Submission to the Department of Education Employment and Workplace Relations

Master Builders Australia

Submission to the Department of Education Employment and Workplace Relations

in response to the

Report of theApprenticeships for the
21st Century Expert Panel

April 2011

Master Builders Australia Limited ABN 68 137 130 182

1

Submission on the Housing Affordability Fund

Master Builders Australia Ltd

© Master Builders Australia Ltd, 2010

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Response to the Apprenticeships for the 21st Century Expert Panel 1

Master Builders Australia Ltd

1. INTRODUCTION
2. This submission is made by Master Builders Australia Ltd (‘Master Builders’) in response to ‘A Shared Responsibility’, the report of the Apprenticeships for the 21st Century Expert Panel. Master Builders is Australia’s peak building and construction industry association, federated on a national basis since 1890. The association represents over 30,000 businesses nationwide and is the only industry body that represents all of the residential building, commercial building and civil construction sectors.
3. Master Builders welcomes the Expert Panel report and supports the Government’s intention to implement significant reforms to address insufficient levels of apprenticeship completions in skill shortage areas. The building and construction industry is the largest employer of skilled tradespeople in the country and so has a significant stake in the success of this process. The 56,000 construction apprentices in-training are the future of our industry and Master Builders estimates that completions will need to double over the next decade to meet the expected rise in employment demand.
4. Master Builders supports many of the recommendations of the Expert Panel, particularly in relation to greater national consistency in apprenticeship employment and training requirements, improved support services for apprentices and employers, closer attention to the quality of VET-in-schools programs, and increased communication of the benefits of an apprenticeship pathway. Master Builders believes that a number of other recommendations require further discussion, and is strongly opposed to recommendations to accredit employers of apprentices and phase out direct employer subsidies.

1. SUMMARY RESPONSES TORECOMMENDATIONS

Master Builders’ responses to the fourteen recommendations of the Expert Panel are:

1. Support for a stronger Commonwealth role to promote nationally consistent regulation of apprenticeships,but with questions about the likely effectiveness of the proposed national ‘Custodian’;
2. Support for clarification of the roles of stakeholders in the apprenticeship system, particularly in relation to apprenticeship support services;
3. Opposition to the accreditation of employers of apprentices, as there are more effective and less intrusive ways of improving on-the-job training standards;
4. Support for improved services for apprentices and employers, including greater availability of mentoring and pastoral care through industry-led channels;
5. Opposition to the redirection of direct employer payments to support services, which could be funded through better use of current support funding;
6. Opposition to an Employer Contribution Scheme, which would increase prices to consumers without necessarily improving training outcomes;
7. Qualified support for measures to allow for the continuation of apprenticeships during economic downturns, provided these do not impinge on the ability of employers to manage their workforce;
8. Support for greater regulation and consistency of VET-in-schools programs, with a central objective of introducing greater industry linkages and clearer vocational outcomes into these programs;
9. Support for work by the National Quality Council to clarify the definitions of preapprenticeships and pre-vocational training;
10. Support for more targeted assistance to disadvantaged apprentices, such as Indigenous Australians and people from remote areas;
11. Support for increased communication of the benefits of apprenticeships as a career choice for males and females;
12. Qualified support for the wider availability of competency-based progression, subject to further consultation with industry on an acceptable model;
13. Support for improved availability of recognition of prior learning (RPL), but opposition to any linkage of RPL to modern awards; and
14. Opposition to a general review of apprentice wages and conditions until transitional issues associated with the move to modern awards have been worked through.

1. DISCUSSION OF ISSUES

3.1A national role in apprenticeship regulation

Master Builders agrees that the current jumble of state regulations around apprenticeships is confusing for apprentices and employers. Nationally consistent and straightforward training contracts/plans and employment arrangements would benefit all stakeholders in the training system. Similarly, there could be significant benefits from clarifying and streamlining the roles played by State Training Authorities, Australian Apprenticeship Centres and the large number of other stakeholders within the apprenticeship system.

However, Master Builders is concerned that there does not appear to be any appetite for serious reform in this area on the part of state and territory governments and we have doubts that the proposed national-level ‘custodian’ of the system will have the authority to drive major changes. Master Builders recommends that COAG gives the Commonwealth the authority to lead streamlining of the apprenticeship system through a taskforce in Prime Minister and Cabinet or another appropriate department, as has been the case with national occupational licensing, regulation of tertiary education, workplace heath and safety and other recent reform initiatives.

3.2Preaccreditation of employers

Master Builders opposes compulsory preaccreditation of employers, as this unnecessary administrative burden will have the effect of driving small employers out of the apprenticeship system. Employers in the building and construction industry are especially wary of additional compliance requirements. Many will simply walk away from offering apprenticeships rather than subject themselves to an exercise that will inevitably be seen as formulaic, prescriptive and unrelated to the real prospects of a successful apprenticeship engagement.

Master Builders understands that poor relationships between apprentices and employers are a contributing factor to non-completions, and agrees that appropriate measures need to be developed to address this issue. The ‘On-track Apprenticeship’ program recently trialled by Master Builders in South Australia is an example of one successful approach that could be adopted more widely. This program includes a short course for employers embedding nationally recognised units of competency, assistance with documenting the achievement of competencies and access to an apprenticeship field officer. A partnership approach of this kind is more likely to have a positive effect on apprenticeship completions than a ‘one size fits all’ accreditation arrangement.

3.3Improving support services for apprentices and employers

Master Builders has previously argued for action to address the highly variable level of support given to apprentices and employers once an apprentice has been signed up. We agree that this needs to take the form of both career mentoring and pastoral care. In the experience of Master Builders’ Group Training Organisations, the use of apprenticeship field officers with an extensive industry background and high level interpersonal skills is the most successful approach to this problem. Master Builders also supports the excellent work of the OzHelp Foundation highlighted in the Expert Panel report. As the report notes, additional targeted support may be required for Indigenous apprentices, apprentices in remote areas and those facing other forms of disadvantage.

Master Builders does not accept that improved support services need to be funded at the expense of direct employer payments, rather than for example making better use of existing funding to Australian Apprenticeship Centres. During the current downturn, employers have shown a strong commitment to apprenticeships in a difficult period for the building and construction industry, assisted to a significant degree by the Government’s ‘Kickstart bonus’. However, with continuing uncertainty over the industry outlook, a phasing out of direct employer payments will almost certainly cause a significant fall in apprenticeship numbers.

For many small employers in the building and construction industry, the decision to take on an apprentice involves justifying substantial direct and indirect costs, whichMaster Builders’ internal research suggests work out at around $128,000 over an apprenticeship. Master Builders does not agree with the Expert Panel that there is strong evidence incentives have little effect on this decision – the outstanding response to the Kickstart bonus shows the important effect that employer payments can have. In the recently released ACCI Employer Commitment to Training survey, 46 per cent of construction employers indicated that cost was deterring them from taking on apprentices.

A number of studies have now made it clear that apprentices in their early years are in an intense learning phase and require a substantial investment of supervisor time. It simply does not make sense to use apprentices as ‘cheap labour’ as some stakeholders have suggested occurs. Employer subsidies recognise that there is in fact a significant net cost borne by employers of apprentices in traditional trades, estimated by recent NCVER research to average $90,000 per apprentice.

By contrast with this cost borne by employers of trade workers, industries employing predominantly university graduates effectively have their entire cost of education met by the public purse and graduates themselves. Given the significant investment of new public money in higher education through the ‘Bradley Review’ reforms, Master Builders believes that there is a case for some supplementary Government funding for measures such as apprenticeship support services, should reform be unviable within the current funding envelope.

3.4Employer Contribution Scheme

Master Builders welcomes the Government’s statement of 21 February that it ‘will not consider introducing an employer contribution scheme’ in response to the Expert Panel’s recommendations. Levies are already used in parts of the construction industry, where they add to costs for consumers without evidence that they actually improve training outcomes. Mobilising employers’ own efforts behind training reform – rather than creating additional bureaucracy to administer a contribution scheme – is a more constructive approach for all stakeholders.

3.5Managing apprenticeships in an economic downturn

Master Builders supports measures to allow for the continuation of apprenticeships during economic downturns, but has concerns at the industrial implications of the proposed measures in the Expert Panel report. For example, Master Builders would not support an obligation on employers to notify training authorities where a contract of training was ‘in danger of being terminated’ (an overly ambiguous concept) due to economic conditions. Where measures (e.g. to increase the time spent in off-the-job training) are voluntary and developed in association with industry, then these could make a contribution to managing the economic cycle without undermining the employment relationship.

3.6A reformed pre-apprenticeship system

Pre-apprenticeship pathways are a major weakness of the current system. Master Builders strongly supports the Expert Panel’s call for enhanced oversight of the quality and consistency of these programs. While overall
VET-in-schools programs have expanded significantly, the employment value of many of these programs is questionable, while at the same time school-based apprenticeships and post-school pathway programs have stagnated in recent years. Master Builders supports both strengthened vocational pathways and also greater investment in prevocational programs (i.e. focussed on literacy, numeracy and employability skills).

3.7Increased communication of the benefits of apprenticeships

Young Australians and existing workers have a range of career options open to them, many of which may appear easier and better remunerated than an apprenticeship. In this context, the long term payoffs of an apprenticeship need to be well communicated. Master Builders supports the development of a strategy to improve public perceptions of the benefits of apprenticeships. Master Builders submits that the career advice provided to high school students warrants particular attention in this respect.

3.8Wider availability of competency-based progression

As the Expert Panel notes, there has been limited progress on COAG’s commitment to the wider availability of competency-based progression announced in 2006. In addition, the ‘Smarter Apprenticeships’ funding announced in the
2010-11 Budget has not yet been made available. Master Builders supports competency-based progression as apotential means to make apprenticeships more flexible and responsive to individual learner needs. We urge government to work with industry and other stakeholders on an appropriate model that allows for competency-based progression based on robust assessment of competencies at the workplace level, where this is supported within a particular industry.

3.9Workplace relations issues

Master Builders agrees that there is a lack of integration between the apprenticeship system and the workplace relations system and that there are inconsistencies and ambiguities in modern awards in relation to apprenticeships. Master Builders will continue to work with Fair Work Australia and other stakeholders to resolve these issues. However, Master Builders does not accept that a general review of apprentice wages and conditions is called for only a year after the introduction of modern awards, at a time when many transitional issues are being worked through. Similarly, while Master Builders supports the availability of Recognition of Prior Learning (and is a large provider of these services through its RTO network), we do not believe there is any justification for linking Recognition of Prior Learning to modern awards.

1. CONCLUSION

4.1Master Builders looks forward to working with the Government to progress apprenticeship reform in the light of the Apprenticeships for the 21st CenturyExpert Panel report. Many of the recommendations made by the Expert Panel are sensible and reflect a consensus among industry and other stakeholders of areas where significant attention is now required.

4.2While welcoming the majority of the Expert Panel’s recommendations, Master Builders submits that several findings would have the unintended effect of driving employers away from the apprenticeship system. This is because the Expert Panel focussed primarily on the need to make apprenticeships attractive to potential employees. In considering issues such as accreditation and subsidy payments, however, the Government should give equal consideration need to support employers to take on apprentices in sufficient numbers.

4.3Master Builderswould welcome the opportunity to discuss any of the issues raised in this submission further. Please contact Dr Alex Maroya, National Director, Training Policy on 026202 8888 or email .

Response to the Apprenticeships for the 21st Century Expert Panel 1