Fair Work Decision and the Apprenticeship System






Fair Work Decision and the Apprenticeship System


















Fair Work Decision and the Apprenticeship System

The stalemate between business groups, employers and employers over the Fair Work decision was one of the latest problems to emerge that affected the apprenticeship system in Australia. The crux of the stalemate was the decision by a tribunal to award a wage increase that was approximately 30% (The Australian 2013). The wage increase applied to all first-year apprentices that had completed Year 12. There was a subsequent 18% pay increase for second year apprentices that had accomplished the same education level. Backed by the Australian Chamber of Commerce and Industry, the decision was among the last ones to reinforce the superior position of the apprentices. The move was also seen as detrimental to the employee fraternity that saw the Fair Work decision as an obstacle to new employees that would start out as apprentices (The Australian 2013). Over several years, apprentices in contemporary Australia have been given unfavorable terms concerning their working conditions (The Australian 2013).

In this impasse, the three main parties were involved. The Australian Chamber of Commerce and Industry was responsible for deliberating with the relevant stakeholders and coming up with the decision to raise the wages for apprentices in Australia. The employers and owners of companies were also affected by the decision. This is because the Fair Work decision placed greater financial pressure on their apprenticeship program and therefore, directly affected them. Lastly, the apprentice association that represents the different interns played a major role in the issue at hand (The Australian 2013).

The main issue being disputed between these three parties is the increase in the wages for official apprentices. The declaration by the Chamber of Commerce and Industry to raise the wages by 30% and 18% for apprentices in first-year and second-year levels caused uproar because of the financial implications that it held (The Australian 2013). The main dispute between the employers and the government concerns the decision to shift the risk of paying the apprentices extra money to the employers (The Australian 2013). Before the changes were introduced, managers of companies were barely able to compensate their interns on the allocated organizational budget. With the introduction of higher wages for these apprentices, employers started realizing greater losses as the government failed to cover any expenditure that resulted from the policy change (Rinaldi, Stewart & Millar 2012).

One of the factions in the dispute, the apprentices, strongly supported the move by the Australian Chamber of Commerce and Industry to raise the wages considerably. Within Australia, apprentices within the corporate environment have been exposed to substandard compensation and had the opinion that they deserved better monetary rewards (Peetz & Bailey 2012). Apprentices are new employees that learn about different aspects of the company with the intention of getting experience. In the process of their internship, apprentices are allocated different responsibilities within the company where they carry out many functions in a manner similar to the conventional employee (Townsend, Wilkinson & Burgess 2013). Apprentices behave in a manner similar to the employee. Therefore, it is only fair that apprentices be awarded a substantial amount of wages for their efforts and time in different companies. The claim by apprentices sought to rectify the unbalanced reward system where companies profited off the efforts of interns without paying them their dues (Creighton & Anthony 2012).

On the other hand, the state argued from the perspective that both private and public companies awarded apprentices insufficient wages. In response to this problem, the state sought to raise the wages sufficiently to solve the employment problem. In summary, employers claimed that by passing on the expenses to them, the state was being biased and even claimed that the policy change should be scrapped altogether (The Australian 2013). The state is responsible for coordinating and controlling the awarding of remuneration for all citizens who work in private and public organizations. Therefore, they are responsible for the formulation and implementation of relevant labor policies depending on the need to rectify imbalances caused by the free market. As the watchdog, the state argued that it was their duty to balance the labor conditions concerning apprentices and therefore, saw it fit to introduce the wages policy.

In my own personal assessment of the resolution process, it is evident that the resolution process was largely ineffective. Analysis by experts demonstrated that the dramatic increase in the wages for apprentices discouraged most corporate bodies from adopting the same number of interns as in the previous years. The conflict between the state and the companies was handled in a dismal manner as the state only sought to spread the cost of the adjusted changes over a period of 18 months (The Australian 2013). However, in the end, the employers would be fully responsible for covering the apprentices’ expenses. In turn, the employers responded by reducing the number of opportunities that were available to apprentices within their companies. Therefore, by introducing the wage policy, the state inadvertently destroyed the numerous opportunities that interns had for getting first-hand experience in most successful corporations (Blanpain, Hiroya, &Takashi 2012).

The following recommendation should be adopted to ensure that the impasse is solved. The state should come up with methods of cost sharing with public and private companies, as this will alleviate the pressure currently being experienced by the companies. The state should also create institutions that will take in the excess apprentices in an intricate system that originates in the colleges and universities. In this way, the issue of half-baked apprentices being released into the corporate environment will be eliminated (Bolton, Tom, and Tsingas 2010). Lastly, all the affected parties should also have regular deliberations that will seek to discuss any areas that trigger conflict.























Blanpain, R, Hiroya N, &Takashi A, 2012, Systems of employee representation at the enterprise: a comparative study, Alphen aan den Rijn: Wolters Kluwer Law & Business.

Bolton, Tom, and Tsingas C, 2010, An overview of compositional change in the Australian labor market and award reliance, Canberra: Fair Work Australia.

Creighton, W, B, and Anthony F, 2012, Rediscovering collective bargaining: Australia’s Fair Work Act in international perspective, New York, NY: Routledge.

Peetz D, and Bailey J, 2012, “Dancing Alone: The Australian Union Movement Over Three Decades”, Journal of Industrial Relations, 54 (4): 525-541.

Rinaldi M, Stewart A & Millar R, 2012, Fair work legislation 2012: current as at 23 July 2012, Sydney: Thomson Reuters.

The Australian, 2013, Fair Work decision “nail in the coffin” of the apprenticeship system, the Australian,

Townsend K, Wilkinson A, and Burgess J, 2013, “Is Enterprise Bargaining Still a Better Way of Working?” Journal of Industrial Relations, 55 (1): 100-117.


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