Econ Appren4

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NCVER

The apprenticeship and traineeshipsystems relationships with theregulatory environment

Report3


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Commonwealth Government, 2011

ISBN PDF 978-0-642-78011-9

ISBN RTF 978-0-642-78012-6

This work has been produced by the National Centre for Vocational Education Research (NCVER) on

behalf of the Australian Government and state and territory governments with funding provided through

the Australian Department of Education, Employment and Workplace Relations. Apart from any use

permitted under the CopyrightAct 1968, no part of this publication may be reproduced by any process

without written permission of the Commonwealth.

The views and opinions expressed in this document are those of the author(s) and do not necessarily

reflect the views of the Australian Government, state and territory governments or NCVER.

NCVER ref: DMS# 99763

January 2011


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NCVER Report 3 final Page 3

ContentsTables and figures 4

Overview 6The role of licensing in the apprenticeship system

Introduction 10The licensing framework 11Licensing, qualifications and apprenticeships 17Conclusions 22References 23Appendix: Occupations that do or may require licensing 24

Award structures

Introduction 30Employment arrangements of apprentices and trainees 32Award wage rates and relativities 35

Trainees 35Apprentices 39Pay rates for adult apprentices 42Consideration of other factors 44School-based apprentices 45

Allowances 46Competency-based progression 48Identifying over-award payments 50

Method 50Extent of over-award payments 53

Final comments 57References 58Appendix 59

Legislative and quality assurance arrangements

Introduction 76Legislation 77

The specific role of apprentice and trainee legislation 77Quality assurance 81

The players 81The training contract and the training plan proposal 82The AQTF 83

References 88Appendix: Some thoughts on quality assurance and the AQTF 89


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Tables and figures

The role of licensing in the apprenticeship systemTable 1 Arrangements for electrical licensing in Australia 14Table 2 Licensing arrangements for selected occupations 15Table 3 Licensing, apprenticeship and traineeship numbers and

qualifications minor occupational groupsrelevant to VET 17

Table 4 Number of commencing apprentices and trainees for2006 by occupational group and sorted by size 20

Table A1 Occupations that do or may require registrationor licensing 24

Figure 1 Generic industry licensing architecture 11Figure 2 Regulatory risk management approaches 13

Award structuresTable 1 Apprenticeship contracts by employment instrument, 2009

commencements 33Table 2 Training wage schedule rates of pay, as proportion of

National Minimum Wage, July 2010 36Table 3 Wage levels as proportion of National Minimum Wage for

certificate IV traineeships, July 2010 37Table4 Wage levels as proportion of National Minimum Wage for

school-based traineeships, July 2010 37Table 5 Proportion of employees in typical trainee occupations

reliant on minimum rates of pay 38Table 6 Apprentices in trades occupations with main relevant

modern award(s) 40Table 7 Apprentice wage ratios by year for selected Awards (4 year

apprenticeships) 41Table 8 Apprentice wage ratios for three year apprenticeships 41Table 9 Pay ratios for adult apprentices 42Table 10 Formula for calculating pay rates for adult apprentices,

selected awards 43Table 11 Formula for calculating pay rates for adult apprentices,

Manufacturing and Associated Industries and OccupationsAward 2010 and related awards 43

Table 12 Formula for calculating apprentice wage rate based onhighest year of schooling 44

Table 13 Incidence and examples of tool allowance provisions forapprentices in modern awards 47

Table 14Apprentice and trainee completions in trade occupations,6certificate III or above, by duration of training, 19992009(%) 48

Table 15 Trainees in-training as at 31 December 2009 bywage level 52

Table 16 Apprentice average weekly income and award over-paymentby selected characteristics 54


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Table 17 Trainee award over-payment by characteristics 56Table A1 Modern awards and their inclusion of apprentice rates of

pay, Training Wage Schedule and School BasedApprentices Schedule 59

Table A2 Pay ratios for 4-year apprentices 62Table A3 Wage levels for ApprenticesQueensland 64Table A4 Wage Levels for traineesQueensland 65Table A5 List of pre-reform awards and NAPSAs used for

calculating apprentice rates of pay 66Table A6 Award rates of pay by award and stage 69Table A7 Adult apprentice rates of pay 71Table A8 Wage level definitions for traineeships based on occupation,

industry and sector of employment 72Table A9 Trainee wage rates used in the analysis 74

Legislative and quality assurance arrangementsTable 1 Indicative good practice for RTOs delivering training to

apprentices noted in the WA good practice guide 84


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Overview

Apprenticeships and traineeships are based on a legal contractthe contract of training

between an individual, an employer and a training provider. However, the contract of training isbut one part of the legal or regulatory framework that impinges on apprenticeships andtraineeships, and it is this framework that is the subject of this report. The report comprises threeseparate papers: the licensing system; award structures; and legislative, institutional and qualityassurance arrangements.

The first examines the role of licensing in the apprenticeship system. It considers whether certainoccupations mandate a licence and whether this has an effect on apprenticeship and traineeshipnumbers. Our conclusion is that licensing may be an issue for the labour market but is not reallyan issue for the apprenticeship and traineeship system. In general one does not have to completean apprenticeship or traineeship to obtain an occupational licence, and there are manyapprenticeships and traineeships providing training for non-licensed occupations.

The second considers aspects of award structures and implications for apprentice and traineerates of pay. The apprenticeship model combines a contract of training with a contract ofemployment and as such involves two regulatory systems: the training system and the industrialrelations system. The new Fair Work industrial relations system has consolidated coverage into122 modern awards, 95 of which contain the Training Wage Schedule and 45 of which providefor the employment of apprentices. Considerable diversity in apprentice pay and conditionsremains and it is as yet unclear whether the new framework can be more adaptive in response toissues such as the expansion of apprenticeships and traineeships into new areas, competency-based wage progression, and the recognition of previous training and qualifications.

Low rates of award pay for apprentices have been targeted as dissuading young people fromstarting an apprenticeship as well as contributing to low completion rates, but this criticismassumes that few apprentices receive above-award payments. Analysis of data from the 2009 ABSSurvey of Education and Training finds that over-award payments for apprentices are common,especially in the electro-technology and automotive and engineering trades. Larger businesses aremore likely than smaller organisations to pay above award and there are few differences betweenapprentice pay in metropolitan and regional areas. Most trainees also receive over-awardpayments, particularly existing workers, older trainees and male trainees. In most cases, therelevant award wage for apprentices and trainees is below the national minimum wage. Evenafter taking into account above-award payments, a majority of apprentices, as well as most youngtrainees and most female trainees, earn less than the minimum wage.

The final paper outlines the legislative and quality assurance arrangements for apprenticeshipsand traineeships, and includes consideration of the Australian Quality Training Framework(AQTF). The first point to be made is that the legislative frameworks main function is to specifythe circumstances in which an apprenticeship or traineeship can be created. This is importantbecause the creation of an apprenticeship or traineeship means that the employer can access theaward provisions pertaining to training wages (i.e. can take advantage of lower wages) and thesupport provided by government. This implies that it is preferable for an employer in somecircumstances to take on an apprentice or trainee rather than an employee who is governed bystandard arrangements. However, there is little in legislative arrangements that impinges on thequality of apprenticeships and traineeships, although they do provide for training plans, whichare an important feature of apprenticeships and traineeships. The issue of quality is pretty muchleft to the AQTF regulatory arrangements, which apply to apprenticeships and traineeships inexactly the way that they apply to all training provided within the AQTF, although the stateauthorities do use the training plans in their quality assurance arrangements, and the field forces


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(which vary in size and activity by state) do provide some pastoral care. At the end of the day, thequality of apprenticeships and traineeships will depend on the culture of the employers andtraining providers, with state field forces also playing a role.


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The role of licensing in the

apprenticeship system

John Stanwick


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IntroductionLicensing and regulation is introduced into occupations where governments believe that marketforces will not adequately address certain riskstypically reasons related to safety but also

consumer transactions, environmental protection and other reasons. Licensing arrangements canalso be promoted by incumbents in an occupation as a way of protecting wages and conditions.There are many occupations that have some sort of licensing arrangements. For many of thesethere are training requirements that lead to or contribute to a licence. By extension, theapprenticeship system may be a relevant pathway to a licence.

The extent of training requirements varies by the type of license in place. Eikenloff and Porter(2003) discuss three types of license in terms of training issues. The first type is referred to asoccupation-based licensing and generally requires a full qualification for the issue of a license.Occupations such as electricians and plumbers fall under occupational licensing. The next type oflicensing is referred to as portional occupation-based licensing and here the license forms part ofthe work of an occupation. For example, pest controllers may be licensed to use certainpesticides but not all. The final type of licensing mentioned is known as activity-based licensing.This often relates to an area of risk or the operation of a piece of equipment, for example,driving a train or a bus or using a forklift. It can in some instances involve a full qualification butmore often it does not. We can see then that the type of license has implications for the trainingrequired1. For some types of licensing, particularly occupational licensing in the trades area,apprenticeships may be an appropriate pathway, but not necessarily for some of the other typesof licensing, where the training requirements are much more limited or specific (e.g. driving aforklift) or where it is more efficiently done off the job. Even where an apprenticeship might bean appropriate pathway, it does not follow that an apprenticeship is a necessary condition for alicence.

The approach taken in this paper to address the links between licensing and the apprenticeshipand traineeship system is as follows. Firstly, the general system of licensing and regulation inAustralia is examined. This will explain how licenses are obtained, the various types of licensesand training required. We find that there is only a loose relationship between licensing andapprenticeships and traineeships, even for those occupations requiring a license. The remainderof this paper elaborates on this lack of connection. We look at the qualification distribution byoccupation and show that even in licensed occupations there are many working without theappropriate qualification. For the licensed occupations we also tabulate from the National VETProvider Collection database the split between apprenticeships and other students. Finally weshow the split between licensed and non-licensed occupations for apprenticeships andtraineeships.

Our conclusion is that licensing may be an issue for the labour market but is not really an issuefor the apprenticeship and traineeship system. In general one does not have to complete anapprenticeship or traineeship to obtain an occupational licence, and there are manyapprenticeships and traineeships providing training for non-licensed occupations.

1We exclude from our analysis of licences the white card required by construction workers as proof of basic safety inductiontraining (). This comprises a single unit of competency on general safety,a site induction and task-specific safety training (see code:

)


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The licensing frameworkBefore we examine data on licensing and apprenticeships it is useful to examine the generalframework for the issuing of licenses as this will also inform the types of training requirements

necessary for a licence. The framework for the issuing of licences is outlined below. Theframework begins with the government deciding the need to introduce a license and ends withthe issuing of a license. While the framework is taken from a 2002 publication it is still relevant tohow the licensing system currently operates. After explaining the main elements the concepts willbe illustrated by a few current licensing arrangements.

Figure 1 Generic industry licensing architecture

Source: ANTA (2002).

Parliament/Government

PrimaryLegislation Subordinate

Legislation

Licensing Authority

Licensing Requirements

Assessment

CompetencyBased

Other

Licence / Permit /Certification / etc


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We see from the diagram that there are four main elements to the arrangements. These arediscussed in turn:

Parliament/government and legislation: as discussed previously, licensing is introduced by state andterritory governments where there is deemed to be market failure in regards to certain publicrisks. The primary way of addressing these risks is through the passing of legislation thatintroduces standards, controls, restrictions and the like on industry and the community. In termsof occupational licensing, the legislation imposes controls on undertaking certain activities orpractising certain professions.

Legislation can be primary (Acts of parliament) or subordinate (rules and regulations etc.).Primary legislation outlines the policy and principles of the legislation, whereas the subordinatelegislation deals with the administrative details.

The licensing authority: there are two main forms of institutional arrangements for industryregulation. The first is that the licensing authority is part of a government agency. The secondtype of licensing authority is independent industry regulatory bodies. If we use the example of

electricity from table 1, we see that, while across most jurisdictions, government departments arethe licensing body (e.g. the Department of Justice in Queensland and Tasmania); in the NorthernTerritory it is the Electrical Workers and Contractors Licensing Board. Both forms of industryregulators are generally accountable to a government minister.

Licensing requirements: these requirements are reflected in legislation and can include bothcompetency related and non-competency-based requirements. Examples of competency-relatedrequirements are possession of trade or tertiary qualifications (sometimes from specificinstitutions) and possibly through an apprenticeship pathway; completion of a training packagequalification or part thereof, completion of a training course through the VET sector; ordemonstration of knowledge and skills through examinations determined by the regulator.

Examples of non-competency-based requirements include insurance requirements, financialcapacity requirements, industry experience requirements, age requirements and fit and properperson requirements. Note that these requirements often do not apply to people undertaking thequalifications for the licence but are more in the nature of business or social characteristics.

The licence: the licence can be issued at various levels as illustrated in figure 2.


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Figure 2: Regulatory Risk Management Approaches

Source: ANTA (2002).

As we can see from figure 2, licensing can range from licensing an entire business to licensing anindividual within the business. At which point the licence will be targeted depends on severalfactors, including the nature of the industry, the nature of the risk the licensing is aimed at, therisk profile of the government or industry regulator, and the resources available to the regulator.

There are two main types of license that are issued. The first is a physical licence that is issuedsubject to entry requirements such as those listed previously. The second can be termed animplied licence and has specific requirements (such as qualifications) but where no physicallicence exists. An example of a non-physical licence is the Australian Securities and InvestmentCommission (ASIC) licence for carrying out certain types of financial services such as providingfinancial product advice or dealing in financial products. The person is therefore deemed to havethe license by virtue of having the appropriate qualification.

As an illustration of this framework tables 1 and 2 provide basic-level information on licensingarrangements for a handful of occupations. Table 1 examines arrangements across all states andterritories for a traditional tradeelectriciansand table 2 examines arrangements for a varietyof other occupations in a given jurisdiction.

Risk Control Point Licensing Type

Business

Princi als

Su ervisors

Individuals

Licensing of Business Entity- applies to entity, not persons- non-competency based requirements

Licensing of Business Principal(s)

- non-competency based requirements- competency based requirements

Licensing of Supervisors- some non-competency based requirements- competency based requirements

Licensing of Individuals- some non-competency based requirements- mainly competency based requirements


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Table 1 Arrangements for electrical licensing in Australia

State Name of licensingbody

Primarylegislation

Types of licence Qualification requirements foran electrician

Western Australia Electrical licensingboard (EnergySafety)

Electricity Act 1945

Electricity(Licensing)regulations 1991

Electrical contracting

Electrical installing

Electrical training

Restricted electrical

Essential performance capabilitiesas agreed by the National UniformElectrical Licensing Council

New South Wales Department of FairTrading

Home Building Act1989

Electricity(Consumer Safety)Act 2004

Contractor

Qualified supervisorcertificate

Nominatedsupervisor (oncontractor licence)

Achieved through various (six)pathways including apprenticeshipand trade qualification.

Some need a certificate from theVocational Trade Tribunal2

Australian CapitalTerritory (ACT)

Building, electricaland plumbing control(ACT Planning andLand Authority)

Constructionoccupations(licensing ) Act 2004

Electrical contractor

Unrestrictedelectricians

Restricted electrician

There are a variety of ways thequalification for the licence can beobtained, including through anapprenticeship or a trade certificate

Northern Territory Electrical Workersand ContractorsLicensing Board

Electrical Workersand Contractors Act(2009)


Electrical worker

Restricted licence

Mainly though an apprenticeship

Queensland Department ofJustice, Fair andSafe Work

Electrical Safety Act2002


Various electricalworker

Restricted electrical

workTraining permit

Mainly through an apprenticeship

South Australia Office of Businessand ConsumerAffairs

Plumbers, GasFitters andElectricians Act1995


Restricted

Registered workers

The appropriate vocationalqualification approved by theCommissioner and certaincertificates of competency issued bythe Industrial and CommercialTraining Commission

Tasmania Department ofJustice (WorkplaceStandards Australia)

OccupationalLicensing Act 2005

Practitioner(electrical work)

Electrical contractors

Completed a relevant trainingpackage qualification andcompleted 12 months experience inthe practical application of AS3000and completed equivalent of 4 yearsrelevant experience

Victoria Energy Safe Victoria Electrical Safety Act1998 Electrical inspectorElectrical contractor

Electrician

Electrical worker

Supervised worker

Restricted electricalworker

Completion of an apprenticeship(cert III) and completed theLicensed Electricians Assessmentconducted by Energy Safe Victoriaor equivalent

Source: The various electrician licensing authorities across Australia

2 The Vocational Training Tribunal (VTT) is a statutory body in NSW responsible for trade skills recognition, resolving complaintsand disputes and considering applications for the transfer, suspension, cancellation and variation of apprenticeships and traineeships(NCVER online glossary, viewed August 2010, < http://www.ncver.edu.au/resources/glossary/about_the_glossary.html,>)


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Table 1 shows that there are quite a lot of similarities in arrangements across the states. In termsof qualification requirements, while the apprenticeship system is the main pathway in somestates, in other states there are other pathways, that is, the apprenticeship pathway is notnecessarily a compulsory pathway to becoming a licensed electrician. It is also worth noting interms of the Council of Australian Governments (COAG) agreement on mutual recognition, if

one state permits licensing without an apprenticeship then de facto all the states do. The tablealso illustrates the point that the licence can be targeted at various risk points, ranging from thebusiness through to the individual.

Table 2 Licensing arrangements for selected occupations

Occupation Name oflicensing body

Primarylegislation

Types of licence Qualification requirements

Plumber (Victoria) Plumbing IndustryCommission

Building Act 1993

The VictorianPlumbingRegulations 2008

Registration

Licence

Generally through the completionof a plumbing apprenticeship butmay also gain registration orlicensing with a minimum and offour years experience and satisfythe Qualifications and ExperienceReview Committee (QERC) ofcompetence.

Security (NSW) NSW Police Security IndustryAct 1997

Class I

Class 2

Master

Various firearms licences

For class I/2: various units ofcompetency by an RTO approvedby the Commissioner

For Master: certificate IV levelqualification

For firearms: safety trainingcourse

In addition to competencyrequirements there are alsovarious other personalrequirements such as being a fitand proper person.

Financial Services(Commonwealth)

AustralianSecurities andInvestmentCommission (ASIC)

Corporations Act2001

Various licences such asa dealers licence,investment advisorslicence or Brokerslicence

The qualification licence can varydepending on licence and level ofresponsibility. Can range fromcertificate III to degree.

Child care worker centrebased(Queensland)

Office of EarlyChildhoodEducation and Care

Child Care Act2002

Child CareRegulations 2003

Licenses can be issuedto entities or individualsand there are prescribedqualificationrequirements in regardsto :

assistants

group leaders

directors

For assistant: certificate III/IV or a1 year qual. in early childhood orchild care studies, or aqualification for a group leader

For group leader: a diploma or 2-year qualification in earlychildhood or child care studies ora qualification for a director

For a director: an advanced

diploma or a 3-year qualificationin early childhood studies or childcare studies, or at postgraduatequalification of at least one yearin childhood studies or childcarestudies.

Source: Various licensing body websites.

Table 2 shows that while the selected occupations all have a licensing body and legislativebacking, the licensing arrangements vary by occupation. We see for instance that in plumbing thepath to a license is generally through an apprenticeship, while for some of the service basedoccupations such as financial services the focus is on completion of a qualification (institutionbased). In the security industry not all classes of licences need a full qualification and in the case

of child care, entities must be licensed and individuals can be licensed.


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In summary, the main features that arise from the description of the licensing system in Australiaare that:

While there is a general framework for licensing, arrangements vary by occupation and withinthat by state/territory.

Most licensing requires some training arrangement. For occupational licenses a wholequalification is generally required, whereas for some other types of licensing a wholequalification may not be required.

Apprenticeships would seem to be a relevant pathway to licensing in some occupations,particularly where the training requirements are considerable and have an on-the-jobcomponent (for example, in the traditional trades), but is not necessarily appropriate to alltypes of licensing, where it may be more efficient to do the training off the job (e.g. securityand finance).

The completion of an apprenticeship does not result in a licence, even when there is animplied link.

The next section examines in more detail data on licensing, qualifications and apprenticeship.


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Licensing, qualifications andapprenticeships

This section looks at some data on licensing and apprenticeships and qualifications profile byoccupation. We find that there is no clear link between licensing and apprenticeships. There are afew reasons for this, primary among which is that apprenticeship training is not mandated formost licensing regimes.

Table 3 shows this lack of direct link. The table looks at, for various 3-digit occupational groups,the proportion of people within that occupational group who hold a certificate III levelqualification or higher as their highest qualification level (from 2006 census data), the numbers ofstudents enrolled as apprentices/trainees by comparison with other students for thatoccupational group, the proportion of all students enrolled as an apprentice/trainee, and finallywhether there may be some licensing requirements within that occupational group.

In our analysis we are mainly interested in occupational licensing. Occupational licensing is morelikely to occur at the higher occupational levels (such as professionals, and technician andtradespersons), while part or activity-based licensing is more likely to occur at the loweroccupational levels (although not exclusively).

Table 3 Licensing, apprenticeship and traineeship numbers and qualifications minor occupationalgroups relevant to VET*

Occupation Cert.III+(%)

No.apprent./trainees

No. otherstudents

%apprent./trainees

Mayinvolvesome

licensing

121 Farmers and farm managers 28.9 1,193 10,358 10.3

131 Advertising and sales managers 62.6 3 1,497 0.2

132 Business administration managers 71.1 590 26,520 2.2

133 Construction, distribution and production managers 62.5 398 10,457 3.7

134 Education, health and welfare services managers 90.4 2,126 44,372 4.6

141 Accommodation and hospitality managers 40.6 92 12,539 0.7

142 Retail managers 34.9 47 1,719 2.7

149 Miscellaneous hospitality, retail and service managers 52.0 122 8,207 1.5

222 Financial brokers and dealers, and investment advisers 68.3 7 640 1.1

311 Agricultural, medical and science technicians 58.1 680 7,845 8.0

312 Building and engineering technicians 71.5 1,308 30,582 4.1

313 ICT and telecommunications technicians 63.3 2,129 19,512 9.8

321 Automotive electricians and mechanics 73.4 20,733 6,343 76.6

322 Fabrication engineering trades workers 62.8 12,296 3,342 78.6

323 Mechanical engineering trades workers 78.8 12,654 11,087 53.3

324 Panel beaters, and vehicle body builders, trimmers 68.1 4,495 931 82.8

331 Bricklayers, and carpenters and joiners 66.0 25,195 4,349 85.3

332 Floor finishers and painting trades workers 54.1 3,096 4,769 39.4

333 Glaziers, plasterers and tilers 48.3 4,551 916 83.2

334 Plumbers 74.2 10,335 6,635 60.9

341 Electricians 79.2 22,426 9,573 70.1


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No. otherstudents

%apprent./trainees

Mayinvolvesome

licensing

342 Electronics and telecommunications trades workers 62.8 4,789 4,623 50.9

351 Food trades workers 49.8 16,669 10,109 62.2361 Animal attendants and trainers, and shearers 30.7 1,141 6,029 15.9

362 Horticultural trades workers 46.7 4,901 8,634 36.2

391 Hairdressers 76.9 11,207 1,872 85.7

392 Printing trades workers 62.1 1,401 1,099 56.0

393 Textile, clothing and footwear trades workers 42.5 340 2,817 10.8

394 Wood trades workers 60.4 4,451 1,897 70.1

399 Miscellaneous technicians and trades workers 56.5 2,359 17,358 12.0

411 Health and welfare support workers 73.1 2,556 37,423 6.4

421 Child carers 46.4 6,132 16,056 27.6

422 Education aides 40.6 917 7,193 11.3

423 Personal carers and assistants 44.8 8,851 40,280 18.0

431 Hospitality workers 24.1 16,046 77,786 17.1

441 Defence force members, fire fighters and police 58.3 132 5,825 2.2

442 Prison and security officers 38.0 1,179 3,219 26.8

451 Personal service and travel workers 54.6 2,868 23,220 11.0

452 Sports and fitness workers 41.3 1,129 10,854 9.4

511 Contract, program and project administrators 64.6 283 8,163 3.4

512 Office and practice managers 39.6 4,659 16,200 22.3

521 Personal assistants and secretaries 29.9 0 147 0.0

531 General clerks 31.5 18,555 58,684 24.0

532 Keyboard operators 29.7 205 33,308 0.6

541 Call or contact centre information clerks 39.5 8,443 3,346 71.6

542 Receptionists 26.7 169 2,072 7.5

551 Accounting clerks and bookkeepers 36.1 281 18,480 1.5

552 Financial and insurance clerks 36.1 1,588 4,017 28.3

561 Clerical and office support workers 30.4 1 1,503 0.1

591 Logistics clerks 34.2 1,090 3,034 26.4

599 Miscellaneous clerical and administrative workers 47.0 1,605 9,533 14.4

611 Insurance agents and sales representatives 40.8 268 713 27.3

612 Real estate sales agents 48.9 1,329 10,130 11.6

621 Sales assistants and salespersons 20.6 33,982 15,801 68.3

631 Checkout operators and office cashiers 12.8 0 0 0

639 Miscellaneous sales support workers 31.7 4 463 0.9

711 Machine operators 24.4 2,536 2,689 48.5

712 Stationary plant operators 33.6 1,591 11,541 12.1

721 Mobile plant operators 22.2 2,205 5,175 29.9

731 Automobile, bus and rail drivers 34.5 385 2,039 15.9

732 Delivery drivers 24.1 5,879 5,276 52.7

733 Truck drivers 23.7 0 219 0.0

741 Storepersons 21.8 6,335 5,454 53.7

811 Cleaners and laundry workers 18.5 4,926 3,439 58.9


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No. otherstudents

%apprent./trainees

Mayinvolvesome

licensing

821 Construction and mining labourers 28.3 1,549 26,509 5.5

831 Food process workers 20.8 9,584 7,861 54.9 832 Packers and product assemblers 17.7 753 3,863 16.3

839 Miscellaneous factory process workers 21.9 1,328 21,057 5.9

841 Farm, forestry and garden workers 23.1 3,245 29,049 10.0

851 Food preparation assistants 13.6 527 13,135 3.9

891 Freight handlers and shelf fillers 15.5 303 450 40.2

899 Miscellaneous labourers 29.8 2,653 23,765 10.0

Source: NCVERs National Provider Collection, students and courses 2007 data, and ABS 2006 census data online,

*Note that the apprentice and student numbers are from 2007 as ANZSCO information on students was not yet available in2006. However this does not deflect from the argument that we are making.

As mentioned, one of the main reasons for the lack of a direct link between licensing and

apprenticeships is that apprenticeship training is not mandated for most licensing regimes. If werefer to the example of electricians in table 1, we see that while apprenticeship training is themain pathway in some states, there are other pathways to the qualification available in otherstates. Table 2 also indicates that apprenticeship training is not mandated for licensing. Further,we can see from table 3 that even in licensed occupations there are considerable numberswithout certificate III level or above qualifications.

Secondly, if we look at the traditional trades, licensed occupations (including electricians,automotive electricians and mechanics, and plumbers) have high numbers of apprentice/traineestudents by comparison with other students but so do other traditional trades that do not haveany licensing requirements, such as fabrication engineering trades workers, food trades workers,

and hairdressing. Clearly, there are other factors that sustain high training rates in theseoccupations. These could be related to the type of work, the requirement for on-the-job training,cultural and historical factors, or a combination of all of these.

It is also worth mentioning that the three occupational groupings within trade and techniciansthat are technician occupations have low proportions of students taking the apprenticeship route.Although two of these three technical occupational groupings may have some licensingrequirements, it would appear that the requisite qualifications are obtained in other ways(probably an institutional pathway).

Some of the growing service sector occupations require licensing but few have high numbers ofapprentice/trainee students. Financial brokers and dealers and investment advisers, health and

welfare support workers, child carers and personal carers and assistants, prison and securityofficers, and personal service and travel workers all may require licensing but have relatively smallproportions of students who are apprentices/trainees. In the non-trades occupations that requireoccupational licensing there are other factors at play. For example, the introduction of theFinancial Services Reform Act(2004) requires that businesses providing financial services hold anAustralian Financial Services Licence.3 However, there is no tradition of apprenticeship trainingwithin this industry, as is reflected by there being virtually no students who areapprentices/trainees for this occupational group (222Financial brokers and dealers, and investmentadvisers) in table 3. We see however that quite a large proportion of people in this occupationalgroup hold a certificate III level qualification or higher (about 68%). One could argue that therequired qualifications are more efficiently obtained through an institutional pathway.

3 See .


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Another example of a licensed non-trades occupational group with low proportions of studentstaking the apprenticeship/traineeship pathway (6.4%) is 411 Health and welfare support workers(which includes enrolled and mothercraft nurses). What we see, however, is a high proportion ofpeople in this occupation with certificate III or higher levels qualifications (73%the highestamong community and personal service workers). What this means is that the licensing

arrangements in this occupational group would influence the qualification profile, but notapprenticeship/traineeship training.

We need to keep in mind that the numbers of people actually licensed in an occupation may alsonot be reflective of the census data on that occupation. There will be cases, for instance, wherethe licensing takes place above the level of a particular individual (refer back to figure 2). Even inthe case of occupations such as electricians (where about 20% do not have certificate III orhigher-level qualifications), there will be those who are not licensed but whose work is supervisedby a licensed electrician.

Another point to make is that not all types of licensing require qualifications. While we focusmainly on occupational licensing, we saw that activity-based licensing (e.g. operation of a piece of

equipment) does not necessarily require a qualification and therefore would be of little relevanceto the apprenticeship/traineeship system. We see for instance that 712Stationary plantoperatorshasa fairly low proportions of students who are apprentices/trainees (about 12%) and, further, thequalification profile for this occupation indicates that only about a third have certificate III orhigher qualifications. The training for some of these occupations may require only thecompletion of certain units of competence or the training may take place outside the formal VETsystem.

Table 4 shows the number of commencing apprentices for the same occupational groups as inthe previous table, ordered by size of number of commencing apprentices and trainees.Occupations with an asterisk alongside them are those where some licensing arrangements mayapply.

Table 4 Number of commencing apprentices and trainees for 2006 by occupational group andsorted by size

Occupation No. ofCommen.


621 Sales assistants and salespersons 37805 313 ICT and telecommunications technicians 1548

531 General clerks 15223 839 Miscellaneous factory process workers 1428

512 Office and practice managers 15214 712 Stationary plant operators 1368

431 Hospitality workers 14632

399* miscellaneous technicians and trades

workers 1296741 Storepersons 10439 821* Construction and mining labourers 1196

331* Bricklayers, and carpenters andjoiners 10412 452* Sports and fitness workers 1147

831 Food process workers 10223 832 Packers and product assemblers 956

351 Food trades workers 9277 121 Farmers and farm managers 915

423* Personal carers and assistants 8857311* Agricultural, medical and sciencetechnicians 906

541 Call or contact centre informationclerks 8610

134* Education, health and welfare servicesmanagers 886

321* Automotive electricians andmechanics 8340

361* Animal attendants and trainers, andshearers 823

732* Delivery drivers 8216 611* Insurance agents and sales representatives 750341* Electricians 7871 392 Printing trades workers 670


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Source: NCVER Apprentice and Trainee Collection no. 63 (March 2010 estimates).

We see that, of the ten occupations with the highest numbers of commencing apprentices onlytwo have any licensing requirements (bricklayers, carpenters and joiners; and personal carers andassistants). We see, in contrast, that financial brokers and dealers, as an example of a licensedoccupation, had no commencing apprentices in 2006.



711 Machine operators 5934 422 Education aides 565

322 Fabrication engineering trades workers 5615511 Contract, program and projectadministrators 558

391 Hairdressers 5374 851 Food preparation assistants 544323* Mechanical engineering tradesworkers 4937

393 Textile, clothing and footwear tradesworkers 301

334* Plumbers 4904441* Defence force members, fire fighters andpolice 301

421* Child carers 4430 532 Keyboard operators 183

552* Financial and insurance clerks 3768 731* Automobile, bus and rail drivers 174

411* Health and welfare support workers 3106 551 Accounting clerks and bookkeepers 171

841* Farm, forestry and garden workers 3099149* Miscellaneous hospitality, retail and servicemanagers 166

362 Horticultural trades workers 2876 142* Retail managers 154

899 Miscellaneous labourers 2873 312* Building and engineering technicians 149

442* Prison and security officers 2678 891 freight handlers and shelf fillers 115

591 Logistics clerks 2496133* construction, distribution and productionmanagers 113

342* Electronics and telecommunicationstrades workers 2477 542 Receptionists 95

333* Glaziers, plasterers and tilers 2469 131 Advertising and sales managers 51

451* Personal service and travel workers 2390 639 Miscellaneous sales support workers 27

599* Miscellaneous clerical andadministrative workers 2317 141* Accommodation and hospitality managers 7

324* Panelbeaters, and vehicle bodybuilders, trimmers and painters 2196

222* Financial brokers and dealers, andinvestment advisers 0

394 Wood trades workers 1969 521 Personal assistants and secretaries 0

721* Mobile plant operators 1943 561* Clerical and office support workers 0

332* Floor finishers and painting tradesworkers 1601 631 Checkout operators and office cashiers 0

612* Real estate sales agents 1577 733* Truck drivers 0


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ConclusionsThis paper has examined the basis for licensing arrangements in Australia. We see that, whilethere are similarities across occupations in terms of the need for underlying legislation and

licensing bodies, there are differences in terms of the types of licenses that are issued and theways in which the requirements of a licence can be achieved. A broad analysis of data onlicensing in occupations, the qualification profiles of occupations and the extent ofapprenticeship arrangements in occupations results in the following observations:

There is no clear link between licensing and apprenticeships. Licences in occupations may beachieved through apprenticeships (and in some cases is the general pathway) but notnecessarily. The use of apprenticeships seems to be more prevalent in some occupations thanothers.

Apprenticeships for licensed occupations seem to be more suitable in the traditional tradesbecause of the amount of time it takes to get the appropriate qualifications and on-the-jobexperience for these occupationsabout four years.

Even so, the structural arrangements and culture within an occupation may have more to dowith apprenticeship pathways than any licence requirement. In some occupations, institution-based methods may be a more appropriate and efficient way to obtain the qualification for thelicence.

Licensing arrangements are more likely to affect the qualifications profile of an occupationrather than the use of apprenticeships.

In some occupations an apprenticeship pathway is not necessary due to the small amount oftraining required to attain the licence, in some cases not even necessitating the completion ofa qualification.


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ReferencesABS (Australian Bureau of Statistics) 2006,ANZSCO Australian and New Zealand Standard Classification of

Occupations, 1st edn, cat.no.1220.0, Canberra.

ANTA (Australian National Training Authority) 2002A licence to skill : the implications of industry l icensing for theimplementation of training packages, viewed July 1010,.

Eikenloff, P & Porter, R 2003 Stairway to a license and beyond licensing issues national project, volume 2, ANTAand Queensland Government, Department of Employment and Training, Brisbane.


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Appendix: Occupations that do ormay require licensing

Table A1 Occupations that do or may require registration or licensing

Occupation Registration orlicensing isrequired

Registration orlicensing may berequired

Expected qualification level

1331 Construction managers Bachelor or higher

1342 Health and welfare services managers Bachelor or higher

1343 School principals Bachelor or higher

1412 Caravan park managers Associate degree,

Diploma, advanced diploma

1413 Hotel and motel managers Associate degree,


1414 Licensed club managers Associate degree,


1419 Other accommodation and hospitalitymanagers

Associate degree,


1421 Retail managers Associate degree,


142113 Betting agency manager Associate degree,


1494 Transport services managers Associate degree,


1499 Other hospitality, retail and servicemanagers

Associate degree,


2211 Accountants Bachelor or higher

221111 Accountant (general) Bachelor or higher

221112 Management accountant Bachelor or higher

2212 Auditors, company secretaries andcorporate treasurers

Bachelor or higher

221213 External auditor Bachelor or higher

221214 Internal auditor Bachelor or higher

2221 Finance brokers Associate degree,


222112 Finance broker Associate degree,Diploma, advanced diploma

2222 Financial dealers Bachelor or higher

222211 Financial market dealer Bachelor or higher

222212 Futures trader Bachelor or higher

222213 Stockbroking dealer Bachelor or higher

2223 Financial investment advisors andmanagers

Bachelor or higher

2241 Actuaries, mathematicians andstatisticians

Bachelor or higher

224111 Actuary Bachelor or higher

2242 Archivists, curators and record

managers

Bachelor or higher

2245 Land economists and valuers Bachelor or higher


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2246 Librarians Bachelor or higher

2249 Other information and organisationalprofessionals

Bachelor or higher

2311 Air transport professionals Diploma or higher

2312 Marine transport professional Diploma or higher

2321 Architects and landscape architects Bachelor or higher

232111 Architect Bachelor or higher

2322 Cartographers and surveyors Bachelor or higher

2331 Chemical and materials engineers Bachelor or higher

2332 Civil engineering professionals Bachelor or higher

233213 Quantity surveyor Bachelor or higher

2333 Electrical engineers Bachelor or higher

2334 Electronics engineer Bachelor or higher

2335 Industrial, mechanical and productionengineers

Bachelor or higher

2336 Mining engineers Bachelor or higher

2339 Other engineering professionals Bachelor or higher

233915 Environmental engineer Bachelor or higher

2347 Veterinarians Bachelor or higher

2349- Other natural and physical scienceprofessionals

Bachelor or higher

2411 Early childhood teachers Bachelor or higher

241111 Early childhood teacher Bachelor or higher

2412 Primary school teachers Bachelor or higher

241213 Primary school teacher Bachelor or higher

2413 Middle school teachers Bachelor or higher

2414 Secondary school teachers Bachelor or higher

2415 Special education teachers Bachelor or higher

2421 University lecturers and tutors Bachelor or higher

2422 Vocational education teachers Bachelor or higher, postgraduatediploma in adult education

2512 Medical imaging professionals Bachelor or higher

251211 Medical diagnosticradiographer

Bachelor or higher

251212 Medical radiation therapist Bachelor or higher

251213 Nuclear medicinetechnologist

Bachelor or higher

2513 Occupational and environmental healthprofessional

Bachelor or higher

2514 Optometrists and orthoptists Bachelor or higher

2515 Pharmacists Bachelor or higher

2519 Other health diagnostic and promotionprofessionals

Bachelor or higher

2521 Chiropractors and osteopaths Bachelor or higher

2522 Complementary health therapists Bachelor or higher

2523 Dental practitioners Bachelor or higher

2524 Occupational therapists Bachelor or higher

2525 Physiotherapists Bachelor or higher

2526 Podiatrists Bachelor or higher2527 Speech professionals and audiologists Bachelor or higher


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2531 Generalist medical practitioners Bachelor or higher

2532 Anaesthetists Bachelor or higher

2533 Internal medicine specialists Bachelor or higher2534 Psychiatrists Bachelor or higher

2535 Surgeons Bachelor or higher

2539 Other medical practitioners Bachelor or higher

2541 Midwives Bachelor or higher

2543 Nurse managers Bachelor or higher

2544 Registered nurses Bachelor or higher

2711 Barristers Bachelor or higher

2712 Judicial and other legal professionals Bachelor or higher

2713 Solicitors Bachelor or higher

2722 Ministers of religion Bachelor or higher

2723 Psychologists Bachelor or higher272311 Clinical psychologist Bachelor or higher

272312 Educational psychologist Bachelor or higher

272313 Organisational psychologist Bachelor or higher

272399 Psychologists nec Bachelor or higher

2725 Social workers Bachelor or higher

3112 Medical technicians Associate degree,


3121 Building, architectural and surveyingtechnicians

Associate degree,


312115 Plumbing inspector Associate degree,


3122 Civil engineering draftspersons andtechnicians

Associate degree,


3123 Electrical engineering draftspersons andtechnicians

Associate degree,


3124 Electronic engineering draftspersonsand technicians

Associate degree,


3129 Other building and engineeringtechnicians

Associate degree,


3211 Automotive electricians Certificate III/IV

3212 Motor mechanics Certificate III/IV

3231 Aircraft maintenance engineers Certificate III/IV

3233 Precision metal trade workers Certificate III/IV

323312 Gunsmith Certificate III/IV

323313 Locksmith Certificate III/IV

3241 Panel beaters Certificate III/IV

3242- Vehicle body builders and trimmers Certificate III/IV

3243 Vehicle painters Certificate III/IV

3311 Bricklayers and stonemasons Certificate III/IV

3312 Carpenters and joiners Certificate III/IV

3321 Floor finishers Certificate III/IV

3332 Plasterers Certificate III/IV

3333 Roof tilers Certificate III/IV

3334 Floor and wall tilers Certificate III/IV


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3341 Plumbers Certificate III/IV

3411 Electricians Certificate III/IV

3421 Air-conditioning and refrigerationmechanics Certificate III/IV

3422 Electrical distribution trades workers Certificate III/IV

3423 Electronic tradespersons Certificate III/IV

3611 Animal attendants and trainers Certificate III/IV

3991 Boat builders and shipwrights Certificate III/IV

399112 Shipwrights Certificate III/IV

3992 Chemical, gas, petroleum and powergeneration plant operators

Certificate III/IV

399213 Power generation plant operator Certificate III/IV

3996 Signwriters Certificate III/IV

3999 Other miscellaneous technicians and

trades workers

Certificate III/IV

4111 Ambulance officers and paramedics Associate degree,


4112 Dental hygienists, technicians andtherapists

Associate degree,


411211 Dental hygienist Associate degree,


411212 Dental prosthetist Associate degree,


411214 Dental technician Associate degree,


4113 Diversional therapists Associate degree,Diploma, advanced diploma

4114 Enrolled and mothercraft nurses Associate degree,


4115 Indigenous health workers Associate degree,


4211 Child carers Certificate II or III

4233 Nursing support and personal careworkers

Certificate II or III

4234 Special care workers Certificate II or III

4412 Fire and emergency workers Certificate III/IV

441212 Fire fighter

Certificate III/IV4422 Security officers and guards Certificate I or compulsory secondary

education

442214 Private investigator Certificate I or compulsory secondaryeducation

4512 Driving instructors Certificate III/IV

4513 Funeral workers Associate degree,


4518 Other personal services workers Certificate II or III

451811 Civil celebrant Certificate II or III

4523 Sports coaches, instructors and officials Certificate III/IV

4524 Sportspersons Certificate III/IV

5523 Insurance, money market and statisticalclerks



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552311 Bookmaker Certificate II or III

5611 Betting clerks Certificate I or compulsory secondaryeducation

561112 Bookmakers clerk Certificate I or compulsory secondaryeducation

5991 Conveyancers and legal executives Associate degree,


5993 Debt collectors Certificate II or III

5995 Inspectors and regulatory officers Certificate II or III

599513 Motor vehicle licenseexaminer


5996 Insurance investigators, loss adjustorsand risk surveyors

Certificate III/IV

599611 Insurance investigator Certificate III/IV

5999 Other miscellaneous clerical andadministrative workers


6111 Auctioneers and stock and stationagents

Certificate III/IV

611111 Auctioneers Certificate III/IV

6112 Insurance agents Certificate III/IV

6121 Real estate sales agents Certificate III/IV

612113 Real estate principal Certificate III/IV

612114 Real estate agent Certificate III/IV

612115 Real estate representative Certificate III/IV

7121 Crane, hoist and lift operators Certificate II or III

7122 Drillers, miners and shot firers Certificate II or III

7123 Engineering production systems worker Certificate II or III

7211 Agricultural, forestry and horticulturalplant workers


7212 Earth moving plant operators Certificate II or III

7213 Forklift drivers Certificate II or III

7219 Other mobile plant operators Certificate II or III

7311 Automobile drivers Certificate II or III

7312 Bus and coach drivers Certificate II or III

7313 Train and tram drivers Certificate II or III

7321 Delivery drivers Certificate II or III

7331 Truck drivers Certificate II or III

8214 Insulation and home improvementinstallers


8217 Structural steel construction workers Certificate II or III

8413 Registration and licensing may berequired


8419 Other farm, forestry and garden workers Certificate I or compulsory secondaryeducation


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Award structures

Damian Oliver


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Introduction

The apprenticeship model combines a contract of training with a contract of employment. Oneimportant element of the model is that apprentices and trainees receive a training wage. Clearly avariety of aspects relating to pay and conditions is important to the attractiveness of undertaking(and completing) an apprenticeship or traineeship. For example:

The perceived low levels of pay are a disincentive for young people who might otherwiseenter into an apprenticeship (Misko, Nguyen & Saunders 2007).

Work-related factors such as pay, hours, other employment conditions and the organisationalculture are the most common reasons given by apprentices and trainees for not completingtheir apprenticeship (Cully & Curtain 2001; Grey et al. 1999; Callan 2001, Snell & Hart 2008).

Apprentices are more likely to complete their training if the wage they can expect to receive

on completion is higher than the wage they could expect in alternative employment, and maletrainees are less likely to complete their training if the wage they can expect to receive inalternative employment is higher than the training wage (Karmel & Mlotkowski 2010).

Workers are discouraged from engaging in further training (including apprenticeships andtraineeships) if their qualifications will not lead to an increase in pay.

Awards are the basis of pay and conditionshence this report provides an overview of howawards connect with apprenticeships and traineeships. A total of 122 modern awards will set theemployment conditions for the vast majority of apprentices and trainees, either directly orindirectly, by providing a floor for conditions contained in collective agreements. Once formerstate awards (referred to as Division 2B Awards in the Fair Work [Transitional Provisions andConsequential Amendments] Act2009) expire, the proportion of apprentices and trainees covered by

modern awards will increase further.

An analysis of the provisions relating to apprentices and trainees has been conducted for each ofthe 122 modern awards. Attention has been paid to the following matters:

the pay rates and relativities for apprentices at all stages4

whether apprentices and trainees are entitled to allowances, paid at either the full rate or aproportion

the rules governing progression through the apprenticeship or traineeship, being time-basedor competency-based progression

whether separate pay rates are included for adult apprentices

whether other factors, such as highest level of education, are taken into account indetermining pay rate or apprentice stage.

The findings establish:

The trainee wage contained in the National Training Wage ranges from 45% of the nationalminimum wage to 91% of the national minimum wage, depending on highest level ofschooling, years since left school, and qualification.

4 The report here, intended as an overview covering differences between occupations and industries, disregards the transitionalarrangements in place to phase in rates of pay in modern awards. Existing employees (including apprentices and trainees) will likelynot be going straight onto the new rates but phasing up or down depending on their pre-modern award arrangements. Modern awardwage rates will be phased in over five years.


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Most awards pay apprentices a portion of the qualified trades rate, which in nearly all cases isbased on the rate for the C10 classification in the Manufacturing Awards.

The relativity for a first-year apprentice in a standard four-year apprenticeship ranges from37.5% to 55% of the relevant tradesperson rate.

The relativity for a fourth year apprentice ranges from 82% to 95% of the relevanttradesperson rate.

A third of awards provide for apprentices to receive tool allowances, most commonly at thesame rate received by tradespeople.

A smaller number of awards pay apprentices some form of industry allowance.

Few modern awards currently provide for competency-based progression, preferring insteadtime-based provisions.

Few modern awards provide for adult apprentices to receive a higher rate of pay.

Few modern awards currently take previous educational experience, including completion of apre-apprenticeship program, into account when determining pay and apprentice stage.

In examining award entitlements, we are analysing only the minimum conditions required by law.It has been often contended that the low level of apprentice pay is a significant barrier toincreasing the number of people successfully completing apprenticeships and traineeships.Bittman et al. (2006) identified that the award pay rates for first-year apprentices in sixrepresentative occupations were all below the Henderson Poverty Line. However, minimumwages contained in awards are just thatminimaand employers have always been free to payemployees higher wages if they choose. The latest data from the Employee Earnings and Hourssurvey indicates around a third of all workers covered by awards receive above-award payments.A survey by the Australian Chamber of Commerce and Industry suggested that a majority oftheir members paid some or all of their apprentices above-award wages (Australian Chamber ofCommerce and Industry 2005).

The report goes on to examine the extent of over-award payments, using data from the Survey ofEducation and Training, conducted by the Australian Bureau of Statistics (ABS) in 2009. Thisperiod precedes the commencement of modern awards, so we match earnings data forindividuals to the rate of pay contained in the relevant pre-reform federal award or NotionalAgreement Preserving a State Award (NAPSA), taking into account occupation, age, stage ofapprenticeship, and highest level of education.

With these data, we establish that most apprentices in trade occupations receive pay in excess ofthe relevant federal award rate. We find that above-award payments are most common in tradeoccupations with strong demand and high levels of collective bargaining by employeeselectrical and engineering and automotive. Where there are higher rates of award dependence byemployees, as in the food trades and hairdressing, we find that wages are closer to the awardrates. We also find that many trainees receive above-award rates. However, this is influenced byexisting workers, who receive well in excess of the relevant training wage. New workers,particularly younger trainees, are more likely to receive close to the relevant award rates.


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Employment arrangements ofapprentices and trainees

The working arrangements of apprentices and trainees are central to evaluating the effectivenessof the apprenticeship model. Unlike other forms of vocational education and training, anapprenticeship combines a contract of training with a contract of employment. Work-basedreasons are frequently cited as the reason why apprentices and trainees may not complete theirtraining (Cully & Curtain 2001; Grey et al. 1999; Callan 2001). Among the various factorsidentified are wage rates, allowances, reimbursement of training expenses, and regulation ofworking hours (see Oliver 2009).

The level of apprentice wages has attracted particular attention, with frequent calls for the levelof apprentice pay to be increased. Low wages are a particular factor for apprentices in the earlystages of their training. One 2006 study found that the award pay rates for first-year apprentices

in six representative occupations were all below the Henderson Poverty Line (Bittman et al.2006).

Karmel and Mlotkowski (2010) examined the impact of wages on the probability of completion.They found that the gap between the training wage and the wage in alternative employment andthe gap between the wage in alternative employment and the wage on completion have a limitedeffect on completion. For apprentices it is the premium attached to completion that matters.This suggests the pay of apprentices is not the issue that many make itat least in terms ofcompletion rates. However, it could still be the case that the number of applicants for anapprenticeship will be affected by apprentice wage rates. Karmel and Mlotkowski also show thattrainee wage rates are an issue for the completion rates of male trainees. Hence, apprentice andtrainee wage rates (and conditions) are certainly worth serious consideration.

There are two reasons why modern awards are an apt starting point for the analysis ofapprentices and trainees employment conditions. Awards remain the predominant instrumentunder which apprentices and trainees are employed. Second, the standards set in awards are alsorelevant for apprentices and trainees who have their conditions set by enterprise agreements.Under the Fair Work Act, an enterprise agreement may deviate from the terms included in therelevant award but must leave an employee better off overall (Fair Work Act 2009, s 186). Table1 shows the employment arrangements for apprentices and trainees who commenced in 2009,using data extracted from the Training and Youth Information Management System (TYIMS)administered by the Department of Education, Employment and Workplace Relations(DEEWR). The results indicate that two-thirds of apprentices and trainees who commenced in

2009 were covered by a federal or state award. Awards are even more important for apprenticesin the traditional trades areas, covering three-quarters of apprentices who commenced in 2009.Fewer than one in 20 apprentices and trainees were covered by an Australian WorkplaceAgreement (AWA). Since AWAs could no longer be made after March 2008, these presumablyrefer either to their temporary successor, Individual Transitional Employment Agreements, or toexisting workers covered by AWAs who entered into a contract of training.


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Table 1 Apprenticeship contracts by employment instrument, 2009 commencements

OccupationFederalor stateaward

CertifiedAgreement

AustralianWorkplaceAgreement

Other1 Total

% % % % %

1 Managers 76 12 2 10 1002 Professionals 55 31 3 11 100

3 Technicians and trades workers 78 9 2 10 100

31 Engineering, ICT and Science Technicians 62 14 4 20 100

32 Automotive and Engineering Trades Workers 80 8 2 11 100

33 Construction Trades Workers 88 6 1 5 100

34 Electrotechnology and telecommunicationstrades workers

72 13 1 13 100

35 Food trades workers 76 12 2 9 100

36 Skilled animal and horticultural workers 84 5 1 9 100

39 Other technicians and trades workers 75 9 3 13 100

391 Hairdressers 94 4 0 2 100

4 Community and personal service workers 76 11 2 10 100

5 Clerical and administrative workers 61 13 5 22 100

6 Sales workers 65 21 4 10 100

7. Machinery operators and drivers 49 18 10 23 100

8 Labourers 56 22 5 18 100

Total2

68 14 4 14 100

Notes: 1 Other includes State Workplace Agreements.

2 Total includes apprenticeships not allocated to any occupation code.

Source: Data extracted from TYIMS; DEEWR, August 2010.

Since 1 January 2010, a set of 122 modern awards form the benchmark for employees covered by

the national workplace relations system. The national system covers all employees employed byconstitutional corporations, all employees in Victoria, the Northern Territory and the AustralianCapital Territory, federal government employees, employees of unincorporated bodies in NewSouth Wales, Queensland, South Australia and Tasmania, and certain other categories ofemployees. The main categories of workers not covered by the national system are stategovernment employees (except in Victoria) as well as private sector employees in WesternAustralia (except those working for constitutional corporations). The referral of all private sectorcoverage in most states means that well over 85% of the Australian workforce is covered by thenational system.

Modern awards have replaced pre-reform federal awards and Notional Agreements PreservingState Awards and Australian Pay and Classification Scales. NAPSAs were created as part of the

former Work Choices system to cover conditions of employment, excluding rates of pay, foremployers and employees who were until 2006 covered by the state industrial relations systems(mainly constitutional corporations). NAPSAs took the terms of the relevant state awards, exceptfor provisions that the Work Choices legislation deemed to be prohibited content. Prohibitedcontent included anti-AWA clauses and restrictions on the range or duration of apprenticeships.The Work Choices changes also removed pay scales from awards and NAPSAs, creating aseparate pay scale instrument (Australian Pay and Classification Scales). At the same time, thereforms transferred wage-setting powers from the Australian Industrial Relations Commission tothe Australian Fair Pay Commission. Modern awards will also soon apply to the smaller group ofemployers and employees working for unincorporated private sector businesses that were


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brought into the national system by the Fair Work Actfrom 1 January 2011. In the meantime, theterms of the state awards continue to apply.5

Awards continue to distinguish between apprentices and trainees. The conditions for apprenticesare contained within the main body of the award relating to the relevant occupation or industryof that apprenticeship. The employment arrangements for trainees reflect their more recenthistory. With a few exceptions, trainees are covered by the same Training Wage Schedule. TheNational Training Wage Award was made in 1994, and following award simplification a newaward was made in 2000. Commissions in the state jurisdictions made their own training wageawards along similar lines. Traineeships in the training wage schedule are allocated to wage levelsbased on training package and qualification level. The arrangements for school-basedapprenticeships are usually contained in a standard schedule to the main award, in the samemanner as the training wage schedule.

A content analysis was conducted of all 122 modern awards.

95 awards include the National Training Wage Schedule.

49 awards include the School Based Apprentices Schedule.

45 awards include rates of pay for apprentices

21 awards include at least one other provision relating to employment conditions forapprentices, such as restrictions on overtime or reimbursement of training-related expenses.

A list of all modern awards that include provisions relating to apprentices or trainees is includedin table A1 in the appendix.

5 Some provisions of pre-reform awards and NAPSAs continue to have effect for apprentices and trainees and their employersformerly covered by these instruments as a result of transitional arrangements. These relate to the supply of tools and competency-based training arrangements and are detailed later in this report.


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Award wage rates and relativities

Trainees

We look first at the wage rates for trainees, which under the modern award system are set by theNational Training Wage Schedule, which is appended to 95 of 122 awards. The training wagerates are published as amounts, but are based on proportions of the national minimum wage(rounded to the nearest dollar). These proportions were initially set in 1994, when the precursorNational Training Wage was made. Other reports have covered in detail how traineeships arepredominantly used in the sales, clerical and administrative, community and personal services andmachinery operator and driver occupational categories.

Rather than a single national training wage, different rates of pay apply, depending on thequalification level, the training package, the highest level of schooling completed and the numberof years since the trainee left school.

Most traineeships covered by the National Training Wage are at the certificate I, certificate II orcertificate III level. The training wage schedule divides traineeships for these qualifications intothree wage levels on the basis of training package and qualification level.

Wage Level A pays the highest wage includes all certificate IIII qualifications from the BusinessServices, Financial Services, Manufacturing, Maritime and Tourism, Hospitality and Eventstraining packages, higher-level (certificate III) qualifications from the Beauty and Retail Servicestraining packages, and various other qualifications from other training packages.

Wage level B includes all level qualifications from the Animal Care and Management, MeatIndustry, Automotive Retail Service and Repair, Entertainment, Forest and Forest ProductsIndustry, Furnishing, Outdoor Recreation, Property Services, and Sugar Milling Industriespackages. Wage Level B also covers certificate III qualifications in the retail services industry.

Wage Level C, the lowest, comprises mainly training packages from primary industries, such asAgri-Food, Conservation and Land Management, Rural Production and Seafood Industry.

Within each wage level, rates of pay differ according to the highest level of schooling completedand the number of years since the trainee completed school. The pay rates are set out in table 2.


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Table 2 Training wage schedule rates of pay, as proportion of National Minimum Wage, July 2010

Highest yr of schooling

Yr 10 Yr 11 Yr 12

% % %

Wage Level A

School leaver 45 49 59

Plus 1 yr out of school 49 59 69

Plus 2 yrs out of school 59 69 80


Plus 4 yrs out of school 80 91

Plus 5 yrs out of school 91

Wage level B







Wage level C







Source: National Training Wage Schedule.

A full-time traineeship is based on 38 ordinary hours a week, with 20% of ordinary hours to bespent in approved training. This training may occur on or off the job, in accordance with thetraining contract. The hourly rate for part-time trainees is 1/38 of the weekly rate, with anadditional 20% loading to take into account the notional time spent in training. Part-time traineesare not paid for time spent in training.

Different arrangements apply to trainees undertaking certificate level IV traineeships, and school-based traineeships. A trainee undertaking a certificate level IV traineeship is paid the rate for thecorresponding certificate level III traineeship, with an additional loading of 3.9%. Adult traineesundertaking a certificate level IV traineeship are paid according to the following proportions:


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Table 3 Wage levels as proportion of National Minimum Wage for certificate IV traineeships, July2010

Wage level First year Subs yrs

% %

Wage level A 95 99

Wage level B 92 95

Wage level C 83 87


School-based traineeships

The rate for school-based trainees is based on their current level of schooling. In addition, theschedule provides for school-based trainees to receive a 25% loading in lieu of paid annual leave,paid sick leave, and other entitlements.

Table 4 Wage levels as proportion of National Minimum Wage for school-based traineeships, July2010

Yr 11 or lower Yr 12

% %

All wage levels 59 65


Existing workersThe rates of pay outlined above do not necessarily apply to existing workers who commence atraineeship. The training wage schedule (Cl 5.3 [a]) provides that:

An employee who was employed by an employer immediately prior to becoming a trainee

with that employer must not suffer a reduction in their minimum wage per week or per

hour by virtue of becoming a trainee. Casual loadings will be disregarded when determining

whether the employee has suffered a reduction in their minimum wage.

The occupational categories with the highest proportions of existing worker trainees are clericaland administrative workers (28.4% of all commencing clerical and administrative trainees in 2009were existing workers), machinery operators and drivers (14.6%) and sales workers (11.6%)

(NCVER 2010, p.17).

Relativities to occupational earnings

The use of the national minimum wage as a base for trainee wages is appropriate, given therelatively high reliance of employees in these occupational categories on the national minimumwage. Table 5 shows for the top 20 traineeship occupational categories the proportion ofemployees who are reliant on minimum rates of pay. In many cases, it is substantially above 19%,which is Fair Work Australias estimate of the proportion of all employees who are reliant onminimum rates of pay.


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Table 5: Proportion of employees in typical trainee occupations reliant on minimum rates of pay

Occupation (ANZSCO - NTIS) group Proportion ofall trainees

coveredby this occupation

Proportion ofemployees in thisoccupation reliant

on minimum rates of pay

% %

621 Sales assistants and salespersons 18% 35%

512 Office and practice managers 13% 13%

431 Hospitality workers 9% 61%

732 Delivery drivers 5% 30%

741 Storepersons 5% 19%

531 General clerks 5% 17%

541 Call or contact centre information clerks 4% 8%

224 Information and organisation professionals 3% 2%

423 Personal carers and assistants 3% 45%

831 Food process workers 3% 12%

411 Health and welfare support workers 3% 19%

811 Cleaners and laundry workers 2% 56%

421 Child carers 2% 69%

591 Logistics clerks 2% 11%

134 Education, health and welfare services managers 2% 14%

552 Financial and insurance clerks 2% 9%

712 Stationary plant operators 2% 4%

711 Machine operators 2% 17%

451 Personal service and travel workers 1% 24%

721 Mobile plant operators 1% 14%

841 Farm, forestry and garden workers 1% 14%

Notes: Proportion of trainees is based on apprentices in non-trade occupations in-training in OctoberDecember 2009.Proportion reliant on minimum rates of pay is based on analysis of 2006 Employee Earnings and Hours Survey.

Source: NCVER Apprentice and Trainee Collection; Bolton & Wheatley (2010, table 4).


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Apprentices

Forty-five awards provide that apprentices may be employed but only 44 specify rates of pay forapprentices (one, the Childrens Services Award 2010, does not include apprentice rates of pay).However, award coverage in practice is concentrated on a few main awards for each industry or

occupational category. In table 6, we match modern awards to the main categories forapprentices in trade occupations, using data from the NCVER collection.

The automotive and engineering, construction and electrical classifications account for more thanseven in ten apprentices in the traditional trades. Approximately a quarter of all apprentices in-training during OctoberDecember 2009 were training for occupations in the automotive andengineering trades (ANZSCO 32). A further quarter were working in the construction trades(ANZSCO 33). We break these classifications down to the 3-digit level to show the proportionof apprentices in the automotive and vehicle trades, the engineering trades, the joinery and otherbuilding trades, and the plumbing trades, in order to better align with modern award coverage.

The main awards for the automotive and engineering trades are the Vehicle Manufacturing,

Repair, Services and Retail Award 2010 and the Manufacturing and Associated Industries andOccupations Award 2010 respectively. Plumbers are covered by their own occupational award,the Plumbing and Fire Sprinkling Award 2010. The main awards for the construction tradeworkers are the Building and Construction General On-Site Award 2010, which covers civilconstruction and the Joinery and Building Trades Award 2010, which covers joiners and buildingtrades workers working in other industries. A further 17% of apprentices are training in theelectrical trades, which is covered by Electrical, Electronic and Telecommunications ContractingAward 2010. Of the remainder, the largest groups are the food trades (10%) and hairdressing(6%). Hairdressers are covered by the Hair and Beauty Industry Award 2010. Coverage of thefood trades is split across many awards, depending on industry: the Restaurant Industry Award2010, the Hospitality Industry (General) Award, the Registered and Licensed Clubs Award 2010,

the Food, Beverage and Tobacco Manufacturing Award 2010, the General Retail Industry Award2010, and the Meat Industry Award 2010.


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Table 6 Apprentices in trades occupations with main relevant modern award(s)

Occupation Proportionof apprentices

in tradesoccupations

Main relevant modern award(s)

%

31 Engineering, ICT and sciencetechnicians

3

32 Automotive and engineering tradesworkers

27

321, 324 Automotive & vehicle tradesworkers

13 Vehicle Manufacturing, Repair, Services andRetail Award 2010

322+323 Engineering trades workers 14 Manufacturing and Associated Industries andOccupations Award 2010

33 Construction trades workers 27

331, 332, 333 Joiners and building trades 19 Building and Construction General On-site Award

2010

Joinery and Building Trades Award 2010

334 Plumbers 8 Plumbing and Fire Sprinklers Award 2010

34 Electrotechnology andtelecommunications trades workers

17 Electrical, Electronic and TelecommunicationsContracting Award 2010

35 Food trades workers 10 Restaurant Industry Award 2010

Hospitality Industry (General) Award 2010

Registered and Licensed Clubs Award 2010

Food, Beverage and Tobacco ManufacturingAward 2010

General Retail Award 2010

Meat Industry Award 2010

36 Skilled animal and horticultural workers 4 Gardening & Landscaping Services Award 2010

Nursery Award 2010

Registered and Licensed Clubs Award 2010

39 Other technicians and trades workers 12

391 Hairdressers 6 Hair and Beauty Industry Award 2010

392 Printing trades workers 1 Graphic Arts, Printing and Publishing Award2010

393 Textile, clothing and footwear tradesworkers

0 Textile, Clothing, Footwear and AssociatedIndustries Award 2010

394 Wood trades workers 2 Timber Industry Award 2010

Manufacturing and Associated Industries andOccupations Award 2010

399 Miscellaneous technicians andtrades workers

3 NA

Note 1: The Building and Constriction General On-Site Award applies to general building and construction, civil constructionand metal and engineering construction.

Source: NCVER Apprentice and Trainee Collection, in-training estimates, OctoberDecember 2009.

In this initial examination of apprentice pay, we consider first the basic rate paid to juniorapprentices. We consider later separate arrangements that may be in place for adult apprenticesand apprentices with higher qualification levels. In all except one case, these are expressed as aratio of the relevant tradesperson rate contained in the award. The ratio is based on the stage ofthe apprentice, typically expressed as a year. The exception is apprentices in the child careindustry. The Childrens Services Award 2010 contains no wage rates for apprentices and insteadspecifies that apprentices are to be paid no less than an unapprenticed junior of the same age.

For the standard four-year apprenticeship, the rates range from 37.5% for a first-year plumber to95% for fourth-year apprentices in a variety of occupations and industries. Table 7 contains the


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ratios for four-year apprenticeships in the main awards, the Miscellaneous Award 2010. Thisaward is intended as a catch-all award for award-reliant employees who are not covered by anyother award. However, the award is not intended for employees who are not traditionally awardreliant. Table A2 in the appendix contains the ratios for all awards with four-yearapprenticeships.

Table 7 Apprentice wage ratios by year for selected awards (4 year apprenticeships)

Award name Year 1 Year 2 Year 3 Year 4

% % % %

Building and Construction General On-site Award 2010 45 55 75 90

Electrical, Electronic and Communications Contracting Award 2010 40 52 70 82

General Retail Industry Award 2010 50 60 80 90

Graphic Arts, Printing and Publishing Award 2010 47.5 60 72.5 87.5

Hair and Beauty Industry Award 2010 (Hairdressing apprentices)2 45 55 77 90

Hospitality Industry (General) Award 2010 55 65 80 95Joinery and Building Trades Award 2010 45 55 75 90

Manufacturing and Associated Industries and Occupations Award 20101 42 55 75 88

Miscellaneous Award 2010 55 65 80 95

Plumbing and Fire Sprinklers Award 2010 (Plumbing apprentices) 37.5 55 70 90

Timber Industry Award 2010 (All except saw doctor apprentices) 50 60 75 90

Vehicle Manufacturing,

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