7.1 of the Standards requires the RTO to ensure that Frank meets all Fit and Proper Person Requirements. To demonstrate ongoing compliance ABC Training have incorporated a National Police and Bankruptcy Register check into their standard hiring process.

Through conducting these checks, it is revealed that Frank has a criminal record and would fail to comply with the Fit and Proper Person Requirements for the position.
Upon further investigation Frank confirmed the criminal record, and acknowledged the nature of the offence compromised the Fit and Proper Person Requirements for the role. As a result, ABC Training was unable to employ Frank as a Compliance Manager.

Case study: Reviewing Fit and Proper Person Requirements for an existing employee
DEF Training’s Compliance Manager, Paige, was preparing documents to submit alongside ASQA’s Notification of material change or event. As part of ASQA’s application process, Paige was required to submit updated fit and proper person declarations for all executive officers, high managerial agents and individuals who exercise a degree of control or influence on the management or direction of the RTO. Liz has been employed as a Marketing Manager at DEF Training for the past two years, she is performing well in her role. As the position exercises a degree of control or influence over the RTO, Liz was required to submit an updated fit and proper person declaration. In accordance with DEF Training’s policies and procedures, Paige reviewed Liz’s completed declaration and conducted a Bankruptcy Register Search to ensure Liz complied with the Fit and Proper Person Requirements. Information regarding past instances of bankruptcy were identified. Liz was informed of this finding and was provided the opportunity to respond to and query this finding. Liz confirmed that this information was accurate. As a result, Liz was no longer able to be employed in the Marketing Manager position with DEF Training. Further, DEF Training identified that their current process was reliant on the submission of an application to ASQA to trigger a review of the Fit and Proper Person Requirements. DEF Training amended their employee's annual performance review to include an annual review of the Fit and Proper Person Requirements.

Case study: Reviewing Fit and Proper Person Requirements for an existing employee

DEF Training’s Compliance Manager, Paige, was preparing documents to submit alongside ASQA’s Notification of material change or event. As part of ASQA’s application process, Paige was required to submit updated fit and proper person declarations for all executive officers, high managerial agents and individuals who exercise a degree of control or influence on the management or direction of the RTO.

Liz has been employed as a Marketing Manager at DEF Training for the past two years, she is performing well in her role. As the position exercises a degree of control or influence over the RTO, Liz was required to submit an updated fit and proper person declaration. In accordance with DEF Training’s policies and procedures, Paige reviewed Liz’s completed declaration and conducted a Bankruptcy Register Search to ensure Liz complied with the Fit and Proper Person Requirements. Information regarding past instances of bankruptcy were identified. Liz was informed of this finding and was provided the opportunity to respond to and query this finding. Liz confirmed that this information was accurate.

As a result, Liz was no longer able to be employed in the Marketing Manager position with DEF Training.

Further, DEF Training identified that their current process was reliant on the submission of an application to ASQA to trigger a review of the Fit and Proper Person Requirements. DEF Training amended their employee's annual performance review to include an annual review of the Fit and Proper Person Requirements.