Types Of RTO Ownership Transfer Contract

There may be several situations and reasons why an employer puts his/her RTO for sale and plans to transfer it to a new employer. However, ownership transfer is not a simple process and involves a lot of complexities in between. Let us know the types of RTO ownership transfer contracts and how they are done. Initial Information On RTO Ownership Transfer

An RTO ownership transfer contract can be of two types – permanent and temporary. The transfer of the contract from one owner to another can be the result of a number of reasons like:

• A scarcity of ongoing employment
• A change in the circumstances of the owner or trainee or apprentice
• To improve education and training opportunities
• For facilitating the assessment of required competencies under the training plan at a time when the employer is temporarily not able to provide the range of facilities and work required

No probationary period will be applicable when the training contract has been temporarily or permanently transferred to another owner.

The apprentices and trainees would still be considered as employees even if the training contract probationary period won’t apply. However, an employment probationary period will still apply under the National Employment Standards (NES).

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Different Types Of RTO Ownership Transfer

Now let us discuss the two types of RTO ownership transfer contracts in detail.

Temporary Transfer

In a temporary ownership transfer of a training contract, the transfer must not exceed a period of one year. It must end prior to the ending of the contract’s nominal term.

• When all the obligations of the training contract need to be transferred from the original employer to the new temporary employer. Both the temporary employer and the parties must come to an agreement in writing. For this the ATF-038 Temporary transfer of a registered training contract form.
• Although a temporary transfer does not require any approval, the original employer must give a copy of the signed agreement form to their Australian Apprenticeship Support Network (AASN) provider or the Department of Employment, Small Business and Training within seven days after the transfer comes into effect.
• The training organisation must also be notified by the original employer within seven days after the transfer comes into effect. It is the duty of the training organisation to ensure the negotiation of a training plan with the temporary employer and trainee or apprentice within 28 days after the transfer takes effect. 
• The training record should be updated regularly; with the training and work details undertaken with the new temporary employer.
• Once the transfer period ends, the original employer needs to accept the returning trainee or apprentice and organize to update the training plan with the training organisation. However he temporary employer would not be able to sign the completion agreement. As the training contract is official with the actual employer, only he or she can sign the completion agreement.

It’s suggested to hire RTO compliance consultants to help both parties. They have in-depth knowledge and expertise in this field and will ensure that nothing goes wrong in the process.

Permanent Transfer

The parties can apply to the department or their AASN provider for the permanent transfer of a training contract for a trainee or apprentice from one employer to another.

The applications for a permanent transfer can be submitted by:

• the new proposed employer and the parties of the training contract, or
• the new proposed employer and the trainee or apprentice under the contract

To serve this purpose, the ATF-039 Permanent transfer of a registered training contract form is there.

If an application doesn’t include the present employer, the department gives an opportunity to the present employer to lodge an objection to the transfer within a period of 14 days.

The department has to decide on an application for permanent transfer within 28 days after receiving the application. After the application is approved; all the applicants are notified in writing which includes the transfer effective date. The current employer is also notified even if the application does not include the current employer.

In the case of the application for RTO for sale not getting approved, the applicants are notified in writing, mentioning the reasons for the judgement.

1. The nominated AASN provider is also informed about the transfer. It enables them to organise an induction with the new employer and trainee or apprentice. It is done to make sure that the new employer is well aware of the duties and responsibilities of the stakeholders in the traineeship or apprenticeship. The training organisation is also given a notice of the transfer.
2. The new employer gets the option of changing training organisations if they intend to do so. That’s why the ATF-010 Change of supervising registered training organisation form is there to serve the purpose.
3. If the training organisation is unable to effectively supervise the traineeship or apprenticeship due to a change in the trainee or apprentice workplace location, the parties can opt for another training organisation to administer the training.
4. The training organisation must negotiate a new training plan and get it signed by the new employer and trainee or apprentice within 28 days from the transfer effective date.

The transferred school-based trainees and apprentices and the new employer, parent, school and training organisation must arrange a schedule of training, education and employment. It would ensure that the school-based traineeship or apprenticeship arrangements with the new employer continue to align with the school timetable.

Also, it is crucial to note that if there is any break in the trainee or apprentice’s continuity of employment between the former and new employer, the training contract may be cancelled, and a new contract may be established with the new employer.

Summary

If you run an RTO and want to temporarily or permanently transfer its ownership to another employer, approach the top-rated RTO compliance consultants to help you with the whole procedure of ownership transfer.