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Fair Trades Outcomes from the Fair Work Ombudsman’s National Apprenticeship Campaign 2015
Fair Trades Outcomes from the Fair Work Ombudsman’s National Apprenticeship Campaign 2015
Table of Contents
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Infographic ..................................................................................................................................3
About the campaign .................................................................................................................... 4
Outcomes at a Glance ................................................................................................................5
Industries Profiles .......................................................................................................................5
Stakeholders ...............................................................................................................................6
Communication and Public Awareness .......................................................................................6
Other media ................................................................................................................................8
National Findings ........................................................................................................................9
Individual errors ........................................................................................................................11
Enforcement Outcomes ............................................................................................................13
Association membership and business size ..............................................................................14
Conclusion ................................................................................................................................14
About the Fair Work Ombudsman .............................................................................................15
Appendix A – Stakeholders .......................................................................................................17
Appendix B – Industry Breakdown ............................................................................................18
Industry Compliance Rates .......................................................................................................18
Appendix C – State Findings .....................................................................................................19
Appendix D – National Apprenticeship Campaign 2015 and National Building and Construction
Campaign 2014/2015 ................................................................................................................20
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Infographic
About the campaign
The Fair Work Ombudsman (FWO) developed the National Apprenticeship Campaign (the
campaign) to test and detect non-compliance with workplace laws for apprentices in
Australia.
Around 60% of apprenticeships are cancelled or withdrawn within the first year, with
reasons relating to the employment experience the most commonly cited grounds for non-
completion. Specifically 33% of apprentices left their training arrangements due to
relationship issues with their employer, poor working conditions or not being happy with the
on-the-job training*. The FWO believes that early intervention through advice and
assistance gives employers and their apprentices the best opportunity of a completed
apprenticeship.
Other factors considered in the development of the campaign included:
From 1 July 2014 to 30 June 2016, the FWO received 2241 Requests for Assistance
from apprentices and trainees
64% of apprentices and trainees who made these Requests for Assistance were
under the age of 24
42,073 enquiries were made to the Fair Work Infoline in relation to apprentices and
trainees between 1 July 2014 and 30 June 2016.
The campaign focused on businesses engaging apprentices, with an emphasis on
businesses that engaged first year apprentices. Businesses were selected for inclusion in
the campaign based primarily upon industries where the most Requests for Assistance were
received by the FWO, including:
Retail Services
Manufacturing
Electrical Services
Automotive – Maintenance and Repair
Hair and Beauty.
The FWO worked closely with the Department of Education in designing and developing the
campaign. Department of Education data was vital in complementing t he FWO’s internal
data, ensuring the FWO could select the most appropriate businesses for inclusion in the
campaign.
All businesses audited in the campaign employed apprentices. The FWO audited the Understanding the Non-Completion of Apprentices - National Centre for Vocational Education and Researchcompliance of 822 businesses that employed 2266 apprentices. Compliance was assessed with the Fair Work Act 2009 (the Act), the Fair Work Regulations 2009 (the Regulations) and the relevant award/agreement.
*Understanding the Non-Completion of Apprentices - National Centre for Vocational Education and Research
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Outcomes at a glance
Entitlements of 2266 apprentices checked, including
o 1325 first year apprentices; and
o 941 non-first year apprentices (second or subsequent years).
822 business that employed apprentices audited
644 (78%) businesses were compliant with record-keeping and pay slip
requirements for their apprentices
558 (68%) businesses were paying t heir apprentices correctly
443 (54%) businesses were compliant with all requirements for their apprentices
$339 433 was recovered on behalf of 323 apprentices
54 formal cautions, seven (7) Compliance Notices and five (5) Infringement Notices were issued.
Industries profiles
The campaign focused on industries where the FWO received a higher proportion of
Requests for Assistance. From July 2013 to 31 May 2014 for example, the breakdown of
total apprentice based Requests for Assistance received by the FWO was:
Construction: 523 (37.41%)
Hair and Beauty: 234 (16.74%)
Hospitality: 158 (11.30%)
Manufacturing: 144 (10.30%)
Automotive: 132 (9.44%)
Electrical Services: 114 (8.15%).
This campaign did not audit Construction and Hospitality businesses because of recent audit activity in those industries. A summary of comparative findings in relation to apprentices in the Construction industry is provided in Appendix D.
Based on the above industries the campaign focused on employers with apprentices
undertaking the following apprenticeships:
Automotive (e.g. mechanics, panel beaters, auto electricians)
Electrical Services (e.g. electricians, equipment technicians)
Manufacturing (e.g. welders, boilermakers, fitter/turners, cabinet makers shopfitters,)
Hair and Beauty (e.g. hairdressers)
Retail Service Industry (e.g. bakers, pastry cooks, retail butchers).
Stakeholders
The FWO engaged with government and industry stakeholders on the design, development
and delivery of the campaign and to obtain insights into specific issues relating to
apprentices and apprenticeships. This also provided the chance to explore future
opportunities to work collaboratively in addressing issues around apprenticeships.
The stakeholders included (but were not limited to):
Commonwealth Department of Employment
Commonwealth Department of Education
Victorian Qualification and Registration Authority
Master Electricians Australia (MEA)
Motor Trades Association of Australia (MTAA)
Australian Meat Industry Council (AMIC)
Sheet Metal Industry Association (SMIA)
Australian Workers Union (AWU)
Australian Manufacturers Workers Union (AMWU)
United Voice (UV).
A full list of stakeholders is available in Appendix A.
Communication and public awareness
The campaign included a communication and public awareness phase. This aimed to
promote awareness of the rights and responsibilities regarding workplace laws among first
year apprentices and their employers. A dedicated web page was created on the FWO
website at www.fairwork.gov.au/apprentices (which attracted 6353 visits).
Presentations
During May and June 2015, the Department of Education conducted eight training sessions
for Apprenticeship Providers in every state and territory. As part of this training, Fair Work
Inspectors (FWI’s) conducted presentations on the tools and resources the FWO provides
for apprentices and their employers. Current issues regarding the employment of
apprentices, such as competency based progression and tuition fees for apprentices were
also discussed.
Social media
In June 2015, the FWO conducted a three-week social media campaign. It was developed
to promote compliance among employers of first year apprentices and their apprentices in
the manufacturing, automotive and electrical service industries. The communication
activities were aimed at ensuring employers and their apprentices were aware of their rights
and obligations.
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Outcomes of the social media campaign included:
6353 visits to the campaign page at www.fairwork.gov.au
FWO content was seen by 774 704 people on Facebook
Twitter delivered 387 574 impressions leading to 2217 clicks and 5190 engagements
(retweets, shares, favourites etc.).
Sample Facebook posts
Sample Twitter posts
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The Age Sydney Morning Herald Swan Hill Guardian
Radio
ABC Southern Queensland ABC South East NSW 105.7 ABC Darwin
ABC Sunshine Coast 702 ABC Sydney 891 ABC Adelaide
ABC Tropical North ABC Central Coast Radio National
ABC Western Queensland ABC South East NSW ABC Broken Hill
ABC Wide Bay 612 ABC Brisbane ABC Far North
ABC North Queensland ABC Capricornia ABC Gold Coast
ABC North West Qld
Online
Hospitality Magazine WA Today Business The Age Business
Medianet WAtoday.com.au Business Day - The Canberra
times
Brisbane Times Business Financial Review The Age
Brisbane Times
Sample postcard collateral
Other media
The campaign also achieved coverage in print, radio and online media as per the following table:
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National findings
During t he campaign, the entitlements of 2266 apprentices were checked. These
apprentices were employed by 822 businesses that were audited, including:
214 businesses that only employed first year apprentices
307 businesses that only employed non-first year apprentices
301 businesses that employed both first year and non-first year apprentices.
Figure 1 shows that apprentices that worked for a business with only first-year apprentices
were less likely to have issues with their pay and records than apprentices working f or
businesses without first year apprentices. Apprentices that worked for a business with both
first and non-first year apprentices were even less likely to have errors for their pay and
employment records.
businesses increases with the number of apprentices employed.
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Figure 1: Compliance by apprenticeship levels
65% 61%63% 61% 59% 57% 55% 53% 51% 49% 47% 45%
54%
48%
Only First Year Only Non-First Year Both Apprentices Apprentices
The more apprentices a business employs, the less likely the apprentice is t o have issues
with their pay and employment records. Figure 2 shows that compliance rates for
Figure 2: Compliance by number of apprentices per business
This is consistent with compliance rates by the number of employees (all employees, not
just apprentices) as per Figure 3. The more employees a business has, the less likely an
apprentice will have errors with their pay or records.
Figure 3: Compliance by business size
40%
54%
61%
72%
30% 35% 40% 45% 50% 55% 60% 65% 70% 75% 80%
1 to 4 5 to 14 15 to 49 50 or more
Number of Employees
Compliance Rates by Business Size
Of the 822 businesses that employed apprentices:
443 (54%) were compliant with all requirements for their apprentices
378 (46%) had at least one error:
o 201 (24%) had errors relating to apprentice pay rates
o 115 (14%) had errors relating to apprentice pay slips or record-keeping
o 62 (8%) had both pay rate and records/pay slip errors.
Figure 4: Compliance rates
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This means that:
644 (78%) businesses were compliant with their apprentice record-keeping and pay slip requirements
558 (68%) were paying their apprentices correctly
$339 433 was recovered on behalf of 323 apprentices, with an average recovery of
$1050.87 per apprentice
54 formal cautions, seven (7) Compliance Notices and five (5) Infringement Notices
(on the spot fines) were issued.
Findings from the National Building and Construction Industry Campaign 2014/2015 show a
higher overall compliance rate for businesses engaging apprentices compared to results
from the National Apprenticeship Campaign 2015 as per Figure 3. This is consistent with the
higher overall compliance rates identified across all Building and Construction Industry
businesses (including t hose without apprentices).
Figure 5: Apprenticeship compliance rates in the Building and Construction
Industry Campaign
Individual errors
The 378 businesses with errors had a total of 520 individual errors (see Figure 6). The
largest proportion of errors related to monetary entitlements (65%), with over a third (38%)
relating to wages. Pay slip errors accounted for 32%, followed by overtime (16%) and
penalty rates (7%). Allowances, including apprentice tool and industry allowance accounted
for 4% of the errors. The other errors identified included unauthorised deductions, minimum
engagements and leave loading.
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Figure 6: Individual error types
Individual Error Types
1%
38%
7% 32%
2%
16%
4%
Wages
Penalty Rates
Pay slips
Record Keeping
Overtime
Allowances
Other
Case study
The FWO audited a motor vehicle servicing centre in regional New South Wales as part of the
campaign. The business employed one first year, and one third year apprentice motor mechanic.
FWI’s assessed the employment records of the apprentices, and found that the third year apprentice
was being paid correctly and receiving all the required entitlements for an apprentice under the
Vehicle Manufacturing, Repair, Services and Retail Award 2010 (the Award). However FWI’s
discovered the first year apprentice was receiving a base hourly rate of $9.36, instead of the correct
rate of $9.82.
The owner of the business advised he had checked the rates some time ago, but had not used the
most current rate (which had increased the previous July in line with the Annual Wage Review).
FWI’s assisted the owner to use the correct rates to calculate the amount the apprentice had been
underpaid due to the incorrect rate. In total the apprentice was underpaid $502, which the owner
immediately paid to the apprentice. The owner also ensured the apprentice was being paid the
correct rates and receiving all the correct entitlements moving forward.
FWI’s provided assistance to the business owner on the tools the FWO has available to determine
apprentice rates of pay, and ensure they are receiving all of their correct entitlements. This included
registering for the FWO My Account service, which provides updates and reminders for issues
including rate changes as a result of the yearly Annual Wage Review. The business will also be
considered for inclusion in the FWO’s National Compliance Monitoring Campaign.
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Enforcement outcomes
Formal cautions were issued to 54 businesses that employed apprentices. Formal cautions
are a written warning when the FWO has found non-compliance and wants to put a
business on notice that future non-compliance could result in the FWO seeking financial
penalties. If the FWO becomes aware of any further instances of non-compliance, the fact
the business was issued with a formal caution will be a factor taken into account in deciding
whether to commence civil proceedings against the business and may be used as evidence
in any penalty determinations.
Formal cautions were issued to businesses employing apprentices across all the industries,
with most being issued in the Electrical Services (15), Automotive (7) and Manufacturing (7)
industries.
Compliance Notices were issued to seven businesses in relation to their apprentices. A
Compliance Notice is a written notice legally requiring a business to rectify contraventions of
the Act. A total of $38 937.63 was back paid by seven businesses to 12 apprentices as a
result of the Compliance Notices issued.
Case study
FWI’s audited a joinery and furniture construction business in Victoria as part of the campaign. The business has
over 30 employees including three cabinet making apprentices. One of the apprentices was a first year, and the
other two were second year apprentices.
FWI’s assessed the employment records of the apprentices, and found that two of the apprentices were working a 40
hours week with no overtime or rostered day off provided. The Timber Industry Award 2010 (the Award) provides for
overtime to be paid for hours worked in excess of 38 ordinary hours worked per week for the apprentices of this
business. FWI’s further determined that whilst all the apprentices were receiving the apprentice rates as specified in
the Award, one of the apprentices commenced work with the business after he had turned 21 years of age. Under
the Award, this apprentice is considered an adult apprentice and entitled to the higher adult apprentice rates
specified in the Award. Further, FWI’s also identified that two of the apprentices were not receiving annual leave
loading as is required by the Award.
FWI’s provided assistance to the business on the tools the FWO has available to determine rates of pay, and
required the business to use those rates to calculate the underpayments to the apprentices from the issues that were
identified in the records.
After completion of the assessment, it was determined that 2 of the apprentices had been underpaid just over
$20,000. Given the significance of the underpayments, and that the underpaid employees were apprentices, the FWI
issued a Compliance Notice to the business. The Compliance Notice required the business to repay the amount
outstanding to the apprentices if full, and within 28 days. A failure to comply with a Compliance Notice can mean the
FWO can commence legal action for not complying with the notice. That legal action can include the recovery of
outstanding entitlements and the imposition of penalties.
The business paid the amounts outstanding in full to the two apprentices within the required timeframe and no further
action was required under the Compliance Notice. The business was provided information and free tools the FWO
has available to correctly calculate and ensure their apprentices are receiving their correct entitlements. The
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Five businesses were issued with an Infringement Notice for not keeping the correct records
and/or pay slips for their apprentices. An Infringement Notice is a fine given to a business
for non-compliance with record-keeping or pay slip requirements of the Act and
Regulations. The total amount of fines issued through infringement notices during the
campaign was $1620.
All businesses found to be non-compliant in the campaign will be re-audited as part of the
FWO’s National Compliance Monitoring Campaign. If businesses continue to underpay
their apprentices, or fail to keep the required apprentice records, the FWO will take further
enforcement action including the taking of court action to have financial penalties imposed.
Association membership and business size
The campaign identified that 42% (349) of the 822 businesses audited were members of
one or more industry or employer associations. Businesses that were members of an
industry or employer association had a higher compliance rate than businesses that were
unaffiliated. Association member businesses had a compliance rate of 60% compared with
a compliance rate of 49% for non-member businesses (see Figure 7). This suggests the
positive effect employer associations have on compliance rates through ongoing
engagement and support to their members.
Results by Industry can be found at Appendix B.
Results by State/Territory can be found at Appendix C.
Figure 7: Compliance rate by Association membership
Conclusion
The results of the campaign reveal that most apprentices were being paid correctly, and
most businesses were keeping the correct time and wage records for their apprentices.
Issues were more likely to occur in smaller businesses, or businesses that employed fewer
apprentices. It is also clear that businesses that were not members of employer
associations were more likely to have errors with the pay or record keeping of their
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apprentices.
The FWO will work collaboratively with stakeholders across industries to educate and
support businesses, as well as to ensure ongoing compliance following the release of this
report. The FWO will continue to encourage businesses, particularly small businesses, to
consider becoming association members as this report again reveals better levels of
compliance amongst association member businesses. This also highlights the important
role the FWO stakeholders continue to have in improving and promoting a culture of
ongoing compliance.
The FWO will:
Share results of this campaign with employers via My Account, social media and
email subscriptions; and
Continue to educate employers of apprentices and apprentices, through media and
communication activities.
The FWO views ongoing non-compliance to be of a serious nature. All businesses that
were non-compliant in the campaign will be re-audited as part of the FWO’s ongoing
National Compliance Monitoring Campaign. If further non-compliance is detected, the FWO
will consider further enforcement action including seeking financial penalties through the
courts.
The FWO will continue to support a culture of compliance by empowering employers and
employees to resolve any issues that arise at a workplace level. To assist in achieving this,
FWO has recently released a number of practical Guides to Resolving Workplace Issues,
which can be accessed at www.fairwork.gov.au. Whilst the FWO will monitor non-compliant
businesses, supporting employers and employees to resolve issues at this level provides
the best opportunity to maintain productive workplace relationships.
About the Fair Work Ombudsman
The FWO is an independent agency created by the FW Act on 1 July 2009. Our main role is
to promote harmonious, productive and cooperative workplace relations.
Each year the FWO runs proactive campaigns to assist employers and employees
understand their rights and obligations under Commonwealth workplace relations laws.
These campaigns can focus on particular industries, regions and/or labour market issues
and are conducted on a national and state level.
This report covers the background, method and findings of the National Apprenticeships
Campaign 2015. For further information please contact the media team at
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If you would like further information about FWO’s campaigns, please contact Lynda
McAlary-Smith, Executive Director – Proactive Compliance and Education at
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Appendix A – Stakeholders
Government Stakeholders
Industry/EmployerStakeholders
Employee Association Stakeholders
Department of Employment Cabinet Makers and Designers Association (CMDA).
Australian Workers Union (AWU)
Australian Taxation Office Motor Trades Association of Australia (MTAA) Electrical Trades Union (ETU)
Department of Education Australian Meat Industry Council (AMIC) United Voice (UV)
Victorian Qualification and Registration Authority Australian Institute of Building Australian Manufacturing
Workers Union (AMWU)
Skills SA (Department of Further Education, Employment, Science and Technology – Traineeship and Apprenticeship Services)
Master Electricians Australia (MEA)
Communications, Electrical and Plumbing Union of Australia (CEPU)
WA Department of Training and Workforce Development (Apprenticeship and Traineeship Policy)
Baking Association of Australia (BAA)
NT Department of Employment, Education and Training (Apprenticeships and Traineeship)
AMA Apprenticeship & Traineeship Services (Western Australia);
Skills Tasmania MTA Apprenticeships Plus
Department of Education, Employment & Training (Qld); MTA NSW
ACT Department of Education and Training
Victorian Automobile Chamber of Commerce (VACC)
MTA SA Inc.
MTAQ
MTA WA
MTA ACT
MTA NT Inc.
National Electrical and Communications Association (NECA)
Australian Welding Institute (AWI)
Sheet Metal Industry Association (SMIA)
Australian Shop and Office Fitting Industry Association (ASOFIA)
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Industry Compliance Rates 70%
60%
50%
40%
30%
20%
10%
0%
60% 59% 59% 50%
45% 45%
-
Appendix B – Industry breakdown
The Retail Services Industry had the highest compliance rate of 60%. The Automotive and Hair
and Beauty Industries shared the lowest compliance rate with 45%.
Industry compliance rates
Industry Compliant Non Compliant
Most common errors Amount recovered
Retail Services 75 (60%) 49 (40%) Pay slips (39%) Base Rates (33%)
$7,480 for 14 apprentices
Manufacturing 115 (59%) 79 (41%) Base rates (42%) Pay slips (27%)
$77,545 for 73 apprentices
Electrical Services 79 (50%) 79 (50%)
Base rates (40%) Pay slips (25%)
$90,818 for 90 apprentices
Automotive 64 (45%) 77 (55%) Base rates (42%) Pay slips (35%)
$40,721 for 41 apprentices
Hair & Beauty 30 (45%) 37 (55%) Pay slips (31%) Penalty rates (27%)
$23,551 for 27 apprentices
Other* 30 (45%) 37 (55%) Pay slips (31%) Penalty rates (27%)
$109,319 for 27 apprentices
*Whilst the campaign audited apprentices in the categories outlined in this report, some of those apprentices worked in industries outside of the 5 mentioned e.g. an apprentice motor mechanic who works for a business in the transport industry.
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Appendix C – State findings
The highest compliance rates were found in the Australian Capital Territory and Queensland,
which both had a 68% compliance rate. The lowest compliance rate was New South Wales with
42%.
Compliance rates by States and Territories
State or Territory Compliant Non
compliant Most common errors Amount recovered
New South Wales 110 (42%) 150 (58%)
Base rates (40%) Pay slips (31%)
$121 612 for 162 apprentices
Victoria 99 (53%) 89 (47%) Base rates (38%) Pay slips (32%)
$78 991 for 55 apprentices
Western Australia 68 (61%) 43 (39%)
Pay slips (29%) Base rates (27%)
$75 443 for 49 apprentices
Queensland 68 (68%) 32 (32%) Base rates (49%) Pay slips (18%)
$25 597 for 29 apprentices
South Australia 48 (57%) 36 (43%) Pay slips (43%) Base rates (34%)
$11 891 for 13 apprentices
Tasmania 22 (65%) 12 (35%) Pay slips (40%) Base rates (27%)
$20 660 for 8 apprentices
Northern Territory 13 (57%) 10 (43%)
Overtime (36%) Pay slips (36%)
$3 504 for 2 apprentices
ACT 15 (68%) 7 (32%) Pay slips (33%) Base rates (25%)
$1,736 for 5 apprentices
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Appendix D – National Apprenticeship Campaign 2015 and National Building and
Construction Campaign 2014/2015
The following tables compare industry compliance rates for businesses employing apprentices
that have been audited by the FWO as part of both the National Apprenticeship Campaign 2015
and the National Building and Construction Campaign 2014/2015.
Overall industry compliance rates including Building and Construction
Compliance rates, common contraventions and money recovered by specific
industry
Industry Compliant Non Compliant
Most common contraventions Amount recovered
Retail Services 75 (60%) 49 (40%) Pay slips (39%) Base Rates (33%)
$7,480 for 14 apprentices
Manufacturing 115 (59%) 79 (41%) Base rates (42%) Pay slips (27%)
$77,545 for 73 apprentices
Electrical Services 79 (50%) 79 (50%)
Base rates (40%) Pay slips (25%)
$90,818 for 90 apprentices
Automotive 64 (45%) 77 (55%) Base rates (42%) Pay slips (35%)
$40,721 for 41 apprentices
Hair & Beauty 30 (45%) 37 (55%) Pay slips (31%) Penalty rates (27%)
$23,551 for 27 apprentices
Other* 30 (45%) 37 (55%) Pay slips (31%) Penalty rates (27%)
$109,319 for 27 apprentices
Building and Construction 122 (65%) 65 (35%)
Base rates (63%) Pay slips (17%)
$69,785 for 194 apprentices
*This category relates to apprentices working in an industry that did not fall within the scope of the 5 specified National Apprenticeship Campaign industries. An example of apprentices that fall within the ‘other’ category is an apprentice motor mechanic who works for a business in the transport industry.
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