The ACT Civil & Administrative Tribunal (ACAT) has recently decided that a Schools decision to enforce one terms’ notice for the cessation of an enrolment contract, at the end of the school year was unfair under Australian Consumer Law [Brindabella Christian Education Ltd CAN 100 229 669 v Respondent XD 561 of 2021 (Civil Dispute) [2022] ACAT 37].

In this matter, the enrolment contract required one term’s notice be provided, should the parents decide to withdraw the child. It further required that the notice be provided prior to the first day of term, and any notice after the first day, would render the parents/carer’s liable for that term and the subsequent terms in lieu of notice.

ACAT found that the provision of the contract was unfair under the relevant consumer legislation, particularly as the school could unilaterally alter the fee structure without notice to the parents or providing parents with an opportunity to withdraw their child without penalty if such changes occurred.

In determining whether the notice provisions were fair, ACAT considered section 23(1) of the Australian Consumer Law, which requires the following criteria to be met:

(a) it would cause a significant imbalance in the parties’ rights and obligations arising under the contract; and 

(b) it is not reasonably necessary in order to protect the legitimate interests of the party who would be advantaged by the term; and 

(c) it would cause detriment (whether financial or otherwise) to a party if it were to be applied or relied on.

Considerations for Schools

While some aspects of the decision are open to challenge, this case highlights the timely reminder to review enrolment contracts, to ensure that the terms contained therein are reasonable and fair in all the circumstances, including how changes can be made to the contract and what notice is afforded to the parents to make an informed choice about the ongoing enrolment. An enrolment terms and conditions sample is available from the AISNSW website. (Login required)

It is also important to consider whether it is appropriate to enforce such terms, should a parent decide to withdraw a student(s) from the school, and fail to give notice in accordance with the contract. It is important to consider the facts of each situation as they arise and make a decision on a case by case basis, taking into account many variables including:

  • What does the contract require?
  • The reason for the withdrawal of enrolment.
  • Was the notice given to take effect during the school year?
  • At what time of the school term was notice provided? What impact does the time of the notice have on your ability to fill the position?
  • What is the financial impact on the school if the notice provisions are waived (ie., do you have a waiting list?)
  • Any other unique circumstances surrounding the case.

For more information on this case or assistance in this area, please contact the Workplace Management Team on 02 9299 2845.