28 August 2013
It’s a decision that Master Electricians Australia has characterised as “a significant blow for productivity in the industry and for Australia's economy". The decision by the Fair Work Commission to increase junior apprentice wages comes with hidden costs and represents an overall increase of up to 50 per cent for employers.
The Commission agreed the increase should be phased in over 2014 and 2015 to mitigate their cost on employers. With the arrangements taking affect for new apprentices commencing after 1 January 2014.
In summary, the pay rises will be transitioned over two years, with the wage of:
- a first year apprentice electrician who has completed year 12 jumping from $289 to $398 a week
- a second year apprentice electrician who has completed year 12 climbing from $376 to $470 a week
- a first year adult apprentice electrician, aged over 21 when commencing their trade, doubling from $289 to $579 a week
- a second year adult apprentice electrician, aged over 21 when commencing their trade, leaping from $376 to $622 a week
- Third and fourth year adult apprentice electricians, aged over 21 when commencing their trade, moving to the higher of the minimum wage or the junior apprentice rates.
Our Workplace Relations team, including Workplace Relations Manager Jason O'Dwyer, have been working hard to minimise the union's agenda and will continue to lobby on behalf of members to reverse this decision. Already we have received significant media coverage about our concerns over the impact this decision will have on our industry and the future of apprenticeships.
View our media release about the decision here.
Details on the decision
While it should be noted that the specific details of the increases as they affect the Electrical, Electronic and Communications Contracting Award 2010 are yet to be released, the main changes to the Modern Awards will include the following:
Apprentice rates of pay
Apprentice rates of pay will be increased in a new tiered structure based on the level of schooling achieved for the first two years of the apprenticeship.
- 1st year apprentice who has completed Year 12 schooling will be 55 per cent of the C10 Award rate (otherwise 50 per cent)
- 2nd year apprentice who has completed Year 12 schooling will be 65 per cent (otherwise 60 per cent).
This will result in a four year wage structure in many Modern Awards approximating 55% (or 50%) - 65% (or 60%) - 75% - 88% of the C10 rate.
Adult apprentices (for all States)
Queensland electrical contractors have had preserved conditions for adult apprentices since the introduction of the Modern Award in 2010. However, adult apprentice rates will be introduced into the Modern Award for all states from 1 January 2014.
Minimum Award rates for adult apprentices will be increased so that the rate of pay for a first year adult apprentice will be 80% of the C10 Award rate, while a second year adult apprentice will receive the higher of the national minimum wage or the lowest adult classification rate in the Award.
Also an employee who has worked full-time for an employer for at least six months, or for 12 months as a part-time or casual employee, before commencing an adult apprenticeship with the same employer, will not suffer a reduction in their minimum rate of pay. This term was common to some Awards pre-modernisation.
Competency based wage progression
Provisions for competency based wage progression will be introduced into the Awards where applications have been made. A model clause should be developed to facilitate the introduction of competency based wage progression into other Awards. This provision will be determined prior to operation.
Training Travel costs
Despite the considerable weight of legal precedents that have repeatedly identified that training is not work and travel/fare provisions do not apply to apprentices attending college and TAFE, the Fair Work Commission will now specifically include terms for payment by employers of apprentices’ excess travel costs for attendance at block release training at a distant location; timely reimbursement by employers in relation to training fees and textbooks; provisions that time spent by apprentices in off-the-job training and assessment is to be regarded as time worked for the purposes of wages, weekly ordinary hours, and leave entitlements.
Apprentice conditions of employment
Further additional provisions will be included to ensure that, except in the case of an emergency, apprentices cannot be required to work overtime or shiftwork if doing so would interfere with their attendance at training. Clauses which purport to exclude apprentices from some provisions of the National Employment Standards will be deleted from Awards.
The Full Bench did not accept all of the Union’s claims, however, the bulk of the accepted terms that will have significant cost implications on employers were largely accepted. The Full Bench rejected terms that would have resulted in duplicate obligations already provided in the standard training contract or under State and Territory arrangements.
The increases to apprentice rates of pay will be phased in and take effect as follows:
- If the relevant increase is equal to or less than a 5 per cent increase in the relevant percentage of the Award reference rate (whether the equivalent of the C10 tradesperson rate or otherwise), then the full increase shall apply from 1 January 2014
- If the relevant increase is more than a 5 per cent increase in the relevant percentage of the Award reference rate, then the percentage or rate shall be increased by 5 per cent from 1 January 2014, with the remainder of the increase to take effect from 1 January 2015.
It was also decided that the new rates of pay shall apply only to apprentices who commence their apprenticeship on or after 1 January 2014.
The phasing arrangements shall apply to increases in apprentice rates of pay, and to increases in first year adult apprentice rates in Awards that already contain adult rates (Queensland employers in the case of the Electrical, Electronic and Communications Contracting Award 2010). In relation to the introduction of adult apprentice rates into Awards, the Full Bench decided that it is impractical to phase them in, noting that these rates only apply to apprentices commencing on or after 1 January 2014.
The variations dealing with apprentice conditions of employment will apply to all apprentices (regardless of commencement date) from 1 January 2014.
These arrangements may impact employers who operate under a registered Enterprise Agreement where the rates of pay for apprentices in the agreement fall below the new minimum rates of pay prescribed by the Modern Award.
The Full Bench said that the decision represented “a fair and relevant minimum safety net for apprentices and would recognise the benefits of having better educated and potentially more productive young people entering apprenticeships”. This is despite the Full Bench not undertaking a work value assessment in order to determine whether better educated and potentially more productive young people entering apprenticeships were in fact as proportionately productive as their new wage level.