Above the Board: NSW’s 2025 child safety overhaul and the reshaping of corporate obligations

…Unsplash

Regulating an early childhood education and care service in New South Wales has long involved navigating two overlapping sets of obligations: the statutory and fiduciary obligations of directors and officers under the Corporations Act 2001 (Cth)[i], and the safety and wellbeing of children under the Education and Care Services National Law.[ii] For years, tension arose between the two, and it was left largely unresolved in legislation. However, the new Children (Education and Care Services National Law Application) Amendment Act 2025 (NSW) now expressly prioritises those obligations.[iii] NSW has now legislated a statutory hierarchy that places the interests of children above all other obligations, including corporate ones.

The amended Act received Royal Assent in October 2025, placing NSW ahead of the national reform timetable following the independent review that found the existing National Law constrained the regulator. Although the Act legislates more than 30 reforms, the significant structural changes are found in Section 4 of the National Law as it applies in NSW.[iv]

From 27 February 2026, the best interests and rights of a child must prevail over all other obligations or interests. Including providers’ financial interests, any fiduciary duties owed by persons with management or control of services, and obligations or duties arising under the Corporations Act 2001 (Cth).[v] Until now, directors of corporate childcare providers have owed primary duties to their company and its shareholders.[vi] Section 4 alters that by ordering that in any decision affecting a service’s operation, when assessing risk to a child, a board cannot weigh shareholder returns or commercial viability as a competing consideration with equal status.[vii] This provision represents an unusually explicit legislative prioritisation of child welfare over corporate interests.

Several other provisions reshape the day-to-day norm. Notification of physical or sexual abuse has dropped from seven days to 24 hours, vaping is prohibited inside services, and providers must publicly display their compliance history.[viii] Educators are given 72 hours to notify their employer when receiving a negative Working With Children Check notice in any jurisdiction.[ix]  The Child Protection (Working with Children) and Other Legislation Amendment Act 2025 (NSW), assented on 15 August 2025, requires NSW to mutually recognise negative notices from other Australian jurisdictions from December 2025, which complements the reform.[x] This reform closes a regulatory gap that previously allowed individuals barred from working with children in one state to relocate and work somewhere else to avoid repercussions.

The reforms raise an important question: whether legislating a hierarchy will materially change conduct, or merely shift liability after harm occurs. The shortened 24-hour window for notifications and penalties is a reactive mechanism, addressing misconduct after it occurs rather than preventing it. For lawyers, the Act is a test of how state legislation interacts with Commonwealth corporate law. For law students, the reform provides one of the clearest examples of statutory paramountcy being used to resolve a conflict of duties. For families whose children attend one of these services, the legal architecture has colossally shifted in their favour.

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References

[i]Corporations Act 2001 (Cth) pt 2D.1.

[ii] Children (Education and Care Services National Law Application) Act 2010 (NSW), sch 1 (Education and Care Services National Law) (‘National Law’).

[iii] Children (Education and Care Services National Law Application) Amendment Act 2025 (NSW) (‘Amendment Act’).

[iv] Amendment Act sch 1.

[v] Amendment Act sch 1, amending National Law s 4.

[vi] Corporations Act 2001 (Cth) ss 180-184.

[vii] National Law s 4, as amended by Amendment Act sch 1.

[viii] Education and Care Services National Regulations 2011 regs 82, 176.

[ix] National Law s 174AA.

[x] Child Protection (Working with Children) and Other Legislation Amendment Act 2025 (NSW), amending Child Protection (Working with Children) Act 2012 (NSW).