Modern Awards Review 2012—Apprentices, Trainees and Juniors
[2013] FWCFB 5411
•22 AUGUST 2013
[2013] FWCFB 5411 |
FAIR WORK COMMISSION |
DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Item 6, Sch. 5—Modern awards review
Modern Awards Review 2012—Apprentices, Trainees and Juniors(AM2012/18, AM2012/64, AM2012/107, AM2012/109, AM2012/110, AM2012/127, AM2012/128, AM2012/129, AM2012/135, AM2012/140, AM2012/141, AM2012/152, AM2012/155, AM2012/157, AM2012/159, AM2012/183, AM2012/247)
JUSTICE BOULTON, SENIOR DEPUTY PRESIDENT | SYDNEY, 22 AUGUST 2013 |
Review of all modern awards after two years - applications relating to apprentices, trainees and junior rates - common matters - apprentice wages - adult apprentice provisions - terms and conditions of employment for apprentices - competency based wage progression - application for variation of National Training Wage Schedule - insertion and variation of model school-based apprentice schedule.
CONTENTS | PARA |
A. Introduction (i) Legislative provisions applicable to the review(ii) Background to the review and the making of the applications The Report of the Apprenticeship Expert Panel (iii) Conduct of the review Evidence Submissions | [1] [5][9] [18] [24] [25] [48] [73] [75] [103] [106] [120] [125] [191] [198] [235] [241] [251] [263] [268] [303] [303] [345] [363] [368] [378] [392] [413] [416] [418] [435] [441] [450] [456] [461] [461] [482] [483] [493] [496] [498] |
A. INTRODUCTION
[1] Under Item 6, Schedule 5 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Provisions Act), 1 the Fair Work Commission (the Commission) is required to conduct a review of all modern awards after two years (the Transitional Review). In the review, the Commission must consider whether the modern awards achieve the modern awards objective and are operating effectively, without anomalies or technical problems arising from the award modernisation process conducted under Part 10A of the Workplace Relations Act 1996 (the WR Act).
[2] In a statement of 27 April 2012, 2 the President of Fair Work Australia (FWA) indicated that a Full Bench would be constituted to determine all applications to vary modern awards in relation to apprentices, trainees and juniors as part of the Transitional Review of modern awards. Forty-six applications were originally referred to the Full Bench. Several additional applications were subsequently referred. A full list of the applications referred to the Full Bench is included as Attachment B to this decision.
[3] After hearing from the parties on the issue of how the review should be conducted, the Full Bench decided that it would deal first with four “common matters” relating to multiple modern awards. 3 A fifth common matter was added to the list at the proceedings on 4 March 2013. The common matters are:
1. An application by the Australian Council of Trade Unions (ACTU) and eight of its affiliates 4 to raise apprentice wages. The variations sought are:
- that the first year rate for apprentices 5 across all relevant modern awards be raised to 60% of the standard C10 tradesperson rate, or $434.70 per week;6
- that adult apprentices 7 be paid the higher of the relevant apprentice rate or the lowest adult rate in the relevant modern award, and that an adult apprentice is an apprentice who is 20 years of age or older; an
- that adult apprentices who were employed by the employer prior to commencing their apprenticeship do not suffer a reduction in pay.
2. Applications by the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU), the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and the Construction, Forestry, Mining and Energy Union (CFMEU) to insert “model clauses” relating to apprenticeship into various modern awards. The model clauses cover a range of matters including:
- the provision by employers of work that is relevant and appropriate to the apprentice’s training contract;
- a requirement that apprentices not be left to work unsupervised, consistent with relevant occupational health and safety (OHS) requirements;
- a provision that apprentices who were employed by the employer prior to commencing their apprenticeship do not suffer a reduction in pay;
- provisions relating to the suspension, cancellation and termination of training and employment contracts;
- provisions relating to the recognition of prior service of an apprentice;
- an obligation that employers provide adequate mentoring to apprentices;
- provisions concerning lost time, probation, rostered days off (RDOs) and dispute settlement;
- provisions relating to attendance by apprentices at training establishments and payment of fees and other costs associated with apprentices’ training; and
- a prohibition against apprentices under 18 years of age working overtime or shift work unless they wish to do so, and a requirement that such work should not interfere with training for other apprentices.
3. An application by the Australian Industry Group (Ai Group) to vary the National Training Wage Schedule (NTWS), as it appears in many modern awards. The variations sought are to change the wording of references to time spent “to attend” or “in attending” training to more explicitly refer to time spent “in attendance” at training. The variations are intended to make it clear that employers are not required to pay for time spent by trainees in travelling to training, and that the NTWS does not extend the application of general award entitlements.
4. Applications by the AMWU and the CFMEU to insert provisions for competency based wage progression for apprentices into the Sugar Industry Award 2010 (the Sugar Award), the Airline Operations - Ground Staff Award 2010 (the Airline Award), the Graphic Arts, Printing and Publishing Award 2010 (the Graphic Arts Award), the Building and Construction General On-Site Award 2010 (the Building Award),and the Joinery and Building Trades Award 2010 (the Joinery Award).
5. A submission by the Commonwealth of Australia, as represented by the Department of Education, Employment and Workplace Relations (DEEWR), seeking to insert the model schedule dealing with school-based apprentices into seven modern awards, and to vary the schedule in the awards before us to provide for competency based progression.
[4] This decision deals with the abovementioned common matters.
(i) Legislative provisions applicable to the review
[5] The Transitional Review is being conducted under Item 6, Schedule 5 of the Transitional Provisions Act. Item 6 provides:
“6 Review of all modern awards (other than modern enterprise awards and State reference public sector modern awards) after first 2 years
(1) As soon as practicable after the second anniversary of the FW (safety net provisions) commencement day, FWA must conduct a review of all modern awards, other than modern enterprise awards and State reference public sector modern awards.
Note: The review required by this item is in addition to the annual wage reviews and 4 yearly reviews of modern awards that FWA is required to conduct under the FW Act.
(2) In the review, FWA must consider whether the modern awards:
(a) achieve the modern awards objective; and
(b) are operating effectively, without anomalies or technical problems arising from the Part 10A award modernisation process.
(2A) The review must be such that each modern award is reviewed in its own right. However, this does not prevent FWA from reviewing 2 or more modern awards at the same time.
(3) FWA may make a determination varying any of the modern awards in any way that FWA considers appropriate to remedy any issues identified in the review.
Note: Any variation of a modern award must comply with the requirements of the FW Act relating to the content of modern awards (see Subdivision A of Division 3 of Part 2-3 of the FW Act).
(4) The modern awards objective applies to FWA making a variation under this item, and the minimum wages objective also applies if the variation relates to modern award minimum wages.
(5) FWA may advise persons or bodies about the review in any way FWA considers appropriate.
(6) Section 625 of the FW Act (which deals with delegation by the President of functions and powers of FWA) has effect as if subsection (2) of that section included a reference to FWA’s powers under subitem (5).”
[6] The legislative provisions applicable to the Transitional Review were considered in a decision relating to the Modern Awards Review 2012 given on 29 June 2012. 8 In that decision, the Full Bench dealt with various preliminary issues relating to the approach to be adopted in the Transitional Review. In particular, and for the purposes of the present matters, we note and adopt the following conclusions in that decision:
“[23] First, any variation of a modern award must comply with the requirements of the FW Act which relate to the content of modern awards. These requirements are set out in Subdivision A of Division 3 of Part 2-3 of the FW Act...
[25] Any variation to a modern award arising from the Review must comply with s.136 of the FW Act and the related provisions which deal with the content of modern awards (ss.136–155 of the FW Act)...
[34] While s.138 is relevant to the Review there is still the question of the extent of its impact and the circumstances in which it will have on an application to a variation determination...
[35] The other issue which is contentious is whether ss.157–160 are relevant to the Review. A number of parties have suggested that these provisions are “contextually relevant” or “compatible” with Item 6 and the Review...
[38] It seems to us that the Review is quite separate from both the 4 yearly reviews of modern awards provided for in s.156 and from the process of varying awards outside the 4 yearly review, as provided in ss.157 and 158. We are not persuaded that these provisions are relevant to the Tribunal’s task under Item 6 of Schedule 5. If ss.157 and 158 applied the Review would be otiose...
[83] As to the historical context the award modernisation process was conducted by the AIRC under Part 10A of the former WR Act. The process took place in the period from April 2008 to December 2009 and was conducted in accordance with a written request (the award modernisation request) made by the Minister for Employment and Workplace Relations to the President of the AIRC. The award modernisation process was completed in four stages, each stage focussing on different industries and occupations. All stakeholders and interested parties were invited to make submissions on what should be included in modern awards for a particular industry or occupation. Separate processes, including variously, the provision of submissions, hearings and release of draft awards, were undertaken in respect of the creation of each modern award to ensure parties were able to make submissions and raise matters of concern relevant to particular awards. By the end of 2009 the AIRC had reviewed more than 1500 state and federal awards and created 122 industry and occupation based modern awards.
[84] ... The award modernisation process required by Part 10A of the WR Act has been completed.
[85] Two points about the historical context are particularly relevant. The first is that awards made as a result of the award modernisation process are now deemed to be modern awards for the purposes of the FW Act (see Item 4 of Schedule 5 of the Transitional Provisions Act). Implicit in this is a legislative acceptance that the terms of the existing modern awards are consistent with the modern awards objective. The second point to observe is that the considerations specified in the legislative test applied by the Tribunal in the Part 10A process is, in a number of important respects, identical or similar to the modern awards objective which now appears in s.136...
[89] In circumstances where a party seeks a variation to a modern award in the Review and the substance of the variation sought has already been dealt with by the Tribunal in the Part 10A process, the applicant will have to show that there are cogent reasons for departing from the previous Full Bench decision, such as a significant change in circumstances, which warrant a different outcome...
[99] To summarise, we reject the proposition that the Review involves a fresh assessment of modern awards unencumbered by previous Tribunal authority. It seems to us that the Review is intended to be narrower in scope than the 4 yearly reviews provided in s.156 of the FW Act. In the context of this Review the Tribunal is unlikely to revisit issues considered as part of the Part 10A award modernisation process unless there are cogent reasons for doing so, such as a significant change in circumstances which warrants a different outcome. Having said that we do not propose to adopt a “high threshold” for the making of variation determinations in the Review, as proposed by the Australian Government and others.
[100] The adoption of expressions such as a “high threshold” or “a heavy onus” do not assist to illuminate the Review process. In the Review we must review each modern award in its own right and give consideration to the matters set out in subitem 6(2). In considering those matters we will deal with the submissions and evidence on their merits, subject to the constraints identified in paragraph [99] above.”
[7] The modern awards objective is set out in s.134 of the Fair Work Act 2009 (the Act) as follows:
“134 The modern awards objective
What is the modern awards objective?
(1) The FWC must ensure that modern awards, together with the National Employment Standards, provide a fair and relevant minimum safety net of terms and conditions, taking into account:
(a) relative living standards and the needs of the low paid; and
(b) the need to encourage collective bargaining; and
(c) the need to promote social inclusion through increased workforce participation; and
(d) the need to promote flexible modern work practices and the efficient and productive performance of work; and
(e) the principle of equal remuneration for work of equal or comparable value; and
(f) the likely impact of any exercise of modern award powers on business, including on productivity, employment costs and the regulatory burden; and
(g) the need to ensure a simple, easy to understand, stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards; and
(h) the likely impact of any exercise of modern award powers on employment growth, inflation and the sustainability, performance and competitiveness of the national economy.
This is the modern awards objective.
When does the modern awards objective apply?
(2) The modern awards objective applies to the performance or exercise of the FWC’s modern award powers, which are:
(a) the FWC’s functions or powers under this Part; and
(b) the FWC’s functions or powers under Part 2 6, so far as they relate to modern award minimum wages.
Note: The FWC must also take into account the objects of this Act and any other applicable provisions. For example, if the FWC is setting, varying or revoking modern award minimum wages, the minimum wages objective also applies (see section 284).”
[8] The minimum wages objective is set out in s.284(1) of the Act as follows:
“284 The minimum wages objective
What is the minimum wages objective?
(1) The FWC must establish and maintain a safety net of fair minimum wages, taking into account:
(a) the performance and competitiveness of the national economy, including productivity, business competitiveness and viability, inflation and employment growth; and
(b) promoting social inclusion through increased workforce participation; and
(c) relative living standards and the needs of the low paid; and
(d) the principle of equal remuneration for work of equal or comparable value; and
(e) providing a comprehensive range of fair minimum wages to junior employees, employees to whom training arrangements apply and employees with a disability.
This is the minimum wages objective.”
(ii) Background to the review and the making of the applications
[9] A review of apprentice wages and conditions has been in prospect for some years. A review by the Australian Fair Pay Commission was commenced in September 2007, but was cancelled in early 2008 following the establishment of the award modernisation process under new legislative arrangements.
[10] In the award modernisation process, apprentice wages and conditions were the subject of consideration, but there was no in-depth comprehensive review undertaken. In the Award Modernisation decision of 18 December 2008, 9 the Full Bench described the approach taken in relation to junior and apprentice rates as follows:
“[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.”
[11] In relation to the hospitality industry awards, the Full Bench said:
“[134] The diversity in apprentice rates is indicative of broader issues which need to be addressed, in relation to apprentice and other training arrangements across the country. We do not think that the award modernisation process provides a proper opportunity to address those issues. In reaching that conclusion, we have had regard to submissions of training organisations which advocate a fuller review of apprentice wages.”
[12] In the Award Modernisation decision of 2 September 2009, 10 the Full Bench said that “it would be desirable to develop a unified national system of training and employment conditions for apprentices”, and in that respect referred to the annual wage reviews.
[13] There were a series of conferences before the President of FWA in 2010 in relation to the possible timing and scope of a review of apprentice and trainee wages and conditions. Following these conferences, the President indicated in early 2011 that the tribunal would wait for the results of the Apprenticeship Expert Panel report and the government response to it before deciding on a further course of action about the review.
[14] The final report of the Apprenticeship Expert Panel supported a review of apprenticeship and traineeship provisions, wages and conditions by FWA, but did not address the mechanism through which such a review might take place. The ACTU and the unions took the view that the best way to progress the apprenticeship matters is in the form of applications as part of the Transitional Review.
[15] Following a conference with interested parties, the President set out a process by which the parties interested in each application relating to apprentices, trainees and junior rates would meet to identify relevant issues and then to report back. 11 Following the reports to the President, some 46 applications were to be dealt with by the Full Bench. Several applications were subsequently referred to the Full Bench.
[16] The matters were listed by the Full Bench for mention and programming on 26 October 2012 and directions were made for the filing of submissions and evidence. 12 A timetable was established for the presentation of evidence and submissions relating to the common matters, and the ACTU was requested to provide an updated table of the common matters.13
[17] Given this background, we have taken the view that the claims are properly before the Full Bench in the context of the Transitional Review.
The Report of the Apprenticeship Expert Panel
[18] On 31 January 2011, the final report of the Apprenticeship Expert Panel, “A Shared Responsibility: Apprenticeships for the 21st Century”, 14 was released. Under its terms of reference, the Expert Panel was given a wide-ranging brief to examine the economic benefits of the Australian apprenticeship system and to develop options for government on how to sustain and build the system into the future.15
[19] The Expert Panel identified a number of major challenges which need to be addressed if the Australian apprenticeship system is to meet the skills needs of the 21st century economy. These include the need to develop skills in certain sectors of the economy, such as engineering and the traditional trades; unacceptably low apprenticeship completion rates; the complexity of the system; and the misalignment of the apprenticeship system and the workplace relations system.
[20] In considering the way forward, the Expert Panel recognised a need for consistency in wages and conditions for apprentices:
“We believe there is scope for a better approach to support the needs of the apprentices and trainees. This includes facilitating arrangements for the effective implementation of competency‐based training progression (and associated wages progression) for apprentices and trainees. The role of Recognition of Prior Learning (RPL) and Recognition of Current Competencies (RCC) is also significant, given the increased number of mature age Australian Apprentices.
We also note the disparity in Australian Apprenticeship and training arrangements in modern awards with respect to several issues including adult Australian Apprentice rates of pay, recognition of pre-apprenticeship training and part‐time arrangements for Australian Apprentices. We encourage and endorse a broad review conducted by Fair Work Australia (FWA) into apprenticeship and traineeship wages and conditions. We note that a large number of Australian Apprentices appear to be receiving above award rates of pay, which likely means that Australian Apprenticeship wage rates contained in awards do not reflect the current market for those wage rates. Whilst many Australian Apprentices receive above award wage rates, the safety net (or minimum wage rates in modern awards) should reflect the changing demographics of Australian Apprentices. This includes more mature age people, many from diverse backgrounds and with a range of experiences choosing to enter into an Australian Apprenticeship compared to the past.” 16
[21] To address the issues identified, the Expert Panel made recommendations directed towards ensuring that Australia has a high-quality apprenticeship system which responds to the needs of the economy, supports nationally consistent standards for employment and training, focuses on retention and completion, and supports high-quality skill development. 17
[22] Several of the recommendations are of particular relevance to the current review. Recommendation 4 refers to support to assist employers to provide high-quality off-the-job and on-the-job training through support services such as mentoring and pastoral care. Recommendation 11 refers to the implementation of a strategy to raise the status of apprenticeships and traineeships, including promotion as a valued career choice for both males and females. Recommendation 14 proposes a broad review conducted by FWA into apprenticeship and traineeship wages and conditions:
“Support a review of apprenticeship and traineeship provisions, wages and conditions by Fair Work Australia, considering:
- the removal of barriers to competency based wage progression in modern awards
- apprentice and trainee award pay compared to going rates of pay
- age, diversity and circumstances of commencing apprentices and trainees
- allowances (travel, tools, clothing, course fees)
- cost to apprentices and trainees of participation in an Australian Apprenticeship
- part‐time and school‐based arrangements
- recognition of pre‐apprenticeship and pre‐vocational programs
- supervision ratios for apprentices and trainees.”
[23] The Australian Government, in its response to the Expert Panel’s recommendations in December 2011, agreed that a review by FWA was warranted and indicated that it would actively contribute to the review. This support is also set out in the scoping paper provided to the Full Bench by the Minister for Employment and Workplace Relations regarding the conduct of the review. 18
(iii) Conduct of the review
[24] In the proceedings on 4-6, 19-22 March and 3-4 April 2013, the Full Bench heard opening submissions on the common matters and evidence from a variety of witnesses called by the parties. On 22-24 April and 1-3, 8-9 May 2013, the Full Bench heard the submissions of the parties on the proposed variations relating to the common matters.
Evidence
[25] There was extensive evidence and material presented in the course of the review proceedings. This included reference to inquiries, research and surveys relating to the apprenticeship system which have been conducted nationally and in various States. We do not seek to summarise or refer to all of the evidence presented, but provide the following overview.
[26] At the outset we refer to the useful statistical and background information regarding apprentices and the apprenticeship system in Australia provided in various publications of the National Centre for Vocational Education Research Ltd (NCVER). In relation to the general position with respect to apprenticeships in Australia, we were referred to the NCVER publication on “Australian vocational education and training statistics”(June quarter 2012). It showed that the number of apprentices and trainees in training as at 30 June 2012 was 514,900, an increase of 11.3% from one year earlier. In relation to overall trends, the publication states that for the 12 months ending 30 June 2012:
● trades commencements increased by 3.2%;
● completions (trades and non-trades) increased by 8.1%; and
● cancellations and withdrawals (trades and non-trades) increased by 2.8%.
[27] The NCVER provided a series of reports to the Apprenticeship Expert Panel, including on “The apprenticeship and traineeship system’s relationships with the regulatory environment”. 19 The report notes that apprenticeships and traineeships are based on a legal contract - the contract of training - between the individual, an employer, and a training provider. However the contract of training is only one part of the legal and regulatory framework that governs apprenticeships and traineeships. The report considers other parts of that framework, in particular, the licensing system, award structures, and legislative and quality assurance arrangements. In relation to award structures, the report notes:
“The apprenticeship model combines a contract of training with a contract of employment and as such involves two regulatory systems: the training system and the industrial relations system. The new Fair Work industrial relations system has consolidated coverage into 122 modern awards, 95 of which contain the Training Wage Schedule and 45 of which provide for the employment of apprentices. Considerable diversity in apprentice pay and conditions remains and it is as yet unclear whether the new framework can be more adaptive in response to issues such as the expansion of apprenticeships and traineeships into new areas, competency based wage progression, and the recognition of previous training and qualifications.” 20
[28] In the course of the proceedings, evidence was given in statements provided by expert witnesses, proprietors and managers of businesses, managers of training providers, union officials, and apprentices. These witnesses provided much useful information about the operation of the apprenticeship system, the challenges and problems in the system, and the implications of the proposed variations from the perspectives of employers, training providers and apprentices. Many of these persons were called for the purposes of cross-examination, which not only allowed their evidence to be tested but also provided an opportunity for the members of the Full Bench to ask questions about their statements and their involvement in the apprenticeship system. We have taken all the evidence into consideration in reaching our conclusions in relation to the matters before us. However, given the large number of statements and witnesses involved, we provide only a general summary of the evidence in this decision.
[29] In support of its claims, the ACTU relied on a report prepared by Dr Phillip Toner, Honorary Senior Research Fellow, University of Sydney, entitled “The Role of Wages and Other Factors in Apprentice Commencements and Completions: A Selected Review of the Literature in Australia” 21 (the Toner Report). The report addresses a range of issues relevant to the ACTU claims, including the extent to which apprenticeship commencement and completion rates are affected by apprentice wages, a comparison of apprentice wage rates with accepted measures of poverty, and the likely impact of granting the union claims on the Australian economy and on business. The Toner Report also refers to a number of major changes to the characteristics of apprentices in Australia that have occurred over the past two decades. In particular, the report notes the significant reduction in the proportion of younger apprentices, aged 19 or under, from over three quarters (77.4%) to less than two thirds (62.1%) and the corresponding increase in the proportion of older apprentices, so that currently more than one in five (21.3%) apprentices is aged 25 or over.22
[30] The unions involved in the proceedings presented evidence from expert witnesses, union officials and apprentices, as well as the results of surveys of apprentices.
[31] CEPU officials gave evidence regarding apprentices in various industries and sectors including in the electrical contracting industry, the transmission, distribution and generation sectors of the power industry, building and construction, the lift industry, telecommunications, black coal mining, and plumbing and fire sprinklers. The CEPU apprentice witnesses gave examples of the types of work undertaken by electrical apprentices in the various industries and sectors, the budget requirements of apprentices and the financial hardships faced by them, and the provision of appropriate supervision and training. The CEPU also relied upon the results of a survey of electrical apprentices conducted from March to July 2012. The survey was about apprentice pay rates and expenses and the ability of apprentices to adequately meet those expenses.
[32] The CEPU called Professor John Buchanan, the Director of the Workplace Research Centre (WRC) and a professor of Work and Organisational Studies at the University of Sydney’s School of Business. The evidence of Professor Buchanan mainly related to a report prepared by the WRC for the Electrical Industry Stakeholder Consortium entitled “The Changing Situation of Electrical Apprentices: Submission to the Modern Award Review”. 23 Key findings of the report include:
● “The assumption that apprentices have lower work value because they are untrained young people who remain marginally or wholly dependent on their parents, and who have limited job-ready experience requires revision. Many apprentices enter their training with deeper cognitive, technical and behavioural skills than their predecessors.” 24
● “There are strong grounds for the structure and contents of these awards to be reviewed to ensure greater consistency in the relativities, adult rates of pay and continuity clauses to reflect the changing demographic situation of electrical apprentices that has occurred over the last ten years.” 25
● “The wage rates contained in modern awards are insufficient to meet community expectations of a reasonable standard of living. The prevalence of financial resource constraints associated with undertaking an adult apprenticeship makes it unattractive and difficult to commence and complete apprenticeship training.” 26
[33] AMWU officials gave evidence relating to apprentices in a range of industries and sectors, including the manufacturing industry, the manufacturing, service and repair sectors of the vehicle industry, and the graphic arts, printing and publishing industries. One AMWU official gave evidence about a survey of apprentices that she conducted in relation to costs associated with travel and accommodation for “block release” training. The AMWU apprentice witnesses gave evidence relating to their personal finances and budgetary situations and the hardships that they experience, and the impacts of apprentice wages and conditions upon their thinking and decision-making regarding their apprenticeships.
[34] The AMWU also relied upon the results of the “Better Wage Apprentice Survey”, 27 which was conducted in 2012 and received responses from 545 apprentices who were AMWU members as well as 32 non-members. The survey was about apprentice demographics, work conditions and training arrangements.
[35] Several CFMEU officials gave evidence relating to apprentices in various States, principally in the residential and commercial sectors of the building and construction industry. The officials also gave evidence in relation to disputes with employers regarding apprenticeship issues, and the ways in which apprentice labour is used in some parts of the industry. The CFMEU apprentice witnesses gave evidence relating to their income and expenditure, and the difference in apprentice wages between the commercial and residential sectors of the building and construction industry.
[36] The employer organisations appearing in the proceedings presented evidence from expert witnesses, managers of group training organisations (GTOs) and employers of apprentices, and also relied upon the results of surveys of employers.
[37] The Ai Group called Mr Dean Arundell, the General Manager of Australian Industry Group Training Services Pty Ltd. Mr Arundell gave evidence primarily relevant to the manufacturing industry, relating to the demand for apprentices, current rates of pay, completion rates, and costs of training and travel.
[38] Australian Business Industrial (ABI) filed witness statements from managers and officers of several GTOs, as well as one small business owner. The witnesses gave evidence about the costs to employers associated with employing apprentices, the reasons for non-completion of apprenticeships, the operation of GTOs, and other issues associated with apprenticeships.
[39] ABI also relied on the evidence of Ms Zoe Jenkins, an employed solicitor at Australian Business Lawyers and Advisers, and Mr Nicholas Minto, a Senior Policy Adviser, Employment Education and Training at the NSW Business Chamber. Ms Jenkins designed an online survey that was distributed to members of six State and Territory chambers of commerce. 28 The report of the survey results concluded that “a significant portion of the employer respondents would decrease or cease engaging apprentices should there be an additional burden on their businesses...” created by a number of factors including an increase in minimum wages, introducing travel time payments for apprentices, or removing employers’ capacity to have their apprentices work overtime or shiftwork.29 Mr Minto gave evidence in relation to various matters, including cost barriers to employers engaging in training, the notion of a training wage, and competency based wage progression.
[40] Master Builders Australia (MBA) and the Housing Industry Association (HIA) relied upon a specially commissioned report by the Centre for International Economics entitled “Increasing apprentice and trainee wages and conditions in the building and construction industry: Costing the impact of union applications” (the CIE Report). The central finding of the CIE Report was that:
“Were the CFMEU application accepted, the relative attractiveness of employing apprentices, relative to qualified construction trades workers would fall considerably, leading to the loss of thousands of apprentice positions.” 30
[41] Following cross-examination of the CIE Report’s author, Mr Derek Quirke, some figures in the report were adjusted. An amended version of the report was tendered as a separate exhibit, along with a schedule setting out the differences between the two versions. 31
[42] MBA also relied on the evidence of Mr Omesh Jethwani, the NSW State Manager Apprenticeship Mentoring for the MBA’s Apprenticeship Group Training Scheme, and Mr Dave Callan, the Chairman of the Board of Directors of the Master Builders Group Training Scheme Inc (MBGTS). Both Mr Jethwani and Mr Callan gave evidence in relation to their experience of operating a GTO within the building and construction industry. Mr Callan also attempted to assess the cost of the ACTU and the CFMEU’s claims in relation to the relevant modern awards, and concluded that they would increase the MBGTS apprentices wage bill by approximately 25%. 32
[43] The National Electrical and Communications Association (NECA) called more than 15 witnesses to give evidence. Its witnesses were mainly small and medium business operators in the electrical contracting industry who employ apprentices. These witnesses gave evidence in relation to conditions in the industry, the financial position of their businesses, and their likely response if the union claims were granted. NECA also called Mr Philip Green, the Executive Director of NECA’s Victorian Chapter, and Mr Robert McGuinness, the Membership Development Officer for the same chapter. Mr Green gave evidence in relation the electrical contracting industry generally, while Mr McGuinness gave evidence in relation to Australian Apprenticeship Centres and safety and licensing issues within the industry.
[44] The Electrical Contractors Association (ECA) called Ms Stacey Ozolins, its National Apprenticeship Programs Manager. Ms Ozolins referred to unpublished data collected by the Queensland Government in relation to apprenticeship cancellations, as well as information relating to the electrical industry generally.
[45] The Victorian Automotive Chamber of Commerce (VACC) and the Motor Trade Association of South Australia presented evidence and submissions on behalf of motor trades associations in five States (collectively, the Motor Trades Associations, or MTA). Most of the MTA witnesses were employers in the vehicle industry that employ apprentices and/or act as host organisations for apprentices who are employed by GTOs. These witnesses gave evidence about conditions in the industry, the financial position of their businesses, and their likely response if the union claims were granted. Unlike the employer witnesses called by other employer associations, the MTA witnesses generally supported an increase in apprentice wages in the modern award relevant to their industry, but not an increase of the size sought by the ACTU and the AMWU.
[46] Evidence was also given by the managers responsible for running the MTA group training schemes in South Australia and Victoria, Mr John Chapman and Mr Nigel Muller respectively. Mr Chapman and Mr Muller gave evidence in relation to the operation of their GTOs and set out their views as to the likely effects of granting the ACTU and the AMWU’s claims.
[47] The Master Plumbers and Mechanical Contractors Association of NSW (MPA-NSW) called Mr Paul Naylor, who is the Chief Executive Officer of the organisation. Mr Naylor explained what he saw as the likely impact of the CEPU’s claims in relation to apprenticeship costs, and the Commonwealth’s submissions in relation to competency based wage progression. He also gave evidence in relation to an online survey of members of the MPA-NSW. The survey sought the views of members regarding the union claims in the present proceedings.
Submissions
[48] The ACTU submitted that there is a strong equity and economic case for improvements to apprentice wages. It was said that report after report, survey after survey, has highlighted the inadequacy of current apprenticeship wages in attracting and retaining apprentices, in responding to the changing profile of apprentices over time in terms of the age, skills and experience, and in providing apprentices with dignity and sufficient income to maintain a reasonable standard of living in line with community standards and expectations. The current situation where apprentices on award rates have to scrape by, often relying on the support of family or friends, is not a fair or sustainable way for the apprenticeship system to continue. It was also said that low wages are a major factor explaining the declining apprenticeship completion rates in recent years, with almost a third of apprentices dropping out in the first year.
[49] It was submitted that a strong apprenticeship system is essential to give young, and older, people a pathway to a secure job, and to meet the skills needs of employers and the economy. Australia has and should continue to set high standards for the way its apprenticeship system operates. This must include a safety net of fair wages and conditions to support apprentices.
[50] The ACTU submitted that the Commission has jurisdiction to consider the various union applications in the Transitional Review and that the claims sought in relation to rates of pay and conditions for apprentices could be granted having regard to the relevant legislative requirements, in particular the modern awards objective and the minimum wages objective. The ACTU submissions with respect to the jurisdiction of the Commission were adopted by the AMWU, the CEPU and the CFMEU, and each of the unions made similar submissions in relation to the wage increases sought.
[51] In relation to its applications, the CEPU submitted that the impact upon businesses and the economy of raising wages was not such as to warrant the claim not being granted, and that on balance the effect on the national economy of granting the claims was likely to be positive. In relation to the proposed clauses regarding apprentice terms and conditions of employment, it was said that the national economy would benefit from improved retention and skills formation. Particularly in relation to the Electrical, Electronic and Communications Contracting Award 2010 (the Electrical Contracting Award), it was said current minimum wages, which are some of the lowest in any modern award, do not meet the needs of apprentices or provide a fair living standard.
[52] The AMWU made detailed submissions with respect to each of the awards that it applied to vary. Generally it submitted that:
“The claim is made at a time when the manufacturing industry faces a shortage of engineering skills’ capacity and at a time when apprenticeships are a less valued option than in previous generations for the cohort of older, more qualified and more experienced school leavers. The claim recognises that there are a plurality of issues impacting on completion rates including apprentice wages and conditions. Modern Award provisions are well placed to make a positive contribution in seeking improved retention outcomes.” 33
[53] The AMWU made detailed submissions with respect to the costs of granting the union claims in relation to the Manufacturing and Associated Industries and Occupations Award 2010 (the Manufacturing Award). It was said that the costs to employers would be relatively modest.
[54] The CFMEU submitted that variations sought to apprentice conditions of employment in the Building Awardand the Joinery Awardwould resolve confusion and ambiguity as to the entitlements of apprentices, particularly with respect to time spent in off-the-job training and in identifying what matters are within the purview of the Commission on one hand and relevant State and Territory training authorities or industrial tribunals on the other. In relation to competency based wage progression, it submitted that all relevant expert reports, government policy and every major employer body have expressed in-principle support, but that employer groups have been slow in taking action to make it a reality. Further, it was said that the introduction of competency based wage progression and higher wages would increase productivity. The CFMEU’s applications to insert competency based wage progression into the modern awards were supported by the Commonwealth. 34
[55] The ACTU and the union applications were generally opposed by the employer parties to the proceedings. Part of the employer opposition was based on whether the union claims could be considered as part of the Transitional Review and on jurisdictional grounds. However the main opposition related to the merits and the implications of the proposed changes.
[56] In relation to what were broadly referred to as “jurisdictional” issues, the employers submitted that some of the variations sought by the ACTU and the unions are terms that cannot be included in modern awards pursuant to Division 3 of Part 2-3 of the Act. It was submitted that some terms could or should not be added to modern awards because of the rules governing the interaction between the Act, modern awards, and State and Territory legislation. It was also submitted that, contrary to the ACTU submission, the Commission must take into account work value considerations in deciding whether to increase minimum wages in the Transitional Review.
[57] In relation to the merits of the claims for increased wages, the submissions of the Ai Group were broadly representative of the employer organisations as a whole. The Ai Group submitted that apprentice wages in modern awards already provide a fair and relevant safety net, satisfying the modern awards and minimum wages objectives. It was said that the increases sought were not justified by work value principles, and that it is not appropriate to standardise apprentice wages across all modern awards given the differences between industries and the skills required of apprentices. Further, on the basis of NCVER research about the costs of training apprentices, 35 it was submitted that the proposed increases would be a disincentive for employers to take on apprentices:
“The abovementioned findings suggest that the Unions’ applications will distort the careful balance between the cost of training an apprentice and the productivity of an apprentice. The Unions’ applications would simply give employer[s] a disincentive to invest in apprenticeships.” 36
[58] With respect to the AMWU, CEPU and CFMEU applications, the Ai Group submitted generally that the variations were not necessary for the relevant modern awards to meet the modern awards objective or to rectify anomalies or technical difficulties arising from the award modernisation process. It was said that the unions had not demonstrated cogent reasons or put on a sufficient evidentiary case to justify the Full Bench departing from the outcomes of the award modernisation process.
[59] The ACCI submitted that the approach of the ACTU and the unions in seeking a common wage rate for first year apprentices across a multiplicity of awards is inappropriate and will substantially reduce the number of opportunities offered by employers. The ACCI submitted that the ACTU claim for a general wage increase for first year apprentices should be refused and applications for changes in wages and conditions should be examined on an award-by-award basis, taking into account apprenticeship and industry circumstances.
[60] ABI submitted that apprentice rates of pay are only one factor influencing commencement and completion rates, and that the ACTU and the unions overstated their impact. It was said that the unions are asking the Commission to discard the long-held view that apprentice rates are intended to provide a training wage, not necessarily a living wage. It was submitted that the variations sought by the unions should be refused as they are not necessary to ensure that the modern awards objective is met or to rectify anomalies or technical problems, and that in fact some of the variations sought would offend the modern awards objective.
[61] MBA opposed the CFMEU applications to insert provisions for competency based wage progression into the two building awards. It submitted that State and Territory laws do not currently providean adequate framework for competency based progression, and that adequate systems for quantifying and assessing competency should be put in place before any change is made. Generally MBA argued that no work value case has been made out and that granting the union claims would result in the loss of apprentice positions in the building and construction industry.
[62] The HIA submitted that granting the ACTU and the CFMEU claims would have significant adverse consequences for the residential construction sector, which differs in many respects from the commercial sector, and is much more reliant on award rates of pay. It said there was no convincing evidence that higher wages would lead to higher completion rates. It made submissions similar to those of MBA in relation to competency based wage progression.
[63] The NECA submitted that there has been no change in the demographic profile of apprentices since award modernisation, and that there has been no increase in the work value of apprentices such as to justify the increases in wages sought. It was said that all of the CEPU’s claims would lead to increased costs to employers, with the result that employing apprentices would be less attractive to employers.
[64] The ECA submitted that the Transitional Review was never intended as the vehicle for a review of apprentice wages and conditions. It was submitted that the ACTU and union submissions did not take into account the existence of all-purpose allowances in several relevant awards or government financial support available to apprentices, which creates a misleading impression of electrical apprentices’ remuneration and financial circumstances. The ECA submitted that if the union applications are granted, the Full Bench should put in place transitional arrangements to phase in any increases.
[65] The MTA supported an increase in apprentice wages on the basis that apprentice wages in the vehicle industry are comparatively low. However it opposed an increase of the size sought by the ACTU and AMWU, and submitted an alternate proposal for smaller increases in the Vehicle Manufacturing, Repair, Services and Retail Award 2010 (the Vehicle Award) that would bring apprentice wages into the mid range for modern awards. The MTA generally submitted that the AMWU’s claims in relation to apprentice conditions of employment should not be granted for reasons similar to those given in submissions by the other employer associations, although for historical reasons its position differed somewhat with regard to travelling time and payment of fares.
[66] The MPA-NSW submitted that the proposed wage increases sought by the unions are contrary to the modern awards objective as they would place an unreasonable burden on employers. It generally opposed the claims of the CEPU as unnecessary and contrary to the modern awards objective.
[67] The Coal Mining Industry Employer Group (CMIEG) made a short submission with respect to the AMWU’s application to vary the Black Coal Mining Industry Award 2010 (the Black Coal Award). It submitted that the application does not fall within the scope of the Transitional Review, and that none of the evidence presented shows any problem with respect to the black coal mining industry that needs to be addressed through variations to the award. It further submitted that the intent of several of the variations is unclear, that some provisions could not be included in a modern award because they seek to fix actual rather than minimum wages, and that some of the provisions sought by the AMWU would act as disincentives for employers who might take on apprentices.
[68] A number of employer bodies only made written submissions with regard to the applications, and did not appear and/or did not present evidence in the hearing proceedings. These bodies included the Australian Chamber of Commerce and Industry (ACCI), the Australian Federation of Employers and Industry (AFEI), the Australian Mines and Metals Association (AMMA), Ports Australia, the Australasian Railway Association (ARA), the Printing Industries Association of Australia (PIAA), the Australian Meat Industry Council (AMIC) and the Local Government Association of NSW and Shires Association of NSW (LGA). Generally these organisations submitted that the Transitional Review was not the appropriate vehicle for the review of apprentice wages and conditions sought by the ACTU and the unions, that the proposed variations are not necessary to meet the modern awards objective or to rectify anomalies or technical difficulties, and that the unions have not made out a sufficient evidentiary case for the variations. The Master Plumbers and Mechanical Services Association of Australia (MPA) appeared in the proceedings and cross-examined several witnesses but did not make oral closing submissions. Four State Chambers of Commerce and Industry 37 made joint written submissions, and the Chamber of Commerce and Industry of Western Australia Inc (CCIWA) made additional oral closing submissions.
[69] In relation to its application to vary the NTWS, the Ai Group submitted that the variation was necessary to correct an ambiguity, uncertainty or error in the awards in relation to travel by trainees to attend training. The variation was said to be necessary in order to refute an interpretation that the CEPU has sought to place on the existing clauses in a recent series of cases. 38 It was said that the CEPU’s interpretation is inconsistent with the understanding of the provisions on which the relevant part of the NTWS is based, and that:
“The unreasonableness and unfairness of the interpretation being pressed by the CEPU and other unions is obvious. If the unions’ interpretation prevailed, major costs would be imposed on employers with consequent major reductions in employment for trainees.” 39
[70] The Ai Group’s application and submissions were generally supported by the other employer organisations. The ACTU and the unions submitted that the variation should be rejected on the basis that requiring trainees to meet significant travel and accommodation costs does not provide a fair and relevant safety net.
[71] The Commonwealth was essentially in the position of an applicant with respect to the model school-based apprentice schedule. It submitted that the Award Modernisation Full Bench intended to insert the schedule into all modern awards under which apprenticeships are available, that its absence from five awards was an oversight, and that in accordance with the same principal the schedule should be added into another award into which Group Training Australia seeks to insert apprenticeship provisions. It further submitted that a provision missing from the schedule as it appears in the Black Coal Awardand the Hospitality Industry (General) Award 2010 (the Hospitality Award) was a technical anomaly that should be corrected in the Transitional Review. In line with the Commonwealth’s support for the principle, it also submitted that the schedule should be amended to allow for competency based wage progression.
Consideration
[72] We now turn to consider the various matters raised in the applications and submissions before us. Firstly we deal with the jurisdictional issues raised in relation to the review. Secondly, we consider the merits of the applications for the variation of the relevant modern awards.
B. JURISDICTION AND RELATED ISSUES
[73] The employers raised objections, described as jurisdictional, to a number of the variations sought by the unions. With the exception of one issue we later refer to relating to wage rates, these objections did not concern the wages and allowances claims. They concerned the claims relating to the training contract, recognition of service and dispute resolution. The employers submitted that the provisions sought to be included in the awards are not terms which, consistent with s.136 of the Act, are either permitted or required to be included in the awards. The ACTU submitted that the Commission has power to include in awards all of the variations contained in both its applications and those of its affiliates. All of the unions appearing before us, and the Commonwealth, supported the submissions of the ACTU.
[74] We have earlier reproduced the provisions of Item 6, Schedule 5 of the Transitional Provisions Act. A note contained after Item 6(3) provides that any variation of a modern award that may be made as part of the Transitional Review “must comply with the requirements of the FW Act relating to the content of modern awards ...” The provisions that can be contained in modern awards are addressed in Part 2-3 of Chapter 2 of the Act. Section 136 provides that a modern award must only include terms that are permitted or required by Subdivisions B and C (i.e. ss.139 to 149), s.55, or Part 2-2 (which contains the National Employment Standards (NES)). Section 136 also refers to terms that are not to be contained in modern awards, which we do not need to address. Section 138 provides that a modern award may include terms it is permitted to include, and must include terms that it is required to include, “only to the extent necessary to achieve the modern awards objective and (to the extent applicable) the minimum wages objective.”
(i) Terms that may be included in a modern award
[75] The terms that may be included in modern awards are addressed in s.139 and this section received a significant amount of attention in the submissions before us. It reads as follows:
“139 Terms that may be included in modern awards—general
(1) A modern award may include terms about any of the following matters:
(a) minimum wages (including wage rates for junior employees, employees with a disability and employees to whom training arrangements apply), and:
(i) skill-based classifications and career structures; and
(ii) incentive-based payments, piece rates and bonuses;
(b) type of employment, such as full-time employment, casual employment, regular part-time employment and shift work, and the facilitation of flexible working arrangements, particularly for employees with family responsibilities;
(c) arrangements for when work is performed, including hours of work, rostering, notice periods, rest breaks and variations to working hours;
(d) overtime rates;
(e) penalty rates, including for any of the following:
(i) employees working unsocial, irregular or unpredictable hours;
(ii) employees working on weekends or public holidays;
(iii) shift workers;
(f) annualised wage arrangements that:
(i) have regard to the patterns of work in an occupation, industry or enterprise; and
(ii) provide an alternative to the separate payment of wages and other monetary entitlements; and
(iii) include appropriate safeguards to ensure that individual employees are not disadvantaged;
(g) allowances, including for any of the following:
(i) expenses incurred in the course of employment;
(ii) responsibilities or skills that are not taken into account in rates of pay;
(iii) disabilities associated with the performance of particular tasks or work in particular conditions or locations;
(h) leave, leave loadings and arrangements for taking leave;
(i) superannuation;
(j) procedures for consultation, representation and dispute settlement.
(2) Any allowance included in a modern award must be separately and clearly identified in the award.”
[76] Section 12 of the Actdefines training arrangement as meaning “a combination of work and training that is subject to a training agreement, or a training contract, that takes effect under a law of a State or Territory relating to the training of employees.”
[77] Section 142 was also the subject of submissions by the parties. It deals with incidental and machinery terms which may be included in an award. The power in s.142(1) to include incidental terms was given particular attention by the employers. That subsection reads as follows:
“142 Incidental and machinery terms
Incidental terms
(1) A modern award may include terms that are:
(a) incidental to a term that is permitted or required to be in the modern award; and
(b) essential for the purpose of making a particular term operate in a practical way”.
[78] As we have earlier indicated the ACTU submitted that each of the claims made were about matters which could be included in modern awards. This submission addressed the terms of s.139 and various other sections of the Act, as well as regulations which deal with the way in which the Act interacts with certain State and Territory laws. Before we turn to those provisions of the Act we should first deal with an issue concerning wages rates.
[79] In so far as the claims made concern increases to the minimum wages to be paid to apprentices there is no basis for any jurisdictional objection to our entertaining such claims. Any challenges that are made are more appropriately dealt with by reference to the considerations that guide this Transitional Review, namely, whether the awards the subject of applications before us are achieving the modern awards and minimum wages objectives. Those considerations are addressed later in this decision. However, there is an issue which arises out of the wording of a number of claims relating to the wage to be paid to an employee, either a junior or an adult, who is in employment with an employer prior to entering into an apprenticeship. The claims are expressed in a number of ways. They include a requirement that the existing rate of pay is to continue; that the minimum wage applying to the classification in which the person was engaged immediately prior to entering the training contract is to continue; and the wage they were receiving immediately prior to entering into the training contract is to continue. The particular concern raised by the employers relates to any wording in these clauses which has the effect of obliging an employer to continue to pay an actual rate that an employee may be receiving. They submit that such a provision is not consistent with either the modern awards objective of providing a fair and relevant minimum safety net or the minimum wages objective of establishing and maintaining a safety net of fair minimum wages. We agree that the insertion of a new provision to require the continuation of the actual rate of pay upon commencement of an apprenticeship would not be consistent with those objectives. Any application we consider is justified on the merits to allow an existing employee to retain a particular rate upon entering into a contract of training will be referable to a minimum wage rate for a classification in the award.
[80] We turn now to consider s.139 of the Act.The ACTU submitted that the construction of this section should be informed by a number of decisions of the Australian Industrial Relations Commission (AIRC) in which the provisions of s.89A of the WR Act were considered. That section provided that industrial disputes which the AIRC could deal with were “normally limited to allowable award matters.” An award made in settlement of a dispute could only contain matters which were in s.89A. Section 89A(2) listed the matters which were allowable award matters. A number of those matters were described in terms which are the same as or similar to those now contained in s.139 of the Act.
[81] We refer first to the Full Bench decision in Re Commonwealth Bank of Australia Officers Award 1990 40and itsconsideration of s.89A of the WR Act. The Full Bench had before it an application by the Finance Sector Union to vary an award concerning the employer’s obligation to provide workers compensation accident make-up pay, allowances and other benefits. The Full Bench referred to a number of the demands contained in the log of claims which had given rise to the dispute in respect of which the award variation was sought. The employer argued that the matters sought were outside the ambit of the dispute and, in any event, not matters referred to in s.89A which could be contained in any award in settlement of the dispute. About s.89A the Full Bench said:
“The list of allowable award matters is comprised of concepts of particular kinds of award benefits and conditions of employment. The construction of section 89A(2) demands that each concept be given a meaning consistent with the use of the concept in industrial relations practice in Australia. In its context, section 89A is not a provision for which there is need for either a restrictive or a generous construction. The terms in it are to be given their ordinary meaning having regard to industrial relations usage. Most of the allowable award matters listed are industrial concepts formulated around entitlements and conditions of employment ubiquitously the subject of award provisions in State and federal industrial jurisdictions. Even within the standard award concepts, the formulation of an award provision covering employment entitlements and conditions has long allowed room for craft and drafting skills. Conceivably, some conditions of employment could be formulated in sufficiently various ways to bring the condition within one, another, or more than one of the allowable award matters. The categories of allowable award matters are not mutually exclusive. We accept Mr Cairns' submission to the effect that some conditions of employment will combine or imply elements from special specific allowable award matters. Thus, a higher duty allowance or the once standard ‘mixed functions’ provision combines elements of allowances and rates of pay. However, it is generally the case that established award provisions are of a sufficiently standard content and form to be identifiable as coming within one or, occasionally, more of the allowable award categories, or as not coming within the category at all.” 41
[82] This extract was adopted by a Full Bench in Re The Hospitality Industry -Accommodation, Hotels, Resorts and Gaming Award 1995 42 (Hospitality Decision) when it was required to construe the terms of s.89A. That decision was what was described as an award simplification decision.43 The Full Bench was required to consider the terms of the award and, amongst other things, ensure that it concerned only allowable award matters.
[83] The AMWU next took us to a decision of Senior Deputy President Marsh in 1998 in Re Metal Industry Award 1984 - Part 1. 44 It submitted that this decision supported its contention that “training and apprenticeships are matters that fall within or are incidental to matters in s.139”.45 We observe that this decision was also an award simplification decision. In it her Honour decided that clauses dealing with probationary employment (both generally and for apprentices), apprentices (including adult apprentices), the training contract and State laws relating to apprentices, the cancellation or suspension of the contract of apprenticeship, the reimbursement of training college fees, constraints on apprentices under 18 years old working overtime or shifts, the making up of lost time and the payment of training costs including travel costs associated with training were all allowable under s.89A of the WR Act.46 We accept the AMWU submission that the range of provisions there considered by her Honour raised considerations similar to those before this Full Bench. We note that in arriving at her decision heavy reliance was placed on the findings in the Hospitality Decision where comparable clauses had been found to be either allowable or incidental and necessary. An important exception however was to a claim made concerning training of apprentices. Senior Deputy President Marsh considered that claim in detail, noting that the Hospitality Decision had not exhaustively dealt with a comparable claim.
[84] We note that many of the provisions being considered in that case were supported by both the unions and the principal employer party to the award. Those which were opposed were generally challenged by the Commonwealth and ACCI. However the award made following her Honour’s decision, then called the Metal, Engineering and Associated Industries Award 1998, contained clauses dealing with apprentices and the training contract which today remain in the Manufacturing Award. That award was made by a Full Bench which was obliged to consider the terms of s.576J of the WR Act, which is the predecessor to s.139 of the Act and in the same terms.
[85] We next refer to decisions which gave particular attention to the term “type of employment” which was one of the allowable matters in s.89A of the WR Act. Section 89A(2) relevantly provided as follows:
“89A Scope of industrial disputes
...
Allowable award matters
(2) For the purposes of subsection (1) the matters are as follows:
...
(r) type of employment, such as full-time employment, casual employment, regular part-time employment and shift work...”
[86] The ACTU submitted that the term “type of employment” in s.139(1)(b) is sufficiently broad to encompass the claims sought by the unions. We note that the ACTU submitted that if we did not accept that term was sufficiently broad then, in the alternative, it was clear that all of the claims were encompassed within one or other of the various matters referred to in s.139(1) and by s.142 and s.55(4) of the Act. 47
[87] In support of its submission about the construction we should place on the term “type of employment” in s.139(1)(b), the ACTU referred to the Full Bench decision in Re National Tertiary Education Union (the HECE Award Case). 48 That decision concerned the content of a new award the AIRC was considering and the employer’s challenges to certain of the proposed clauses on a number of bases, one being they were not about any of the allowable award matters in s.89A of the WR Act. When commenting upon a clause that might be awarded to deal with duties on an employer to use specified types of employment, the Full Bench said:
“Clause 2 of the [Higher Education Contract of Employment Award 1998] links the duty on the employer to use the specified types of employment with the notion of contract of employment. Perhaps that clause could provide to similar effect and be entitled ‘Types of Employment’. In the past, awards have almost generally included a contract of employment clause. Despite that, the list of allowable award matters makes no reference to contract of employment provisions as a distinct class of allowable matter. We are unable to conceive how the allowable matter “types of employment” could be effectively dealt with by an award that did not purport to impinge directly on the contract of employment to be entered into between an employer and an employee subject to the award. Indeed, a ‘type’ or ‘category’ of employment may be conceived to be an elliptical expression covering a type of contract of employment. For that, and other reasons, we conclude that some provision about contract of employment is incidental to the allowable award matters dealt with and sufficiently necessary to their effective operation for it to be appropriate for the award in this instance.We have formulated the substantive award provisions as far as practicable in terms of duties on theemployer, or rights of employees...” 49
[88] A further relevant extract from the HECE Award Case is referred to in the next Full Bench decision we were taken to. In Qantas Airways Ltd v Australian Municipal, Administrative, Clerical and Services Union 50 (Qantas v ASU)a Full Bench of the AIRC considered an appeal against a decision that a dispute about job sharing was one which the AIRC could arbitrate and that it was about an allowable matter in terms of s.89A of the WR Act. The Full Bench said that it was not persuaded that Commissioner Whelan was in error in ruling that job sharing was a type of employment in the same way as regular part-time employment was a type of employment and was therefore allowable under s.89A. The ACTU submitted that apprenticeships are no different to job sharing and that this decision should guide us in our approach to interpreting what is encompassed by “type of employment”. The Full Bench in Qantas v ASU said:
“[56] As the Full Bench observed in the HECE Award Case, “a ‘type’ or ‘category’ of employment may be conceived to be an elliptical expression covering a type of contract of employment”. The industrial connotations of types of employment were explained in several passages which are relevantly applicable to the issue raised by this appeal:
‘It is clear also that included within the allowable award matters is the stipulation in awards of “type of employment”, or, more commonly, “categories of employment”. The latter expression has a well established use in relation to Commonwealth industrial legislation. It describes different classes of employment arranged in categories based upon the incidents or the terms and conditions of the employment. We read the reference to type of employment as meaning much the same thing. In section 89A(2)(r), the Act envisages award provision for different types of employment based in particular upon the term of employment and the hours worked...
However the identification of “a particular type of employment” can in practice be more of an exercise of a judgment formed around inferences and assessment of relative conditions than an outcome derived by the application of definitional precision...
Any category or type of employment acquires meaning from the rights, duties and privileges incidental to inclusion in the category. Thus, continuing employment, or “tenure” as a distinguishable form of it, is constituted by an assemblage of rights and privileges. Some of them may be common to other categories of employment. Essentially the Commission and the parties in a case of this nature must address the differential rights in each of the categories.’”
[89] The ACTU next referred to the Full Bench decision in AMWU re application to vary the Metal, Engineering and Associated Industries Award 1998, 51 a decision which it submitted made similar observations about the construction to be placed on the term “type of employment” in s.89A(2)(r) of the WR Act. In that matter the Full Bench of the AIRC was considering variations to the award in respect to casual and part-time employees. The extract from the decision relied upon by the ACTU is as follows:
“2.2 The function and incidents of casual employment as a type or category of employment under the Award:
[9] Types of employment provided for in an award are foundational to the award's regime, and therefore to the award safety net. The expressions ‘categories of employment’ and ‘types of employment’ in industrial jargon refer to types of contract of employment. A type of employment specified in an award is the subject to which the terms and conditions for that type of employment are awarded. Usually an award applies to one or more main or primary types of employment; each other type, in concept at least, is exempt from some or all of the conditions awarded to apply to the primary category or categories. For purposes of the Award, weekly hire, in effect a form of continuing employment for standard hours, has long been the primary category provided for under the Award's predecessors. Each other type of employment may be seen as a response to operational, employment market, or perhaps special case needs. Those needs have been met by making provision as the need arose for the extra type of employment contract to which specific exemptions or peculiar conditions were then awarded. The reasons for having a category of employment should be distinguished from the reasons for awarding exemptions or differential conditions to apply to the supplementary category. Aspects of the use later made of a category in the industry can also be distinguished from each of those reasons. Those distinctions appear not always to have been kept in mind in some of the cases or analysis dealing with particular types of employment.” 52
[90] The Full Bench returned again to these considerations at paragraph [69] and said:
“[69] As we have noted at paragraph 9 above, type or category of employment is a concept that goes to the regulatory role of awards. The types of employment provided for in an award may vary over time. Moreover, a type of employment, for instance hourly hire employment, may at one stage be sparsely used. Or, at times it may have well understood operational characteristics extrinsic to the award provisions about it. However, the concept is the type of employment: the incidents of the legal relationship under contracts of service in that category. Type of work requirement, or the kind of circumstances in which a type of employment may be used initially or eventually, are not definitive of the type of employment. Such requirements, circumstances or even type of demand for a particular categories [sic] of employment may explain or justify its existence, or be relevant to the determination of some of its incidents. However, unless imported into the terms constituting the category itself, such considerations do not define the category, or even limit its use under the Award.”
[91] Relying on the above decisions, the ACTU submitted there could be little doubt that employment as an apprentice is a type of employment. It also followed that the claims made relating to disputes concerning the training contract, restricting, suspending, limiting or extending the training contract, probation and the obligation to provide training are all intrinsically bound up in the notion of the category of apprentice employment. If the training contract is removed (terminated or cancelled) or if there is no training there can be no category of apprentice employment. Those things, it submitted, are fundamental. The purpose of the provisions concerning these matters is to define and maintain the integrity of the terms of the modern awards in question that provide for apprentice employment. 53
[92] The ACTU submitted that if we had any doubt about the breadth of the term “type of employment” or that it was not a sufficient source of power, then any one or combination of the following provisions in the Act would provide power. It identified ss.139(1)(a)(i), 139(1)(c), 139(1)(g), 139(1)(h) and 139(1)(j). Additionally it relied on s.142 to the extent any provision was incidental to a permitted term and essential to make the particular term operate in a practical way. Finally, it relied on s.55(4) which allows a term which is ancillary or incidental to the operation of an entitlement under the NES or that supplements the NES.
[93] The employer submissions were wide ranging, some taking objection to all clauses other than those dealing with minimum wages and some allowances and others challenging only some of the particular clauses dealing with and relating to the training contract. We do not propose to refer separately to each individual employer submission. We think the matters raised can be fairly summarised in the following way:
[488] There are no discounted wage rates for apprentices under this award, although there are discounted rates for unapprenticed juniors. An apprentice would be paid the rate for an adult track rider. In these circumstances we consider it unlikely that an apprentice would be employed as a school-based apprentice under the award. However we cannot exclude this possibility, and therefore we will insert the schedule into the award.
[489] The variations to the abovementioned awards will be made to ensure the awards are operating without anomalies or technical problems and meet the modern awards objective.
[490] Group Training Australia applied to vary the Aged Care Award 2010 to insert the schedule for school-based apprentices into the award. 175 There are no apprentice rates of pay in the award, although Group Training Australia has sought to have these inserted. An examination of the classifications covered by the award suggests that trades qualified employees may be included in some instances. It is therefore possible that there may be a desire to engage apprentices. We do not consider it appropriate to insert provision for school-based apprentices when there is no specific provision for their continuing employment under the award when they complete the school based phase of their apprenticeship. The application to insert apprenticeship rates into this award will be considered separately. It was not identified as a “common matter”. If such provisions are inserted, the schedule for school-based apprentices should be inserted at that time.
[491] The Contract Call Centres Award 2010 does not provide for the employment of apprentices. The NTWS excludes those engaged as traditional apprentices. The classification structure includes provision for a trainee level which excludes those engaged through a new apprenticeship/traineeship. There are no pay rates for apprentices and no classifications which appear to cover traditional trades employees. In the absence of further evidence we do not consider it appropriate to insert provisions for school-based apprentices in the award. The Commonwealth submitted that there are apprentices employed under this award. In the event that there is evidence that apprentices are employed under the award the appropriate apprentice provisions, including school-based apprentice provisions, can be revisited in the four yearly review.
[492] There was no opposition to the proposal to vary the schedule for school-based apprentices in the Black Coal and Hospitality Awards to correct an omission. For similar reasons as above, we will vary those awards to insert the missing provision in the schedule.
(ii) Competency based wage progression
[493] The other aspect of the Commonwealth’s proposal is to vary the schedule to provide for competency based progression.
[494] We are satisfied that competency based progression for school-based apprentices is consistent with the modern awards objective. We will therefore insert the schedule into the specified awards with the variation for competency based progression proposed by the Commonwealth. We will also vary the schedule in a similar way in the other awards before us to provide for competency based progression.
[495] It is possible that not all affected parties have had the opportunity to consider the particular drafting of the amendments proposed by the Commonwealth to the school-based apprentice schedule in a large number of awards. In the settlement of orders we will consider any technical drafting issues which may be raised to ensure that the variation meets the intended purpose.
F. OTHER MATTERS
[496] There are a number of other aspects of the variations proposed by the AMWU, CEPU and CFMEU in the common claims 176 which could appropriately be described as technical amendments to remove uncertainty or ambiguity. For example, several applications seek consistency of expression in award descriptions of apprenticeship training contracts and the use of updated names for various authorities. Generally there were no specific submissions in opposition to these variations being made. The parties should confer in the settlement of orders in respect to those matters.
[497] As referred to earlier, the parties should also confer in the settlement of orders on the expression “all purpose” in the Building and Joinery Awards and in respect to consequential changes for three year apprenticeships and trainee apprentices in NSW. They should also confer about the proposed simplification of the tables in the Higher Education Award and the deletion of the definition in G1 of that Award; the inclusion of an “all purpose” preamble for the apprentice rates proposed by the CFMEU in the Building and Joinery Awards; the proposed insertion of the heading to 15.3 adult apprentices in the Manufacturing Award and the proposed addition of a prohibition on payment by results in the Vehicle Award clause 15.9; and how the CEPU proposal in respect to the lift industry allowance should be considered by the Full Bench. These matters will be finalised in the settlement of the award variations to be made pursuant to this decision.
G. CONCLUSIONS AND OPERATIVE DATES
[498] The apprenticeship system is a complex area and we have been greatly assisted in our consideration of the matters by the very comprehensive submissions and the evidence provided by the parties in the proceedings, and by the numerous reports, research, studies and surveys referred to. We have noted in particular the report of the Apprenticeship Expert Panel and its recommendations directed at the reform of the apprenticeship system to allow it to meet the skills needs of the 21st century economy.
[499] For all the reasons given, we have decided that in the Transitional Review there should be variations made to the modern awards before us in relation to apprentice rates of pay and conditions of employment. We consider that these variations are necessary having regard to the modern awards and minimum wages objectives, and to take into account the significant changes which have occurred in relation to apprenticeships in Australia.
[500] In particular, we have decided that:
● the rates of pay for first and second year apprentices should be adjusted;
● special provisions should be made in relation to rates of pay and wage protection for adult apprentices;
● provision should be made for competency based wage progression to be introduced into a range of modern awards and for consideration to be given to its introduction into other awards;
● adjustments should be made in relation to apprentice conditions of employment including those relating to travel costs, training time, timely payment of training fees, and attendance at training; and
● The model school-based apprentice schedule should be inserted into several modern awards which do not contain it, and the schedule should be varied to provide for competency based wage progression.
[501] We consider that these changes are appropriate having regard to the purpose and objective of the Transitional Review as set out in the Transitional Provisions Act, and are necessary to ensure that the apprenticeship system meets the needs of business and the Australian economy and is relevant and attractive to modern day apprentices.
[502] We have not adopted many of the award variations sought by the unions in relation to apprentice conditions of employment and training requirements. This is not because we do not accept the principles and good practices which the variations are directed at achieving. However, many of the proposed changes would duplicate obligations already provided in the standard training contract and in State and Territory legislation. To provide for such matters in awards may add unnecessary complexity in circumstances where there was inadequate evidence that the current arrangements have not been be working satisfactorily.
[503] We have been mindful in determining the various matters of the cost of the changes to business and the economy. However we consider that the costs of the changes we have determined can and should be accommodated in the interests of providing a better functioning apprenticeship system and a more relevant set of award minimum wages and conditions for apprentices.
[504] Several of the employer groups submitted that if we decided to increase apprentice wages, any increases should be phased in over time. It was generally submitted that this should be done in order to mitigate the cost impact of any increases on employers.
[505] We have decided that the increases to apprentice rates of pay should be phased in, and will take effect as follows:
● If the relevant increase is equal to or less than a 5% increase in the relevant percentage of the award reference rate (whether the equivalent of the C10 tradesperson rate or otherwise), then the full increase shall apply from 1 January 2014;
● If the relevant increase is more than a 5% increase in the relevant percentage of the award reference rate, then the percentage or rate shall be increased by 5% from 1 January 2014, with the remainder of the increase to take effect from 1 January 2015.
[506] We have also decided that the new rates of pay shall apply only to apprentices who commence their apprenticeship on or after 1 January 2014.
[507] The phasing arrangements shall apply to increases in apprentice rates of pay, and to increases in first year adult apprentice rates in awards that already contain adult rates.
[508] Where we have decided to introduce adult apprentice rates into awards we consider that it is impractical to phase them in. We note that these rates shall only apply to apprentices commencing on or after 1 January 2014.
[509] In relation to the variations dealing with apprentice conditions of employment, these variations shall apply to all apprentices (regardless of commencement date) from 1 January 2014.
[510] The parties should confer about the variations necessary to give effect to this decision and provide draft variations to the Full Bench by 30 September 2013. The Full Bench will make the determinations varying the modern awards.
SENIOR DEPUTY PRESIDENT
Appearances:
T Shipstone, R Reitano of counsel, T Clarke and D Oliver for the ACTU
S Taylor, L Weber, N Apple, J Moriarty and A Dettmer for the AMWU
S Maxwell and D Noonan for the CFMEU
A Kentish and P Tighe for the CEPU
C Young for the USU and ASU
J Willey for the SDA
M Tehan and T Pick,solicitors, and A Morehead for the Commonwealth of Australia
B Ferguson, S Smith and G Vaccaro for the Ai Group
S Forster for the AFEI
N Ward and S Haynes, solicitors,for ABI
H Wallgren for Business SA
J Murphy for the CCIWA
R Calver for MBA and the ACCI
J Nikolić for MBA
D Humphrey and M Adler for the HIA
K McCosh for the NECA
J O’Dwyer for the ECA
W Chesterman for the MTA
P Eblen for the Motor Trade Association of South Australia
A Morris and B Rauf, solicitors, for the CMIEG
M Gao for the PIAA
S Kraemer for the MPA
T Dixon of counsel and N Peacocke, solicitor, for the MPA-NSW
Hearing details:
2012.
Sydney, Melbourne, Brisbane, Canberra, Adelaide (mentions by video link):
October 26, December 10.
2013.
Sydney:
March 4-6 and 19, April 3-5 and 22-24, May 1-3 and 8-9.
Adelaide:
March 20.
Melbourne:
March 21-22.
H. ATTACHMENTS
Attachment A: Glossary of terms
ABI | Australian Business Industrial |
ACCI | Australian Chamber of Commerce and Industry |
Act | Fair Work Act 2009 |
ACTU | Australian Council of Trade Unions |
Ai Group | Australian Industry Group |
AIRC | Australian Industrial Relations Commission |
Airline Award | Airline Operations—Ground Staff Award 2010 |
AFEI | Australian Federation of Employers and Industry |
Aluminium Award | Aluminium Industry Award 2010 |
AMIC | Australian Meat Industry Council |
AMMA | Australian Mines and Metals Association |
AMWU | “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union |
Alpine Resorts Award | Alpine Resorts Award 2010 |
AQF | Australian Qualification Framework |
ARA | Australasian Railway Association |
ASU | Australian Municipal, Administrative, Clerical and Services Union |
Black Coal Award | Black Coal Mining Industry Award 2010 |
Building Award | Building and Construction General On-site Award 2010 |
BVET | Board of Vocational Education and Training NSW |
CBWP | competency-based wage progression |
CBWP Principles | Principles for competency-based wage progression for Australian Apprentices, developed by the Commonwealth and relevant stakeholders |
CCIWA | Chamber of Commerce and Industry WA Inc |
CEPU | Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia |
CFMEU | Construction, Forestry, Mining and Energy Union |
Children’s Services Award | Children’s Services Award 2010 |
CMIEG | Coal Mining Industry Employer Group |
COAG | Council of Australian Governments |
Coal Export Award | Coal Export Terminals Award 2010 |
Commission | Fair Work Commission |
DEEWR | Department of Education, Employment and Workplace Relations |
ECA | Electrical Contractors Association |
Educational Services Award | Educational Services (Schools) General Staff Award 2010 |
Electrical Contracting Award | Electrical, Electronic and Communications Contracting Award 2010 |
Electrical Power | Electrical Power Industry Award 2010 |
FWA | Fair Work Australia |
Graphic Arts Award | Graphic Arts, Printing and Publishing Award 2010 |
GTES | Group Training Employment Services |
GTO | group training organisation |
Higher Education Award | Higher Education Industry—General Staff—Award 2010 |
HIA | Housing Industry Association |
Hospitality Award | Hospitality Industry (General) Award 2010 |
Joinery Award | Joinery and Building Trades Award 2010 |
LGA | Local Government Association of NSW and Shires Association of NSW |
Local Government Award | Local Government Industry Award 2010 |
Manufacturing Award | Manufacturing and Associated Industries and Occupations Award 2010 |
MBA | Master Builders Australia |
MBGTS | Master Builders Group Training Scheme Inc |
MPA | Master Plumbers and Mechanical Services Association of Australia |
MPA-NSW | Master Plumbers and Mechanical Contractors Association of NSW |
MTA | Motor Trades Associations |
NAPSA | Notional agreement preserving State awards |
NCVER | National Centre for Vocational Education Research Ltd |
NECA | National Electrical and Communications Association |
NES | National Employment Standards |
NTWS | National Training Wage Schedule |
Nursery Award | Nursery Award 2010 |
OHS | occupational health and safety |
PIAA | Printing Industries Association of Australia |
Plumbing Award | Plumbing and Fire Sprinklers Award 2010 |
RTO | Registered Training Organisation |
SDA | Shop, Distributive and Allied Employee’s Association |
standard training contract | Apprenticeship/Traineeship Training Contract |
State Chambers of Commerce and Industry | Chamber of Commerce and Industry WA, Chamber of Commerce and Industry Queensland, Business SA and the Victorian Employers’ Chamber of Commerce and Industry |
Sugar Award | Sugar Industry Award 2010 |
TCF Award | Textile, Footwear, Clothing and Associated Industries Award 2010 |
Telecommunications Award | Telecommunications Services Award 2010 |
Timber Award | Timber Industry Award 2010 |
Transitional Provisions Act | Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 |
Transitional Review | The review of all modern awards after two years required by Item 6, Schedule 5 of the Transitional Provisions Act |
USU | New South Wales Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union |
VACC | Victorian Automobile Chamber of Commerce |
Vehicle Award | Vehicle Manufacturing, Repair, Services and Retail Award 2010 |
Water Award | Water Industry Award 2010 |
WR Act | Workplace Relations Act 1996 |
WRC | Workplace Research Centre |
Attachment B: List of applications referred to the Full Bench
Table 1: Applications referred to the Full Bench in the President’s statement of 14 June 2012 ([2012] FWA 5102).
Matter no. | Modern award title | Award ID |
AM2012/18 | N/A* | |
AM2012/128 | All awards containing the National Training Wage Schedule | |
AM2012/135 | 34 awards** | |
AM2012/107 | Airline Operations—Ground Staff Award 2010 | MA000048 |
AM2012/282 | ||
AM2012/60 | Aged Care Award 2010 | MA000018 |
AM2012/140 | Black Coal Award | MA000001 |
AM2012/50 | Broadcasting and Recorded Entertainment Award 2010 | MA000091 |
AM2012/48 | Building and Construction General On-Site Award 2010 | MA000020 |
AM2012/129 | ||
AM2012/160 | ||
AM2012/228 | ||
AM2012/52 | Clerks - Private Sector Award 2010 | MA000002 |
AM2012/159 | Electrical Power Industry Award 2010 | MA000088 |
AM2012/157 | Electrical, Electronic and Communications Contracting Award 2010 | MA000025 |
AM2012/161 | ||
AM2012/184 | ||
AM2012/59 | Fast Food Industry Award 2010 | MA000003 |
AM2012/178 | Food, Beverage and Tobacco Manufacturing Award 2010 | MA000073 |
AM2012/177 | General Retail Industry Award 2010 | MA000004 |
AM2012/8 | ||
AM2012/141 | Graphic Arts, Printing and Publishing Award 2010 | MA000026 |
AM2012/172 | Hair and Beauty Industry Award 2010 | MA000005 |
AM2012/287 | ||
AM2012/58 | Health Professionals and Support Services Award 2010 | MA000027 |
AM2012/110 | Higher Education Industry—General Staff—Award 2010 | MA000007 |
AM2012/61 | ||
AM2012/24 | Hospitality Industry (General) Award 2010 | MA000009 |
AM2012/127 | Joinery and Building Trades Award 2010 | MA000029 |
AM2012/55 | Labour Market Assistance Industry Award 2010 | MA000099 |
AM2012/168 | Local Government Industry Award 2010 | MA000112 |
AM2012/109 | Manufacturing and Associated Industries and Occupations Award 2010 | MA000010 |
AM2012/164 | Meat Industry Award 2010 | MA000059 |
AM2012/54 | Nurses Award 2010 | MA000034 |
AM2012/202 | Plumbing and Fire Sprinklers Award 2010 | MA000036 |
AM2012/183 | ||
AM2012/199 | ||
AM2012/57 | Social, Community, Home Care and Disability Services Industry Award 2010 | MA000100 |
AM2012/152 | Sugar Industry Award 2010 | MA000087 |
AM2012/56 | Surveying Award 2010 | MA000066 |
AM2012/155 | Telecommunications Services Award 2010 | MA000041 |
AM2012/64 | Timber Industry Award 2010 | MA000071 |
AM2012/53 | Vehicle Manufacturing, Repair, Services and Retail Award 2010 | MA000089 |
AM2012/247 | Vehicle Award | MA000089 |
AM2012/271 | Wine Industry Award 2010 | MA000090 |
* This application was made by a Queensland government body which no longer exists, and has not been dealt with by the Full Bench. The matter number AM2012/18, however, has been used to refer to the ‘common claims’ proceedings generally.
** Following the amendment of the application, which initially sought to vary 36 awards.
Table 2: Applications subsequently referred to the Full Bench
Matter no. | Modern award title | Award ID |
AM2012/14 | Aquaculture Award 2010 | MA000114 |
AM2012/66 | MA000114 | |
AM2012/196 | General Retail Industry Award 2010 | MA000004 |
1 A glossary of terms used in this decision is included as Attachment A.
2 [2012] FWA 3514.
3 [2012] FWAFB 10395.
4 The AMWU, the ASU, the AWU, the CEPU, the CPSU, the CFMEU, the SDA, and United Voice.
5 In this decision, the term “apprentices” refers to all apprentices other than adult apprentices.
6 The figure originally sought was $423.66 per week, but as a result of the Annual Wage Review 2012-13 decision ([2013] FWCFB 4000), the C10 rate was raised from $706.10 to $724.50 per week.
7 “Adult apprentice” in this decision refers to a person who is 21 years of age or older at the time of the commencement of an apprenticeship.
8 [2012] FWAFB 5600.
9 [2008] AIRCFB 1000.
10 [2009] AIRCFB 800 at [51].
11 See [2012] FWA 5102.
12 See [2012] FWAFB 9215.
13 See [2012] FWAFB10395.
14 ‘A shared responsibility - Apprenticeships for the 21st Century’. Final Report of the Expert Panel, 31 January 2011 (the Apprenticeship Expert Panel Report).
15 The full terms of reference are set out at Appendix A of the Report, pp.98-99.
16 Apprenticeship Expert Panel Report, p.13.
17 The recommendations are set out in the Report at pp.14-15.
18 Exhibit CTH3: Letter to the FWA President, 23 May 2012, and attached “Scoping Paper for Fair Work Australia on Decision Points for Review of Apprentice and Trainee Wages and Conditions”.
19 NCVER, ‘The Apprenticeship and traineeship system’s relationships with the regulatory environment’, Report 3, 2011 (NCVER Report 3).
20 Ibid p.6.
21 Exhibit ACTU1, Attachment PT-1.
22 Ibid, pp.23-24.
23 Hanna Schutz, Michael Bittman, Sharni Chan, Michelle Jakubauskas and John Buchanan, ‘The Changing Situation of Electrical Apprentices: Submission to the Modern Award Review, Fair Work Australia’, Workplace Research Centre, University of Sydney (the WRC Report).
24 Ibid, p.53.
25 Ibid, p.54.
26 Ibid, p.55.
27 Exhibit T13, pp.95-114 (summary); Attachments M and N.
28 Excluding Tasmania and the Northern Territory.
29 Exhibit W4, Schedule ZJ.1, p.12.
30 The Centre for International Economics, “Increasing apprentice and trainee wages and conditions in the building and construction industry: Costing the impact of union applications”. Prepared for Master Builders Australia and the Housing Industry Association, February 2013, p.5. See also Exhibit MBA8, p.6.
31 Exhibits MBA8 and MBA9 respectively.
32 Exhibit MBA3, p.3 para 13.
33 Exhibit T13, p.4 para 1.4.
34 Exhibit CTH1, pp.12-13 para 3.16.
35 NCVER, ‘The cost of training apprentices’, January 2009.
36 Exhibit AIG6, p.42 para 105.
37 The Chamber of Commerce and Industry of Western Australia Inc, the Chamber of Commerce and Industry Queensland, the South Australian Employers’ Chamber of Commerce and Industry Inc (T/A Business SA) and the Victorian Employers’ Chamber of Commerce and Industry.
38 CEPU v Excelior Pty Ltd [2012] FMCA 621; CEPU v Excelior Pty Ltd [2013] FCA 638.
39 Exhibit AIG3, p.7 para 17.
40 (1997) 74 IR 446.
41 Ibid at Part 4.4.
42 (1997) 75 IR 272 at 276.
43 These were decisions that arose out of the provisions of Schedule 5, Item 49 of the Workplace Relations and Other Legislation Amendment Act 1996.
44 AIRC Print P9311, 11 March 1998 (Metals Award Simplification Decision).
45 Exhibit T12, p.2; Exhibit T33.
46 Metals Award Simplification Decision at pp. 21-42.
47 Exhibit ACTU 5, para 5.
48 AIRC Print Q0702 (11 May 1998); [1998] AIRC 589.
49 Ibid at Part 4.2.
50 AIRC Print T0301 (7 September 2000); [2000] AIRC 290.
51 AIRC Print T4991 (29 December 2000); [2000] AIRC 722.
52 Ibid at [9].
53 Exhibit ACTU11, para 6.
54 Ibid para 7.
55 Exhibit ACTU5, para 16.
56 See also Modern Awards Review 2012 [2012] FWAFB 5600 at [38].
57 Unless otherwise indicated, any reference in this decision to a ‘regulation’ is a reference to the relevant part of the Regulations.
58 Explanatory Statement, Fair Work Regulations 2009 at [29]-[32].
59 Explanatory Memorandum, Fair Work Bill 2008 at [149].
60 [2012] FWAFB 10080.
61 Ibid at [8].
62 Ibid at [9].
63 Ibid at [13].
64 Set out at Exhibit ACTU4, p.4 para 24.
65 The ACTU application and submissions were also supported by the joint applicant unions (see fn. 4), as well as the Maritime Union of Australia and the Textile, Clothing and Footwear Union of Australia.
66 Annual Wage Review 2012-13 [2013] FWCFB 4000.
67 In awards where the C10 trade rate is not the relevant adult rate for the purpose of determining apprentice wages, the ACTU sought that the first year apprentice rate should also be $434.70, although expressed as an appropriate percentage of the relevant benchmark classification in the relevant award.
68 The Hospitality Industry (General) Award 2010, the Miscellaneous Award 2010, the Registered and Licensed Clubs Award 2010, the Restaurant Industry Award 2010, and the Higher Education Industry - General Staff - Award 2010.
69 NCVER Report 3, pp.50-58.
70 ‘Paying Apprentices: The Market Responds’, ACCI Review, February 2005, pp.5-9.
71 NCVER Report 3, p.54, table 16.
72 See “Summary of the current Australian Apprenticeships Incentives Program” as at 1 January 2011: Apprenticeship Expert Panel Report, Appendix Q, pp.126-128.
73 2007 Active Apprenticeship Survey, Prepared by ABS Statistical Consultancy for SA DFEEST (the Active Apprenticeship Survey), p.17. Cited in Exhibit ACTU4, p.220, fn 94.
74 Michael Bittman, Ron Reavell, Greg Smith and Tim Battin, ‘Living standards of apprentices: a report prepared for Group Training Australia by the centre of Applied Research in Social Science (CARSS)’, October 2007 (Living Standards of Apprentices).
75 Ibid, p.8.
76 See WRC Report, pp.35-41 generally, and particularly p.36.
77 See e.g. Apprenticeship Expert Panel Report, pp.9, 21-25.
78 Active Apprenticeship Survey. Cited in Exhibit ACTU4 at pp.53-56, p.60 para 266.
79 Josie Misko, Nhi Nguyen and John Saunders, ‘Doing an apprenticeship: what young people think’, NCVER, 2 October 2007.
80 Huntly Consulting Group Pty Ltd, ‘Exits from the Trades: Final Report’, 2008 (Exits from the Trades).
81 NCVER, ‘2010 Apprentices and Trainee Destinations: Australian vocational education and training statistics’, 2010.
82 See e.g. Tom Karmel and Peter Mlotkowski, ‘The impact of wages and the likelihood of employment on the probability of completing an apprenticeship or traineeship’, NCVER, 2011.
83 Exhibit ACTU4, p.69, Table 7.
84 Ibid, Appendix 5.
85 WRC Report, p.43.
86 Exits from the Trades, p.29.
87 Melbourne Institute of Applied Economic and Social Research, ‘Poverty Lines: Australia’, ISSN 1448-0530, September Quarter 2012, p.1.
88 AIRC Print PR968890 (21 February 2006) (the Metals Award Decision 2006).
89 See ss.3(a) and (b), 134 and 284 of the Act.
90 See summary of evidence at Exhibit K20, para 21.
91 See evidence of Mark Osborne: Transcript of 20 March 2013, PN4536-PN4537 and PN4579; Mr Allen Hicks: Exhibit K2; Ms Cangie Edwards: Transcript of 22 March 2013, PN6440-PN6443 and PN6438-PN6439; Mr Stewart Munro: Transcript of 22 March 2013, PN6727-PN6768; Mr Phil Green: Transcript of 22 March 2013, PN6209-PN6218, Ms Ninette Markulis: Transcript of 4 April 2013, PN8260; Mr Stephen Kerfoot: Transcript of 4 April 2013, PN8867; and Mr David Pollock: Transcript of 3 April 2013, PN7356-PN7367.
92 See summary of evidence: Transcript of 1 May 2013, PN10883.
93 Chamber of Commerce and Industry WA, Chamber of Commerce and Industry Queensland, Business SA and the Victorian Employers’ Chamber of Commerce and Industry.
94 We note the comments made by the Minimum Wage Panel about the Henderson poverty line in the Annual Wage Review 2010-11 decision ([2011] FWAFB 3400 at [226]): “Our view at present is that this measure is not helpful to our task. Its origins in the 1960s, the inconsistency between its original construction and the way it is updated, and its focus on poverty rather than the needs of the low paid reduce its value as a tool for wage-setting.” See also Annual Wage Review 2011-12 [2012] FWAFB 5000 at [179].
95 Apprenticeship Expert Panel Report, p.88.
96 See ss.134(1)(a) and 284(1)(c) of the Act.
97 See ss.134(1)(d) and (f) and 284(1)(a) of the Act.
98 See ss.134(1)(h) and 284(1)(a) of the Act.
99 Apprenticeship Expert Panel Report, p.88.
100 Ibid, p.21.
101 See ss.134(1)(c), (f) and (g) and 284(1)(a) and (b).
102 Metals Award Decision 2006 at [43].
103 See ss.134(1)(g) and 284(1)(e) of the Act.
104 See e.g. the Manufacturing and Associated Industries and Occupations Award 2010, clause 25.1.
105 Apprenticeship Expert Panel Report, p.88.
106 See ss.134(1)(g) and 284(1)(e) of the Act.
107 See e.g. the maintenance and engineering stream of the Airline Award, the streams of the Sugar Award under which apprentices can be employed, and the Black Coal Award. Under all three awards the rate for an unapprenticed 18 year old is substantially higher than 55% of the C10 rate.
108 See ss.134(1) and 284(1)(e) of the Act.
109 NCVER, ‘Historical time series apprenticeships and traineeships in Australia from 1963’, Table 5 (Commencements in 12 months ending 30 June by trade occupation, 1963–2012), 2012 (NCVER Historical Time Series).
110 Brian Knight, ‘Evolution of apprenticeships an traineeships in Australia: an unfinished history’ (NCVER, 2012) p.27; Australian Bureau of Statistics, ‘Schools, Australia’ (Catalogue Number 4221.0, 2012).
111 Apprenticeship Expert Panel Report, Appendix F, p 122.
112 Ibid p.90.
113 Ibid. See also at pp.96-7.
114 NCVER Historical Time Series, Table 3 (In-training at 30 June by trade occupation, 1963-2012).
115 Exits from the Trades p.76, referred to in Exhibit ACTU4, para 325.
116 Exhibit T1, para 10, and Exhibit T2.
117 See for example the evidence on transcript of Allan Hicks (5 March 2013, PN1454 and PN1457) and Omar Merhi (21 March 2013, PN5212).
118 Exhibit ACTU3 (It’s not about age).
119 Ibid, pp.5 and 31.
120 See also the Apprenticeship Expert Panel Report, p.88, and Queensland Government, ‘Queensland’s proposed responses to the challenges of skills for jobs and growth’ (Green Paper, 2005) p.16.
121 See generally Exhibit ACTU4, para 246; Living Standards of Apprentices; and the WRC Report.
122 For the ages of the witnesses see Exhibit K21, para 87(d).
123 See summary in Exhibit K21, paras 126 and 127, and see Exhibit T29 evidence of Ms Mayer.
124 Exhibit ACTU4, paras 296-307 and Exhibit T13, paras 2.8-2.10. The ACTU and AMWU appear to rely on unpublished NCVER data for their estimates.
125 Transcript of 8 May 2013, PN12484-PN12488.
126 AMMA Submission in Reply, February 2013, paras 27, 28 and 31.
127 Exhibit MTA8, paras 101-103. See also the evidence of Mr Chapman: Transcript of 20 March 2013, PN4078- PN4081. However it is noted that a small majority of the employer respondents to the MTA employer survey support increasing adult apprentices’ wages to the adult minimum rate of pay under the Vehicle Award: see Exhibit MTA8, para 99.
128 Exhibit MTA8, Attachment B.
129 Damien Oliver, ‘An Examination of Award Wages among Australian Apprentices and Trainees’, Australian Bulletin of Labour Vol. 38 No 2, 2012, pp.166, 170.
130 See ss.134(1)(a) and 284(1)(c) of the Act.
131 [2009] AIRCFB 345 at [100].
132 This was accepted by Mr Nixon Apple for the AMWU: Transcript of 9 May 2013, PN12983-PN12986.
133 Minimum Standard for Remuneration [2006] SAIRComm 13 at [94].
134 Apprenticeship Expert Panel Report, pp.95-96.
135 Manufacturing Skills Australia, Response to the Expert Panel Report, April 2011, p.10.
136 It is not intended that the commencement rate in the Black Coal Award be varied by this decision.
137 Apprenticeship Expert Panel Report, Recommendation 12, p.94.
138 Mary Dickie, Rod McDonald and Fadil Pedic, “A fair deal: Apprentices and their employers in NSW”. Integrated Research Report. Quay Connection, Ithaca Group and the Research Forum. Prepared for the NSW Board of Vocational Education and Training. November 2011. pp.15-6 (BVET Report).
139 Group Training Australia Submission, 9 July 2012, para 16.
140 Cover letter to submission of NSW Government, acting through its State Training Services, 29 January 2013.
141 Exhibit CTH7.
142 Exhibit CTH3, Attachment 1, principles 4 and 5.
143 Workplace Research Centre, ‘A step into the breach: Group Training initiatives and innovations using competency-based progression’, Final Report, June 2012.
144 COAG, National Partnership Agreement on Skills Reform.
145 See e.g. the Education and Training Reform Act 2006 (Vic) s.5.58(2); Training and Skills Development Act 2008 (SA) s.46(10)-(11); Vocational Education and Training Act 1996 (WA) s.60E(1)(a)(iv); Apprenticeship and Traineeship Act 2001 (NSW) s.19.
146 [2007] FCAFC 165.
147 Ibid at [13].
148 Ibid at [20].
149 [2012] FMCA 621.
150 Ibid at [58]-[59].
151 CEPU v Excelior Pty Ltd [2013] FCA 638 (Katzmann J).
152 Mr Nigel Muller also referred to having witnessed apprentices sleeping in cars overnight during his time as a trainer at Box Hill TAFE in Victoria: Transcript of 4 April 2013, PN8545.
153 [2012] SAIRComm 7.
154 Exhibit ACTU7.
155 Ibid.
156 PIAA Outline of Submissions in Response to application by AMWU, paras 17.1-17.4.
157 Exhibit ACTU4; Apprenticeship Expert Panel Report, Appendix N, p.121.
158 BVET Report, p.21.
159 Apprenticeship Expert Panel Report, p.21.
160 Ibid, pp.9, 30-31.
161 Ibid, p.33.
162 See e.g. s.13 of the Apprenticeship and Traineeship Act 2001 (NSW), which states:
“13 Duties of employers under apprenticeships and traineeships
(1) The employer of an apprentice or trainee must, in accordance with the relevant training plan, take all reasonable steps:
(a) to enable the apprentice or trainee to receive the work-based component of the required training, in particular by providing all necessary facilities and opportunities to acquire the competencies of the vocation concerned; and
(b) to enable the apprentice or trainee to obtain an appropriate qualification for that vocation, in particular:
(i) by releasing the apprentice or trainee as required for attendance at the relevant registered training organisation, and
(ii) by liaising with the relevant registered training organisation in relation to the apprentice’s or trainee’s attendance and participation in the training provided by the relevant registered training organisation.
(2) The employer of an apprentice or trainee must discharge his or her obligations under the relevant apprenticeship or traineeship as an employer of the apprentice or trainee.”
163 See e.g. s.19 of the Work Health and Safety Act 2011 (NSW).
164 See ss.26-29 of the Act, which deal with the interaction between the Act and modern awards on one hand and State and Territory legislation on the other.
165 See in particular s.134(1)(d) and (f) of the Act.
166 Apprenticeship Expert Panel Report, p.33.
167 The relevant legislation is referred to in numerous exhibits and submissions. See for example Exhibits CTH6 and AIG4.
168 See s.123(4) of the Act. We do not intend to alter any entitlement to redundancy pay which an apprentice may have under a modern award or enterprise agreement.
169 Clause 15.2(c).
170 [2007] FCAFC 165.
171 [2012] SAIRComm 7.
172 [2012] FMCA 621.
173 [2013] FCA 638 at [65].
174 [2009] AIRCFB 345.
175 Group Training Australia also made a similar application to vary the Fast Food Industry Award 2010, but withdrew the application by letter dated 6 August 2013.
176 See Exhibits ACTU7 and ACTU8.
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