Apprentice Pay Increase Information

Oct 22, 2013

This information has been taken from http://www.workplaceinfo.com.au/payroll/wages-and-salaries/apprentices-to-get-big-pay-rises

Large scale pay rises for both junior and senior apprentices have been awarded by a Full Bench of the Fair Work Commission. The Full Bench has made a number of variations to modern awards, in recognition of the ‘significant changes which have occurred in relation to apprenticeships in Australia’.The new rates of pay will generally apply from 1 January 2014, with some variations.

First- and second-year apprentices

First-year apprentices who have completed Year 12 will now receive 55 per cent of a tradesperson’s rate (up from 42 per cent) and second-year apprentices who have completed Year 12 will now receive 65 per cent (up from 55 per cent). The remaining two years of a typical four-year apprentice wage progression scale will not change.
So, for example, a current typical wage progression is:
Year 1:   42%
Year 2:   55%
Year 3:   75%
Year 4:   88%
This will now change to:
Year 1:   55%
Year 2:   65%
Year 3:   75%
Year 4:   88%

Adult apprentices

First-year adult apprentices will now receive 80 per cent of a tradesperson’s classification. Second-year adult apprentices will receive the higher of the national minimum wage or the lowest adult classification rate in the award. Adult apprentice rates also will be introduced into a number of modern awards that currently do not have them, in recognition that over a half of all apprentices are now over 21 years of age.
Employees who have worked for an employer either full-time for at least six months, or as a part-time or casual employee for 12 months, and then commence an adult apprenticeship with that employer, are to be paid the minimum rate they were earning prior to taking up the apprenticeship.

Competency-based wage progression

Competency-based progression will be added into several modern awards (the Sugar Award, the Airline Award, the Graphic Arts Award, the Building Award and the Joinery Award), and its introduction into other modern awards will be considered via the development of a model clause.

Apprentice conditions of employment

Adjustments to awards will be made relating to apprentices’ conditions of employment:
    • payment of apprentices’ excess travel costs for attendance at block release training at a distant location that requires an overnight stay that the employer and the employee both agreed upon
    • timely reimbursement by employers in relation to training fees (six months) and textbooks
    • 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
    • apprentices cannot be required to work overtime or shiftwork, except in an emergency, if doing so would interfere with their attendance at training
    • clauses that purport to exclude apprentices from some provisions of the National Employment Standards will be deleted from awards.

School-based apprentices

The model school-based apprentice schedule is to be inserted into several modern awards that do not contain it, and the schedule in all modern awards should be varied to provide for competency-based wage progression.

Wage increases to be phased-in

Employer groups had asked the Full Bench to phase-in any increases in apprentice wages over time in order to mitigate their cost impact. The Full Bench agreed — and the schedule of when the increases will take effect is as follows:
    • ‘If the relevant increase is equal to or less than a 5% increase in the relevant percentage of the award reference rate (whether the equivalent of the C10 tradesperson rate or otherwise), then the full increase shall apply from 1 January 2014;
    • If the relevant increase is more than a 5% increase in the relevant percentage of the award reference rate, then the percentage or rate shall be increased by 5% from 1 January 2014, with the remainder of the increase to take effect from 1 January 2015.
    • 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. 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.’

Responses

‘Nail in coffin for apprenticeships’
Peak employer association, the Australian Chamber of Commerce and Industry, responded to the decision that it was ‘a body blow to the capacity and confidence of employers to offer new apprenticeships’.
CEO Peter Anderson said that the decision was harsh because it did not factor in the differing capacity of employers to pay the increase. He noted that there had been a 40 per cent fall in apprenticeship commencements over the past 12 months, with some commencement categories at their lowest since 1999.
Size of wage increase is risky
Australian Industry Group (Ai Group) Chief Executive Innes Willox released a statement that the FWC Full Bench ‘… has clearly tried to strike a careful balance between the need to modernise wages and conditions for apprentices, without jeopardizing jobs and career prospects for young people. In doing so, it has rejected many unworkable union claims which industry strongly opposed. Hopefully the big increases which will apply to first and second year apprentice wage rates from next year will not impact on apprentice numbers which are already under pressure.’
Rise will undermine capacity of employers to take on apprentices
Group Training Australia (GTA), the national peak body for more than 150 Group Training Organisations (GTOs), said the decision would add significantly to employer costs. Chief Executive, Jim Barron, said that GTA had consistently argued that the government should bear the cost of any rise to apprentice’s pay.
Part of the solution to boosting skill levels
The Australian Countil of Trade Unions (ACTU) was positive in its response to the wage rises: Secretary Dave Oliver said that the low wages for apprentices contributed to almost half of apprentices not completing their apprenticeship. He was also optimistic that the increase in adult apprentices’ wages to 80% of a tradesperson’s wage was a ‘real step forward’. Oliver linked the low completion rates for apprentices to the rise in 457 visas in skilled trades categories.
Young people will be ‘locked out of work’
Master Builders Australia CEO Wilhelm Harnsich said the decision will price many apprentices out of an already tight job market and could not come at a worse time as the number of apprentices in the construction industry had recently slightly increased for the first time in two years.
The CFMEU said that it welcomed the decision after a ‘long and hard’ campaign to ‘lift apprentice wages above the poverty line’. National Construction Secretary Dave Noonan said:
‘For too long, apprentices have struggled to make ends meet, often resorting to second jobs or going into debt to meet daily expenses. Too many of them don’t complete their apprenticeships due to low wages. Young people earn more working at McDonald’s than they do as first year apprentice in the construction industry.’
2 Comments
CarolS  29 August 2013,10:47
Does this mean that the wage rate for School Based Apprentices or Trainees will remain at the previous percentage of the C10 rate e.g. 42% as in the example in the article until they complete Year 12? Are Trainees that have completed Year 12 entitled to the same new wage scale % as for apprentices?
1
WPI Admin  30 August 2013,11:37
The minimum wages for apprentices who have not completed Year 12 will also be increased. The first year rate will be 50% and the second year rate will be 60% of the trades equivalent rate. see pp 188-189 of the full decision The pay rates for trainees are determined by the National Training Wage. There have been no changes to the National Training Wage as a result of this decision.