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As minister Bill Shorten prepares to release the findings from a sweeping review of the NDIS, the head of its regulator faces allegations she was aware or should have been aware of abuse exposed by the media. By Rick Morton.

NDIS regulator faces fresh allegations

Bill Shorten.
The minister for the National Disability Insurance Scheme, Bill Shorten.
Credit: AAP Image / Lukas Coch

A senior employee of the National Disability Insurance Scheme regulator who was suspended following an explosive Four Corners investigation has been temporarily reinstated after the Federal Court heard the body’s commissioner knew about allegations of abuse almost a year ago.

Just weeks before the expected release of the final report from a sweeping review into the disability scheme, three top-ranking executives of its Quality and Safeguards Commission – which is designed to protect those who use NDIS services – are embroiled in a legal dispute that has exposed the inner workings of the agency in the wake of a media storm.

The Saturday Paper revealed last month that NDIS Quality and Safeguards senior practitioner and deputy commissioner Dr Jeffrey Chan was stood down on “leave” just two days after the ABC program aired footage of autistic children being pinned to the floor as they screamed. The name of the service provider cannot be reported for legal reasons.

Following a conversation with NDIS commissioner Tracy Mackey on September 27, Chan complained he had been forced to take miscellaneous leave and did not agree to it. The commission’s chief operating officer, Lisa Pulko, revoked the decision, allowing Chan to work from home instead.

Federal Court of Australia Justice Yaseen Shariff told counsel for the commission, James Emmett, SC, that between October 10 and 18 Chan had written to the commission, via both Pulko and his lawyers, “putting forward a position about the legality” of the decision, “challenging it and raising a range of personal circumstances”.

“I’m right, aren’t I, that there was never a substantive response other than a holding one to those letters?” Shariff asked.

Emmett said there was, in that Pulko “recognised” Chan’s concern by allowing him to work from home.

“So the response is, ‘all right, you’re not directed to take leave but I’m directing you to work from home – by the way, you’re about to get a letter by which we propose to suspend you from your employment’,” Shariff said.

Chan gave evidence on Wednesday that he was experiencing suicidal ideation and mental anguish as a result of being singled out for disciplinary action when email evidence provided to the court showed other senior figures, including Commissioner Mackey, were also aware or should have been aware of allegations about the service provider as far back as August last year.

The deputy commissioner didn’t take on a direct supervisory role in the body’s regulation of restrictive practices until July last year, following an agency-wide restructure led by Mackey, who started in January 2022. Under this restructure, deemed a “disaster” internally, state director roles were abolished and reporting lines completely redrawn across the agency.

Chan’s counsel, Dilan Mahendra, said a normal case would turn on whether Lisa Pulko had reasonable grounds to believe Chan “may” have breached the Australian Public Service Code of Conduct by failing to act with care and diligence. Mahendra argued instead that she didn’t hold the belief in the first place.

“In circumstances where she’s aware that others have had the same knowledge, if not greater knowledge of what was going on and acted in a particular way – why is it that Dr Chan is held to a different standard?” he said.

“Even on the respondent’s own case, there are a number of people who are being investigated or reviewed as part of their external review or independent review. How is it in the public interest that only Dr Chan gets suspended?”

Justice Shariff said the counsel didn’t need to aim so high.

“You’re actually putting in submission to me that she didn’t hold a belief,” he said. “So what, it was bad faith?”

Mahendra said they would make that case at the final hearing.

Shariff said the mere fact other “people below” the deputy commissioner might have had some involvement in the matter suggested a “reverse Nuremberg” defence.

Mahendra said it was actually the opposite. “Not below,” he said. “We are saying people on the equivalent level of Dr Chan had responsibility.”

Justice Shariff noted Commissioner Mackey may have made a “fairly serious” misstatement during her interview with Four Corners, and this set off a chain of events that ended in the suspension.

“I can only infer that prior to agreeing to be interviewed, the commissioner knew of the subject matter of what was going to be raised with her,” Shariff said.

“I have evidence that when the matter was raised with the relevant responsible minister, he is [was] surprised if not shocked to hear that the ... service provider was continuing to be engaged.”

“It is only after that, it seems to me on the evidence, the commissioner talks to Dr Chan to say ‘well, I need a sequence of events’ so then he has agreed to go, on your case, on leave, miscellaneous leave and then when he protests about that ... somehow then a question arises as to whether he should be suspended or not.”

Chan alleges he discussed the matter raised in the Four Corners report with Commissioner Mackey roughly a year earlier, between August and November. According to the evidence in this case, he sent an email in November 2022 to the commissioner’s general email address that contained more detail.

“I’ve got to assume that a fairly significant Commonwealth agency, acting properly in discharge of its duties, where it has an email address attributable to messages being received by the commissioner, receives them,” Justice Shariff said.

“And this organisation would have a function by which material addressed to the commissioner would be considered, would it not?

“[Dr Chan] says in his evidence that he did previously send emails to that address and so on but put that to one side, I’m looking at your client’s conduct when Ms Pulko comes to make an assessment of whether Dr Chan should be suspended or not, she knows that some communication was sent on the 28 November, does she not?”

Emmett said the chief operating officer took this into account in her reasons for suspending Chan.

“Yes, in a way adverse to him,” Shariff said. “Might it not have been relevant to reasonable grounds to inquire what on earth happened to this email?”

Commissioner Mackey launched an independent review of the third-party service provider that was a subject of the Four Corners report on September 25. The review began on October 16, according to the agency, but is not due to report until December 31, with the possibility of a two-month extension.

Nevertheless, Chan – who was told to go on leave before the review began – received notice of plans to suspend him within 10 days of the review being commissioned. He was suspended on November 8.

“Let me put it this way,” Justice Shariff said to Emmett. “The APS values and code of conduct are pitched at a very high level of generality. Anyone can have failed to exercise care and diligence from the most innocuous inaction to more extremes.

“I’d have to be satisfied that although Ms Pulko held a genuine belief, whether she had reasonable grounds that he may have breached his obligation to exercise care and diligence having regard to the position that he was in at the time ... and would all of that context at final trial include the fact that he was only in the chair of the current position say from approximately July 2022?

“Whether it’s May or July, does your client accept that Dr Chan did not have a supervisory role or oversight of the relevant third-party service provider and its conduct prior to May 2022?”

Emmett responded: “Certainly not as far as reporting lines go.”

In her letter to Chan, Pulko says she does not intend to suggest the senior practitioner had “sole responsibility” for the matter raised in the ABC program. Justice Shariff said he would be “very interested
to know” if the third-party service provider remained engaged in providing services.

He also said he would be “very interested to know how the standing down of one employee among a group” could be in the public interest if others who knew about the issue were also not the subject of any disciplinary action.

Interviewed for the television report, Commissioner Mackey said immediate action was taken to “cease a number of elements of their practice”.

However, the service itself continued operating. No fines were issued and the chief executive was not sanctioned. Asked why she did not take more serious action against the service provider, Mackey said only that there were a “range” of compliance levers available to the agency.

Three days before the Four Corners episode aired, however, two people involved with the service, including its chief executive at the time, were the subject of banning orders by the commission.

NDIS Minister Bill Shorten this week flagged major changes to the way children with developmental conditions – especially autism – accessed the scheme in advance of the major NDIS report expected early next month.

“I don’t think the NDIS should be the only scheme to provide support for kids with developmental delay,” he told Ben Fordham on Sydney radio station 2GB on Monday.

“What we have to do, though, is make sure there’s other systems out there because some parents will say ‘pigs might fly’ when you say, ‘Well, your child doesn’t need to be on the NDIS, they could be getting some other help.’ ”

He said entry to the scheme needed more “clarity”.

As participants and families wait nervously for the review to drop – likely on December 7, when the minister is booked to address the National Press Club – Shorten faces the prospect of an NDIS regulator incapable of overseeing the ballooning industry under its charge.

Chan has been granted a temporary order allowing him to return to work from next week, subject to a report from his psychologist and an undertaking not to discuss the independent review with colleagues.

The matter is expected to go to mediation in early December.

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This article was first published in the print edition of The Saturday Paper on November 25, 2023 as "Commission critical".

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