The Training Reform Agenda - Some Industrial Relations Issues

The Training Reform Agenda - Some Industrial Relations Issues

Australian reforms to vocational training arrangements. Governments, employers and unions can work together to deliver better outcomes in the future. ACTU Assistant Secretary, Bill Mansfield.

1. Introduction

1.1 Over the last decade there has been a major effort in Australia to reform and expand our vocational training arrangements. Basically the aim is to achieve a quality vocational training system which is nationally recognised and available to a much larger group of employees than is currently the case.

 

1.2 The current program is known as the Modern Australian Apprenticeship and Traineeship System [MAATS]. It builds on the principles established by the Carmichael report of 1992 but with an amount of deregulation of the processes associated with the training system. Vocational training will be related to the first six levels of the Australian Qualifications Framework and it is likely that the use of the Australian Standards Framework will be discontinued.

 

1.3 The aim of the current and previous governments is to expand the vocational training system considerably so that, over time, most school leavers will enter the workforce through structured vocational training leading to a recognised qualification.

 

1.4 Significant features of the MAATS include :

 

i] Based on industry and enterprise competency standards

 

ii] Delivered through a user choice system which promotes flexibility in the provision of training

 

iii] Structured around Training Packages which deal with the components of competencies, assessment guidelines, AQF levels and supporting materials

 

iv] A nationally recognised training system

 

v] Importance attached to quality outcomes through ensuring that proper standards are met in the development of competencies and the ability of providers to deliver courses and award qualifications

 

1.5 In the past development of the training system we have produced large amounts of paper describing in great detail what it is expected to do and precisely how it will do it. To many people the volume of paper and the peculiar terminology often serves more to confuse than enlighten.

 

1.6 From a trade union standpoint there is a number of fundamental objectives which we are seeking to ensure that our members get a training system which is of benefit to them as well as their enterprises and Australia as a whole. These fundamental aims include :

 

i] The competencies acquired through a training course must equip the trainee/apprentice to work in an industry area and to build a career - they should not be narrow, enterprise specific competencies which effectively tie a person to a particular enterprise

 

ii] Training must lead to, or be part of a recognised qualification

 

iii] The training system must be national so that courses undertaken and qualifications issued are recognised throughout Australia

 

iv] Proper quality controls need to be built into the system to ensure that the outcomes are of a good standard

 

v] Training should be articulated so as to encourage additional qualifications and career advancement

 

vi] Remuneration levels for people in vocational training should recognise a range of factors including competencies acquired/used, the need to attract capable young people into training, prevailing community standards and the overall value of the trainee/apprentice to the employer

 

vii] Competencies achieved through experience need to be recognised through a practical system of Recognition of Prior Learning

 

viii] The development of the vocational training system should be led by industry representatives of employers and employees through their unions

 

1.7 Most opportunities in the area will come through apprenticeships and traineeships. When considering the industrial relations issues in the vocational training area the most important areas are :

 

i] The wage rates which should apply to vocational trainees and apprentices in competency based training

 

ii] The opportunities for enterprise bargaining for apprentices and trainees in Group Training Companies

 

iii] The proposition that training time for vocational trainees should be regarded as non-productive and unpaid

 

iv] Whether there is an entitlement for wage increases following achievement of a qualification/set of competencies

 

v] What are the implications of the abolition of the Declaration of Vocations in States other than NSW?

2. Competency Based Training And Wages

2.1 One of the fundamental changes to the training system has been the development of industry and enterprise competency standards and the introduction of competency based training in lieu of time based training.

 

2.2 The change from a "time served" to a "competency based" system should carry with it the introduction of new wage arrangements based on competency for vocational trainees.

 

2.3 For a number of years young employees have highlighted an outstanding source of injustice in the workplace through the existence of pay rates which are based on age not value or competency. Young members of unions have been increasingly vocal about the need to overturn age based pay rates and achieve "equal pay for work of equal value".

 

2.4 Competency based pay rates should have application to participants in apprenticeships and traineeships and to school leavers who enter the workforce directly without the opportunity for structured training.

 

2.5 Basically for a pay system to be fair and non-discriminatory it should reflect the value of the contribution made by the employee to the employer plus the other factors mentioned earlier [1.6 (vi)]. Where that contribution is "equal" the level of remuneration should also be "equal". Age should not be a factor in determining pay rates.

 

2.6 In the 60's women were paid around 25% less than men for doing identical work. Moves to achieve equality of wages were strongly opposed by many employers and some governments on the basis that the economy could not stand it and that women would be priced out of work. In 1966 equal pay became law and women's employment has increased practically every year since.

 

2.7 Just as women demanded equal pay for decades young people also want the discrimination against them to be removed. Why should a competent 18 year old shop worker with two years experience who does the same work as a 21 year old receive thousands of dollars less in a year simply because of his/her age?

 

2.8 It should be noted that wage rates for young people have rarely been the subject of close attention either in negotiation or arbitration hearings. Some Awards have no junior rates, some have "adult" rates at age 18, many have adult rates at age 21. The percentages compared to the adult rate at various ages vary between industries, Awards and States. With the exception of the National Training Wage Award the whole area is unfair and messy.

 

 

Apprentice

 

Non-Apprentice

 

 

%

 

Age

 

Metals

 

Paint

 

Funerals

 

Australian Govt.

 

1st year

 

42.0

 

16

 

47.5

 

70

 

65

 

50

 

2nd year

 

55.0

 

17

 

57.8

 

85

 

65

 

60

 

3rd year

 

75.0

 

18

 

68.3

 

100

 

80

 

70

 

4th year

 

88.0

 

19

 

82.5

 

 

90

 

81

   

 

20

 

97.9

 

 

100

 

81

 

2.9 In the case of apprenticeships and traineeships unions and management need to be considering the introduction of a competency based wages system to replace the current time-served arrangements which perpetuate discrimination based on age.

 

2.10 Taking apprenticeships as an example most time based pay scales provide for four pay points with yearly adjustments based on nominated award percentages of the trades award rate.

 

2.11 This approach had a clear rationale when there was a fixed, time based, curriculum and the improvement in skill/competency/value occurred in a predictable way over the apprenticeship period.

 

2.12 With CBT there is a need for a changed approach. Apprentices will gain their competencies in different time periods and can have accelerated progression through the training period - this change needs to be recognised by the wage system.

 

2.13 One company which is seriously involved in vocational training and which has introduced the change to competency based wages for apprentices is Email. Email is an Australian owned company with around 12,000 employees and around 200 apprentices. Following the restructuring of the training program to competency based training the company has also agreed with the relevant unions to introduce a competency based wages system.

 

2.14 Competency based wages in Email are :

 

i] not paid for time served

ii] paid on the basis of acquisition of competencies

iii] for apprentices there are seven levels of remuneration based on acquisition of competencies in modules

 

2.15 The results to date are very positive with the company reporting that the responses include:

 

i] good feedback from apprentices, trades level employees and supervisors

 

ii] wage system provides the incentive for the apprentices to learn and be recognised

 

iii] offers rewards for those who "have a go"

 

iv] records the progress on the work completed during the apprenticeship

 

2.16 Competency based wages should also have application to traineeships through Enterprise Bargaining which builds on the National Training Wage Award. The traineeship system is expanding in numbers and around 40,000 are expected this year. The wages of young people entering the workforce other than through vocational training should also be competency based.

 

2.17 The issue of age based pay rates was being examined in detail by the Federal government, employers and unions in the National Labour Consultative Council. Federal legislation enacted by the Labor government also made age based pay rates illegal after 1/7/97. Both of these initiatives have been stopped after the Federal election and the draft of the Workplace Relations Bill removes the existing provision that Award rates for juniors could not discriminate on the basis of age after 1/7/97.

 

2.18 Young people will increasingly agitate for the removal of discriminatory wage rates which are based simply on age, not competency. Governments, unions and employers should be tackling this issue in a pro-active manner, not putting their heads in the sand in the hope that it will go away.

 

2.19 One action which Group Training Companies could undertake is to examine a change of remuneration arrangements for apprentices and Traineeships through enterprise bargaining to move from a time based pay system to a competency based pay system. You have led the way in several other areas of training reform why not extend your ideas to wage arrangements?

3. Enterprise Bargaining And Group Training

3.1 The second area of industrial relations and vocational training is in relation to Enterprise Bargaining for your employees, who of course include apprentices, trainees, teaching and administrative staff in Group Training companies.

 

3.2 My understanding is that very few GTCs have an Enterprise Agreement covering their staff. This means that basically your staff are :

 

i] employed under the minimum terms of a relevant Award

 

ii] often not considered for regular increases in remuneration other than "safety net" increases

 

iii] not subject to agreements which reflect the special needs of GTCs

 

3.3 Enterprise Agreements should have application to significant employers in Australia, and this includes GTCs. They are the means by which wage increases and other changes are put in place for the workplace and employees.

 

3.4 Several years ago there was an attempt to have the ACTU co-ordinate the development of an EA for all GTCs and unions in Victoria. For a variety of reasons it did not succeed. It is overdue for GTCs to go on the front foot and face up to this issue before it becomes a major problem between unions and Group Training.

 

3.5 If an Enterprise Agreement was developed it could deal with a number of issues which affect apprentices, trainees and your office staff. Obviously it should examine the introduction of competency based remuneration, with incentives for individuals to finish their training in a shorter time where practicable. Other issues which could also be examined include taking account of the special needs of GTC's and their employees.

 

3.6 The experience of the ACTU in the earlier negotiations was not particularly positive in terms of our ability to get all of the unions affected into one bargaining unit however if GTA wanted to make another effort to get a model agreement we would be prepared to have another attempt to co-ordinate the union-side response.

 

3.7 Should this issue continue to be largely ignored the relationship between the ACTU, its unions and Group Training companies could take a sudden turn for the worse. That would be very unfortunate and I hope the positive approach which the ACTU takes toward Group Training can continue.

4. Should Training Time Be Paid?

4.1 In a recent development the Federal Government has proposed that under Australian Workplace Agreements and Certified Agreements the remuneration for trainees and apprentices can totally discount any training time. The government's proposal for vocational training wages focussed solely on the discounting of training time and did not acknowledge any other factor in regard to matters such as accelerated acquisition of competency, the wage rate which should apply when competency is acquired or the fact that training time is already taken into account in apprentice and traineeship wages.

 

4.2 The government also proposes to make the training arrangements more flexible so that training time could be up to three or more days in a working week as distinct from existing arrangements where the amount of training time would not normally exceed one day per week.

 

4.3 To compensate for the lower levels of remuneration which could occur due to non-payment for training time the government proposes safety net remuneration levels of $128 p.w. at age 16, $158 p.w. at age 17 and $195 p.w. at age 18 or older.

 

4.4 The ACTU, unions and many employers are opposed to the proposals due to their narrow focus and the negative reaction which is sure to come from young people.

 

4.5 The basis of the concerns from the ACTU and unions are :

i] Wage/remuneration levels for trainees and apprentices should be set by the industry parties on agreed criteria, not by some political decision.

 

ii] The remuneration of the apprentice/trainee should be as wages not a combination of low wages and a government handout.

 

iii] The remuneration level of the "Safety Net" is too low to attract capable young people into vocational education.

 

4.5 We support the view expressed by the MTIA in its appearance before the Senate Inquiry into the Workplace Relations Bill where it was stated :

 

"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."

 

4.6 Apprentice pay rates have taken account of training time for decades and they should not be further discounted by some double counting system as proposed by the government.

 

4.7 In a competency based wage system increases in competency are rewarded by higher levels of remuneration. At present most apprenticeship wage arrangements are expressed as years of training i.e. first year, second year and so on. The government's proposals re discounting training time have not paid any attention to the increase in value which accompanies accelerated training (through greater amounts of training time) or the need to move to a competency based wage system on an industry/enterprise basis.

 

4.8 To resolve the issue of training time and its influence on the remuneration levels of trainees/apprentices the government should be prepared to sponsor negotiations between all of the parties to determine how existing age based and time served training rates can be adjusted to a modern competency based wage system. At present we have put the jet engine of a competency based training system into a horse and cart wage fixing system.

5. Pay For Qualifications Held Or Those Used?

5.1 Several years ago the argument about pay for competencies acquired was going on strongly. Basically from the union-side it was argued that once an employee acquired higher level competencies he/she should straight away get a pay increase to recognise the higher skills. Employers responded by threatening to abandon the training reform process which they began to describe as a device for unions to get pay increases.

 

5.2 In an agreement reached in the employer-union Joint Industry Training and Education Council [JITEC] the issue of pay for competencies acquired was considered and agreed. Basically we agreed that :

 

i] The case for a wage increase is established by the use of the competencies, not just their acquisition

 

ii] The fact that a qualification is issued at a particular AQF level does not mean that the salaries relevant to the job have to be identical to other positions with the same AQF level

 

iii] Many employers and unions have reached agreements to provide incentives to employees to acquire higher qualifications by a "you get we pay" deal. These agreements are sensible and efficient and are recognised as appropriate in the JITEC agreement.

 

5.3 A copy of the JITEC agreement on industrial relations issues related to the training reform agenda is attached.

6. Abolition Of Declaration Of Vocations

6.1 The final significant issue which is causing concern to unions is the proposal to abolish the Declaration of Vocations in all States bar NSW.

 

6.2 The process of Declaration of Vocations has existed for decades in the apprentice area. It has been a valuable mechanism for ensuring that training opportunities were provided to young people and to be the touchstone for the payment of public funds for training.

 

6.3 The process of Declaration of Vocations has been misused in recent years when some States have prevented the spread of Traineeships by refusing to declare vocations even when there were established competencies, courses and demand from enterprises. While this problem is acknowledged it could have been overcome without the abolition of the Declaration of Vocations.

 

6.4 The ACTU and unions in the area are seriously concerned that the recent decision of Ministers [bar NSW] will lead to the dilution of trade skills as young people are employed without the establishment of an apprenticeship and given narrow enterprise specific skills to meet the requirements of the enterprise.

 

6.5 The use of Declaration of Vocations to establish the basis for the payment of public funds for vocational training is also a matter of concern.

7. Conclusion

7.1 There is a large amount of common ground between all those involved in the reform of the vocational training system. Most want a system which is :

 

i] relevant to the needs of the individual and the enterprise/industry

 

ii] less bureaucratic

 

iii] applicable to most school leavers

 

iv] available to senior secondary students

 

v] national in scope

 

vi] consistent in quality

 

vii] delivers a nationally recognised qualification

 

viii] able to be delivered in a flexible manner

 

ix] able to recognise competencies gained through experience

 

7.2 Governments, employers and unions can work together to deliver better outcomes in the future. Group Training Companies are becoming more important in this area and they also have an important role to play.

 

7.3 If we continue to consult and exchange views there is no issue which cannot be resolved to achieve the successful introduction of one of Australia's most important reform processes to prepare us for the most challenging century we have faced.

 

Bill Mansfield, Assistant Secretary, ACTU, Group Training Conference : Perth 22 October, 1996