About training partnerships

Ross Woods
Based on "Partnerships Arrangements in VET: Program outline and Participant Notes" by Anne Simpson and Mairead Dempsey, The Teaching and Learning Group, Department of Education and Training, Western Australia

 

Introduction

What kinds of partnerships are there?

  1. An auspicing agreement is a partnership as the term is used in the training sector. It means that a program is run jointly between an RTO and another organization, so that a non-RTO is doing part of the work of the RTO. The division of responsibilities makes these kinds of agreements quite complex. They are likely to be fixed term. The AQTF refers to this kind of agreement when it says that RTOs must not use partnerships to extend scope. That is, the RTO itself does not have the personnel and resources to offer new programs because it must depend on partners to offer those programs.
  2. In a franchise, the non-RTO party becomes part of the RTO and is obliged to comply with all RTO requirements, which will change over time. It should be a long term or open-ended time commitment. The relationship might come under the federal framework governing franchises with its attendant extra compliance load.
  3. In a collaboration agreement, two or more RTOs work together to provide a program that neither could provide on its own, each providing different units. It would normally be linked to a provision of services agreement, because the two RTOs are joining forces to meet the needs of a client with larger or more complex needs that they could not meet separately.
  4. A provision of services agreement simply binds the RTO to provide specified training and/or assessment services at a set fee and timescale.
  5. There may be others kinds of partnerships because they naturally invite innovation. It’s simply a task of finding the best way to meet a need.

Why go into partnerships?

  1. Some RTOs see an opportunity. It might be a way to make money, or it might be a way for a community group to provide better services.
  2. A partnership might also be that a strategic entry point into a significant market sector in an alliance with a larger player. In that case, profit margins will probably be slim but the benefits might be in long term.

What kinds of organizations go into partnerships?

  1. Private RTO’s
  2. TAFE colleges
  3. Schools
  4. Universities
  5. Industry
  6. Community organizations
  7. Government departments
  8. Overseas organizations
  9. Town and city councils
  10. Franchise groups

 

Preparation

What are the risks?

  1. Communication, especially if it involves distance or cultural or language barriers.
  2. People don’t carefully read the agreement or don’t adequately understand it, or forget what’s in it. (Believe it or not, people simply sign a standard contract without reading it.)
  3. Disputes, which seem more likely if:
    1. communication is poor
    2. people don’t read the agreement carefully, or
    3. it is poorly written and doesn’t cover lots of "what if" cases.
  4. Consequences of non-compliance
  5. Consequences of financial loss
  6. Who will bear consequential damages? For example, you partner with a school to teach some VET courses. Too many students drop out so you drop the class, but some students now won’t have enough subject to graduate from high school. Could parents sue you?

What should you find out before going into a partnership?

  1. What do the prospective partners do?
  2. Who are their clients?
  3. Where are they?
  4. What are their values and objectives?
  5. Who owns the organization?
  6. Who are the other stakeholders?
  7. How do they make decisions?
  8. Can you trust the people and work with them?
  9. Do they understand CBTA?
  10. Do they have qualified teachers and assessors?
  11. Would a pilot project be a good way to start?

 

Why a legal document?

The terms need to be stated clearly enough to guide compliance and identify non-compliance. A shared wish-list is not much help because it can’t be contravened.

It’s not about having just enough to satisfy an AQTF auditor. You need something that will prevent problems and help in case they arise.

In fact, some people would say that if you're in the business long enough, you'll eventually use everything in the agreement.

You'll find the following questions important:

  1. Is there an indemnification clause?
  2. When does the agreement start?
  3. When does it end?
  4. What arrangements are in place for changing the agreement?
  5. What arrangements are in place for extension past the expiry date?
  6. Requirements for:
    1. confidentiality
    2. protection of reputation
  7. Are there any other agreements in place between the parties (oral, written or implied) Are they still in place in any way? Or should they be cancelled?
  8. How could the agreement be changed? If so, how?
  9. Are the any provisions in the agreement that should continue after the partnership comes to an end?
  10. What level of autonomy is given to the non-RTO?
  11. Does the agreement guarantee the non-RTO privacy from the RTO in all matters unrelated to the agreement?

 

Agreement opening

  1. What title is on the top of the front page? "Agreement" is good, but some prefer a "Deed of Agreement" or "Memorandum of Agreement". Besides, the agreement needs to state the level of legal bond.
  2. A Memorandum of Understanding is not binding and is largely worthless unless it has some kind of built-in guarantee. For example, it may specify that you won’t issue qualifications unless all requirements are met. Then again, it’s not a strong guarantee for the consumer that you will, although the payment of money normally establishes a common law purchase contract. Consumer law might also back this up, although some consumer laws only apply to private individuals.
  3. Does it clearly identify the parties to the agreement by full legal name (including trading names where relevant) and address?
  4. If it includes more than one RTO, does the agreement clearly identify the lead RTO? This is the one that will ultimately be responsible for assessments, quality assurance, and issuing qualifications and statements of attainment.
  5. However, two RTOs could collaborate to offer separate parts of a qualification with neither being lead RTO because no units are jointly conducted:
    1. RTO A delivers and assesses a series of units for which it issues Statements of Attainment. It follows its own procedures and conducts its own quality assurance.
    2. RTO B also provides a series of units, following its own procedures and conducting its own quality assurance.
    3. The student uses the Statement of Attainment from RTO A as part of the requirements to get a qualification from RTO B.

Are terms clearly defined?

  1. A separate paragraph may be necessary just for definitions. This is especially important for:
    1. training terminology, especially when it has a specialised meaning in the Australian training sector at either national or state level.
    2. overseas agreements, especially countries where English is a foreign language.
  2. Do you need document control for templates (e.g. version number)?
  3. Is there a clear purpose statement?

Define the program

  1. What qualifications?
  2. Where?
  3. When?
  4. Who for?
  5. Who may teach in it?
  6. Who may assess?
  7. How ill it be delivered?
  8. What parameters apply?

 

Communication

  1. How will you communicate or provide information? (Website information, email, regular meetings of some kind)
  2. What things do you need to communicate on?
    1. Industry consultation
    2. Regular program review
    3. Preventing misunderstandings
    4. Problem-solving
    5. Quality management
  3. Will you nominate persons or positions from each organization that are responsible to relating to each other?
  4. What advice must the RTO give? How much is free and how much attracts a consultancy fee?
  5. How will consultancy and audit fees be calculated? Do they include travelling time and expenses? Does the non-RTO provide car and accommodation?
  6. Are there provisions for periodical review and renegotiation?
  7. What provisions are there for resolving problems?
    1. For example, you might agree to a timetable of meetings. Or the non-RTO could be invited to a regular meeting of partner organizations for review and joint development of policy.
  8. What information must the non-RTO provide to the RTO on students’ progress? This is often necessary for
    1. identifying problems early so they can be rectified more easily
    2. billing purposes
    3. confirming active enrolments with Centrelink for entitlements.

 

Who does what?

  1. Do you need to make a list of implementation milestones? What happens if you get behind schedule?
  2. Do you need to hold any audits before commencing? An AQTF audit is one possibility.
  3. Do you need to nominate people or positions to implement the partnership?
  4. Are there provisions for:
    1. orientation, training and professional development necessary?
    2. staff induction needed?
    3. validation of assessment tools and processes?
  5. Who processes Austudy / Abstudy /Youth Allowance applications?
  6. What about foreign students?
  7. What materials will be used?
  8. Who will own copyright on any new materials to be written? Will there be other kinds of intellectual property?
  9. Who processes appeals?
  10. Does the agreement commit the partner to keep adequate insurance cover?
  11. Who will issue qualifications? The RTO will normally issue all qualifications and Statement of Attainment. However, another organization could contract to become a state or regional branch in a franchise agreement, in which case they may be authorised to issue qualifications and Statement of Attainment under the RTO’s name.
  12. What provisions are there for duty of care? Risk management?
  13. Are there provisions for business planning? Are each party’s separate business plans adequate? Will you work out a joint business plan? Or does the agreement commit one party to comply with the business plan of the other? In some franchises, the franchisee’s business is so substantial that it will need its own business plan, both to adequately conduct its business and for the RTO to meet its AQTF commitments.
  14. If you plan to hold graduation ceremonies, who will run them. Who will pay for them? Will there also be excellence awards?

 

Fees

  1. What fees will be payable?
    1. How much and how will they be calculated?
    2. When are they due?
    3. How must they be paid?
    4. What late fees apply?
    5. If late fees apply, and how will they accrue during the period of non-payment?
    6. Are they payable without a prior invoice or will the invoice be issued upon payment?
  2. Is there a paragraph saying that no fees will be payable by either party to the other party other than those stated in the agreement?
  3. Do you need provision for periodical review of financial arrangements? You might need to change them from time to time, especially long-term agreements. Although increases are sometimes necessary, they have the potential to cause considerable consternation.

 

Compliance

  1. Does it include:
    1. compliance with relevant sections of the quality standards? Auditors often want to see a list of the sections, with which the partner is required to comply.
    2. compliance with the policies and procedures of the RTO?
    3. updates to these?
  2. Does it include compliance with other policies and frameworks such as:
    1. apprenticeships and traineeships,
    2. licensing requirements,
    3. industry standards or codes of practice,
    4. industrial relations and award regulations,
    5. overseas students,
    6. updates to these?
  3. Does the agreement prohibit the non-RTO getting double recognition for the course, or attempting to do so?
  4. What about if the non-RTO partner wants to become an RTO, or applies to do so? It is more likely in a long-term partnership when the non-RTO learns the skills and requirements in a real program under the supervision of an RTO. The effects can be serious:
    1. It might sour the relationship and be construed to be backstabbing.
    2. It may contravene a service agreement.
    3. It might be construed to be double accreditation.
    4. In a franchise, it might even affect the RTO’s scope if the franchisee is the only part of the RTO with the resources and personnel to offer those qualifications.
  5. Are there provisions for identifying any relevant legislation? RTOs should already have a list of legislation relevant to their activities.

 

Non-compliance

Non-compliance is a serious risk. Corrective actions may be frustrating, expensive, and time-consuming. There might also be risks of fines and litigation. The point is to make sure all legislation goes onto the list so that everybody knows what legislation they must comply with. For example:

  1. The partnership may include a new activity under legislation that is not on the RTO’s current list. This is especially likely if expanding scope into a new field or entering into complex interactions with government. New interstate activities almost certainly involve new legislation.
  2. The non-RTO may already know of other relevant legislation
  3. There may be new legislation at either state or federal level.
  4. There may be undiscovered relevant legislation. This is quite likely if it is rather obscure, indirectly relevant, or become relevant through a court precedent. It may apply to employment or taxation rather than the actual business.

Checklist

  1. Does the agreement have provisions for non-compliance? What if the non-RTO contravenes the rules so much that it endangers the registration of the RTO?
  2. What happens if the partner does not meet their obligations?
  3. What obligations does the RTO have to students?
  4. What obligations has the non-RTO to students?
  5. How will the RTO fulfil its obligations?
  6. Does it say that the RTO owns the student records? If they are held at the non-RTO, what will happen upon the winding up of the agreement for any reason?
  7. What if the RTO loses its registration? Losing registration through negligence might be different from a case where all reasonable effort has been made.
  8. What if its registration will run out during the period of the agreement? You’ll need a "pending re-registraion" clause

 

Evaluation

  1. How will you evaluate the program?
  2. When?
  3. Is there a set of performance indicators that you will use?