Australian Technical Colleges Submission |
1. The ACTU supports the injection of additional funding specified in
the Bill into vocational education and training. The direction of funding into
pre-apprenticeship and apprenticeship training in schools is welcome as are the
increased options for VET in schools. This funding will assist in addressing one
aspect of the array of contributors to the skill shortage.
2. The ACTU
is concerned however that the particular use of the funding – on the
establishment of specialised technical colleges – does not optimise the
use of the funding. We are also concerned that there is no allocation of funding
to other aspects of need in the VET system – such as growth funding to
TAFEs.
3. The establishment of special technical colleges is, in our
submission, an inefficient use of funds and not the most appropriate allocation
of funds given other areas of need.
4. In addition the ACTU is concerned
that the Bill fails to address any issues with respect to equity of access and
outcomes of the colleges. It is possible that the technical colleges, because of
their emphasis on traditional trades, will become schools that attract boys and,
as such, disenfranchise young women in regional centres considering careers in
the traditional trades areas. Moreover the Bill fails to mention equity in the
achievement of its object.
5. The funding provided in the legislation over a five year period is
$343.6 million. For this it is anticipated the colleges will train up to 7,200
students in years 11 and 12 over that five year period. This provides for an
average funding per student of approximately $48,000.
6. This funding is
in addition to that already provided for students through normal funding
arrangements and is provided in recognition of the additional cost of
providing specialised vocational
training.[1]
7. It is the
submission of the ACTU that such funding could be better directed to areas such
as TAFE and other strategies to alleviate the skill shortage that will have a
more direct and immediate effect than the colleges.
8. It is of concern
to the ACTU that the level of funding provided to the colleges will result in
two tiers of educational institutions offering access to VET in schools. The
effect of non-college educational institutions not being able to match the level
of funding provided to the colleges may well result in schools withdrawing from
the VET in schools programs as they are unable to compete on an equitable basis
without the level of funding being provided to the colleges.
9. The
allocation of the funding would, in our view, be better used by supporting an
expansion of VET in schools/pre-apprenticeship training in schools generally,
thereby increasing access and participation.
10. The Bill seeks to achieve its objective of the establishment and
operation of the colleges through an industry-led approach to the provision of
education. But that is a misnomer – the provision of education will not be
industry led but employer led.
11. The term “industry-led”
has always been taken to mean the industry partners – employers and
employee representatives – working together within a framework designed to
improve the vocational education and training system for all users –
employers and employees – of that system. The use of the term
“industry-led” in the context of the object of the Bill is
misleading and implies a level of involvement by parties in the system that does
not exist.
12. This is not just some minor argument about language by
the ACTU. If the establishment of the colleges is, as claimed, a vital step
in addressing the skills needs that Australia is experiencing in a number of
traditional nation building
trades[2] then it is vital that
all the industry partners are involved in the process. The representatives of
workers, along with employer representatives, have a vital contribution to make
in addressing Australia’s skill shortage. It is not some fluke of nature
that the ACTU and affiliated unions were, and remain, a driving force in the
on-going development of the vocational education and training system in
Australia.
13. By the same reasoning the use of the description
“industry-led” to describe the governing council may also be
misleading. It is difficult to be definitive on this as there is no mandatory
membership of the governing councils of the colleges. Whilst the Bill may claim
they are “industry-led” there is nothing in the Bill that gives
confidence that this is the case. Given the misuse of the term (as set out
above) it is probably fair to claim that the governing council will not be
“industry-led”.
14. In addition, the Bill fails to clarify
the governance arrangements and accountabilities of the colleges and their
governing councils as an employer. This potentially leaves employees in a
precarious position in protecting their rights as employees as the status of the
employer may not be clear.
15. The ACTU is concerned by the potential effect the establishment of
the colleges will have on the local school system.
16. The establishment
of the colleges is premised on students in the local area shifting from their
current education stream into that offered by the college. The college will
therefore draw students away from existing schools and programs. This will
result in alterations to funding to those existing schools with the
consequential effects that may be felt from such a reduction in funding and
student numbers, including an ability to continue to offer the maximum range of
curriculum.
17. The ACTU is not aware of any evaluation undertaken on
the potential effects of the colleges on schools in the regional areas marked
for the colleges but believe that this is a matter that should be examined as a
matter of priority.
18. That none of this has been done is evidence of
the rushed and ill-considered nature of the proposal.
19. While the Bill says little of the governance arrangements for the
colleges, it does determine some of the employment arrangements – not as
might be thought with respect to guaranteed terms and conditions of employment
but through the nature of the employment contract.
20. The principle
object of the Bill is also to be achieved through encouraging an environment
of freedom and reward for effort...through flexible employment
arrangements. If this is code for ensuring that staff of colleges are
to be employed on individual contracts as we believe, without genuine choice of
collective bargaining, then this is in breach of ILO Convention
98[3].
21. This Bill links the
funding of the colleges to the offering of AWAs to staff. Subclause 6(2) enables
the Minister to specify conditions for payment to be made in the case of
colleges operating as State schools and subclause 7(5) of the Bill makes it
clear that, in determining criteria for the funding of non-government colleges,
the minister must have regard to the objects of the Act.
22. The wording
of the Bill makes it clear that the government will, where it has the capacity
to do so, impose AWAs as a condition of funding.
23. The imposition of
such a requirement takes away from the “industry-led” governing
council the capacity to determine, with their employees, the most effective form
of agreement making for them at their workplace. The “industry-led”
governing council is, it would appear, government controlled.
24. The
Minister claims that the choices confronting workers with respect to their wages
and conditions are to work for the award wage if they so want or if they
are a teacher of quality then they can negotiate a higher wage and a
better wage.[4] He then claims
that the relevant union is arguing for lower wages for
teachers[5]. The Minister, as so many
other do, assumes that AWAs deliver a higher wage and a better wage. The
underlying assumptions of this statement of course are that individual contracts
necessarily deliver higher and better wages than collective agreements and that
collective bargaining somehow suppresses the wages that would otherwise be paid
to workers. Public school teachers are paid well above the rates of pay in the
federal teachers awards through improvements negotiated by their union
representatives in collective agreements. This is true, with few exceptions, for
employees in the private sector as well.
25. The ACTU has made an
extensive submission on the effect of AWAs in our submission to the Committee
with respect to the Skilling Australia’s Workforce Bill 2005.
Relevant excerpts from that submission are at Attachment 1 to this
submission.
26. While the Bill seeks to impose individual contracts it
does not allow workers to choose their preferred form of agreement making and
have that accepted or enforced in any way. The Bill places no requirement on the
employer (whether that is the governing council or the principle of the college)
to respect the wishes of employees should they seek a collective agreement. In
fact it requires that this preference by overridden.
27. As we stated in
our submission to the Skilling Australia’s Workforce Bill 2005 it
is improper for the government to use legislation designed to address a skills
issue to achieve their ideological obsession with individual workplace
agreements.
28. The causes of, and solutions to, Australia’s current skill
shortage in the trades, and in the area of child care (which is not addressed by
the colleges) are complex and not open to single, simplified solutions. And yet
this is what the colleges suggest.
29. The colleges will not cause a
skilled tradesperson to come into the labour market until 2010 (year 12
completed in 2007 at the earliest respectively with the finalisation of the
apprenticeship to occur after that time). This will do nothing to assist
industry now.
30. The ACTU has consistently identified some of the
reasons for the skills shortage and sought to contribute to solutions through a
range of measures we believe form the first steps in addressing the shortage.
These include: an examination within each industry sector where a skills
shortage has been identified and the development of plans specific to that
industry to address that shortage; additional funding from governments for
additional TAFE places and to better match apprentices to vacancies; and
additional employer subsidies to recognise increased investment in
apprenticeships in areas of skill shortage. These proposals do not rely on high
infrastructure costs or the duplication of existing education and training
resources. What they will do however is deliver skilled workers to industry in
the shortest possible time.
31. The contrast with the proposition put
forward in the Bill is clear.
1.1 Australian workers have not taken up with vigour the Government’s
preferred individual contracts so the Government instead will use this
legislation to have such individual contracts forced on the workforce wherever
it can.
1.2 Individual contracts do not lead to greater productivity,
higher wages outcomes or better and improved conditions of employment for
workers who sign those AWAs.
1.3 Claims by the Government that
individual contracts offer better pay and
conditions[6] and the BCA that they
boost productivity[7] are not based on
any sound or rigorous analysis of individual contracts and other forms of
determining pay and conditions of employment.
1.4 In analysing AWAs and
comparing outcomes to workers who are on collective agreements and awards it is
necessary to ensure that the comparison made is valid. Many employees on
individual contracts occupy professional and managerial positions on higher than
average incomes.[8] This is, of
course, not the profile of workers on collective agreements. This profile of
workers on AWAs therefore distorts any comparison between workers on AWAs and
workers on collective agreements or awards.
1.5 The capacity to analyse
the effect of AWAs is compromised by the secret nature of those AWAs. Unlike
collective agreements they are not open to public scrutiny and therefore public
analysis.
1.6 The patterns of experiences of managerial and
professional employees on AWAs compared to ‘ordinary’ workers are
explored by Peetz.[9] Whilst he does
not compare the Professional/managerial group to the ‘ordinary’
group of workers but rather examines the issues for the ‘ordinary’
workers on AWAs compared to a control group, the separation of the AWA employees
into two distinct categories does provide some insight and support for the
conclusion that managerial and professional workers have a different view and
experience with AWAs to ‘ordinary’ workers. This difference is
driven in part by the earning capacity and bargaining power held by managerial
and professional workers compared to ‘ordinary’ workers.
1.7
This differing profile helps explain why the earnings of workers on individual
contracts may appear to be higher than those on collective agreements – in
fact up to 35 per cent higher[10] in
some cases. If just the private sector is considered the earnings of workers on
AWAs is actually around two per cent less then those on collective agreements
and, for female workers are 10 per cent less than for those on collective
agreements.[11]
1.8 Recent
ABS data confirms that, when non-managerial workers are considered, AWAs provide
a lower average hourly rate of pay than collective
agreements.[12]
1.9 Peetz,
in a further study, shows that productivity was in fact higher during the highly
regulated pre-accord period[13]. In
examining the mining industry – who claim a high industrial contract
density – productivity has been very low since 1996. Peetz does not say
that AWAs cause high or low productivity, what he does show is that there is no
link between deregulation of the labour market and productivity.
1.10
Workers forced on to AWAs through this legislation will be further disadvantaged
should the government’s proposed workplace reforms be implemented. The
proposed legislation will allow for a real reduction in terms and conditions of
employment for workers on AWAs compared to their terms and conditions today.
Under the regime set out in the Workplace Relations Act 1996 as at July 2005
AWAs must pass a no disadvantage test as measured against the relevant award.
The relevant award currently contains 20 allowable matters including skilled
based career paths, redundancy pay, holiday loading, public holidays, additional
payment for work on weekends, public holidays
etc[14]. An AWA cannot disadvantage
a person – on an overall basis – as compared to the
award.
1.11 Under the government’s new proposals the AWA cannot
disadvantage a person compared only to four specified minima and the minimum
rate of pay. Even without detailed analysis it is obvious that an AWA under the
new proposals can reduce a raft of conditions of employment and pass the
proposed new no disadvantage test as compared to the current test.
1.12
In addition, the proposed industrial relations legislation will enable an
employer to require a future employee to sign an AWA as a condition of
employment. Pronouncements of the ‘voluntary’ nature of AWAs and the
right of employees to choose their preferred form of employment regulation
without discrimination are meaningless to these workers.
1.13 The
legislation provides no rights for workers who chose to enter into a collective
agreement and have their union negotiate that agreement on their behalf. Nor
does it require, should the employees so choose, that the employer respect these
wishes of the employees to bargain collectively or to be represented by their
union in that bargaining.
1.14 Article 4 of ILO Convention
98[15] requires that Australia take
appropriate measures to encourage and promote collective bargaining. The
requirement that AWAs be offered to staff undermines the right to collective
bargaining as it fails to encourage collective bargaining.
1.15 In 2000
the Committee of Experts on the Applications of Conventions and Recommendations,
having heard from the Australian Government called on the Government to take
measures to ensure that workers in Australia are adequately protected against
discrimination based on negotiating a collective agreement and that the
Government take steps to amend the WRA to ensure that collective bargaining not
only be allowed but be encouraged at a level determined by the bargaining
parties.[16] These views were
re-iterated in the 2005 Country Observations of the Committee.
1.16 In
no sense can this legislation be seen to effectively address the concerns
expressed by the Committee of Experts. In fact the legislation does the opposite
of that sought by the Committee of Experts. It does not encourage collective
bargaining nor does it protect workers from discrimination if they participate
in collective bargaining. This legislation in fact penalises workers who
participate in collective bargaining by removing funding from their State TAFE
system.
1.17 As recently as June 2005 the Australian Government has been
asked by the Committee of the Application of Standards and Recommendations to
provide a detailed report to the Committee of Experts on all elements
relating to the application of the Convention, in both law and practice,
including the discussion held in the present Committee, taking into account all
matters relating to the impact of the legislation on the effective recognition
of the right to collective
bargaining.[17]
1.18
Whilst this requirement may be seen to be directed at the Workplace Relations
Act 1996 in particular, the inclusion in funding legislation of the
requirement to offer AWAs is an example where the practice in Australia is
contrary to the Convention requirements.
[1] Department of Education,
Science and Training, Request for Proposal for Establishment and Operation of
Australian Technical Colleges
[2]
Australian Technical Colleges (Flexibility in Achieving Australia’s Skill
Needs) Bill 2005, Explanatory
Memorandum
[3] ILO Convention 98 on
the Right to Organize and Collective
Bargaining.
[4] Minister for
Vocational and Technical Education, Gary Hardgrave, Meet the Press,
Channel Ten, 17 July 2005
[5]
ibid
[6] Advertisements by
Government in newspapers on 9-10 July 2005 – The Weekend
Australian page 6
[7] Business
Council of Australia (BCA) (2005), Workplace Relations Action Plan: For
Future Prosperity, BCA
Melbourne
[8] Peetz, D., (2004)
How well off are employees under AWAs? Reanalysing the OEA’s employee
survey Association of Industrial Relations Academics of Australia and New
Zealand Conference Papers, Volume 1
[9]
ibid
[10] ABS Employment,
Earnings and Hours survey as reported in Peetz (2004), see note
4.
[11] Peetz, D. 2004 How
well off are employees under AWAs? Reanalysing the OEA’s employee
survey Association of Industrial Relations Academics of Australia and New
Zealand Conference Papers, Volume
1
[12] ABS, Employee Earnings
and Hours Cat. No.
6306.0
[13] Peetz, D., (2005)
Is individual contracting more productive? University of Sydney, http://www.econ.usyd.edu.au/wos/IRchangesreportcard/
, June 2005.
[14] Allowable award
matters are set out in s. 89A of the Workplace Relations Act
1996
[15] ILO Convention on
the Right To Organize And Collective Bargaining
[16] ILO, Report of the
Committee of Experts on the Application of Standards and Recommendations, ILC
88th Session 2000, Report III (Part 1A), pp 222-5
[17] International Labour
Conference, Provisional Record, Ninety-third Session, Geneva, 2005