CHAPTER 6
Employment, Training And Skill Formation
Training and Skill Formation
6.1 The Workplace Relations Bill does not deal directly with the issues
of training and skill formation. Primary responsibility for vocational
education and training rests with the Federal Department of Employment,
Education Training and Youth Affairs (DEETYA) and also with the various
State governments. The Federal Government proposes to replace existing
training arrangements with the Modern Australian Apprenticeship and
Traineeship System (MAATS).
6.2 However, the Government has claimed that the Workplace Relations
Bill contains a number of initiatives which will complement its reform
of the vocational education and training sector, increase the number
of training opportunities available to young people and reduce youth
unemployment.
6.3 The Bill affects vocational education and training by establishing
a new training wage system which sets minimum wages and conditions for
trainees and apprentices covered by agreements (Australian Workplace
Agreements and Certified Agreements).
Apprenticeships and Traineeships
6.4 The Bill will not directly affect the apprenticeship or traineeship
system. It does, however, deal with the wages of apprentices and trainees
covered by Australian Workplace Agreements and Certified Agreements.
6.5 New subsection 170XW(3) provides that the wage of a trainee undertaking
an approved traineeship, who is to be covered by an agreement, must
not be less than the appropriate portion of the non-training wages payable
under the relevant award. The 'appropriate proportion' is to be determined
by the approving authority, which must have regard to the reduction
in the productive time of a trainee (compared to a non-trainee) due
to their time spent in training.
6.6 An 'approved traineeship' is a traineeship approved by an 'approving
authority'. The 'approving authority' means any person or unincorporated
body declared by either the Federal Minister for Employment, Education,
Training and Youth Affairs or the Minister for Schools, Vocational Education
and Training.
6.7 Similarly, for new apprentices, the wage must not be less than
that provided for in the award where the apprenticeship is 'at par'
with the apprenticeship under the award. If it is not, the minimum wage
is calculated (by the approving authority), taking into account the
difference in the productive time of the employee undertaking the award
apprenticeship, and the employee undertaking the new apprenticeship.
6.8 It can therefore be seen that the 'approving authorities' will
be a crucial element in ensuring that claims concerning reduction in
productive time are accurate and not merely an opportunity for unscrupulous
employers to obtain a cheaper source of labour. Approving authorities
must also ensure maintenance of high standards in training programs
offered.
6.9 The Department of Employment, Education, Training and Youth Affairs
submitted that: 'Approving authorities will be organisations with credibility
in industry'. [1] The Department proposed
that certain criteria which approving authorities must meet in order to
be appointed, be declared and cover such aspects as industry support,
knowledge of industry training requirements and commitment to high quality
and competency based training.
6.10 It should be noted that the existing training wage structure (the
National Training Wage) already incorporates a discount for the time
spent in accredited training. However, the critics of the Bill's approach
feel that it may result in a much more significant discounting of already
low wages with less scrutiny of the quality of the training being offered.
Similarly, wages for apprentices are already set as a percentage of
the fully-qualified tradesperson, reflecting the difference in productive
capability.
6.11 The National Training Wage discount is for 'off-the-job' training,
usually time spent at technical college. The Bill does not distinguish
between on-the-job and off-the-job training.
6.12 The possibility that this might allow an employer to claim that
actual work performed by the trainee was in fact 'on-the-job training'
(and therefore non-productive time) reducing the trainee's wages accordingly,
was suggested by one witness. [2] Another
witness suggested that the proposed new training wage structure would
see young people choosing better paid jobs which offered little by the
way of ongoing structured training, in preference to trades or occupations
which offered longer term career prospects but a very low training wage.
[3]
6.13 A particular example of such problems was raised in relation to
trainees, often in rural and remote regions, who undertake off the job
training for several days at a time. The Hon J Riordan AO, argued that
such trainees 'who must travel long distances to receive training on 'block
release'... would be particularly disadvantaged'. He concluded that: 'Many
would be discouraged from undertaking the training concerned. This would,
in turn, reduce the relevant skilled employees numbers in rural areas'.
[4]
6.14 The potential effect of these arrangements was very graphically
identified by Mr Boland of the Metal Trades Industry Association who
said in his evidence to the Committee:
We do express a concern in the submission that, if it is the Government's
intention - as it is under the bill - to pay trainees and apprentices
for productive time worked only and not time spent in training under
the proposed new MAATS arrangements and on top of that there is an abolition
or watering down or removal of training subsidies, we would be concerned
that that would tend to undermine our training effort in Australia which
is so important to us in the manufacturing industry. If apprentices
see that their rates of pay are going to be cut and employers see that
those subsidies are going to disappear, it is likely to make it less
attractive to both parties to engage in apprenticeship arrangements.
That is not, in our view in the interests of manufacturing industry'.
[5] (Committee's emphasis.)
6.15 Initially, the Government indicated that it did not propose to
introduce any 'top-up ' arrangements to ensure there was an absolute
minimum wage that all trainees would receive, regardless of the proportion
of non-productive training time. This position attracted significant
criticism in light of the fact that it would be possible for trainees
to receive less than those in receipt of unemployment benefits.
6.16 However, on 28 July 1996, the Minister for Schools, Vocational
Education and Training, the Hon David Kemp, announced an income-support
scheme in which all trainees would be guaranteed a wage equivalent to
the National Training Wage level, any additional amount being met by
the Government.
6.17 It should be noted that, at present, this does not involve any amendment
to the Workplace Relations Bill. It will still be perfectly legal for
a trainee to enter into an AWA which provides for a wage below that of
the National Training Wage. However, the Government has stated that it
will pay any differences as a matter of policy, [6]
although this will not apply to part-time traineeships.
Youth Training and Vocational Education
6.18 Another important effect of the Bill on existing arrangements
for youth training centred on the use of Australian Workplace Agreements
to determine training arrangements.
6.19 At present, training arrangements between employers and employees
are regulated by contracts of training in each State (slightly different
terms are used by each State). These contracts provide for the right
to attend and complete the training course; a requirement that the employee
receives proper information; an appeals process to resolve disputes,
and monitoring by the relevant State authority to ensure that adequate
training is provided.
6.20 Concern was expressed that the inclusion of training arrangements
in AWAs will override or replace the existing contracts, with no requirement
that the AWA contain similar protections. [7]
This is presumably because, although AWAs permit the continued operation
of State laws on apprenticeships, no mention is made regarding State laws
on traineeships (proposed section 170VR).
6.21 It was suggested that this could leave young employees vulnerable
to sub-standard training arrangements under AWAs without access to the
protections currently offered under State laws. A system whereby the
individual employer determines the quality and quantity of training
could lead to the proliferation of lower quality training with little
portability.
From a social and economic point of view, it is essential that apprenticeships
and traineeships be broad based and portable and especially focus on
broad skills such as problem solving, adaptability, communications and
so forth. The [Bill] runs counter to this in two ways: by increasing
employer control over the nature of apprenticeships and traineeships
and allowing more specific enterprise training to the detriment of this
broader training…" [8]
6.22 It should be noted, however, that this is not an issue associated
only with youth training. The last 15 years has seen a substantial system
of competency based training built up to provide for systematic and
consistent training regimes designed to ensure portability and articulation
of skills. Because of the involvement of the industrial parties in the
development of these systems through Industry Training Boards, many
of these arrangements are now the subject of awards and agreements.
6.23 There is nothing in the Bill's Schedule on AWAs which ensures
that training arrangements included in an AWA are properly structured,
or sets out clearly the rights and responsibilities of the trainee and
the employer. Responsibility for this once again rests with the approving
authorities.
6.24 The question of whether the acquisition of skills and training is
affected by the level at which bargaining occurs was examined by Robin
Archer. [9] One of the difficulties identified
with the provision of training at the individual employer level is the
problem of free riders, whereby some employers (rather than invest in
training themselves) seek to poach employees trained by other firms. Firms
may therefore be reluctant to invest in training at all, or limit their
training to skills that are specific to their firm.
6.25 A discussion paper recently released by the West Australian Chamber
of Minerals and Energy identified as one of the main problem areas the
over-reliance on larger employers to provide experienced graduates. It
also recommended the establishment of a national centre for specialist
professional eduction and training for the minerals industry. [10]
6.26 By contrast, multi-employer bargaining can reduce the free rider
problem by ensuring that all firms make an investment in training, and
that this training meets uniform standards. In Britain, tripartite bodies
such as the Manpower Services Commission have been abolished because of
the Government's belief that individual managers should be entirely responsible
for their enterprise including training of its employees. Regionally-based
Training and Enterprise Councils were established, however, Archer concludes
that 'dependent on a poor level of government funding, and without the
discipline of either centrally coordinated union or employer organisations,
these have met with little success'. [11]
The ACTU submission endorsed this conclusion, stating that 'over the last
decade apprenticeship training has collapsed in the UK '. [12]
6.27 Archer contrasts this position with that of Germany which has maintained
and expanded its vocational education and training. The initial training
system is two-thirds funded by employers and one third by government with
certain aspects subject to tri-partite or bi-partite regulation. Subsequent
training has increasingly been the subject of collective bargaining arrangements.
[13]
6.28 Although the Government states that the Modern Australian Apprenticeship
and Traineeship System will operate within a national framework ensuring
quality and portability (overseen by the approving authorities), and
the employer groups claim that the new training wage arrangements will
encourage employers to take on more trainees, the potential problem
of free riders and haphazard training remains.
Conclusions
6.29 The majority of the Committee sees this issue as a prime example
of the extent to which these radical changes can have considerable effect
on many issues extending beyond the normal run of the mill wage and
conditions issues which are the hallmark of industrial bargaining.
6.30 The evidence demonstrates that a narrow focus on 'freedom to bargain'
does not comfortably fit with areas involving highly developed systems,
which require consistency. It is illogical to talk of training arrangements
being the subject of individual bargaining, when virtually every aspect
of that relationship ties in with the protections and infrastructure
developed to facilitate these training arrangements. This demonstrates
one of the reasons why AWAs should be subject to the independent scrutiny
of the AIRC and that the Commission should have reserved a power to
refuse to certify an AWA which is contrary to the public interest.
6.31 In relation to the specific issue, the majority of the Committee
recommends that the Act be amended to prevent AWAs from overriding public
arrangements which relate to the provisions and administration of training
issues. This will avoid the problems identified above.
6.32 In order to prevent apprentices and trainees from suffering
reduced wages and conditions Labor members of the Committee again recommend
that Schedule 13 not be enacted.
6.33 The Australian Democrats member of the Committee has made additional
comment in his Supplementary Report.
6.34 The Government members of the Committee disagree with the conclusion
and oppose the recommendation.
Footnotes
[1] Submission No. 417, p. 14, Department
of Employment, Education, Training and Youth Affairs.
[2] Mr P J Olive, Evidence p. E 690.
[3] Mr R Walsh, Evidence p. E. 806.
[4] Submission No. 1341, p. 15, The Honourable
JM Riordan AO.
[5] Evidence, p. E788.
[6] The Sydney Morning Herald, 29 July
1996, p.3.
[7] Submission No. 1017, p. 155, ACTU.
[8] Evidence, p. E 2111, see also Evidence,
p. E 1844.
[9] R. Archer, p.170, 'Lessons from Northern
Europe: Collective Bargaining and Economic Performance in Britain, Germany
and Sweden' in Peetz et al (1993), Workplace Bargaining in the International
Context, Department of Industrial Relations, Canberra.
[10] The Australian Financial Review,
p. 53, 12 July 1996.
[11] R. Archer, p.172, 'Lessons from Northern
Europe: Collective Bargaining and Economic Performance in Britain, Germany
and Sweden' in Peetz et al (1993), Workplace Bargaining in the International
Context, Department of Industrial Relations, Canberra.
[12] Submission No. 1017, p. 159, Australian
Council of Trade Unions.
[13] R. Archer, p.172, 'Lessons from Northern
Europe: Collective Bargaining and Economic Performance in Britain, Germany
and Sweden' in Peetz et al (1993), Workplace Bargaining in the International
Context, Department of Industrial Relations, Canberra.