1
IN THE FAIR WORK COMMISSION
Matter No.: AM2012/18 and others
Modern Awards Review 2012 – Apprentices, Trainees and Juniors
CFMEU (Construction and General Division) Submission in Support of
Common Matters Applications
31st January 2013
Lodged by: Stuart Maxwell, Senior National Industrial Telephone:
Officer, CFMEU (Construction and General Division)
Fax:
Address for Service: Level 9, 215-217 Clarence St., Email:
Sydney, NSW
02 8524 5800
02 8524 5801
smaxwell@fed.cfmeu.asn.au
hearings@fed.cfmeu.asn.au
2
1.
Introduction
1.1
The CFMEU (Construction and General Division) (the “CFMEU”) has made separate
applications to vary the Building and Construction General On-site Award 2010 (AM2012/129)
and the Joinery and Building Trades Award 2010 (AM2012/127) as part of the Modern Awards
Review 2012 (the “Review”). These applications deal with a number of issues but are
particularly focused on seeking variations in regard to wages and conditions applying to
apprentices and trainees. We are also a joint applicant in AM2012/135 which is the common
application by the ACTU and other unions to increase apprentice wage rates.
1.2
On 10th December 2012 the Full Bench that has been established to determine the
applications regarding apprentice and trainee matters issued a Statement and Directions
([2012] FWAFB 10395) as to how the Review relating to apprentices, trainees and juniors
would proceed. The Full Bench decided that it would deal with matters common to multiple
applications first. They decided that the common matters would be as follows:
“The common matters are those raised in the application by the Australian Council of
Trade Unions (ACTU); matters raised in the applications by the Australian
Manufacturing Workers’ Union (AMWU), including those matters raised in the
applications by the Construction, Forestry, Mining and Energy Union and the
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and
Allied Services Union of Australia that are the same as or similar to those raised in
the AMWU applications; matters relating to competency-based wage progression
raised in the applications relating to the building and meat industries; and the
matters relating to the National training Wage Schedule raised in the application by
the Australian Industry Group.”
The remaining award-specific issues raised in the applications which have been referred to the
Full Bench would be dealt with after the common matters.
1.3
The Full Bench also requested that the ACTU provide to Fair work Australia a table of the
common matters. On the 17th December 2012 the ACTU filed such a table 1 (“the ACTU
Common Claims document”). As identified in this table the common matters that are
included in the separate CFMEU applications are the following:

Item 1 – Rates of pay for junior apprentices

Item 3 – Competency-based wage progression

Item 4 – Suspension, cancellation and termination

Item 5 – Training requirements

Item 6 – Payment for specific costs associated with attending training

Item 7 – When training time is work time and what follows from this

Item 8 – Recognition of service

Item 12 – Probation
The specific clauses sought by the CFMEU in our applications are set out in the relevant
schedules that are contained within the ACTU Common Claims document.
1
http://www.fwc.gov.au/documents/awardmod/review/AM201218&ors_actu_commonclaims.pdf
3
1.4
In accordance with the Full Bench Statement and directions of 10th December 2012 this
submission is made in support of our applications relating to the common matters identified
in 1.3 above. Further submissions will be made, at the appropriate time, in regard to the
remaining matters arising from our applications when directed to do so by the Full Bench.
2.
Issues of Jurisdiction
2.1
In earlier proceedings prior to the allocation of these applications to the Full Bench, the
President Justice Ross, in the Statement of the 14th June 20122, encouraged the parties with an
interest in the relevant awards affected by the applications to,
“”meet to discuss the issues relevant to the application in relation to that award with
a view to identifying:
 the provisions of the award that are affected and the manner in which the
applicant(s) seeks to change the relevant provision;
 the extent of consensus reached; and
 any jurisdictional issues.”3
The President also requested that the parties provide a written report on the outcome of
these discussions.
2.2
In accordance with the timetable set by the President the CFMEU provided a written report in
regard to the discussions on the Building and Construction General On-site Award 2010 and
the Joinery and Building Trades Award 2010 held on 27th June 2012. This report along with the
reports for the discussions concerning other awards can be found on the FWC website4. The
common themes from all of these reports are that no consensus was reached and a number of
parties raised jurisdictional issues in regard to most matters covered by the applications.
2.3
The main jurisdictional argument advanced so far by the employers against our applications is
that the matters covered should be dealt with by the legislative provisions of the States and
Territories and not by the modern awards. The MBA for example claim that,
“The jurisdiction of the tribunal does not extend to matters that relate to regulation
of the conditions attached to training contracts or the manner in which State and
Territory Governments regulate apprentices and trainees.”5
2.4
2
It would appear from these previous submissions that the employers have misinterpreted the
interaction arrangements between the Fair Work Act 2009 and the State and Territory training
legislation, as set out in ss.26-29 of the Fair Work Act 2009, and 1.13 to 1.15 of the Fair Work
[2012] FWA 5102
Ibid at paragraph [3]
4
http://www.fwc.gov.au/documents/awardmod/review/AM201218&ors_apprentices_reports.pdf
5
http://www.fwc.gov.au/documents/awardmod/review/AM201218&ors_furthersub_MBA.pdf at paragraph
3.4
3
4
Regulations 2009. This is not surprising given that a similar issue arose in regard to workplace
health and safety matters recently considered by another Full Bench.6
2.5
In their decision of 12th December 2012 ([2012] FWAFB 10080)on workplace health and safety
matters, the Full Bench said the following:
“Division 2 of Part 1-3 of the Act
[51]
The MBA submission in relation to Division 2 of Part 1-3 of the Act
mischaracterises its purpose and effect. It is necessary to examine the interaction
between the Act, awards and agreements and laws regulating OHS. Section 26 of the
Act provides that it applies to the exclusion of State and Territory industrial laws so
far as they would otherwise apply in relation to a national system employee or a
national system employer. Section 27, however, provides that a number of State and
Territory laws are not excluded by s.26. In particular s.27(1)(c) provides that State
and Territory laws in relation to specified “non-excluded matters” are not excluded.
Section 27(2)(c) deals with OHS, including it as a “non-excluded matter”.
[52]
Section 29 is relevant. It reads:
“29 Interaction of modern awards and enterprise agreements with State and
Territory laws
(1)
Modern award or enterprise agreement prevails over a law of a State or
Territory, to the extent of any inconsistency.
(2)
Despite subsection (1), a term of a modern award or enterprise agreement
applies subject to the following:
(a)
any law covered by subsection 27(1A);
(b) any law of a State or Territory so far as it is covered by paragraph 27(1)(b), (c)
or (d).
(3)
Despite subsection (2), a term of a modern award or enterprise agreement
does not apply subject to a law of a State or Territory that is prescribed by the
regulations as a law to which modern awards and enterprise agreements are not
subject.”
[53]
While s.29(1) of the Act provides that, as a general rule, modern awards
prevail over State and Territory laws to the extent of any inconsistency, s.29(2)
provides an exception in relation to a term of an enterprise agreement which is
inconsistent with, relevantly, a law of a State or Territory covered by s.27(1)(c).
Section 27(1)(c), as we have already noted, refers to non-excluded matters, one of
which is OHS.i
[54]
The effect of these provisions is that in the event of inconsistency between a
term of a modern award dealing with OHS and State and Territory OHS legislation
the latter prevails. To the extent that a provision in a modern award purports to
reduce an entitlement under the relevant State and Territory legislation, the
6
[2012] FWAFB 10080
5
provision is of no legal effect. As the Government noted, this is consistent with
paragraph 149 of the Explanatory Memorandum:
“149. However, subclause 29(2) provides that a modern award or enterprise
agreement is subject to any of the State or Territory laws that are saved by clause 27,
as well as any State or Territory laws prescribed by the regulations. This means that a
modern award or enterprise agreement cannot diminish, but may supplement rights
and obligations under these laws.”
[55]
Provided that a modern award term must or may be included in modern
awards under Division 3 of Part 2-3 of the Act, its inclusion is lawful, even if it reduces
an entitlement under the relevant State and Territory legislation saved by s.27.
Division 2 of Part 1-3 of the Act does not render such a term unlawful, rather it
renders the provision to be of no legal effect. Although it is unnecessary, we note for
completeness, we are not persuaded that any of the provisions identified by the MBA
in the On-site Award or other modern awards reduces an entitlement under the
relevant State and Territory legislation saved by s.27.
[56]
It is clear that Division 2 of Part 1-3 of the Act does not deal with the
lawfulness of the content in modern awards or any other instruments made under
the Act. Its purpose is to provide interaction rules to operate in conjunction with
ss.109 and 122 of The Constitution, with s.26 providing an express statement of an
intention to cover a field and s.27 setting out the exceptions to that exclusivity set
out in s.26. Sections 26 to 30 are not directed to nor have the effect of enlarging or
confining the matters which may lawfully be contained in a modern award. They are
concerned with resolving issues relating to inconsistency of laws under s.109 of The
Constitution and have nothing to do with the lawfulness or otherwise of what may be
contained in a modern award.
[57]
We reject the proposition that Division 2 of Part 1-3 of the Act has the effect
that provisions which “directly regulate” health and safety may not lawfully be
included in modern awards. Division 2 of Part 1-3 of the Act raises no question of
power or lawfulness of such provisions in modern awards.”
2.6
We submit that the above reasoning by the Full Bench is relevant to these proceedings as
training arrangements are referred to in s.27(2)(f) of the Fair Work Act 2009, however the
extent of the non-excluded matter is more limited in this case as s.27(2)(f) provides,
“(f)
2.7
training arrangements, except in relation to terms and conditions of
employment to the extent that those terms and conditions are provided for
by the National employment Standards or may be included in a modern
award.”
The practical effect of ss.27-29 of the Fair Work Act 2009, and 1.13-1.15 of the Fair Work
Regulations 2009, is therefore as follows:

any provision of a law of a State or Territory that deals with training arrangements is
excluded if it deals with terms and conditions provided for by the National
Employment Standards or may be included in a modern award;
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
A provision of State or Territory law that deals with the suspension, cancellation or
termination of a training contract that is entered into as part of a training
arrangement is not excluded by s.26 of the Fair Work Act 2009;

A provision of a State or Territory law that deals with a period of probation of an
employee that is part of a training arrangement, but which is not a period of
probationary employment, is not excluded by s.26 of the Fair Work Act 2009; and

A provision of a law of a State or Territory that deals with training arrangements,
that is not excluded, cannot be reduced or diminished by a provision of modern
award.
2.8
The only jurisdictional constraints therefore on including matters in modern awards dealing
with apprentices and trainees are that they must be terms and conditions that can be included
in modern awards.
3.
Rates of Pay for Junior Apprentices
The Claim
3.1
The CFMEU’s claim for the rates of pay for junior apprentices is set out in pages 11 to 14 of
the ACTU’s Common Claims document. Our claim has two elements, firstly a claim for the
minimum rate of pay for apprentices to be based on 60% of the tradespersons minimum
classification rate in the first year and 65% in the second year (with the applicable allowances
prescribed in the award then added on). (NB It should be noted that the CFMEU is not seeking
a change in the minimum wage rates for 3rd and 4th year apprentices.) The second part of our
claim is for the introduction of a competency based wage progression model which includes a
default time based wage progression (which is the current model that applies). The second
part of our claim is dealt with in section 4 of this submission.
3.2
In regard to the first part of the CFMEU’s claim, the increase in the first year minimum wage
rate (exclusive of allowances) to 60% of the trade rate, this is common with the ACTU’s claim
and to the majority of claims of other unions. Accordingly the CFMEU supports and relies on
the submissions of the ACTU and other union’s that deal with this aspect of our claim. The
claim for a 2nd year apprentice minimum wage rate of 65% of the trade rate is also common
with a number of other union applications.
3.3
That the CFMEU has made this application to increase the first year apprentice wage rates
should not come as a surprise to employers in the building and construction industry. The
CFMEU has for many years called for substantial increases in apprentice wage rates. In 2004
we made an application (C2004/279) to vary the National Building and Construction Industry
Award 2000 to totally revamp the wages and conditions for apprentices and trainees covered
by that award, including a competency based wage structure. Unfortunately that case was
brought to an abrupt halt by the passing of the Workplace Relations Amendment (Work
Choices) Act 2005 in December 2005, under which the power to set minimum wages was
transferred from the Australian Industrial Relations Commission to the Australian Fair Pay
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Commission. The union however pursued a similar claim in the NSW Industrial Commission
(Matter no. IRC 5815/2005) which was resolved by a conciliated settlement.
3.4
In the present matter the CFMEU submits that the current first year apprentice wage rates
(for non-adults) in the awards for which we have made application do not provide a fair and
relevant safety net, particularly when the relative living standards and the needs of the low
paid are considered. Accordingly we submit the awards do not meet the modern award
objective as set out in s.134(1)(a) of the Fair Work Act 2009.
3.5
We submit that a first year apprentice minimum wage of $317.75 per week7 (excluding
allowances) is not a fair and relevant safety net that meets the needs of the low paid. If the
wage rate is to meet the needs of the low paid, in this case the first year junior apprentices,
then a minimum wage of $423.66 needs to be set (this equates to 60% of the minimum
classification rate for a tradesperson).
3.6
The CFMEU has arrived at the figure of $423.66 after taking into account a number of factors
which include the results of a CFMEU survey of apprentice living costs conducted in 2011/12,
surveys and research undertaken by other unions, previous research undertaken for Group
Training Australia, the impact of the current wage rates on the completion rates of
apprentices, and the level of other training wages.
History of Apprentice Wage Rates in the Building and Construction Industry
3.7
Apprentice wage rates and other terms and conditions applying to apprentices have been
included State and Federal awards for over 100 years. In 1907 in Re Bagshaw8 President
O’Connor of the Commonwealth Court of Conciliation and Arbitration granted the applicant,
J.S. Bagshaw and Sons Ltd (a manufacturer of agricultural implements in Adelaide), an order
for exemption under the Excise Tariff 1906 (no. 16 of 1906), on the grounds that the rates of
wages paid and the conditions of labour in their factory were fair and reasonable. The agreed
rates contained daily rates expressed in dollar amounts for various tradespersons including
blacksmiths, fitters, carpenters, painters and wheelwrights, and for apprentices and learners
for the first year through to the fifth year.
3.8
In 1921 Deputy President Justice Powers in Amalgamated Society of Carpenters and Joiners v
Adelaide Steam-ship Co. Ltd and Others9, handed down an award covering carpenters and
joiners engaged in the shipping industry. This award at clauses 16 to 23 included wages and
conditions for apprentices. In terms of wage rates the Deputy President set those at fixed
dollar amounts which increased every 6 months (see clause 21).
3.9
In 1922 Deputy President Webb, in Amalgamated Society of Carpenters and Joiners of
Australasia v Anthony and Others10, handed down an award for the industry of carpenters and
joiners. In making the award the Deputy President reluctantly refused the unions claim “that
all boys employed in the industry shall be apprenticed” stating,
7
This is calculated at 45% of the Trade minimum classification rate of $706.10
1CAR122
9
15CAR239 – see Tab 1 in the CFMEU Authorities Folder
10
16CAR1136 – see Tab 2 in the CFMEU Authorities Folder
8
8
“I would readily grant this claim if I were able to do so. All boys who are employed in
skilled trades have a right to become skilled workmen. It is greatly in the interest of
the community that the education and training of skilled workmen should be
encouraged in every skilled trade but especially is this so in the building trade.
..........
There is hardly any subject more pressingly urgent from the point of view of the
people of Australia than the housing problem. The lack of suitable housing
accommodation is one of our greatest problems. We ought to be educating an army
of skilled builders for the purpose of meeting this problem. I am satisfied that a
scheme for indenturing a boy to the industry would be successful if the Legislatures
made it possible. I am also satisfied that if I make an award that none but indentured
boys are to be employed such award would greatly restrict the number of boys who
are at present engaged in the industry, and would accentuate the very evils which I
wish to avoid. Boys ought to be apprenticed and properly taught. If I made the award
as asked for it might force the Legislatures to turn their attention to this vastly
important subject, but I think that at the present moment the wisest course is to call
attention to the problem in the hope that Legislatures will take the matter into
consideration and do something which will guarantee a supply of skilled workmen
for the needs of the quickly-growing nation.”11
3.10 The award that was made, in clause 17(e), contained the following minimum wages for
apprentices:
‘’(e)
Apprentices’ wages shall be not less than the following:First year
Second year
Third year
Fourth year
Fifth year
..
..
..
..
..
..
..
..
..
..
..
..
..
..
..
20s. per week.
25s. per week.
35s. per week.
41s. per week.
60s. per week.”
Again the rates were expressed as flat dollar amounts and increased with each year of the
apprenticeship. The other significant point from this case is that the Deputy President
reserved for further consideration the unions claim for the inclusion in the award of the Form
of Indenture for apprentices.12
3.11 In 1924 Deputy President Webb, in Amalgamated Society of Carpenters and Joiners of
Australasia v Allan and Others13, made a new award for carpenters and joiners which
extended the coverage to include respondents in New South Wales. This award included the
same wage rates as the 1922 award and added the Form of Indenture. In regard to
apprentices in NSW the Deputy President granted the union’s request that these apprentices
not be included in the award, stating
11
16CAR1146-1147
16CAR1158
13
20CAR311 – see Tab 3 in the CFMEU Authorities Folder
12
9
“The existing award makes certain provisions with regard to apprentices. Much
attention is being given to the problem of apprentices, and in New South Wales a
comprehensive scheme for solving the problem of apprenticeship has been drawn up,
and the claimant organization informs me that it is desirous that the scheme should
have a fair trial and asks me to make a provision that the award shall not apply to
apprentices in New South Wales. This provision will therefore be made in the
award.”14
3.12 In 1946 Judge Kelly issued an order which made the Carpenters and Joiners Award 194615 (also
known as the Ackland Award). In this award we see the introduction of apprentice wage rates
calculated as a percentage of the total basic wage of the tradesperson starting at 20% for the
first 6 months (see clause 39(f)) and rising to 25% in the second 6 months of the
apprenticeship.
3.13 In 1947, following an application by the Building Workers Industrial Union of Australia, Justice
Kelly varied the Carpenters and Joiners Award to include higher wage rates for apprentices in
Victoria.16 These higher rates were as follows:
Percentage of the total basic wage
For the first year
For the second year
For the third year
For the fourth year
For the fifth year
28 1/3
38 1/3
53 ¼
73 ¾
93 ¼
The rates applying in South Australia and Tasmania were:
Percentage of the total basic wage
For the first six months
For the second 6 months
For the second year
For the third year
For the fourth year
For the fifth year
20
25
30
45
65
85
3.14 In 1949 His Majesty the King in the Right of the State of Tasmania made an application to vary
the Carpenters and Joiners Award 1946 which sought the transfer of certain apprenticeship
conditions from the purview of the award to the Tasmanian Apprenticeship Commission and
increased rates and a tool allowance for apprentices. The matter was initially dealt with by
Commissioner Galvin17 who granted the transfer arrangement by varying the award as follows:
14
20CAR314
56CAR238 – see Tab 4 in the CFMEU Authorities Folder
16
58CAR734 – see Tab 5 in the CFMEU Authorities Folder
17
66CAR390 – see Tab 6 in the CFMEU Authorities Folder
15
10
“By deleting sub-clause (kk) of Part II of clause 39 and by inserting in lieu thereof the
following:
(kk) Notwithstanding any of the provisions of this clause, apprentices to who any
provision of the Apprenticeship Commission of Tasmania relates shall, in respect of
their employment, be bound by and entitled to the benefits of any such provisions.”
3.15 The other variations sought were subsequently dealt with by Commissioner Portus who
accepted the employers argument that an award should not be varied to confer benefits on
employees who were members of a deregistered organisation (the BWIU) and refused the
variations sought.
3.16 On 30th January 1953 Commissioner Portus made the Carpenters and Joiners Interim Award
195318. This new award contained the following provision in regard to apprentice wage rates:
“(f)
The minimum ordinary rate of payment to be paid to apprentices shall be in
accordance with the percentages set out in the table herein of the current minimum
weekly aggregate of the contemporaneous basic wage for the locality in which they
are employed, plus a margin for skill of £2 6s. plus a tool allowance of 5s. plus war
loading of 6s.
Table.
Percentage per week
For the first six months
25
For the second 6 months
30
For the second year
35
For the third year
50
For the fourth year
65
For the fifth year
85
(g) Provided that rates fixed in sub-clause (f) hereof shall not apply to mixed
industries, the fixation of the rates for which is hereby reserved.
The said minimum rates shall be calculated to the nearest 6d. per week, any fraction
not exceeding 3d. to be disregarded. ”
3.17 In 1960 Commissioner Webb made the Stonemasons (South Australia and Victoria) Award
1960.19 This award contained the following provisions in regard to apprentices:
“29 – APPRENTICES
(a) Youths entering the trade of a stonemason shall be indentured, if between 15
and 17 years of age for a period of five years; if over 17 years of age, for a period
of four years.
...........
(f) The minimum ordinary weekly rates of wages to be paid to apprentices shall be
in accordance with those percentages of the current total minimum ordinary weekly
18
19
75CAR535 – see Tab 7 in the CFMEU Authorities Folder
93CAR729– see Tab 8 in the CFMEU Authorities Folder
11
rate of wages for stonemasons as prescribed in clauses 24 and 25 of this award, as
set out in the following table:Four year term.
Five year term.
Percentage.
Percentage.
For the 1st six months of the apprenticeship
25
25
For the 2nd six months of the apprenticeship
30
30
For the 2nd year of the apprenticeship
45
40
For the 3rd year of the apprenticeship
65
50
For the 4th year of the apprenticeship
85
65
For the 5th year of the apprenticeship
85
The amounts derived from the foregoing table shall be computed to the nearest 6d.
per week, any fraction not exceeding 3d. to be disregarded.”
3.18 In 1960 Senior Commissioner Chambers varied the Carpenters and Joiners Interim Award 1953
by increasing the margin for skill (to which the percentage was applied) from £2 6s. to £4
16s.20 The same variation deleted the reference to the war loading of 6s.
3.19 In July 1968 the Report of the Inquiry Regarding the Functioning of the Apprenticeship System
in New South Wales (the Beattie Report) was released. This comprehensive report of over 600
pages arose from a referral from the Minister for Labour and Industry to the Industrial
Commission of NSW to consider and report on a range of matters related to the
apprenticeship system in NSW. The report contained a number of recommendations including
the following on wages:
“19.20 RECOMMENDATIONS: WAGES (9.38)
1. Minimum rates of wages for apprentices should be fixed by the processes of
conciliation and arbitration.
2. An industrial tribunal should aim to make apprentices’ wages sufficiently
attractive to induce young people and their parents to look on apprenticeship
with favour but not so attractive to them as to deter employers from playing a
part in apprenticeship training.
3. Because the present costs of training are such that in many cases employers
cannot recoup their out-of-pocket expenses from the productive work done by
apprentices provision should be made by governments for new financial
incentives for employers to take apprentices. In the absence of such incentives,
any appreciable improvement in the wage levels at present prescribed for
apprentices will constitute a pronounced deterrent to employers to engage
additional apprentices.
20
95CAR18 – see Tab 9 in the CFMEU Authorities Folder
12
4. Until provision is made for such incentives, the deterrent effect of higher wage
costs, particularly on small employers, who collectively employ a substantial
proportion of the apprentice work force, should be carefully weighed by a wagefixing tribunal.
5. When fixing wages for apprentices there are a number of considerations which
the tribunal should bear in mind:
(a) It is proper for the tribunal to assume that, at least for some of the
earlier years of the apprenticeship, the apprentice will be living at home,
and that he will only gradually become self-supporting and at the most
will only be self-supporting, that is to say, not married. If the minimum
wage scales are fixed on this basis, they will provide fair remuneration
for apprentices except those who are required to live away from home
and who need special provision to be made for them. See as to this
recommendation 6.
(b) The value of the work done by apprentices is a factor to be considered
when fixing their wages and, in particular, when deciding on the proper
increments to be awarded at the conclusion of the various stages of the
apprenticeship.
(c) It is also proper, when fixing apprentices’ wages, to take into account the
fact that the apprentices are receiving training which will be of value to
them during their working life and that the apprentices are released by
their employer in ordinary working hours to attend for supplementary
instruction at technical colleges.
(d) Account should be taken of the security of an apprentice’s employment,
of the fact that the apprentice does not lose time and of the other
conditions of his employment.
(e) Any factor pertinent to a particular class of apprentice, such as an
obligation to provide or replace tools, should be considered.
(f) It is desirable that the wage rates fixed for apprentices should bear a
reasonable relationship to the rates awarded for tradesmen in the trade.
(g) It is desirable that, so far as is practicable, substantial discrepancies
between the level of wages prescribed for apprentices in different
industries should be avoided, but it is too much to hope that uniformity
in rates can be achieved even in awards made under the Industrial
Arbitration Act.
(h) It is desirable that in an industry where there are a number of different
apprenticeship trades, for example the metal industry or building
industry, the rates for apprentices in the various classes of trades should
be the same, but there may be exceptions to this. In the case of trades
which are failing to attract a reasonable number of apprentices, it may
13
become necessary to fix higher than standard rates as a means of
attracting apprentices.
(i) An establishment apprenticeship council should fix uniform wage rates
for all apprentices employed in the establishment without trade
distinctions, but differences in matters such as tool allowance may
properly be made.
6. Consideration should be given to an approach to the Commonwealth
Government by the Government of New South Wales to have the
Commonwealth scheme for the payment of living-away-from-home allowances
to country apprentices in certain trades extended to apprentices whose home is
in the country but who work in the main industrial areas of the State.
7. The considerations referred to in recommendations 2 and 5 cannot be taken into
account when fixing wages for apprentices if a tribunal fixes wages as
percentages of whatever the wages may happen to be for the relevant class of
tradesman, and the percentage system should not be adopted.
8. Not less frequently than once in every 3 years each apprenticeship council
should, either on its own initiative or on application to it, review the wages
payable to apprentices in the trade with which it is concerned.
9. Whenever the Commonwealth Conciliation and Arbitration Commission
determines that wage rates generally should be increased on economic grounds
and the decision of that Commission is followed by the Industrial Commission of
New South Wales in relation to marginal rates generally under State awards,
each apprenticeship council should act on its own initiative to adjust wage rates
for apprentices in an appropriate manner.
10. Apprenticeship councils should consider the desirability of providing in the wagescales for apprentices increments at 6-monthly rather than yearly intervals.
11. Apprenticeship councils should give favourable consideration to the provision of
additional payments for proficiency to apprentices who pass the annual
examinations in their trade courses at a technical college at a reasonable
standard to be determined.
12. In fixing rates of wages for apprentices in a trade or occupation in which the
work has usually been performed by male apprentices, an apprenticeship council
should fix the same rates of pay for female as for male apprentices (see par 5.14
(9)).
13. It is undesirable that two separate industrial tribunals, one Commonwealth and
on State, should have the function of fixing wage rates for apprentices and it is
also undesirable that the wages of apprentices should be fixed in proceedings
involving the settlement of an industrial dispute. It is preferable that the fixation
of apprentices wages be left to State authorities and representations should be
made to the Commonwealth Government to amend the Commonwealth
14
Conciliation and Arbitration Act to exclude apprentices from the jurisdiction of
the Commonwealth Commission.”21
It is interesting to note that until the conciliated settlement in the CFMEU’s application to vary
the Building and Construction Industry (State) Award in 2006 (see 3.29 below), the apprentice
wage rates in NSW were not based on percentages of the trade rate.
3.20 In 1969 Commissioner Holmes of the Australian Conciliation and Arbitration Commission
varied 12 awards and determinations covering employees in the ACT, to provide for an
apprentice wage rate of 40% of the tradesman’s rate for the first six months and 45% for the
second 6 months.22 The unions had claimed a wage rate of 45% of the tradesman’s rate for
the whole of the first year arguing that it was essential if young people were to be attracted to
the apprenticeship occupations. In his decision in which he took the growth of the ACT into
account he said:
“We have to produce a highly skilled, technically adept individual who can keep
industry turning and who is capable of meeting the requirements of complex
sophisticated technological devices known as machinery. In order that this kind of
person is produced it is essential that apprentices to most trades be academically
qualified to a high level. Thus industry will compete with sections of the economy
which hitherto has attracted boys of high educational levels. Not only must
encouragement be given to boys to enter apprenticeship, there must additionally be
encouragement towards improving standards throughout training. Apprentices must
be encouraged to study; they must be encouraged to learn as thoroughly as possible
every facet of the calling they have entered.”
3.21 In 1975 when the National Building Trades Construction Award 1975 was made23 it only
included the following wage rates for apprentices in South Australia:
“47(4)(b) The minimum ordinary rate of pay to be paid to apprentices shall be in
accordance with the percentages set out in the table herein of the aggregate of the
rates of pay and allowances prescribed by clause 9.2, 10 and 11 for a tradesman in
the locality in which they are employed.
Table
Percentage per week
For the first year
32 ½
For the second year
50
For the third year
67 ½
For the fourth year
85
The foregoing minimum rates shall be calculated in multiples of 5 cents per week,
any fraction not exceeding 2 cents to be disregarded.”
21
Report of the Inquiry Regarding the Functioning of the Apprenticeship System in New South Wales, July 1968,
p.520-522
22
1969AILR395 - see Tab 10 in the CFMEU Authorities Folder
23
Print C6006
15
3.22 In 1975 two further variations took place which introduced wage rates for apprentices in
Tasmania and Western Australia into the national award. On 20th October 1975 the National
Building Trades Construction Award 1975 was varied by Commissioner Brack24, to insert a Part
III Apprentices – Tasmania into clause 47 – Junior Labour. The wage rates inserted were the
following:
“47.5 Except as provided in this Part, the award shall not apply to the employment
in Tasmania of any apprentice in any trade subject to the provisions of the
Tasmanian Apprenticeship Act 1942.
The minimum ordinary rate of pay per week to be paid to apprentices shall
be in accordance with the percentages set out in the table herein applied to the
aggregate of the appropriate rate of pay and special allowance prescribed in clause
9.2 and 9.6 – Rates of Pay, 10 and 11 for a tradesman in the locality in which they
are employed.
Apprenticeship year
Percentage
First year
38
Second year
55
Third year
75
Fourth year
90
The foregoing minimum rates shall be calculated to the nearest 5 cents, 2 cents and
less to be disregarded.”
This variation also changed the wage rates in South Australia to the following:
“b)
The minimum ordinary rate of pay per week to be paid to apprentices shall
be in accordance with the percentages set out herein of the aggregate of the
appropriate rate of pay and allowances prescribed by clause 9.2 -Rates of Pay, 10 –
Industry Allowance and Underground Allowance - and 11 – Tool Allowance - for a
tradesman in the locality in which they are employed.
Apprenticeship year
Percentage
First year
45
Second year
55
Third year
75
Fourth year
90
The foregoing minimum rates shall be calculated to the nearest 5 cents, 2 cents and
less to be disregarded.”
3.23 On 19th December 1975 the National Building Trades Construction Award 1975 was varied by
Justice Ludeke to apply in Western Australia.25 The variation included detailed provisions for
apprentices including the trades covered, the proportion of apprentices to be taken on by an
24
25
172CAR40 - see Tab 11 in the CFMEU Authorities Folder
Print C7326 - see Tab 12 in the CFMEU Authorities Folder
16
employer, the period of the apprenticeship, schooling time, wage rates which differed
depending on the length of the apprenticeship, and the allowances paid. An interesting aspect
of this variation is that clause 47.12(b) provided that “Where the apprentice has completed the
twelfth year of schooling he may be allowed a credit to reduce the period to three years”, and
the wage rates in clause 47.14(a)(iv) for a three year term started at 55%.
3.24 In 1977 Justice Alley varied the National Building Trades Construction Award 1975 to provide
that all apprentices covered by the award (i.e. in South Australia, Western Australia and
Tasmania) should be paid the full industry allowance and tool allowance.26 His Honour
decided,
“I have given consideration to all other arguments of employers including the
possible adverse effect on employment opportunities. However, I am not persuaded
that they are of sufficient substance to outweigh the logic and equity of the case put
on behalf of the unions. Accordingly, I decided that the claim should be granted both
with respect to payment of the full amount of the Industry Allowance and Tool
Allowance, and also the provision now appearing in cl. 47.8 providing for the
employer by agreement with the apprentices’ parent or guardian to elect to provide
a kit of tools and to deduct the tool allowance until the cost is reimbursed.”
3.25 In a related decision the NSW Industrial Commission in Court Session dismissed an appeal
against a decision of the Carpenters, Bricklayers (State) Apprenticeship Committee to increase
the amounts of the industry and tool allowance payable to apprentices pursuant to the
Carpenters and Joiners and Bricklayers (State) Apprenticeship Award.27 The Apprenticeship
Committee had effected a flow-on of the decision of Justice Alley in the National award into
the NSW apprenticeship award. In rejecting the employer arguments that the increase was
likely to deter employers from playing a part in apprenticeship training and that it was likely to
deter employers from engaging apprentices the Commission in Court Session said,
“But no material at all was placed before the Committee to support the propositions
that the granting of the application would be likely to deter employers from playing
a part in apprenticeship training...and no witness was called in the appeal
proceedings in an attempt to support them. Statistics showing a downturn during the
last four years in building trade apprenticeship approvals were produced, but no
attempt was made to link the down-turn with wage levels and, on the case
presented, the trend might have been due to the depressed economic state of the
building industry or structural changes in the industry involving an increased use of
sub-contractors or other factors. As the reasons for the decision show, the
Committee did not fail to pay regard to the question whether the engagement of
apprentices would be inhibited if it allowed the application.
In the result, it is our view that the case for the appellants did not support even the
guarded submission made by their counsel that the statistics should be sufficient ’to
caution the tribunal in relation to granting increases which may have some
unquantifiable effect upon the enthusiasm of employers to engage apprentices’. ”
26
27
1978AILR104 - see Tab 13 in the CFMEU Authorities Folder
1979AILR74 - see Tab 14 in the CFMEU Authorities Folder
17
3.26 In 1979 the NSW Industrial Commission in Court Session refused an application by the Master
Builders Association of New South Wales for a reduction in apprentices wages in the building
industry on the basis that “the statistical material which is before us does not support the
proposition that there has been a decline in building trades apprentices intake which calls for
the Commissions intervention”.28
3.27 In 1994 a Full Bench of the Australian Industrial Relations Commission varied the Furnishing
Trades Award 1981 to apply the apprentice percentages to the total minimum rate inclusive of
supplementary payments.29 In deciding to vary the award the Full Bench said,
“We have concluded that the Furnishing Trades Award should be varied, consistent
with the consent position of the parties to apply the current junior and apprentice
percentages to the total minimum award rate, inclusive of supplementary payments.
We have reached this conclusion for several reasons.
First, within a skill based classification structure, the prescribed junior/adult
apprentice percentages should be applied to the adult rate which reflects the skill,
responsibility and conditions under which work is performed. That rate is the total
minimum rate of pay, inclusive of supplementary payments.
Second, application of the junior/apprentice rates to the total minimum rate and
thus to the supplementary payments component properly reflects the current nature
of supplementary payments. In 1978 and in the March 1987 “second tier” principles,
supplementary payments reflected the level of overawards applicable to employees
covered by an award, with the level of actual payments being a prime consideration.
The current nature of supplementary payments is different. In the context of the
August 1989 National Wage Case decision [Print H9100] and the process of award
restructuring commenced by it, supplementary payments have been part of the
minimum rate adjustment process within award restructuring. In that context
supplementary payments were no longer fixed primarily by reference to overaward
payments, but as part of the process in establishing consistent minimum rates,
directed in particular to facilitating absorption. They form part of the skill based
classification rates determined by that process.
Third, it is inequitable to deny junior employees and apprentices access to
supplementary payments in their current form.
Fourth, the CFMEU application will prescribe wages for junior and apprentice
employees under the Furnishing Trades Award consistent with Federal Awards in the
industry and is consistent with junior/apprentice provisions in a majority of Federal
Awards.
Fifth, we are satisfied that the cost impact which needs to be considered both in
general terms and specifically having regard to the impact on youth employment in
the industry, does not provide grounds for refusing the application of the percentage
rates to the total adult rate which is otherwise justified. We are satisfied that the
cost impact can be addressed through the proposed phasing of the resultant wage
28
29
1979AILR161 - see Tab 15 in the CFMEU Authorities Folder
Print L5963 - see Tab 16 in the CFMEU Authorities Folder
18
increases (which is agreed between the award parties) and by absorption of the
wage increases out of existing overaward payments. We not that the cost impact of
the application of supplementary payments to adult workers in awards generally and
to junior employees and apprentices in other awards as part of the minimum rate
adjustment process was dealt with through phasing and absorption. In our view the
same approach should be applied in relation to access to supplementary payments
by junior employees and apprentices in the Furnishing Trades Award.”
3.28 In 1995 SDP MacBean varied the National Building and Construction Industry Award 199030
and the National Joinery and Building Trades Award 198331 to provide for the same
arrangement. Of interest here is that both variations were by consent, and that in regard to
some apprentices, covered by the NBCIA 1990, the increases granted ranged from $30.50
per week for a first year apprentice up to $60.10 per week for a 4th year apprentice.
3.29 On 8th December 2006 the Full Bench of the Industrial Relations Commission of New South
Wales handed down its decision on the CFMEU’s application to vary the Building and
Construction Industry (State) Award.32 The Decision approved a Comprehensive Conciliated
Settlement reached between the employer parties (except for the HIA) and the CFMEU to vary
the award.33 The settlement set the wage rates as a percentage of the trade rate, or CW3 rate,
to make the award consistent with the Federal award, and provided for substantial wage
increases for apprentices, which were to be phased in over a 3 year period. The increases
ranged from $47.85 per week for 1st and 2nd year indentured apprentices to $71.80 per week
for a 3rd year indentured aprentice . In approving the wage increases the Full Bench noted:
“13
At the outset, we are satisfied that the CFMEU has plainly made out a special
case for the reasons it and the MBA contended and those contentions were
supported by the evidence presented. The principal reasons presented were:
(a) There is a skills shortage and it is difficult to retain apprentices in the
industry to the completion of their apprenticeship, where there is a drop
out rate of approximately 50 per cent. The HIA evidence (presented by
Ms Lesley Brooks) was that the termination rate for apprentices engaged
by the HIA was almost 40 per cent in a single year. While there are many
reasons why an apprentice does not complete an apprenticeship, one of
which is salary.
Whilst a skills shortage, of itself, is not sufficient to justify a special case:
see Health Employees Pharmacists at [54], the Full Bench in Pharmacists
was satisfied that a special case was made out on the basis of staff
shortages because of the impact of the shortages on work value and the
nature of the work being performed. We consider that he CFMEU has
similarly established a special case on the basis that the skills shortage
30
Print M4131 - see Tab 17 in the CFMEU Authorities Folder
Print M4130 - see Tab 18 in the CFMEU Authorities Folder (NB the variation incorrectly referred to applying
the percentages to the Group 4 rate when it should have been the Group 5 rate, this was corrected in Print
N0523)
32
[2006] NSWIRComm 387 - see Tab 19 in the CFMEU Authorities Folder
33
see Tab 20 in the CFMEU Authorities Folder
31
19
has significantly altered the contribution of apprentices in their jobs,
with apprentices being expected to carry out a full range of duties at an
earlier stage of their apprenticeship.
We observe also that there is a clear public interest in ensuring there is
sufficient trained personnel in the building industry and that this also
provides a basis for taking a skills shortage into account in determining
whether a special case is made out: see Health Employees Pharmacists
at [55] and Public Hospital Nurses (State) Award (No 3) (2002) 121 IR 28;
(b) There have been substantial changes to the apprenticeship system over
the last 40 years – the introduction of competency based training has
meant that the productivity and competence of apprentices arising from
their off the job training is greater than under the old system, conferring
benefits on both the apprentice and the employer. The evidence revealed
that apprentices are now expected to be more equipped at earlier stages
of their apprenticeship and given the competency based nature of the
training are expected to become proficient in a wider set of skills earlier
than they might otherwise have done;
(c) Apprentices are generally older on commencement. The CFMEU
tendered evidence in the form of the Department of Education and
Training figures that showed that the average age of commencement for
an apprentice has increased from 17.5 years in 1985 to almost 19 years
of age in 2005. This evidence was consistent with the evidence presented
by HIA that he average age profile for new apprentices is 19 years. The
HIA also presented evidence that individuals who had completed a preapprenticeship, had a car licence and vehicle were more likely to be
employed by HIA. The evidence of Lesley Brooks, for HIA, was that these
attributes mean that greater productivity is achieved from those
apprentices;
(d) Apprentices are expected to have reached higher educational levels
including the completion of pre-vocational and vocational studies and
apprentices are more productive because of these higher educational
levels. For example, the evidence of Mr. Michael Hall, for the MBA, was
to the effect that it is fair to recognise life experience and skills brought
from other industries.
The evidence of Douglas Greening was also that, as part of competency
based training and assessment, an apprentice was required to address a
much higher level of communication, self management and health and
safety mastery and as part of every practical assessment, the apprentice
must deliver a Safe Work Method Statement as a result of Job Safety
Analysis. Mr Greening deposed that this activity, of itself, uses higher
order skills not previously required of apprentices during training and
examination. We accept that evidence;
20
(e) The current rates for apprentices/trainees in NSW are generally and
significantly lower than those that apply across the building and
construction industry across Australia. We observe that this factor does
not, of itself, necessarily warrant a salary increase, however, it does
indicate special factors in the rates in NSW that are anomalous.”
3.30 On 19th December 2008 the Full Bench of the Australian Industrial Relations Commission
handed down their decision34 on the priority awards for the award modernisation process. In
regard to apprentices the Full Bench said:
“Junior and apprentice rates
[71] The federal awards and NAPSAs with which we are dealing contain a very wide
range of rates for junior employees and apprentices. The relevant instruments fix
percentages of the adult wage for juniors and apprentices based on a host of
historical and industrial considerations, most of which can only be guessed at. It is
not possible to standardise these provisions on an economy-wide basis, at least not
at this stage. We have adopted the limited objective of developing new rates which
constitute a fair safety net for each of the modern awards based on the terms of the
relevant predecessor awards and NAPSAs. We have attempted to strike a balance as
between, in some cases, wildly varying provisions. In the case of junior employees the
rates will be expressed as a percentage of the rate for the relevant adult
classification. In the case of apprentices the rates will generally be expressed as a
percentage of the relevant trade rate.”
3.31 Then in April 2009 the AIRCFB handed down its award modernisation Decision35 on the Stage 2
awards, which included the Building and Construction General On-site Award 2010 and the
Joinery and Building Trades Award 2010. In the decision the Full Bench stated:
“[83] We have added additional content to the apprentices clause, drawing on
current award prescription and applied the payments arrangements from the Metal
and Engineering On-site Award in respect of adult apprentices. We have, however,
added a provision to make it clear that notice of termination and redundancy
provisions do not apply to apprentices, subject to the apprenticeship period being
counted as service in the event that the employment is continued at the completion
of an apprenticeship or resumed within six months of completion.
[84] We have not included the trainee provisions for civil traineeship and the more
general traineeship provision in cl.39 of the Building and Construction Award. The
application of the National Training Wage Schedule will be applied with any
necessary modification to maintain the current award provisions in respect of wages
and additional payments for trainees.
34
35
[2008] AIRCFB 1000
[2009] AIRCFB 345
21
...........
[113] The terms and conditions in the award largely reflect those in the National
Joinery and Building Trades Products Award 2002.37 However, the casual conversion
clause reflects that in other modern awards. The apprentice provisions have been
simplified and adult apprentice wage rates consistent with those in other modern
awards have been included. The apprentice provisions recognise there are both 3 and
4 year apprenticeships covered by the award. Where practical allowances have been
simplified. The adjustment of allowances reflects industry practice.”
3.32 The awards that were subsequently made contained the following junior apprentice wage
rates:
Building and Construction General On-site Award 2010
19.7 Apprentice wages
(a) A person who has completed a full apprenticeship must not be paid less than the
standard rate.
(b) An apprenticed employee will be paid the percentage of the standard rate, as
follows:
Four year apprenticeship
% of the standard rate
First year
45
Second year
55
Third year
75
Fourth year
90
Three year apprenticeship
% of the standard rate
First year
55
Second year
75
Third year
90
(c) Transitional provisions competency based progression
(i) An apprentice is entitled to progress through the wage structure based on
achievement of competency in accordance with the terms of an award made under
the Workplace Relations Act 1996 (Cth) that would have applied to the employee
immediately prior to 27 March 2006, a notional agreement preserving a State award
that would have applied to the employee immediately prior to 1 January 2010 or a
Division 2B State award that would have applied to the employee immediately prior
to 1 January 2011:
22

if the employee had at that time been in their current circumstances of
employment and no agreement-based transitional instrument, enterprise
agreement or Division 2B State employment agreement had applied to the
employee; and

that would have entitled the apprentice to progress through the wage
structure based on achievement of competencies.
(ii) Clause 19.7(c) ceases to operate on 31 December 2014.
(d) Transitional provisions—Two year residential apprenticeships in Western
Australia
(i) An apprenticed employee undertaking a two year residential apprenticeship in
Western Australia will be paid the percentage of the standard rate, as follows:
Nominated residential apprenticeships in Western Australia
Two year apprenticeship
% of the standard rate
First year
55
Second year
75
(ii) Clause 19.7(d) ceases to operate on 31 December 2014.
(e) In addition to the above rates apprentices will be paid amounts prescribed in:

clause 21.2—Industry allowance;

clause 20.1—Tool and employee protection allowance;

the relevant percentage (as identified in clauses 19.7(b) and (d) for the year
of the apprenticeship) of the Special allowance contained in clause 21.1;
and, where applicable,

clause 21.3—Underground allowance; and

for refractory bricklaying apprentices the relevant percentage (as identified
in clause 19.7(b) for the year of the apprenticeship) of the Refractory
bricklaying allowance contained in clause 21.8.
as part of the ordinary weekly wage for all purposes.
Joinery and Building Trades Award 2010
19. Apprentice minimum wages
23
19.1 The minimum wages for an apprentice, except as provided for in clause 20—
Adult apprentice minimum wages, are to be calculated in accordance with the
percentages set out below (calculated to the nearest $0.10, less than $0.05 to be
disregarded) applied to the Level 5 classification minimum weekly wage in clause
18.1:
(a) Four year apprenticeship:
Stage of apprenticeship Per week
%
First year
45
Second year
55
Third year
75
Fourth year
90
(b) Three year apprenticeship:
Stage of apprenticeship Per week
%
First year
50
Second year
75
Third year
90
19.2 Where an apprenticeship is shortened in accordance with clause 13.4, the
apprentice is to be paid the minimum wage corresponding to the stage of the
apprenticeship being undertaken.
19.3 An employee who is under 21 years of age on the expiration of their
apprenticeship and thereafter works as a minor in the occupation to which the
employee was apprenticed must be paid at not less than the minimum wage
prescribed for the classification.
3.33 The above history demonstrates that there have been significant phases in the development
of apprentice wage rates over the years. These phases were as follows:


From the early 1900’s to 1946 apprentice wage rates were set as fixed monetary
amounts;
From 1946 to 1975 apprentice wage rates were set by a mixture of Federal and
State regulation with Federal awards setting the apprentice wages as a percentage
of the trade rate (these percentages increased over the period);
24



In 1995 Federal apprentice wage rates were set as a percentage of the total trade
rate inclusive of supplementary payments;
In 2005 NSW set the apprentice wage rates as a percentage of the trade rate
thereby falling in line with the rest of the country;
In 2009 the AIRCFB made the modern awards and set common industry specific
percentages for apprentices across the country based on existing awards and
NAPSA’s.
3.34 We submit that the applications that are before the Commission as part of these proceedings
are the next logical phase, that is to complete the task identified in the decision of the AIRC
Award Modernisation Full Bench “to standardise these provisions on an economy-wide basis”
particularly in regard to the minimum starting rates of pay for junior apprentices.
CFMEU Survey of Apprentice Living Costs
3.35 During 2011 and 2012 the CFMEU conducted a survey of the living costs of apprentices. The
results of this survey are set out in the Report which is contained in Appendix 1 of this
submission. The union received 116 responses to the survey from a range of apprentices
including adult apprentices. As our applications only seek to vary the wage rates for 1st and 2nd
year junior apprentices our analysis is concentrated on these groups.
3.36 The survey results show that the total average living costs for 1st year apprentices is $518.49
per week and for 2nd year apprentices is $753.05 per week. As these living costs included a
number of work specific costs and some other discretionary spending amounts (e.g. going out
and holidays), the CFMEU analysed the results using a narrower range of living costs. This
narrow range included the following:
 Bought lunches
 Board
 Home/mobile phone
 Take Away Food
 Coffee/refreshments
 Petrol/fuel
 Car insurance
 Car Rego/licence
 Road tolls/parking
 Public transport
3.37 Using this narrower range of costs the survey results show that the average living costs for
first year junior apprentices is $440.47 per week and for 2nd year junior apprentices $439.00
per week. If these amounts are calculated as a percentage of the minimum classification rate
for a tradesperson, i.e. $706.10, we arrive at 62.38% for a first year junior apprentice and
62.17% for a 2nd year junior apprentice. The union has rounded off these percentages to arrive
at the 60% rate for a first year junior apprentice and has used 65% for the 2nd year rate to
provide an incentive to the apprentices to carry on learning with the apprenticeship and to
reflect their greater skill level.
25
3.38 The results of the CFMEU’s survey are consistent with the results of surveys undertaken by
other unions.
3.39 Attached at Appendix 2 is a witness statement of Jordan Parker a 1st year apprentice carpenter
employed by the
Mr. Parker’s car registration costs of $800 per year, petrol costs of $50
per week, $80 per month a on public transport, $60-85 per month on mobile phone, $50 per
week on morning tea and lunches, and $400 per month on accommodation costs, are
consistent with the results of the CFMEU survey.
3.40 Attached at Appendix 3 is a witness statement of Jason Wainwright, a 4th year apprentice
employed by
. This statement recalls Mr. Wainwright’s expenses when he
st
was a 1 year apprentice and his current expenses. Mr Wainwright’s costs for car registration
of $1200 per year, car insurance of $50 per month and petrol of $120 per week are consistent
with the results of the CFMEU survey.
3.41 Attached at Appendix 4 is a witness statement of Mr. Quan Tran, a 3rd year apprentice
carpenter employed by
. Again we find that Mr. Tran’s basic living costs are
consistent with results of the CFMEU survey.
GTA Survey of Living Costs
3.42 In 2007 Group Training Australia commissioned the Centre of Applied Research in Social
Science (CARSS), at the University of New England, to compare the current earnings of junior
apprentices to a variety of benchmarks widely accepted in the community. A copy of the
report is attached at Appendix 5. Some of the key findings set out on page 2 and 3 of this
report include:

School leavers who engage directly in paid work and are paid a junior wage typically
earn $40-70 per week more than a first year apprentice.

Taking into account the value of cash and non-cash benefits the first year
apprentices’ standard of living is barely above that of the unemployed.

Second year apprentices are not that much better off; they usually earn above the
poverty line, though they are not in a position of extensive comfort.

The generosity of above award payments varies by occupation – a first year
apprentice in the NSW building and construction industry typically earned 13.2%
more than the award, still less than the poverty line.

Apprentice pay over the period 2001-2006 tended to keep pace with the CPI and was
in line with the growth of minimum pay. Over this period minimum pay grew at a
slower rate than average pay. Apprentices earning are correspondingly still not
keeping pace with average earnings.

Using the Commonwealth Government’s indicative budget standards with its two
benchmarks – a ‘modest but adequate’ living standard, defined as that typical of
‘middle Australia’ and an austere ‘low cost’ level, a standard of living fractionally
above the poverty line, the research shows that:
26
a)
The modest but adequate living standard is unattainable for first year
apprentices, unless they receive large allowances.
b) Most first year apprentices, apart from those receiving substantial allowances,
are dependent on their parents’ magnanimity to achieve even the austere low
cost standard of living and cannot generally pay a nominal $80 a week board to
their parents as a contribution to their accommodation costs. The prospect of
living independently away from the parental home, even at a meagre low cost
standard, is beyond the reach of most second year apprentices.
c)
The low cost standard of living is a very austere standard. An apprentice living at
this standard cannot afford to own or run a car of a standard typically of their
peers, can only afford generic brands, buys barely any take-away food, has a
very small weekly ration of alcohol, pays for fewer goods and services, takes
most of his/her leisure at home or in very cheap pastimes, spends less than
most Australians on personal care and must stay healthy and have good teeth.

Apprentices are living on the margins of Australian society – the smallest misfortune,
ill Health, an unexpected large bill, or the theft or loss of any wages, is likely to tip
anyone living at this low cost standard into debt.

Although more research is needed on this topic, young apprentices most probably
survive through a mixture of handouts from parents, working overtime wherever
possible, working in the cash economy or taking a second job.

The low level of apprentice pay extends the period of dependence on parents and
must presumably make these young members of the workforce feel unnecessarily
juvenile and insufficiently autonomous for their age and working status, particularly
as the average starting age for junior apprentices has long since ceased to be 15
years of age and is now closer to 17 and 18 years of age.

Apprentices experience relative deprivation, since the extra items that are in the
budgets of their peers (living at the more typical ‘modest but adequate’ standard)
are precisely the items that those living on a low cost standard are forced to go
without. This is likely to lead to apprenticeships being perceived as an unattractive
lifestyle for those leaving school and seeking employment, especially as it has none
of the prestige attached to study at university.

Overall this research shows that beginning an apprenticeship is not only initially less
attractive than other alternative pathways but completing training requires the
capacity to endure sustained periods of relative depravation before rewards become
commensurate with those of age peers.

Low relative earnings and lower standard of living, with their associated
deprivations, will lead to continuing difficulties in recruiting apprentices and to poor
rates of completion.
27
3.43 Appendix 2 of the report contains tables of comparisons between the budget standards and
the apprentice award rates for each of the capital cities (except Darwin). Using the modest but
adequate budget standards36 the report shows the following living costs for apprentices:
City
Apprentice Paying Board ($80 Apprentice Renting
p/w)
Adelaide
$350.34
$400.31
Brisbane
$347.81
$432.45
Melbourne
$346.71
$418.72
Sydney
$347.81
$457.45
Canberra
$345.65
$450.02
Hobart
$343.73
$397.85
Perth
$344.37
$418.57
Average
$346.63
$425.05
(NB the union has not included the “at parental home figure” as this does not include any
amount for paying Board and we consider it unreasonable to expect parents to be fully
subsidising the accommodation costs of a person earning a wage, especially as some parents
may not be able to afford to do so).
3.44 As the above figures were calculated using data from 2006 the CFMEU has done a
recalculation of the average figures taking into account the increase in the CPI based on the
Eight Capital Cities Weighted Average index numbers from December 2006 to December
201237. The CPI increase is 17.8%. This would arrive at the following figures:
Apprentice Paying Board ($80 Apprentice Renting
p/w)
Average
$408.33
$500.71
3.45 The above figures demonstrate that the CFMEU’s, and other unions, claim for a starting
minimum wage for first year junior apprentices of $423.66 is a reasonable figure based on
the findings of the GTA survey (increased in line with the CPI).
36
We have discounted the low cost standard of living as the report notes ‘’’The low cost standard of living is an
austere standard. An apprentice living at this standard cannot afford to own or run a car of a standard typical
of their peers; can only afford generic brands, barely any take-away food, a small weekly ration of alcohol; has
fewer goods and services; takes most of their leisure at home or in cheap pastimes; spends less than most
Australians on personal care and must stay healthy and have good teeth. The smallest misfortune is likely to tip
someone living at this standard into debt.” (p.18)
37
http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/6401.0Main%20Features5Dec%202012?opendocu
ment&tabname=Summary&prodno=6401.0&issue=Dec%202012&num=&view=
28
Apprentices and Debt
3.46 One related issue raised by the GTA/CARSS Report is the affect that the current low wages
have on the levels of debt faced by apprentices. Attached at Appendix 6 of this submission is a
witness statement of Liam O’Hearn the CFMEU Victorian Branch Apprenticeship Officer. In
paragraph 4 of the Statement Mr. O’Hearn refers to the common complaint that he receives,
particularly from first year apprentices, that they cannot survive on the current award rate of
pay and have to resort to borrowing money from family, friends, and other sources, and in
some cases resort to questionable activities to raise money. The statement of Quan Tran
refers in paragraph 14 that he could not survive on the award rates. Attached at Appendix 7 is
the witness statement of Robert Cameron. Attached to that statement are letters from
apprentices that could not survive on award rates.
3.47 The issue of debt and severe financial problems faced by apprentices, especially first years
have been highlighted by recent studies. In their report “Financial Management and Young
Australian Workers”38(published in the Youth Studies Australia, Volume 27 Number 1 2008),
Dowling, Hoiles, Corney and Clark, conducted two studies of male apprentices in the building
and construction industry. The first study was of 318 male apprentices from five TAFE’s
located in metropolitan Melbourne, of which 106 were in their first year. The results of the
first study were:
“Examination of Table 1 reveals that the participants most often borrowed from
banks and parents/family, and that they were most likely to borrow money in order
to purchase a motor vehicle. The majority of participants reported that the largest
amount of money they had ever borrowed was under A$10,000, although a
substantial proportion of the sample (9%) had borrowed over A$50,000. Of those
with a loan, approximately one-quarter (26%) reported that they had trouble
repaying the loan, and 11% reported that they had had to default on the loan. Seven
participants had declared bankruptcy and a further 11 had considered becoming
bankrupt as a way out of debt.” (p.28-29)
3.48 In the second study of 400 male apprentices in the building and construction industry with a
mean age of 19.7 years, of which 254 were in their first year, thirty-nine per cent of
participants reported that they were dissatisfied or strongly dissatisfied with their current
financial situation (p.31). In discussing the overall findings of the two studies the report noted,
“In addition, a substantial proportion of the young workers surveyed reported
significant financial difficulties. For example, 10-15% reported frequently
experiencing financial difficulties related to a lack of money for essential expenses
(e.g. adequate insurance, medical assistance, new shoes or clothes, utilities etc.) and
39% reported dissatisfaction with their current financial situation. Further, significant
proportions of those with a loan reported that they had trouble making loan
repayments (26-40%) and that they had to default on a loan (6-11%).” (p.33)
3.49 In 2011 the report “Reducing the risks – Improving access to home contents and vehicle
insurance for low-income earners” by Dominic Collins was published by the Brotherhood of St.
38
See
http://philanthropywiki.org.au/upload/8/8d/Financial_Management_and_Young_Australian_Workers.pdf
29
Laurence.39 Part of this study included focus groups comprising of eight first year plumbing
apprentices and seven cabinet-makers at different stages of their apprenticeship. In regard to
vehicle insurance for apprentices the report said,
“Particular attention was paid to vehicle insurance for apprentices, whose wages
vary considerably depending on their course, year of study, and whether they are
employed in the commercial or domestic sector (commercial wages can be almost
double domestic wages). For this group a car is an occupational requirement, not
only to improve their job opportunities but also for the day-to-day transport of work
tools. But the costs of living and maintaining a vehicle draw heavily on their income,
making car insurance difficult to afford:
I’ve got to drive from Airport West to Mount Waverley, that’s almost $100
just in CityLink [tolls].
I’ve been driving to Dromana every day, it’s been killing me.
If I didn’t have help from my parents I wouldn’t be able to live [away from
home] because with the wage you make, it’s not enough to pay for the rent
and all the bills and then living expenses as well.
Most of the apprentices were acutely aware of the need for vehicle insurance and
would have liked to have comprehensive insurance but were only able to pay for third
party cover.” (p.35-36)
3.50 Obviously only having third party cover can lead to a spiralling debt crisis for young
apprentices if they have an accident and have taken out a loan for their own vehicle.
Impact of Current Wage Rates on Apprentice Completion Rates
3.51 There have been numerous studies over recent years that have looked at the poor completion
rates of apprentices. A number of these have been referred to in the ACTU’s submission (and
so will not be repeated here). A common factor in the non-completion of apprenticeships is
the fact that young people, especially in the first year of an apprenticeship, leave for a better
paying job.
3.52 In June 2008 the Victorian Building Industry Consultative Council Industry Advisory Body
released a report on Apprenticeship Completion Rates in the Building and Construction
Industry (a copy is attached at Appendix 8). The aim of this report was to determine the
reasons behind the success of the Fire Protection apprenticeship and analyse why it has a high
completion rate of 85% compared to 70% in other building trades. The report found that one
of the reasons for the high completion rate for fire protection apprentices was a good income,
whilst low wages was a factor in apprentices leaving other building industry apprenticeships.
3.53 In regard to the good income for the fire protection apprenticeships the report contained the
following:
“First year Fire Protection apprentice income is set at 50% of the trade rate. Industry
advice states that it is common for many apprentices to start at the second year rate
39
See http://www.bsl.org.au/pdfs/Collins_Reducing_the_risks_insurance_2011.pdf
30
which is 55% (as they often comply with the higher age bracket). This is in
comparison to 36% for plumbers and 35% for carpenters which equates to $367.40
per week for a first year carpenter (first three months) compared with $494.28 for a
sprinkler fitter (or $543.70 second year).”
3.54 By contrast the report referred to a 2007 study funded by Skills Victoria and completed by
Holmesglen Institute of TAFE which focused primarily on building and construction
apprentices,
“The report cited the following reasons for leaving an apprenticeship.
Apprenticeship Income - 17% of ex-apprentices cited ‘not earning enough’ as a
significant factor causing them to leave, however a further 19% cited other income
related issues such as incorrect award payment and the availability of higher
labourer wages.” (p.18)
3.55 Also of interest in this report are the other reasons that were identified as contributing to the
non-completion of apprenticeships; issues such as being treated as cheap labour, lack of
appropriate supervision in the workplace, problems with poor or inappropriate training, and
bullying and abuse in the workplace. The union’s applications to vary the awards also seek to
address a number of these issues to the extent that the award can deal with them.
3.56 In November 2011 the NSW Board of Vocational Education and Training (BVET) released the
report, A fair deal – Apprentices and their employers in NSW -Integrated research report40. The
purpose of this research project was to provide BVET with insights into opportunities for
improving recruitment and retention of apprentices in key trades and increasing the number
and proportion of apprentices who complete training and go on to work as qualified
tradespeople in their field of expertise. The report noted that,
“The number of apprentices completing their apprenticeship has remained fairly
constant in the last 10 years. Despite almost a 40% increase in the number of recruits
over a decade (designed to increase the supply of apprentices to employers), we have
seen a steady decline in the proportion of apprentices who finish training and receive
a qualification (as a percentage of commencements). Nationally and in NSW, only
around 55% of trade apprentices complete their training although the proportion
does vary across different occupations.
In effect, we are recruiting more and more young people to take up an
apprenticeship but as the pool of starters increases, the proportion of completers
decreases. The proportion of young people terminating their apprenticeship in the
first 12 months has steadily increased over the last decade so that now one in three
apprentices is likely to leave their apprenticeship in the first year.” (p.5)
3.57 Whilst the report canvassed a number of factors affecting a young persons’ experience as an
apprentice in regard to wages it had the following to say,
“Pay, by itself, did not come out as a major factor in commitment although one in
four apprentices mention it as one of the worst parts of an apprenticeship. In
40
See Appendix 9
31
qualitative research it emerged more strongly as an issue when other aspects of the
apprenticeship were perceived as unfair or unreasonable.”(p.13)
“They also expect low pay, especially in the first year, but they don’t expect to be
‘slave labour’ or to do lots of extra hours without overtime pay. That is seen as
unfair. They also expect their pay to improve, based on their performance. Bad pay is
one of the top two reasons that discontinued apprentices give for terminating their
apprenticeship.” (p.28)
“Pay is strongly related to working conditions. Apprentices don’t expect to be stuck
with artificial pay structures based on time served or the pay rates of their peers;
that just doesn’t seem fair. They want merit based pay and progression and they are
not afraid of it – if they are capable of better work, more valuable or skilled work,
then it seems only fair that they should be paid according to their abilities. They also
expect to be rewarded for going the extra mile although that could be a reward in
pay or in some additional flexibility – ‘a bit of slack about being late’, as one
apprentice put it.
Interestingly it is not only the money but also what the money represents that
matters. For the most committed apprentices, merit or competency based pay is
recognition of their motivation and achievements; for some discontinued
apprentices, artificially structured pay scales are symptomatic of other unfair aspects
of the contract.” (p.30)
3.58 The union recognises that low pay is only one of many factors affecting the attrition rate of
apprentices. It is however a very important factor, especially for those apprentices who
cannot survive on current award wage rates.
Other Training Wage Rates
3.59 In assessing the appropriate level of the minimum wage for first year apprentices we submit
that it is proper to compare it with other training wages that apply. We submit that where the
entry requirements for an apprentice are substantially the same then the wage rate should
also be the same.
3.60 Under both the Building and Construction General On-site Award 2010 and the Joinery and
Building Trades Award 2010 there are different minimum wages for first year apprentices
depending on whether it is a 4 year apprenticeship or a 3 year apprenticeship (see paragraph
3.32 above). Different wage rates also apply for 2 year apprenticeships under the Building and
Construction General On-site Award 2010.
3.61 Under the current arrangements for training it would be the contact of training that
determines the nominal length or duration of the training contract. The duration would be
based on the nominal hours of the off the job training for the competencies required for the
qualification and would normally be set by the State Training Authority. For example in NSW
the nominal hours are set by the Vocational Training Orders (VTO’s) issued by the NSW
Department of Education and Communities. Attached at Appendix 10 is a copy of the
Commissioners Information Bulletin 523 which contains the VTO’s for the trade vocations in
32
the building and construction industry. This shows that a Carpentry Apprenticeship for a new
entrant without any other qualifications has a term of 48 months or 4 years, whereas a Roof
Tiling Apprenticeship has a term of 36 months or 3 years.
3.62 Whilst in the past the duration of the apprenticeship was linked to the age of the apprentice
upon commencement (see for example the provisions that applied for apprentices in WA in
197541) this is no longer the case. Accordingly we submit that the starting rate for the first
year junior apprentices should be the same irrespective of the nominal duration of the
apprenticeship.
3.63 If the minimum rate for a first year apprentice starting a 3 year or 2 year apprenticeship is 55%
of the trade rate then there is no justification for paying a first year apprentice starting a 4
year apprenticeship any less. Although in this application we say the common starting wage
should be 60% given the age profile and living costs of junior apprentices.
3.64 It is also worth noting that even under the National Training Wage Schedule the minimum
wage rate for a trainee who is 18 years of age or older is higher than current junior first year
apprentice wage rates.
3.65 Taking into account the various factors identified in this section of the CFMEU’s submission we
say that there is sufficient justification to warrant the Commission increasing the minimum
rates for first year junior apprentices to 60% of the minimum classification rate for a
tradesperson.
4.
Competency-Based Wage Progression
4.1
The variations to the wage rates for junior apprentices, in the CFMEU applications to vary the
Building and Construction General On-site Award 2010 and the Joinery and Building Trades
Award 2010, also include a competency based wage progression component. The applications
are nearly identical (save for the clause references) and seek a clause that provides as follows:
“(b)
An apprentice shall be paid a minimum all purpose rate of pay calculated
on the total of the percentage of the tradespersons minimum classification rate
determined in accordance with the following table, and the allowances prescribed
in clause 19.7(e):
Wage Level
1
41
Minimum Training
Requirements on Entry
% of Tradesperson's Rate
(i.e. CW3 minimum
classification rate set out
in clause 19.1(a))
Prior to the attainment of the
minimum training requirements
specified for Wage Level 2
60%
Print C7326 - see Tab 12 in the CFMEU Authorities Folder
33
2
On attainment of 25 % of the
total competencies specified in
the training plan for the relevant
AQF Certificate III qualification
65%
or
twelve months after commencing
the apprenticeship whichever is
the earlier
3
On attainment of 50 % of the
total competencies specified in
the training plan for the relevant
AQF Certificate III qualification
75%
or
twelve months after commencing
Wage Level 2 whichever is the
earlier
4
On attainment of 75 % of the
total competencies specified in
the training plan for the relevant
AQF Certificate III qualification
90%
or
twelve months after commencing
Wage Level 3 whichever is the
earlier
5
On attainment of 100% of the
total competencies specified in
the training plan for the relevant
AQF Certificate III qualification
100%
or
twelve months after commencing
Wage Level 4 whichever is the
earlier
Under this clause apprentices could move to the next wage level on either a time served or a
competency based method.
4.2
Apart from the actual wage rate (i.e. the percentage of the trade rate) that is to apply in
stages one and two, the clause is identical to that contained in clause 2 of Schedule 1 of the
Queensland Order – Apprentices’ and Trainees’ Wages and Conditions (Excluding Certain
34
Queensland Government Entities) 2003 (the “One Big Order”)42, upon which the application is
based.
4.3
As noted in the witness statement of Robert Cameron (appendix 7), competency based
apprentice arrangements have operated in Queensland since 1999. Although there was some
early resistance from employers the opposition has waned over time as employers witnessed
increased productivity as the skill levels of apprentices increased.
4.4
A very similar competency based wage progression arrangement currently applies under the
Manufacturing and Associated Industries and Occupations Award 2010 (see clause 25.6(a)43),
and has applied in one of its predecessor awards, the Metal Industry Award, since 2006. The
only difference between the two models (apart from wages) is that under the Manufacturing
Award it is based on the percentage of the competency points for the qualification, whereas
under our application it is based on percentages of the competency standards required for the
qualification. This is because points are not allocated to the competency standards that form
the qualifications under the Construction and Plumbing and Services Training Package –
CPC0844.
4.5
Competency based wage progression is therefore not a new concept. Indeed it was one of the
significant matters discussed in the CFMEU’s application to vary the NSW State Award in 2005.
Part of the conciliated outcome in those proceedings was the following:
“(b)
the claim for the introduction of competency based progression in the Award
not be pursued during the life of the award except by consent of the parties as the
CFMEU would forego pressing its claim for such progression for this period;
(c)
4.6
the award will expire on 1 December 2008;”
The employers in the building and construction industry, particularly in NSW, have therefore
been on notice for a significant period of time that the union would be pursuing this part of
our claim. The fact that they have not actively engaged with the union to discuss it or come up
with any alternative proposal in the intervening period is a sad indictment on their
representatives. We note that in 2006 the MBA’s National Director Industrial Relations and
Legal Counsel, Mr. Richard Calver, gave a paper entitled Challenging the Apprenticeship
System: Skill Needs for the Future,45 in which it states,
“Master Builders is examining at present the way in which competence should be
established for wage progression purposes. This work includes examining each
current training package and proposed new packages that are being developed
under the auspices of the Council of Australian Governments (COAG) in regard to
specialisation. This COAG work is to be completed by June 2006 at which time all
competencies will be mapped by Master Builders to the Metals Engineering and
Associated Industries Award points system for recognition of competence as a first
step to see if that system stands as a model for the building and construction
industry.
42
see extract in Tab 21 in the CFMEU Authorities Folder
http://www.fwc.gov.au/documents/modern_awards/award/ma000010/default.htm
44
http://training.gov.au/TrainingComponentFiles/CPC08/CPC08_R7.0.pdf
45
See Appendix 11
43
35
Master Builders will then work with relevant agencies to develop a wage structure
or, for that matter a progression through the training system, based upon other than
time served, incorporating any useful information that comes from the comparative
work.”(p.13)
To date the union has not seen any proposals put forward by the MBA and it would appear
that their claims of developing a competency based wage progression model was nothing
more than idle boasting.
4.7
The union has been more than willing to sit down with the employer organisations in the
building and construction industry to develop a model suitable for our industry, yet at every
opportunity the employers find some half hearted argument as to why they cannot agree (the
lack of points allocated to competency standards being one of the re-appearing themes).
Suffice it to say the union’s patience has been exhausted.
4.8
The 2011 report for BVET clearly demonstrates the frustration of employers and apprentices
over the lack of competency based progression,
“Through qualitative research, the four year apprenticeship contract emerged as a
source of significant frustration for some employers and apprentices. For both
parties, it is an outdated model and to some extent an unfair one. Dissatisfaction is
strongly linked to the issue of merit based progression in both level of work and
wages.
Employers and apprentices know that the training and assessment are now
competency based and there are no degrees of competency – you are competent or
you are not. How long it takes to become competent is different for each apprentice
– while there are average times and benchmarks, some become competent much
more quickly than others, especially when they are able to put skills into practice
across a range of work experience.
……..
In quantitative research, many employers indicated that they would like to see a
shorter apprenticeship, one that is genuinely competency based, although they
recognise that an apprentice is unlikely to get the range of experience they need in
much less than three years. But a shorter apprenticeship would give them skilled and
qualified workers more quickly to meet the shortages they are already facing.
………
Progression based on competencies appeals to apprentices who see that it opens the
door to merit based advancement in work and pay, something GenY values highly.
The sooner they are competent, the more quickly they can earn more, do more
interesting or varied work and move up the workplace ladder.
……
Action on the issue can’t reasonably be postponed for long. Competency based
progression is fundamental to apprentice perceptions of fairness and important to
employer satisfaction with the experience of employing apprentices and the rate of
return on investment. That in turn impacts on employer willingness to take on
36
further apprentices. And that, combined with shorter apprenticeships, has the
potential to impact relatively quickly on skills shortages.” (p15-16)
4.9
Accordingly the union submits that the waiting time is over, the time for action has arrived
and the awards should be varied in accordance with the union’s applications.
5.
Suspension, Cancellation and Termination
5.1
The variations that the CFMEU seek that fall under this heading are set out on pages 48 to 49
of the ACTU’s Common Claims document. The variations deal with notice of an employer’s or
apprentice’s intention to seek the suspension or cancellation of an apprenticeship, and notice
of termination.
5.2
The union notes that regulation 1.13 of the Fair Work Regulations 2009 provides that a law
dealing with the suspension, cancellation or termination of a training contract entered into as
part of a training arrangement is not excluded by s.26 of the Fair Work Act 2009. But as we set
out in section 2 of this submission this does not prevent an award dealing with the same
matter (see 2.7 above).
5.3
The variations sought by the CFMEU are not intended to diminish the provisions of any State
or Territory law that deals with the suspension or cancellation of apprenticeships. This is made
clear by the inclusion of the words “This clause is additional to and does not replace any
entitlements or process under the training contract or the relevant state/territory training
legislation”, in our proposed clause 13.6 for the Joinery and Building Trades Award 2010 (and
clause 15.2(f) for the Building and Construction General On-site Award 2010).
5.4
Attached at Appendix 12 is the NSW State Training Services A complete guide to
apprenticeships and traineeships in New South Wales (“the Guide”). Section 9.2 of the Guide
sets out the arrangements/requirements that apply for the suspension of an apprenticeship
and the process that must be adhered to. Section 9.4 of the Guide deals with cancellations.
The union’s application does not seek to interfere with these arrangements, but seeks to
provide for additional notice if the employer or apprentice intends to seek to suspend or
cancel the apprenticeship. By including this provision in the award, and alerting both sides to
the rights of the apprentice under the training contract, the union is trying to prevent the
instant dismissal of apprentices that the witness statement of Liam O’Hearn refers to in
paragraph 14.
5.5
In regard to notice of termination, the clause we seek in both the Joinery and Building Trades
Award 2010 and the Building and Construction General On-site Award 2010 again does not
seek to interfere with the existing State or Territory training legislation provisions. The clause
does however seek to address a situation that applies in NSW as noted in section 9.4 of the
Guide ,
“Trainee apprenticeships (which are available under some awards) can be
terminated by either the employer or apprentice simply giving notice to the other
party and the State Training Services in accordance with the provisions of the
industrial award or workplace agreement under which the apprentice is employed.
37
Similarly, the employment of existing worker traineeships can be terminated by
either party in accordance with the provisions of the industrial award or agreement
that applied prior to the commencement of the traineeship.” (p.25)
5.6
By including this provision in the awards it will provide certainty for those situations that are
not covered by the State or Territory legislation.
6.
Training Requirements
6.1
The variations to clause 13.12 in the Joinery and Building Trades Award 2010 and clause 15.6
of the Building and Construction General On-site Award 2010 that the CFMEU proposes are
identical. The proposed clauses consist of a number of existing and new provisions. Subclause
(a) is a re-write of clause 13.3 of the Joinery and Building Trades Award 2010 (also see the
definition in 15.1(b) of the Building and Construction General On-site Award 2010), which
seeks to make it clear that an employee can only be an apprentice if they have a registered
contract of training. By putting this provision up front we seek to prevent the exploitation of
young people of the kind referred to in paragraph 6 of the witness statement of Liam O’Hearn.
6.2
Subclause (b) is the same as the existing clause 13.11 in the Joinery and Building Trades Award
2010 and consistent with the existing 15.2(b) of the Building and Construction General On-site
Award 2010.
6.3
Subclause (c) is a new provision which is intended to address the current exploitation of
apprentices as referred to in the witness statements of Terry Kesby (see Appendix 13) and
Liam O’Hearn. The variation would enshrine in the awards the essential elements of the fair
deal as outlined in the BVET report,
“The essential elements of the fair deal are:

Varied and increasingly challenging work experience, so that by the end of
the apprenticeship, the apprentice has experience across the range of trade
work; no long periods of doing the same task or too much time spent on
meaningless work

Real on the job training, provided by a skilled tradesperson, someone who
can coach and mentor the apprentice through skills acquisition, not leave
them to work it out by themselves or expect them to be able to perform
tasks for which they don’t have the skills

Good supervision, with increasing flexibility and autonomy but in the early
months, no time left unsupervised or working alone

Competency based pay and progression, based on skills and work
performance and recognition for the apprentice’s achievements and
contributions, not an artificial time construct

A good boss, someone who treats the apprentice as a human being and an
employee, not a kid at the bottom of the ladder
38

Good open communications between apprentice, employer, work colleagues
and RTO

Fair work practices including a contemporary workplace culture that
prevents bullying and ensures safety” (p.13)
6.4
Subclause (d) is a new provision requiring mentoring arrangements for apprentices. Mentoring
is one of the elements of the fair deal set out above. The witness statements of Liam O’Hearn
and Robert Cameron also demonstrate the value of mentoring. Further support for mentoring
can be found in the recent release by Dr Alex Maroya, National Training Director, Master
Builders Australia Ltd, promoting the Master Builders Construction Apprenticeship Mentoring
Scheme (see Appendix 14). In the release titled The construction skills crisis and the industry
response, Dr. Moraya refers to the Commonwealth government’s $101 million Apprenticeship
Mentoring Package as “an industry-led program to improve retention and promote trade
careers” and that the MBA’s CAMS “allows for a much greater level of support on a national
basis to be provided to construction trades apprentices and their employers, which should lead
to increased apprenticeship completions and a greater commitment to a career in the building
and construction industry”.
6.5
Subclause (e) is a new provision which requires employers to provide the appropriate facilities
and experienced people to facilitate the training and supervise the apprentice while at work. It
seeks to address the problems identified in the witness statements of Liam O’Hearn and Terry
Kesby. It is also consistent with the elements of the fair deal set out in 6.3 above.
6.6
Subclause (f) is an extension of an existing provision found in clause 15.3(a) of the Building
and Construction General On-site Award 2010 (“No apprentice/trainee will work overtime or
shiftwork on their own or without supervision”). It seeks to extend the requirement to all
work performed by an apprentice but links it in with the employers health and safety
obligations and the competence of the apprentice. The provision is consistent with the fair
deal elements.
6.7
Subclause (g) is a rewrite of an existing provision found it clause 15.6 of the Building and
Construction General On-site Award 2010 and clause 13.12 of the Joinery and Building Trades
Award 2010. Over recent years we have witnessed significant increases in the fees being
charged by RTO’s and increases in the cost of text books. The witness statements of Quan
Tran and Jason Wainwright refer to these costs and the length of time before they are
reimbursed. The witness statements of Liam O’Hearn and Terry Kesby also refer to the
problem of apprentices not being reimbursed. The union submits that it is unrealistic to
expect apprentices, especially those on junior apprentice wage rates to pay what is the
equivalent of 2-3 weeks income in fees at the start of their employment.
7.
Payment for Specific Costs Associated With Attending Training
7.1
The variations that the CFMEU seek that fall under this heading are set out on pages 62-63 of
the ACTU’s Common Claims document. The variations essentially deal with the payment of
travelling time and fares when attending the off the job training away from the workplace,
39
and the payment of living away from home allowances when the apprentice has to attend the
off the job training under a block release or similar system and it would be unreasonable to
expect the apprentice to return home each night.
7.2
By the variations that we seek the union is attempting to remove the current uncertainty over
an apprentice’s entitlements. Under the Joinery and Building Trades Award 2010, clause 13.1
states that “The terms of this award apply to apprentices, including adult apprentices, except
where otherwise stated.” Clause 24.5 – Transfers, travelling and working away from usual
place of work, contains detailed provisions outlining an employee’s entitlements when an
employee is directed to proceed to a distant job (subclause (a)), and entitlements of
employees engaged on stonemasonry work at a cemetery (subclause (b)) and employees
engaged on glass and glazing work who is directed to commence work at a location other than
the employer’s usual place of business (subclause (c)). Nowhere in clause 24.5 does it say that
this clause does not apply to apprentices. Indeed we submit that it would be unfair for
apprentices not to be paid living away from home allowances and travel payments.
7.3
Similarly under the Building and Construction General On-site Award 2010 clause 15.2(a)
includes the provision that “The terms of this award apply to apprentices except where
otherwise stated”. Clause 24 – Living Away From Home – Distant Work, contains no
exemptions for apprentices. Clause 25 – Fares and Travel Patterns Allowance has a subclause,
25.12 that deals specifically with apprentices and states,
25.12 Apprentices
(a) Apprentices will be entitled to a proportion of the allowances prescribed in
clauses 25.2, 25.3 and 25.4 in accordance with the following scale:
(i) on the first year rate—75% of amount prescribed;
(ii) on second year rate—85% of amount prescribed;
(iii) on third year rate—90% of amount prescribed;
(iv) on fourth year rate—95% of amount prescribed.
(b) Apprentices will only receive the allowances prescribed in clause 25.12(a) for
days when they attend work. They will not be paid the allowance for days they
attend school. When a school-based apprentice attends off-the-job training not at
the school in which they are enrolled, they will receive 25% of the allowance as
prescribed in clause 25.12(a).
7.4
Under clause 25.12 apprentices are paid the fares and travel patterns allowance, at the rates
specified in 25.12(a), for days when they attend work. The only time that apprentices are not
paid the allowance are the situations covered by clause 25.10 (c) i.e. when on annual and
personal/carer’s leave (although the allowance is included in the calculation of annual leave
loading under 25.10(b)), or for days that they attend school. If a school based apprentice
40
attends off the job training not at the school at which they are enrolled, they are paid a
percentage of the fares and travel allowance.
7.5
The reference to “school” in clause 25.12(b) can be traced back to the variation made by
Commissioner Smith to the National Building and Construction Industry Award 2000 in
November 200446”, when the school based apprentices clause was introduced. Under this
variation a new clause 38.12.3 was inserted that provided as follows:
“38.12.3
7.6
Notwithstanding the other provisions of this clause, school based
apprentices shall only receive the allowance prescribed under clause
38.1, 38.2 and 38.3, at the scale prescribed in 38.12.1, for days when
they attend work and they shall not be paid the allowance for days
they attend school. When a school based apprentice attends offthe-job training not at the school in which they are enrolled, they
shall receive 25% of the allowance prescribed in clause 38.12.1.”
The variation was made following a Supplementary Decision47 by Commissioner Smith made
at the same time, in which he decided,
“[8]
Finally, fares and travelling will be calculated, for the time spent at
structured training away from the school in which the pupil is enrolled, at 25
percent of the usual allowance. This is consistent with other aspects of the
calculations for payment.”
7.7
This decision is clear indication that the fares and travel allowance is to be paid to apprentices
who attend off the job structured training. It is consistent with a number of other training
provisions that were included in the pre-modern awards.
7.8
In September 1995 Commissioner Gay varied the National Building and Construction Industry
Award 1990 to include clause 9D- Relationship to National Training Wage Interim Award
199448, and this clause made specific reference to the rates of pay including the fares
allowance being paid as per the award. On 18th October 1995, Commissioner Jones varied the
National Building and Construction Industry Award 199049 to include clause 51 – Civil
Operations Traineeship, and clause 51.4(g) provided that “All other allowances and
entitlements (including compensation for travel patterns) shall be paid in accordance with the
award”. These provisions are now retained by clause 28.3(b) in the Building and Construction
General On-site Award 2010.
7.9
When the National Building and Construction Industry Award 1990 was varied in October
1995 to include Appendix S – Award Restructuring in the Building and Construction Industry50,
clause 7.5 provided that,
“Travel costs incurred by an employee undertaking training in accordance with this
clause pursuant to 7.2 which exceed those normally incurred travelling to and from
work shall be reimbursed by the employer.”
46
PR952835 – See Tab 22 in the CFMEU Authorities Folder
PR952834 - See Tab 23 in the CFMEU Authorities Folder
48
Print M5238 – See Tab 24 in the CFMEU Authorities Folder
49
Print M5693 – See Tab 25 in the CFMEU Authorities Folder
50
Print M6430 - See Tab 26 in the CFMEU Authorities Folder
47
41
This provision has been included in the modern award and can be found in clause B.5(c) in the
Building and Construction General On-site Award 2010.
7.10 Under the NSW Building and Construction Industry (State) Award the only apprentices not
entitled to the fares and travel allowance when attending the off the job training were those
attending Master Builders Association of New South Wales off-the-job training school , as
clause 38 included the following provision:
“38.11 Apprentices
38.11.1 The following fares allowance and travelling allowance shall apply to
carpenters, joiners, bricklayers, painters, plasterers, slaters, roof tilers, stonemasons
and tilelayers apprentices employed under the terms and conditions of this award for
travel patterns and costs peculiar to the industry, which include mobility
requirements on employees and the nature of employment on construction work:
When employed on work located within the counties of Cumberland,
Northumberland or Camden - an amount set out in Item 5 of 38.12
38.11.2 Apprentices at a Master Builders Association of New South Wales off-the-job
training school shall not be paid any allowance in accordance with this clause unless
such an apprentice is required to commence work away from the regular training
school.
38.11.3 Civil Engineering Carpenter apprentices shall receive the full entitlement as
prescribed in 38.1, 38.2 and 38.3.”51
7.11
The payment of fares and travel, and living away from home allowances, has only become an
issue in recent times following a decision of the Full Federal Court in Construction Forestry
Mining & Energy Union (Construction & General Division) v The Master Builders Group Training
Scheme Inc, [2007] FCAFC 16552, which is discussed in the next section.
8.
When Training Time is Work Time and What Follows From This
8.1
The variations that the CFMEU seek that fall under this heading are set out on page 64 of the
ACTU’s Common Claims document. Essentially we seek variations to the awards to specify that
time spent by an apprentice to attend training, including off-the-job training, shall be work
time for all purposes of the award. The main effect of the variations would be to remove any
doubt as to the payment to apprentices of fares and travel payments and living away from
home allowances payable under the awards.
51
52
http://www.fwc.gov.au/consolidated_awards/AN/AN120089/asframe.html
[2007] FCAFC 165 - See Tab 27 in the CFMEU Authorities Folder
42
8.2
As noted in 7.11 above the payment of the fares and travel allowance has become an issue
following the Full Federal Court decision in Construction Forestry Mining & Energy Union
(Construction & General Division) v The Master Builders Group Training Scheme Inc. This
decision was in regard to an appeal concerning the proper interpretation of clause 38 of the
National Building and Construction Industry Award 2000 as it applied to apprentices in South
Australia. The dispute between the parties concerned whether an apprentice in South
Australia was entitled to the fares and travel patterns allowance on a day when he or she was
at trade school.
8.3
The Full Bench (at paragraph 11) identified that the critical issue to be determined in the
appeal was whether an apprentice who was at trade school as required by his or her training
contract was “employed on work” within the meaning of clause 38.1.2 of the award. The Full
Bench accepted that the attendance at trade school was part of the work of the apprentice
and that apprentices attended trade school in the course of, and as part of, their employment
(paragraphs 12 and 13).The Full Bench however determined,
“In our view the long accepted nature of a contract of apprenticeship, the language
of the Award and the purpose for which the fares and travel patterns allowance is
paid, all suggest that an apprentice while at trade school is not ‘employed on work’
within the meaning of cl 38.1.2 of the Award.” (Paragraph 21)
8.4
This decision was clearly determined on the wording of the National Building and Construction
Industry Award 2000. There is nothing in the decision that prevents the Commission including
a provision in these awards, that requires the payment of fares and travel and living away
from home allowances, if the Commission determines that such a variation has merit, is
necessary for the award to meet the modern award objective and is matter that can be
included in an award. We submit that the variation we seek meets all of these tests.
8.5
In regard to merit we submit that the evidence of Terry Kesby, Quan Tran, Jason Wainwright
and Jordan Parker demonstrate that apprentices have to travel significant distances to attend
their off the job training. We submit that for them not to receive any payment for this travel
would be unfair taking into account that apprentices are low paid, and mean that the award
would not meet the modern award objective, particularly s.134(1)(a). The Full Bench of the
Federal Court has determined that attendance at trade school for the off-the job training is
part of work, and that apprentices attend trade school in the course of ,and as part of, their
employment. The payment of travel allowances to attend trade school would therefore fall
within s.139(1)(g) and be a term that could be included in modern awards.
8.6
The union would also point out that the variations we seek are consistent with the provisions
that currently apply to trainees covered by the National Training Wage Schedule which is
included in most awards. In the case of the Building and Construction General On-site Award
2010 clause C.6.3 provides as follows:
C.6.3 Time spent by a trainee, other than a trainee undertaking a school-based
traineeship, in attending any training and assessment specified in, or associated
with, the training contract is to be regarded as time worked for the employer for the
purposes of calculating the trainee’s wages and determining the trainee’s
employment conditions.
43
8.7
We submit that under this provision the travel allowances would apply, therefore it would
unfair not to have the same travel allowances apply to apprentices.
8.8
If the Commission is not attracted to the specific wording proposed in the union’s variations
then we submit that the same outcome could be achieved by a provision that stated that
apprentices shall be paid for travel cost incurred in attending off the job training.
9.
Recognition of Service
9.1
The variation that the CFMEU seeks that falls under this heading is set out on page 71 of the
ACTU’s Common Claim document. The specific variation to the Joinery and Building Trades
Award 2010 is the insertion of a new 13.8(d) to read,
“Where the employment of an apprentice by an employer is continued after the
completion of the apprenticeship, the period of the apprenticeship will be counted
as service for the purposes of the award and long service leave entitlements and in
the event that an apprentice is terminated at the end of their apprenticeship and is
re-engaged by the same employer within six months of such termination, the period
of the apprenticeship will be counted as service in determining any future
termination entitlements.”
9.2
The above clause is based on clause 15.2(c) of the Building and Construction General On-site
Award 2010 (which was specifically referred to in the Stage 2 Award Modernisation decision –
see paragraph 3.31 above) and seeks to ensure that there is consistency in the provisions of
the awards.
10.
Probation
10.1 The union notes that regulation 1.13 of the Fair Work Regulations 2009 provides that a law
dealing with the probation of an employee that is part of a training arrangement (but that is
not a period of probationary employment) is not excluded by s.26 of the Fair Work Act 2009.
But as we set out in section 2 of this submission this does not prevent an award dealing with
the same matter (see 2.7 above).
10.2 In the variation to the Building and Construction General On-site Award 2010 sought by the
union we do not seek to diminish the existing standards for probationary periods. The VTO’s
for NSW (see Appendix 10) clearly show that the probationary periods for apprenticeships in
the building and construction industry are 3 months. This is what is sought to be included in
the Building and Construction General On-site Award 2010. It should be noted that the same
probationary period is already provided for in the Joinery and Building Trades Award 2010
(see clause 13.7), and the variation to the Building and Construction General On-site Award
2010 will provide consistency between the two awards.