News & Views
28th January 2014
Increased Apprentice Rates Effects Enterprise Agreements
On 22 August 2013, the Full Bench of the Fair Work Commission made a landmark ruling to increase the rates of apprentices commencing their apprenticeship from 1 January 2014.
What many may not know is that this decision will effect all companies recruiting apprentices from 2014 onwards, not just those covered under a relevant Award.
For the Electrical, Electronic and Communications Contracting Award 2010, the decision means substantial increases, as set out below:
Junior Apprentices (under 21 upon commencement of apprenticeship)
|
Apprenticeship Year Level |
Percentage of Grade 5 Electrical Worker |
|||
|---|---|---|---|---|
|
Current |
1 January 2014 |
1 Jan 2015 No Year 12 |
1 Jan 2015 Have Completed Year 12 |
|
|
First Year |
40% |
45% |
50% |
55% |
|
Second Year |
52% |
57% |
60% |
65% |
Adult Apprentices (over 21 upon commencement of Apprenticeship)
|
Apprenticeship Year Level |
Percentage of Grade 5 Electrical Worker |
|
|---|---|---|
|
Current |
1 January 2014 |
|
|
First Year |
40% |
80% |
|
Second Year |
52% |
The greater of: National Minimum Wage, Grade 1 Rate or Second Year Apprentice Rate |
|
Third Year |
70% |
Whatever is the greatest of: National Minimum Wage, Grade 1 Rate or Third Year Apprentice Rate |
|
Fourth Year |
82% |
Whatever is the greatest of: National Minimum Wage, Grade 1 Rate or Fourth Year Apprentice Rate |
What many may not know is that this decision will effect companies employing apprentices under an Enterprise Agreement from 2014 onwards, not just those covered under a relevant Award.
Section 206 of the Fair Work Act 2009 states that the “base rate of pay under an enterprise agreement must not be less than the modern award rate or the national minimum wage order rate etc”. For those with an Enterprise Agreement, this means that although the Agreement remains the same for the duration of its life, the base rate of pay for each employee covered under the Agreement must at least match the base rate under the applicable Award.
As many Enterprise Agreements have rates close to the Award as it currently stands, their Agreement may fall below the Award. It is expected this will be particularly true with adult apprentices, as the majority of Enterprise Agreements in the electrical industry do not have a separate adult apprentice rate.
In coming months, NECA SA will make available new Wage Bulletins with the relevant rate changes for commencing apprentices. Upon request, Danae Keen, Workplace Relations Advisor can assist any members who have an Enterprise Agreement in place in ensuring they will not be underpaying their apprentices when the changes come in on 1 January 2014. This will be a complimentary service for any companies who engaged NECA in the negotiation of their Enterprise Agreement, or charged at a rate of $120.00 per hour for others. This service will only be available from mid-October to the end of November.
More details on this will be included in the September / October and November / December editions of NECAnews.
If you have any questions or concerns about how these changes may affect your business, please contact Danae Fleetwood, Workplace Relations Advisor at NECA SA on (08) 8272 2966.
