Understanding the Australian National Quality Framework
The Australian National Quality Framework (NQF) is a comprehensive system that regulates early childhood education and care services across Australia. It encompasses various legislative regimes, including the Education and Care Services National Law Act 2010 and the Education and Care Services National Regulations 2011. The regulations set out the minimum standards that approved childcare providers must meet, to ensure the safety, health, and wellbeing of children in childcare.
Changes in Service Transfer Obligations
As of 1 October 2023, the NQF has introduced new changes affecting childcare service providers. These changes aim to enhance transparency, efficiency, and accountability in service approval transfers. A service approval is the licence required to operate a childcare centre in Australia. These changes impose enhanced notification obligations on the provider and increase approval timeframes relating to the transfer of the service approval. It is important for childcare service providers to understand these changes and how they may impact the sale of a childcare service.
In this article, we provide an overview of the key changes to the NQF to assist childcare service providers in understanding their obligations under the new amendments.
Enhanced Notification Requirements:
Approved childcare providers must now provide earlier and more detailed notifications regarding service transfers. This includes:
- the receiving approved provider must notify parents of children enrolled at the service at least seven (7) calendar days prior to the transfer’s effective date, up from the previous requirement of two (2) calendar days[1]; and
- transferring and receiving approved providers are now required to jointly inform the regulatory authority of the service transfer date a minimum of 60 calendar days prior to its intended implementation. This notification must also include a specific date for the transfer (i.e. the settlement date for the business).[2]
Notification of parents:
When communicating the transfer of service approval to parents of children enrolled at the service, it is suggested by the NQF that the following details be shared:
- any changes required to children’s enrolment and health records;
- any new or amended policies and procedures that will come into effect;
- the names, roles and qualification(s) of the educators and staff working at the service; and
- changes families may see at the service after the transfer has taken place.
Handling Service Transfer Delays:
In the event of a delay in the service transfer date, both the transferring and receiving approved providers are mandated to jointly inform the regulatory authority of the new proposed transfer date. Importantly, this delay does not affect previously granted transfer consent.[3]
The transferring approved provider and the receiving approved provider may also request that the transfer take effect on an earlier date.[4] These applications will be assessed on a case-by-case basis and will only be granted if the regulatory authority considers that exceptional circumstances exist.
Intervention:
If the regulatory authority intervenes in a service transfer, both the transferring approved provider and the receiving approved provider must be notified of its decision at least ten (10) days before the intended transfer is to take effect.[5]
Confirmation of Transfer:
The transferring and receiving approved provider must give written notice to the regulatory authority within two (2) days after the transfer takes effect specifying the date the transfer took effect.[6]
Implications for Child Care Providers
It is essential for providers to be well-informed about the updated regulations and implement necessary measures to ensure compliance when acquiring or selling a childcare service.
Legal Compliance:
Approved providers must understand and adhere to the new notification requirements, ensuring that all legal obligations are met.
Record Management:
Ensuring a smooth transfer of records is crucial for legal compliance and the wellbeing of the children involved. Transferring providers should establish clear procedures for handling and transferring sensitive information to avoid any potential data breaches.
Staffing Considerations:
Developing comprehensive staff transition plans requires attention to employment considerations. Receiving providers should consider employment contracts, training, and orientation to ensure a seamless transition.
Quality Assurance:
Receiving providers must maintain the same high standards of care even after a transfer. This includes ongoing monitoring and assessment to ensure the wellbeing of the children.
Conclusion
It is important for childcare service providers who are acquiring or selling a childcare service to understand these changes and how the enhanced notification obligations may impact the transaction.
For assistance in complying with these new amendments, the team at McTaggart Grant Lawyers can assist with:
- Pre-transaction planning;
- Contract negotiation and ensuring the amendments to the notification requirements and timeframes can be managed in the context of the business sale agreement;
- Service transfer procedures; and
- Post-transaction compliance and notifications.
For updated information sheets and other resources on the changes to the NQF, head to the Australian Children’s Education & Care Quality Authority or contact our office for additional guidance.
About McTaggart Grant Lawyers
McTaggart Grant Lawyers is a boutique corporate, commercial and property law firm founded by former top-tier lawyers Ben McTaggart and Mary Grant. Our lawyers are specialists and we partner with our clients to deliver expert, timely and commercially astute advice with a relentless focus on quality. We work with founders, business owners, family offices and corporations Australia-wide across a range of industries, including childcare, property development, private capital, franchising, medical and allied health services and retail.
If you are interested in understanding how McTaggart Grant Lawyers can assist you, please contact us.
[1] Section 69 of the Education and Care Services National Law Act 2010.
[2] Section 59 of the Education and Care Services National Law Act 2010.
[3] Section 59A of the Education and Care Services National Law Act 2010.
[4] Section 67A of the Education and Care Services National Law Act 2010.
[5] Section 66 of the Education and Care Services National Law Act 2010.
[6] Section 68 of the Education and Care Services National Law Act 2010.