Source: https://oag.parliament.nz/2010/plumbers/part4.htm
Timestamp: 2020-07-03 15:51:34
Document Index: 725148069

Matched Legal Cases: ['art 4', 'art 4', 'art4', 'art 2', 'art 7', 'art 1', 'art 6', 'art 3', 'arts 3', 'art 6']

Part 4: The registration and licensing system — Office of the Auditor-General New Zealand
Part 4: The registration and licensing system Inquiry into the Plumbers, Gasfitters, and Drainlayers Board. https://oag.parliament.nz/2010/plumbers/part4.htm https://oag.parliament.nz/@@site-logo/logo.png
In this Part, we discuss our findings on the registration and licensing system, under the 1976 Act and the 2006 Act.
At a system level, the processes operated well and the Board took care to check each application. Although the Board's documentation and record-keeping had been poor in the past, there had been substantial improvements during the last five to six years.
Our main concerns were legal questions. We identified several issues under the 1976 Act where we were not satisfied that there was a strong legal basis for some basic policies. We acknowledge that the Board has now obtained legal advice that supports the approach it was taking, but we still consider that there was an undesirable level of legal risk associated with some policies.
Many of these legal concerns have been addressed with the implementation of the 2006 Act, but we still have questions about some of them.
We discuss these legal issues in detail in this Part, because we and the Board take different views. We cannot finally determine the legal questions. Rather, we are raising these issues because we are concerned that they show an organisation that has not been giving careful or close enough attention to the legal basis of its policies and procedures. As we explained in Part 2, the proper exercise of its statutory powers should be at the heart of the Board's work.
The registration and licensing system under the 1976 Act
The 1976 Act stated that a person was eligible for registration as a plumber or gasfitter once they had passed the relevant examinations, paid the fee, and:
already been registered in the other trade; or
completed an apprenticeship; or
held a limited certificate for five years.
There was also separate provision for registering very long-serving members of the profession who passed examinations under an earlier system.
A candidate who met all these requirements applied to the Board for registration, enclosing copies of the relevant documentation and the required fee. The Board then considered the application. If the Board was satisfied that an applicant met the requirements for registration as specified in sections 21 and 25 of the 1976 Act, then registration was granted. Registration was for life unless a person was struck off the register as a result of disciplinary action or asked to be removed from the register.
Once registered as a plumber or gasfitter (or both), a registered person could apply for registration as a craftsman plumber or gasfitter. We discuss below that the legal requirement was for one year of experience after registration, but in practice the Board required two years. As well as the two years' post-registration experience, applicants had to have obtained a pass in the craftsman common examination and in either (or both) the craftsman plumbing examination or the craftsman gasfitting examination.
Registered people and craftsmen were required to periodically apply for and obtain a licence. The licences authorised practitioners to legally carry out sanitary plumbing or gasfitting or drainlaying for the year in which the licence was issued. Although the 1976 Act authorised the Board to grant licences for up to five years at a time, in practice it chose to issue only annual licences.
The 1976 Act stated that the Registrar was required to issue a licence to a registered plumber or drainlayer on payment of the prescribed fee. For gasfitters, the requirement was slightly more complex. The 1976 Act stated that the application had to also specify whether the applicant was actively engaged in work as a gasfitter, and any other matters that were prescribed in regulations. There was also provision to make regulations to prescribe conditions about ongoing training and professional development. However, no regulations were made to prescribe any additional requirements or any conditions relating to ongoing training. Therefore, the law required the Registrar to issue a licence if a gasfitter paid the fee and specified that they were currently working as a gasfitter.
To check that the Board was operating a registration and licensing system that was well organised, we selected at random a sample of about 100 registration files from 2000 to 2008. We wanted to check that the files contained the documentation to support the decision to register a practitioner and to renew their annual licence.
Our review of the registration files showed that, before 2004, the files did not contain all the documentation necessary to support the decisions to register that person. This does not mean that the documentation does not exist, only that it was not on the file we reviewed. For example:
In 2003, the Board approved registration of a person as a craftsman gasfitter. There were no papers on file indicating how he attained either registration status or craftsman status.
One file contained a computer printout of a limited certificate granted to a plumber in 1994, and he was then registered in 1999. There are no papers on file indicating that he had completed an apprenticeship or gained the required qualifications.
In another case, the registration file for a plumber showed that a limited certificate was issued in 2000 and registration as a plumber granted in 2003. However, the registration file contained no copies of documents that would verify the completion of an apprenticeship and qualifications obtained.
Board staff explained to us that, in the past, registration documents were not systematically filed. A lot of time had been spent in bringing together the papers and establishing a unique file for each practitioner. The lack of documentation on files does not mean that it is impossible to establish that a registered person has the qualifications to be properly registered.
We chose at random the file for a plumber who was registered before 2000 to see if he had met the requirements for registration. A note on the file indicated that he was registered in 1987. The Board has bound volumes of every registered practitioner, dating back to 1912. This record, which is handwritten, contains the name, registration number, and examination results for all registered persons. The record contained in the bound volume confirmed that the plumber had been properly registered. To find the actual documents that would have been provided with the original application, however, would have required a substantial search of the files held in the Board's archives.
Our review of the registration files showed that there has been a substantial improvement in the record system maintained by the Board during the last five to six years. The files contained all the relevant records, and it was easy to establish from the documentation on file that an applicant for registration was entitled to registration.
The registration files also contained copies of the licences issued to practitioners each year. The Board requires plumbers and gasfitters to apply annually for licences. The 1976 Act required applicants for limited certificates to have their applications countersigned by the craftsman or registered person who was supervising them. Similarly, Board policy required the licence application for a registered person to be countersigned by the craftsman who was directing the work of the registered person.
Our review of the registration files showed that, up until about 2007, licence applications sometimes omitted the name of the supervising registered person or the name of the craftsman providing direction for a registered person. More recently, Board staff have been carefully checking the applications for the annual licences to ensure that the supervisors have countersigned the application.
We had some concerns with the way in which the Board was registering overseas applicants. We discuss this issue specifically in Part 7.
Our other main concern with the way in which the Board carried out its registration function was with its policy on when registered people were eligible to sit craftsman exams (and therefore eligible to qualify to be registered as craftsmen).
As noted in Part 1, we systematically reviewed all the main decisions or actions of the Board to check their legal basis. We did this because many of the concerns that led to our inquiry suggested that there might not always be a clear connection between the legislation and the Board's actions. Wherever we identified a question from our own analysis of the legislation, we researched Board papers and Board minutes to attempt to establish the basis on which the Board had instituted a particular approach.
On this issue, the policy, as set out in a Board minute from November 1990, was:
Craftsman: In addition to passing the prescribed examinations and satisfying the practical work experience requirement [a candidate] must have held registration as a registered plumber/gasfitter for a minimum period of two years since obtaining registration at registered level.
This policy did not appear to us to be well-grounded in the 1976 Act. Section 21 of the Act stated that:
Subject to section 27 of this Act, a person shall, on payment of the prescribed fee, be entitled to be registered as a craftsman plumber if he satisfies the Board –
(d) That after obtaining registration as a plumber, he has undergone such course of training and acquired such experience and passed such examination or examinations as may be prescribed, or, if no course or experience or examination (as the case may require) is prescribed, as may be approved by the Board, for the purposes of this section.
If no training, experience, or examination requirements were prescribed by the 1976 Act or regulations, the Board had the discretion to set those requirements. The regulation-making power in section 66 of the Act said that regulations could be made "prescribing the nature and duration of any training or experience necessary for the purposes of obtaining registration under this Act, and relating any period so prescribed to the time of undertaking any examination for such purpose".
The relevant regulations accordingly set out the examinations that needed to be passed and a work experience requirement. As required by the regulation-making power, the two were linked so that the experience requirement controlled when the examination could be sat. The work experience requirement in the regulations was one year of work after passing the registration examination.
In our view, therefore, a person was entitled as a matter of law to be registered as a craftsman plumber if they had completed one year of work since passing the registration examinations, sat and passed the craftsman examinations, and paid the fee.
This is not the approach the Board took. As set out above, it required a person to have been registered for two years.
When we looked for the source of the two-year requirement in the Board's files, we were unable to find anything. From the documents we reviewed, it appears that the two-year requirement may have been Board policy since at least 1984, was explicitly confirmed in 1990, and was reviewed again in 2003. The 2003 paper showed that the different parts of the Board's systems recorded different requirements, and that at various times a one-year requirement may have been applied. The outcome of that paper was not clear, but all the Board's public information when we began our inquiry was that the two-year requirement was mandatory. We could not find anything in the Board's papers indicating when it was introduced, or what its basis in law was.
We raised this issue with the Board and the former Registrar. The former Registrar told us that he believed that it had been Board policy since November 1990, and believed it had been done after consulting with the trades and the Ministry of Health.
The former Registrar also suggested to us that it would have been difficult to adhere to a one-year requirement, as the registration examinations were held only once a year in November, with results released in January. Therefore, a person who passed the registration exam and applied for registration would not have one year's experience by the time the craftsman examinations were held in November of that year. They would have to wait until the November of the next year to sit the craftsman examination.
We note that the regulations gave the Registrar a discretion to manage this type of timing issue. The Registrar has the power to let a person within three months of completing the experience requirement sit the examinations. We also note that the two-year requirement had not changed even though the Board moved to holding examinations twice a year. In our view, it is unlikely that the basis of the policy was simply because of timing.
We were also told that the industry consensus was that additional work experience of about two years was necessary before a person took on final and supervising responsibilities for work.
The Board sought external legal advice about whether it had the power under the 1976 Act to require candidates for the craftsman examination to have two years' experience. The legal advice was that the regulations simply prescribed eligibility requirements for sitting examinations, and the Board still had discretion under section 21 to set separate and additional criteria for registration. The initial advice did not address the terms of the regulation-making power in section 66, which links the experience and examination requirements, or analyse the working of section 21.
A second opinion advised that section 66(1)(f) had two limbs and that regulations were made in relation to only the second limb. That is, the regulations referred to the time requirements for sitting any examination, but did not refer to the duration of experience necessary for the purpose of obtaining registration. Therefore, the Board could prescribe the experience and training required for registration as a separate matter under section 21.
After discussing this issue further with the Board and its legal adviser, we concluded that the lawfulness of this policy depended on the interpretation of section 66(1)(f), and in particular on whether the two limbs were linked, so that the second was contingent on the first, or whether they could be separated. The Board received advice that they could be separated and therefore the policy was lawful. However, we consider that the more logical interpretation is that the two are linked, and the experience requirement for registration had to be set by reference to the time for sitting the examination.
The issue is now historical. The 2006 Act clearly gives the Board power to set new requirements, and we have no concerns about the way it has put in place a two-year requirement under the new system. However, we are concerned that the Board continued with a significant requirement that was legally arguable for so many years. As noted, we were unable to find any clear consideration by the Board of the basis of the policy requirement. This issue is another illustration of our general concern that the Board did not give enough focus to the legal basis for its policies and actions.
It is hard to know how important this additional restriction has been in practice. It is potentially significant, because until plumbers and gasfitters were registered as craftsmen they were required to work under the direction of another craftsman. It created limits on the ability of tradespeople to work autonomously, which can affect business structures. However, the Board told us that most people prefer to sit the two craftsman examinations one after the other, and so the effect might not have been so great.
We had some concerns with the way in which the Board had operated the licensing system under the 1976 Act. In particular, we were surprised to find that the Board maintained that it had the ability to refuse to issue or renew licences on the following grounds:
failure to meet the supervision requirements of the Act;
in the case of gasfitters, failure to obtain enough points in continuing professional development courses in the previous year; and
failure to pass the gas audit.
The 1976 Act was also amended in 1992, to alter the way in which the quality of gasfitting work was regulated. Alongside the self-certification system (which we discuss in Part 6), the Board was given a new function of ensuring that craftsman gasfitters maintained an adequate level of competence. The provisions on registering and licensing gasfitters were amended, and a new power to make regulations prescribing conditions on people applying for gasfitting licences was also inserted.
No regulations were ever made to impose additional conditions on people applying for gasfitting licences. In our view, if a gasfitter who was currently working applied to the Registrar for a licence and paid the required fee, the Registrar was required to issue the licence. If the person was not currently working as a gasfitter, the Board would consider the application. The Board could only issue the licence if it was satisfied the person was competent to work as a gasfitter.
The Board publicly maintained that it had introduced a competence-based licensing system for gasfitters from 1 April 2004 (although a system for audits of gasfitters had been in place since 1993). It described the system of continuing professional development for gasfitters, and of auditing the competence of gasfitters every two years, as mandatory. It regarded itself as having the power to withhold licences if these systems showed a concern with competence. However, it had taken no formal steps to use the legal mechanism that had been legislated to enable these systems to be linked into the regulatory requirements of the 1976 Act.
We could see no clear legal basis on which the Registrar could refuse to grant a licence because a craftsman gasfitter had failed to obtain enough continuing professional development points or had failed a gas audit. It would have been possible if regulations had been made to impose these prerequisites, but no such regulations had been made. If a person had failed a gas audit, the Board may have been able to exercise its disciplinary powers, under other parts of the 1976 Act, to deal with competence issues.
We could also see no clear legal basis on which the Registrar could refuse to grant a licence on the basis of supervision arrangements. However, we note it was an offence under the 1976 Act for a registered person to work other than under the supervision of a craftsman. Therefore, if the Board believed that the requirements for supervision had not been adhered to, then it could carry out its own investigation to determine if an offence had occurred and take whatever action it considered necessary through the disciplinary process.
We discussed our concerns with the former Registrar and the Board. The former Registrar told us that he sought legal advice about this at the time. The advice he was given was that the power existed as a result of the new function given to the Board. We did not see a copy of that legal advice, but have seen reference in the early papers to the fact that legal advice was sought when the systems were first developed.
The Board obtained fresh legal advice about this in response to our questions. The advice was that, when the Act was amended in 1992, the Board was specifically given the function of ensuring that craftsman gasfitters maintained an adequate level of competence. Given the Act's purpose, this function was considered to have effectively given the Registrar an implied power to refuse to grant licences on these various grounds, because they provided evidence of a lack of competence. Although regulations could have been made, they did not need to be as the amendments effectively also gave the Board wide discretion.
We can see the logic of this argument, and understand the need to, at times, read an incidental power into legislation to give proper effect to the statutory purpose. However, we consider that it is arguable whether a court would support implying a power in this circumstance. We note that the legislation was amended to include an express mechanism for prescribing conditions at the same time as the new function was conferred on the Board. Our reading of the parliamentary debates when the Act was changed suggests that the intention was for the regulations to be used to set the standards that the Board would then enforce. We question whether a court would imply a power to sit alongside an express mechanism that had been created for the same purpose but not used.
The doctrine of implied powers also has limits, and is most commonly applied to incidental matters. Withholding a licence is not an incidental matter; it prevents a person from working. This is a significant power, which would usually attract reasonably strong natural justice protections. The Board's explanatory material on the licensing system did not contain any clear explanation of the process or rights of affected individuals when the Board considered such decisions.
Only the courts can finally determine legal issues of this kind. We regard this issue as important, from an organisational perspective, because it is another example of the Board operating with a surprising, and unnecessary, amount of legal risk. There were steps it could take, with the administering department, to remove this risk. But it does not appear to have pressed for regulations on this issue.
The registration and licensing system under the 2006 Act
The processes and requirements for registration and licensing have changed with the 2006 Act coming into force. Currently, there are six classes of registration – certifying plumber, licensed plumber, certifying gasfitter, licensed gasfitter, certifying drainlayer, and licensed drainlayer. The key difference between certifying and licensed is that a certifying person can work on their own and certify their own work as meeting statutory requirements. A licensed person is required to work under the supervision of a certifying person and cannot certify their own work, which must be done by a certifying person.
Before 1 April 2010, the registration and licensing processes were governed by the 1976 Act. Under that Act, there were five classes of registration – craftsman plumber, registered plumber, craftsman gasfitter, registered gasfitter, and registered drainlayer. Craftsmen could work on their own and certify their own work, but registered people had to work under the direction of a craftsman and could not certify their own work.
Under the 2006 Act, the Board has the power to designate classes of registration and to prescribe minimum standards to be met for registration, such as competence, qualifications, and experience. The Board can also set the terms and conditions subject to which a person is registered. In prescribing registration matters, the Board is required to have regard to section 32 of the Act, which provides:
Principles guiding prescribing of registration and licensing matters
In prescribing matters under section 28 and 30, the Board must be guided by the following principles:
the matters must be necessary to –
protect the health or safety of members of the public; or
promote the prevention of damage to property; or
promote the competency of persons who do, or assist in doing, sanitary plumbing, gasfitting, or drainlaying; or
carry out, give effect to, or provide for a matter that is incidental to, or consequential on, the matters relating to subparagraph (i), (ii), or (iii); and
the matters may not unnecessarily restrict the registration or licensing of persons as plumbers, gasfitters, or drainlayers; and
the matters may not impose undue costs on plumbers, gasfitters, or drainlayers, or on the public.
If the Board designates classes of registration, minimum standards for registration, or the terms and conditions under which people are registered, the Board is required to consult on these and, after approval from the Minister, publish them in notices in the New Zealand Gazette.
The Board has designated the classes of registration (listed in paragraph 4.49). It has also set minimum standards for registration for each of these classes, but not terms and conditions of registration. The minimum standards were published in New Zealand Gazette notices in March 2010.
The 2006 Act also sets out the process that the Board is to use when registering a person. Once granted, registration stays in force unless it is suspended or cancelled, or the person dies.
Under the 2006 Act, registered people are required to obtain practising licences from the Board if they wish to carry out plumbing, gasfitting, or drainlaying. For each class of registration, the Board can set the terms and conditions under which licences are issued, prescribe requirements relating to competent and safe work practices and the testing of those practices, and prescribe requirements relating to the completion of competence programmes. As with registration, if the Board does this, it is subject to section 32 of the 2006 Act. It is also required to consult on these and, after approval from the Minister, publish this information in a New Zealand Gazette notice.
The Board has set terms and conditions that apply to licences it issues to the various types of registered people. These include terms and conditions for completing continuing professional development, carrying licence cards, who can certify work, and supervision requirements for supervisors and the people they supervise. The Board issues licences annually. In general, we have no concerns about the way this has been done.
The Board also has the power to grant a number of types of exemptions that then enable unregistered people to carry out specific types of plumbing, gasfitting, or drainlaying. In particular, the Board has the power under section 13 of the 2006 Act to grant an exemption to trainees. The Board can also issue limited certificates to such trainees, which we discuss in Part 3.
The 2006 Act came into force on 1 April 2010 and introduced a different system for registration and licensing. We have described that process above. The Board has produced a Registration Policy Statement and a Licensing Policy Statement, to help guide it in applying the provisions of the 2006 Act.
We reviewed both the Registration Policy Statement and the Licensing Policy Statement. We consider that these documents are a good step forward for the Board, and indicate their desire to ensure that they exercise their registration and licensing powers lawfully. However, these documents did raise some concerns for us – in particular, that the policies do not always comply with the Board's legal powers and obligations. We summarise those issues below.
Registration Policy Statement
The Registration Policy Statement appears to provide that the Registrar requires applicants for registration to send in more information than the Registrar is required to consider under the 2006 Act. The Board needs to ensure that the information that it assesses in determining whether to register a person is information that it is able to assess under the Act. It was unclear to us why it required more information than it was able to assess, and this seemed to us to place additional unnecessary requirements on applicants.
The Registration Policy Statement provides that limited certificate holders who have followed the "time served" path are required to sit the practical test of workmanship to be eligible for registration as a licensed plumber or gasfitter. This is current Board practice. However, the Board cannot require this. To do so, it would have to include such a requirement in the New Zealand Gazette notice on registration. The Board told us that it is considering whether it needs to amend the Gazette notice.
The Board has the power under section 52(1) of the 2006 Act to exempt a person from meeting the requirements for registration. It can do this for individuals or classes of people. There is no information in the Statement as to how the Board would exercise this power.
Section 36 of the 2006 Act provides that a person is entitled to be registered if they satisfy the Board in a range of listed matters. These matters include that the applicant is a "fit and proper person". There is no discussion in the Statement of how the Board assesses this requirement, and what information it would require from an individual.
The Licensing Policy Statement provides that certifying gasfitters are required to participate in the gas audit system as a condition of their licence. It further states that the Board may suspend the licence of a certifying gasfitter who has failed a gas audit. We could not see the legal basis for stating that participation in the gas audit system is mandatory. We discuss this further below.
As we discuss in more detail in Parts 3 and 7, the Board has the power to issue provisional licences to people while it is considering their application for registration. The Statement suggests that the Board intends to do so for overseas people who are yet to sit the registration exams. While that may be sensible, it is possibly not in accordance with section 38 of the 2006 Act. The Board told us that it is considering this issue further. The Statement also suggests that the power to grant provisional licences will be used only for overseas people, but there might be other cases where it is appropriate to grant a provisional licence.
One of our major concerns after reviewing the Licensing Policy Statement was the Board's apparent fettering of its discretion. The legislation gives the Board certain discretionary powers, but the Statement states that the discretion will either never be exercised or exercised only in a particular way. For example, the Board has stated that it will not issue licences to people residing overseas. It is not clear how this would apply in the case of a New Zealand plumber working and living in the United Kingdom (the UK) who is registered here and wants to return home to work.
The law does not allow public decision-makers to fetter their discretion in this way.
Gasfitter audits are still voluntary
As we discussed above (and also discuss in more detail in Part 6), in our view, participating in the gas audit system was voluntary under the 1976 Act. We consider that the Board could not refuse to grant licences to tradespeople who failed to participate in that system. The 2006 Act includes a clearer set of provisions that enable the Board to review the competence of a plumber, gasfitter, or drainlayer. These provisions set out a process for doing so.
We were told that, initially, the Board proposed to include a condition on the licences of certifying gasfitters that would require them to participate in the gas audit system. This condition would be published in the licensing New Zealand Gazette notice. The Department of Building and Housing told the Board that it could not impose a condition requiring participation in the gas audit system through the licensing system in this way, because the 2006 Act provided a separate and specific process for reviewing a gasfitter's competence. It was more appropriate to use the specific process rather than to read this into its general powers on licensing.
However, the Licensing Policy Statement that was published alongside the New Zealand Gazette notices still refers to the need to pass gas audits as a condition of licensing.
In discussion with us, the Board confirmed that it would look further at the content of the Licensing Policy Statement and consider whether it would be better to implement the gas audit system under section 53 of the 2006 Act.
We appreciate that the Board has been attempting to develop clear policies and procedures alongside the new registration and licensing systems under the 2006 Act. The 2006 Act gives a much clearer legal framework for the Board to exercise the kind of oversight that it considers necessary, and most of the requirements are now clearly grounded in the 2006 Act.
However, the Board could still considerably improve the clarity of the policies and the amount of detail used to explain processes and rights. We encourage the Board to regard the current policy statements as a step in the right direction, rather than as completed documents.
We remain concerned that the Board does not yet have an adequate appreciation of the legal environment in which it operates, its legislative powers, and the general administrative law disciplines that govern their interpretation and operation. We have described that we saw considerable legal and procedural risk with some of the policies that were operating under the 1976 Act, and that the Board did not appear to be aware of these risks. Although some of these risks have been removed with the 2006 Act, we are concerned that the need to pay careful and conscious attention to the legal basis for policies and actions is not yet embedded into the Board's way of operating.
We encourage the Board to strengthen its focus on legality, in terms of legislation and natural justice procedural requirements, as it continues to work on the new registration and licensing systems. These are fundamental to the Board's work, and there should be no room for argument about the legality of its basic systems.
We recommend that the Plumbers, Gasfitters, and Drainlayers Board review its Registration Policy Statement to ensure that it complies with the Plumbers, Gasfitters, and Drainlayers Act 2006 and administrative law principles.
We recommend that the Plumbers, Gasfitters, and Drainlayers Board write further policies to guide the exercise of its other powers under the Plumbers, Gasfitters, and Drainlayers Act 2006 and, in doing so, that it carefully consider the legal basis for such policies.
We recommend that the Plumbers, Gasfitters, and Drainlayers Board consider with the Department of Building and Housing whether the legislation needs to be amended to deal with registration and licensing issues.