RTOs using a third party: What do you need to know?

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Under the Standards, RTOs can arrange with other organisations (third parties) to deliver training and assessment services, provide educational support services, or recruit students. All services delivered by a third party must be documented in a written agreement (Clause 2.3). These agreements must be reported to ASQA within the stipulated 30 days (Clause 8.4), using the form here provided online.

Outsourcing services can be an efficient way to delegate a task, or tasks, but the responsibility to maintain compliance with the Standards at all times, cannot be delegated.

No matter who delivers the services on behalf of the RTO, it’s the RTO’s responsibility to:

  • Comply with advertising and marketing requirements
  • Inform prospective students
  • Collect fees
  • Record, maintain, report data about enrolments and students’ participation in training activities
  • Collect assessment evidence
  • Cooperate with ASQA, and Deal with complaints and appeals.

These are just some of the obligations under the Standards.

Who qualifies as a Third Party?

A third party may be another RTO, a non-registered training provider, a recruitment agent or broker, or an employment or job services agency.

RTOs must develop and implement sufficient strategies and resources to monitor any services delivered, regardless of the type of third party. (Clause 2.4).

Trainers and/or assessors working as contractors, or workplace supervisors that contribute to collecting assessment evidence are not considered as third parties and, therefore, Clauses 2.3, 2.4 and 8.3 do not apply.

Third party arrangements with another RTO and the National VET Regulator Act

An RTO may engage another RTO to provide specific training and assessment to its learners on its behalf; this could include the delivery of all or part of a training product. Such arrangement must meet the regulatory requirements for third parties listed in Clauses 2.3, 2.4 and 8.3.

Additionally, under the National VET Regulator Act, RTOs are not allowed to deliver part of a full training course that it is not on its scope of registration. Furthermore, the National VET Regulator Act defines specific civil penalties for RTOs that incur these practices.

Recently, ASQA’s commissioner Mark Patterson, referred to a situation where the partner RTO didn’t have on its scope of registration the training product that was delivered/assessed. He stated this was “illegal” and seen by the regulator as bypassing the scrutiny conducted by ASQA when RTOs applied to add a training product to their scope of registration.

While I agree with the commissioner’s interpretation of the requirements, I believe the Standards should be more prescriptive when referring to third parties. A simple clause should be added to RTO-to-RTO partnership condition that states both parties must have on their scope of registration the training product to be delivered/assessed. This could avoid some misinterpretations we have had in the past.

If you’re asking yourself why an RTO would enter into a third-party agreement to deliver a course, if the RTO has the course on its own scope, I am not going to analyse the many potential reasons for that decision. But, in all cases, the partner RTO must add value to the training product. This could be location, industry specific expertise and/or resources, position in the market, training model, etc. RTO-to-RTO partnerships are always a valid alternative when offering quality training to students.

Third party arrangements with a non-registered training provider

An RTO may engage another organisation (that is not an RTO) to provide specific training and assessment to its learners on its behalf. This type of partnership can be of great value to students’ experience when the non-registered training provider adds expertise and resources to the training and assessment strategies and practices. Clauses 2.3, 2.4 and 8.3 apply in these cases.

Third party arrangements with a student recruitment agent/broker

An RTO may outsource marketing and recruitment tasks to a third party. In the current marketplace, there are a number of organisations that specialise in marketing VET training products. Many RTOs lack marketing expertise and resources, and find these partnerships offer great commercial value for their business model.

In these cases, Clauses 2.3, 2.4 and 8.3 apply, and the RTO is always responsible for any marketing and advertising activity conducted by the third party on its behalf.

Using employment service providers

Some employment service providers develop a strong relationship with one or more RTOs to upskill their clients. Often, these relationships evolve into a formal agreement to delivery training and assess the providers’ clients.

Under the third-party agreement, the RTO and the employment service provider will set the conditions that apply to the product that can better benefit students and promote a student-centred approach to the design and delivery of training.

Clauses 2.3, 2.4 and 8.3 apply to these arrangements, and the RTO is always responsible to ensure the relevance of training and suitability of students.  

Insources Group has developed a webinar to guide RTOs on how to engage and manage third parties.

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