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Standing Committee on Education and Employment - 13/07/2015 - Small business employment

CHESTERMAN, Mr William, Industrial Relations Manager, Victorian Automobile Chamber of Commerce

PRICE, Ms Jodee, Education and Training Manager, Victorian Automobile Chamber of Commerce

YILMAZ, Mrs Leyla, Deputy Executive Director Industrial Relations, Policy and Engagement, Victorian Automobile Chamber of Commerce

CHAIR: Welcome. Although the committee does not require you to give evidence on oath, I remind witnesses that this hearing is a legal proceeding of the parliament and warrants the same respect as proceedings of the House. The giving of false or misleading evidence is a serious matter and may be regarded as contempt of parliament. The evidence given today will be recorded by Hansard and will attract parliamentary privilege. I invite you to make some brief introductory remarks before we proceed to questions.

Mrs Yilmaz : On behalf of the VACC, thank you for giving us the opportunity to meet with you this afternoon and share with you the issues that our members continually raise. Essentially, our submission is focused predominantly on small business. As has been outlined in our submission, the vast majority of our employer members are small businesses in the automobile industry and, similarly, about 95 per cent of industry is represented by businesses with less than 20 employees.

In Victoria and across Tasmania, where the majority of our members currently are, we have more than 5,000 member businesses and they employ more than 50,000 employees. The industry itself, the repair service and retail side of industry, employs more than 300,000 people Australia wide. Our members report that regulation and red-tape compliance have increased to the point where they are affecting our members' decisions around employment of individuals, particularly young people, where the employers need to invest significantly in training and upskilling. Our submission has identified areas where we believe there are some simple and practical solutions to address some of these issues. We do not, in our submission, indicate that all regulation is bad. In fact, a lot of our members will support a fair bit of regulation, particularly where it relates to the need for a level playing field for business safety, work standards and the protection of entitlements and obligations. Our industry, as I said, is small business and we believe we represent the voice of small business, and that is important.

In summary, our submission does specifically point to the fact that employers are fatigued by change, particularly in the industrial relations space. There have been numerous changes over a number of years and that level of continuous change creates difficulty for employers not only around compliance but also around their level of enthusiasm to embrace change. Nevertheless, there have been some expert reviews done over the years. Many of the recommendations made by those expert review panels have been supported by industry but they have not been implemented, and that has created, in many respects, a fair bit of frustration on the part of industry.

While many changes are burdensome, there are very few times when our industries are actually genuinely consulted, and that is a problem as well. To give you an example: there is occasionally a little bit of consultation with industry on funding for programs, but despite the fact that we may have even been involved in the delivery of a number of these programs or that we are able to demonstrate they actually work, for whatever reason—we are not given specific reasons—funding is pulled and employers lose faith. Those sorts of decisions are costly in respect of those decisions that employers subsequently make about investment in employment.

The other interesting thing that we have identified in our submission is the level of frustration on the part of industry when government fails to act. We point to issues around RTOs specifically. There are rogue RTOs and there are schools that have not been properly dealing with training issues—we have pointed to a couple of abuses of situations—and that creates a loss of confidence on the part of industry. We believe that it is time to act. Our evidence shows that employers are walking away. It is definitely time to act. Thank you.

CHAIR: Anyone else?

Mr Chesterman : I will wait.

CHAIR: Do you want to start?

Mrs McNAMARA: Yes, I will start. One thing I am interested in is, when you mention the cost and investment in training, are you talking about a young person who comes to the employer with a lack of basic skills or are you talking about on-the-job further development? Secondly, in regard to apprenticeships, one of the things I am concerned about is the retention rate of apprentices. How do we keep apprentices in the system and encourage more apprentices? Because I am worried about the loss of specific trades.

Ms Price : I will start with that. That is exactly what we are concerned about. There are two issues there. We take the view that, when we are looking at the retention of apprentices, it is very important to get them there in the first place. The commencements are falling rapidly, and the key concern there is about how we get the correct advice to schools.

We note that many of the submissions that were heard this morning addressed that same issue, which is that career advice at schools is really letting the trades down. Over the last three years we were involved in the federal government funded advisor program only for a period of 18 months. That allowed industry to go into schools and do a lot of work. We developed a lot of great relationships and did a lot of work in that area and then the funding was pulled. It is very challenging for us as an association to continue to do that work. We do it the best we can but that was a real concern for us.

Following on from that, we had the apprenticeship mentoring program. In Victoria alone—it was a national program—we mentored about 2,200 first-year apprentices in that period. We had retention rates at 90 per cent at each of those levels, from year 1 to year 2 and the second and the third. Unfortunately, that project only went for three years; we did not have the opportunity to measure the completion but we know that that would have made a dramatic increase to that completion rate. That program has since been pulled and has become part of the apprenticeship support program.

Our real concern about that is that it is not run or delivered by industry. Whilst some of the key issues may be addressed about individual needs, the whole of the apprenticeship issue has not been addressed. When we were operating that program we had opportunities to assist the employers as well. If an apprentice and employer relationship was not working, because we are industry we were able to find another employer for that apprentice. Under this new arrangement, not all first years are entitled to mentoring, and also the providers of those programs do not have those industry relationships. So we are really concerned about the lack of industry involvement now in those programs.

Mrs McNAMARA: Which is a worry for the future if we are going to not have mechanics.

Ms Price : It is a huge worry for industry. We are an ageing industry, and if we do not have people come in and take over those businesses—and it is a real opportunity. We talked earlier about the genuine outcomes of becoming small business owners. Our industry is made up of small businesses. There are great opportunities for young people to own their own businesses and operate their own businesses, but that has not been adequately represented through careers advice in schools and there is a real gap there.

Mrs McNAMARA: Do you have group training companies?

Ms Price : Yes, we do.

Mrs McNAMARA: Do you find the apprentices who are provided through the group training companies have a better retention rate?

Mrs Yilmaz : Yes. Actually we do run a group training operation and we have close to 500 apprentices and trainees. We work with over 200 schools across Victoria, in terms of promotion of the traditional trades. We currently use 13 training providers for our trainees and apprentices. As Ms Price said, the critical issue for us is getting down into the schools to make sure that they understand what is expected by industry, because young people coming into the industry need to understand what is expected by industry before they get there. That is an important part of this process. But our resources are limited when it comes to what we can do, so the loss of the mentoring and adviser program made a serious indent.

The other important thing to note with our group training operation is that our retention rate is in the 90 percentile—95 or 97 per cent. For our Holden program it is 97 per cent; across the different trades it is around 95 per cent. That is probably one of the highest retention rates in the country, and what we are finding is that, as employers are finding it more and more difficult to engage apprentices directly, they are calling on us to engage the apprentices directly. We actually have the specialists who interact with schools and the training providers to make sure that they are all delivering what they need to deliver, because it is quite complex and difficult working with even the TAFEs and the private providers. We just cannot meet demand at the moment, and we believe that it is still necessary for individual employers to be part of the program of training up apprentices and trainees. We recognise it is becoming much more difficult, but the group training operation will never fully replace the need to have individual employers participate.

CHAIR: When it comes to mechanics and that sort of thing, we have trades training centres in schools now, which should be sorting this out. What is your take on trades training centres?

Mrs Yilmaz : Some work quite well and some do not. We launched a donation program late last year to assist these trade training centres come up to scratch in delivering the training that they need to deliver. The critical issue is that you often have teachers who have not been in industry for a long time, so they do not have current understanding of industry expectations. That is one problem. The second problem is that they were often given significant amounts of money to establish themselves, but to deliver training in automotive is extremely expensive. The equipment you need must be current. If they cannot maintain currency, it becomes a problem for industry. Again, it is about projecting what industry expects from young people. There is a perception out there that becoming a mechanic is a dirty job, but, if you go to your modern workplaces these days, it is very different—it is very high end. That is what we need to impart to those trade training centres.

As I mentioned earlier, we do work with quite a number of these schools and the donation program is helpful in providing much-needed equipment and components to these trade training centres. The issue, nevertheless—and there are just so many of them—is that we still need industry engagement with these trade training centres; otherwise they do not become relevant. They need to remain relevant and they have to work with industry. There is a mixed bag out there when it comes to how they are working with industry.

Ms Price : And VET in Schools programs are very varied. The different relationships they have with their local communities really depend on their exposure to industry. For example, some have really good relationships where the kids get good experience in workplaces, and other kids go to workplaces that do not have any opportunity for them. They can actually have an adverse effect on us because the kids go into the workplace and cannot do anything because of a whole lot of OH&S issues and other issues. They come away saying, 'I never want to be in an industry again because I haven't had a good workplace experience.' They are so varied. There are some fantastic examples and some really poor ones.

CHAIR: During the last parliament we finished off the 42nd Parliament's inquiry into TAFE. A couple of people presented on behalf of trades training centres and we were trying to get information from them on how many people were failed. They were saying that the problem was that TAFE did not instruct them properly—that is a very broad statement. I said, 'How many people did you fail? What happens to the kid who doesn't fail?' They come out as a 17-year-old being paid third-year wages or second-year wages and they are not able to sweep the floor, let alone change the oil on motor cars.

Ms Price : The poor individuals are disadvantaged. They might genuinely want to be a mechanic and they are actually less employable than they were before they entered that course.

CHAIR: I do not want this to get bogged down on TAFE, but one of the things about TAFE when you look at VET and the nature of the change in VET to profit based entities is that anything that can be done with a data projector and a laptop has been shaved off, and that is where all your profit goes. TAFE runs the real risk of being the school for the mega-expensive, the illiterate, the innumerate and the handicapped. It becomes a real issue. It is about how we are trying to get those things through there. The cost of equipment and of maintaining expensive equipment, and keeping it current, is huge to TAFE.

Ms Price : Which is why that relationship with industry is so important.

Mrs Yilmaz : And the training programs themselves need to be quite right, as well. We actually put in a submission to the review, as well, and the point we raised there is that you have structured workplace learning, which, in our view, in many cases is being abused. There is $5 a day at workplaces for a year or two years. That is not our view of proper training and preparation for young people to enter the industry. We do actually support good workplace school based programs and we do participate in those. That is where they actually do a certificate II program, or in some cases it might be the first year level of a certificate III program. But that is in conjunction with the VCAL studies, and they actually have proper training in the workplace, and the learning itself is based on the training package, whereas a lot of the learning that comes out of trade training centres is not connected to the training package itself.

CHAIR: Ideally, when it comes to youth, at what age would you like to have industry involvement in going into schools to say what options there are for a career?

Mrs Yilmaz : Most of our work currently is commencing at the year 9 and year 10 level, when there is some work experience. Mostly, our members prefer to give the young people an opportunity to do some work experience. So we often have tapped into those situations where we connect young people from schools with employers in the workplace, as well, and we think that is important. If they are still interested they obviously can go into a school based program. That is a good transition, where they learn good employability skills, good practical skills, and they are credited towards their apprenticeship, as well. So when they come out of school it is not like starting again. They have actually most of year 1 completed and they just articulate into second or third year as they progress.

CHAIR: A lot of people have said to us that these are seen as a dirty job, and their friends are off skiing in Colorado while they are changing oil and trying to find what this thing is. How do your employers view youth and the opportunity to employ youth?

Mrs Yilmaz : There is a critical issue here. If you speak to our manager and group training person he will tell you this, and our members are saying the same thing. Young people might have left school, gone on a gap year and then gone to university and decided they wanted to come back. They are still young people—usually anywhere up to 25-plus. Those people entering the industry usually come through in an apprenticeship. They start there, because our industry relies on trade skills. As they come down that particular pathway, what is important for them is to actually learn those fundamental skills. But to employ an apprentice now is a huge investment, and employers see employing apprentices as an investment in their business, because there is a lot of downtime, a lot of supervision, a lot of mistakes made, which are very costly indeed. They need to present well, which means uniforms, tools and so on. We provide all of our apprentices with tools, which are worth almost $1,500. So it is not a cheap industry. It is a huge investment, particularly since the apprentice wage case, when wages were increased quite significantly. Employers take their responsibilities a lot more seriously. It becomes a serious question for them as to whether they are going to go down this particular pathway and invest, and then bear all of those other responsibilities, because they are trying to run a business in a high-end competitive environment and they have to deal with all those other issues that young people deal with—the girlfriend, the boyfriend, loss of licence, parents breaking up and people in their family who are suicidal, or whatever. All of those sorts of issues come with it, and they understand that they have to be part of that process, and they struggle with it. Then, of course, the regulation around it has become even more complex.

So they do struggle, and this is why, for us, the mentoring program has been a huge benefit. It is where a lot of employers are now saying that they can understand that their job is to train them up in the trade, keep the business going and all of that other stuff that is all too complicated.

Ms Price : Not be their parent!

Mrs Yilmaz : Not be the parent, but having that outside support gives them the confidence to continue to invest, because if they do not continue to invest it becomes a huge problem for us down the track. I think in our submission we actually do point to a couple of case studies. Some employers actually say that with the removal of that mentoring program they have seen the benefit, where it is increased retention rates. In our industry, retention rates are less than 50 per cent. We can show that it works. We can introduce programs that really do work.

Ms Price : On your point about how they view you, it is very different. The employers who has had apprentices for 30 years tell us all the time that this is a different person, a different beast, we are dealing with now and it is so much more complex, because of all of those reasons. Most of them are already out of home and trying to support themselves. When I was an apprentice I would come home and mum would have my dinner cooked and all that. So the buy-in in having an apprentice is almost like becoming a parent, particularly in some of the more regional areas, where some of them have had to relocate from one town to another. So there is a lot more personal investment required and it is a huge challenge. Also, they are coming to them with a lot lower level of numeracy and literacy, so they are often having to teach them those basics at the same time.

CHAIR: I am interested in literacy and numeracy, and I think it is a shame where we are as a country. If you can get onto a child at 14 or 15 and get them interested in literacy and numeracy, because you have to be able to read and write it down.

Ms Price : Absolutely. Put it into a workplace context. The ASAL schools council has done a lot of work around that in putting together some prevocational stuff that, in an online game type format, actually helps literacy and numeracy, but putting it into a workplace context, because you cannot get by without that.

CHAIR: My son is 13. When he was in very early primary school, maths was just stupid. But when we were watching the Cowboys play the Broncos and we were down by eight points, I asked him what we have to score, and he said either two tries, or with one converted try and a penalty we are equal. So is said, 'You do get maths!' But that is when it is important.

Ms Price : We do have to change the context, because it is not working.

CHAIR: Workplaces now cannot send their kid down to the hardware store for a long-weight or a left-handed screwdriver or a tin of striped paint! Those sorts of things are not allowed in workplaces any more. When it comes to offering employment, to giving people opportunity, how much does the actual wage come into play? I buy in totally to the investment. I have never believed that wages were an issue.

Mrs Yilmaz : There is a tipping point, and I think Bill might be one of the best people to explain this one. During the apprentice case we actually were one of the few organisations that went in and argued that there needed to be an adjustment to apprentice rates. But we argue that the adult apprentice rate should not adjust, because there as already a movement away from employers. An adult apprentice is considered someone who is 21 and over, and there is no difference between a person coming into the industry at the age of 21 or 22 compared to someone who is 17 or 18, in terms of their learning ability and the level of investment and time required by the employer. So we argued that the adult apprentice rate should stay the same, but in our view junior rates needed to increase in our award, because it is meant to be an industry award. However, the outcome of that was actually very, very different. We have found since then that employers have moved away because of the adult apprentice rate. They certainly will not take on adults—that is, 21 and over. They just cannot afford it. I mentioned to you earlier—

CHAIR: Sorry to interrupt. We have had people present today and say that we have this massive push that everyone has to go to university, so a young kid is going to go to university, do business law, realise that is not for them, try to do education, find they cannot do that, and then at 21 or 22 say, 'I don't care for university; I've got to get myself a job.' That is the person who is going to miss out on the apprenticeship.

Mrs Yilmaz : That is correct.

Ms Price : More and more, particularly with our group scheme, something like 60 to 70 per cent of our applicants are coming from the mature-age group, for all those reasons—they have had gap years and they have travelled. It is a myth that they are more employable, because they have not working in a trade and they are not on the tools, so they are actually coming in level, but the wage is really, since we lost the subsidies for—

Mrs Yilmaz : It is cost per head.

CHAIR: Our TAFE inquiry went through all this. In our TAFE inquiry, we were looking for people going from TAFE or VET through to university, whereas it is quite the other way round.

Ms Price : Absolutely.

CHAIR: Someone with an engineering degree has to come through and find out just how hot a welder actually gets and how tough boilermaking actually is. You cannot just send someone out in a pair of nylon shorts.

Ms Price : That is the issue. We talk about the completion rates being really poor with apprentices, but they are no worse than university qualifications and things like that. We have so many of them coming the other way. We used to have the wage subsidy for mature age. That made it, particularly in the first two years, a lot more—

CHAIR: I find it hard to understand that a 21-year-old is being called 'mature age'.

Ms Price : Isn't it? That is what we think too.

CHAIR: I have a 22-year-old and a 21-year-old.

Ms Price : I have a 27-year-old. Since we lost that wage subsidy, and since the wage case, it is very challenging.

Mrs Yilmaz : The other area is the cert IIs. In our industry, in our training package, we had certificate II qualifications and tradies at certificate III. At certificate II level, there are five qualifications which are entry level to a trade, so they can matriculate to a trade. What happened is that when the old SAAA, the adult apprentice rebate, was removed employers looked for an alternative. They are no different from us. Sixty per cent of our applicants are at 21 and over, and we cannot afford them. So we actually employed them at certificate II level. For example, if they wanted to do work in the body area, we would do underbody certificate II qualification and make sure they transitioned over, because they are different skills—learning to learn again and transition into a workplace environment. If they successfully completed that, we gave them credits and they went into second year. That is what we were doing as a stepping stone to encourage these people to come into the industry. Then, of course, we had the hit with the removal of certificate II incentives, which meant not only that employers do not get a rebate for employing someone at a certificate II level but that their funding for training also increased significantly, so it became a disincentive. So employers simply walked away from employing those aged 21 and over, and that was the end result.

CHAIR: We have had a couple of competing views today. One was that it was okay for award rates to be age based, but other people are saying they should be skill based. There were arguments on both sides.

Ms Price : Yes.

CHAIR: But flexibility around that would be handy from your perspective? Am I putting words in your mouth?

Mr Chesterman : You are, really. If I look at the apprenticeship case, I might be slightly off the mark here, but I believe that, given that there has been a reduction in the subsidies to employers, you really need to keep a junior or standard apprenticeship rate at the level it is at now for people under the age of 21, because if you increase the rate to such a level that it is equivalent, say, to someone who is 21 years of age, or if you remove the distinction, I can tell you, based on listening to all the evidence in that case and on case experience that Leyla and Jodee have spoken about today, that you are not going to get an employer paying nearly $700 for a first-year apprentice. That is why it is important, I think, to have the junior rates, unless you get some subsidies between the ages of 21 and 25, which Leyla has once again talked about.

CHAIR: This is the area which seems to be coming out as the area of real concern—those people who have been to university, who have had the living daylights belted out of them, who have been working eight months here, nine months there, six months unemployed, got another start. Next thing you know, by 21 or 22, they have had the living daylights beaten out of them and they are the ones that are disengaging. We are going to end up with a bunch of people there who have never had a job.

Mr Chesterman : We are going to have to have subsidies in that section—that is my view. I am on the phone with the VACC with our members and if they are looking for an apprentice and they ask what the rate for a first-year apprentice is who starts an apprenticeship over 21 years of age, if you tell them the rate, they will say is too expensive—they are not interested. They are prepared to go lower but they will not go for that 21 years of age and over apprentice because the subsidies were removed when SARS was removed. That created the issue

CHAIR: There must be some sort of benefit to employing a 21-year-old as opposed to a 17-year-old.

Ms Price : We cannot find it. That is not what we are hearing.

Mrs Yilmaz : Three years ago, we invested quite significantly and put on close to 100 people over the age of 21. The interesting thing was that we just assumed, like everybody else assumes, that once you are 21 you are much more mature and you have got your life in order. Well, I have got a 22-year-old and I can tell you that is not the case. I assumed she was just one person. But we found the trend was different. Even though they may be older, they still are not settled, they have only just decided what career they are interested in but they have other issues and, if they have a family, there are other things. So the employer is not dealing with a young person who is transitioning from childhood to adulthood, they are dealing with an adult who is dealing with adult issues and it is no different. But from a learning point of view, that does not translate into capability to learn the skill quicker at all.

Ms Price : What we are told is there might be some changes after they have been there a couple of years. They might move through those last stages quicker but not at those early stages. We did quite an extensive survey around some of these things and we saw that it is exactly the same.

CHAIR: What you are telling me is there is no simple answer, there is no silver bullet and we are just wasting everyone's time. I am conscious of the time so would like to transition to over 50's. It has happened a number of times in my home city of Townsville where people have been working for organisations such as Queensland Rail for their entire life and they do not have any formal qualifications. We are going to come up against this with Holden, Toyota and those sorts of things where people's jobs no longer exist or the company has been sold off or it has been privatised by government. Whilst they have major skill sets, there is no formal qualification. What area can the VACC assist us, assist government or assist these people in when it comes to over 50s in underemployment and getting an opportunity? I am happy for you to take it on notice.

This is going to be major challenge for us in the next 10 years. It is a challenge for us now. My generation is the last cohort of people to go through who could possibly have a job for life and that just will not exist. We are going to see it with postal workers and those sorts of things. We will see those sorts of people who have had a job that suddenly their job does not exist anymore even though they have serious skills.

Additionally I would like to add to that how we deal with non-English speaking first-generation migrants. Once upon a time, you guys would have been a major employer of the Italians and the Greeks and all those people who came to Australia. Although they could not speak English, they knew what they were doing. They could change points, plugs and all of that sort of stuff so you did not have to worry about them unlike today with the cost of compliance for companies' work place health and safety—we do not want unsafe workplaces. I always tell the story that when I started as an auction me, we had this old Italian guy who was a veteran of the Second World War. He swept the floors of the auction room. He could barely speak English. He could not read English or anything like that but he never got run over because he was not deaf so he was not unsafe, but he would never get a job today.

Mrs Yilmaz : It is interesting because our industry is going through a massive transition now. We have a lot of people who started off in the industry quite young and who are still running businesses. They are quite small businesses. When you have a look at the bell curve of the age group of our members, it is pretty much like that with the 40s up at the top and still a large portion of business people in our industry that are in their 60s and 70s. The difficulty we have is that whilst the industry itself is also going through transition with changing technology and so on, a lot of the work is still relatively physical because you are pulling, pushing and lifting. Even though they have lifting aids and things like that, it does require spatial coordination and manual work.

But also the technical demands on our industry are actually very high and the technology continually changes. So a lot of young people coming into our industry are very skilled when it comes to computers. They do not like sitting in front of the computer to learn. What TAFEs do is pop them in a room with computers—they do not like that. They like that interaction. But they will use a computer to research because the technology continually changes.

And they need to have language and literacy and communication skills. They are communicating with the with the public, they are communicating with their co-workers, they are checking standards on a regular basis, they are checking manuals from manufacturers because manufacturers change technology so they are multiskilled. If they lack those initial skills when they come into the industry, it is extremely difficult to transition in and grasp those skills at a later stage. The industry is attracted to entrants coming into the industry once they leave school because they can make those transitions a lot easier. But someone coming in at 50 plus for the first time ever in the automotive industry is challenging, it really is unless they are able to do other roles that are not so physically demanding or technically challenging. Some of those jobs are few and far between because they are the nice-to-have jobs.

Ms Price : Our members are so small that they do not have the luxury of managers that would offer a lot of skills to these people. We have done some work with our skills council around the forward closures. I think initially we thought it would be much easier for people to transition from the manufacturing side into the repair and service side but it has not been that way. Among our larger employers, which are few and far between, it has been easier for them to take those supervisory roles because they have got that experience. But because most of our members are very small, there are not a lot of those types of roles available unfortunately.

Mr WILLIAMS: If I could just pick up on that point about the transition and closure of the automotive manufacturing in Australia, in Victoria and South Australia in particular. To clarify, you have found it more challenging to try and get some of those Ford, Toyota and Holden workers to come across? Has there been anything that has been successful in that way? Have there been small successes? How as an industry are you creating interest in your industry? Your members are different to the manufacturers but overall automotive is seen as being a declining sector in the public perception. How are you tackling that to attract people or are you not finding it a problem?

Ms Price : It is a real challenge. We go to careers events and do a lot of that work. We attend all of the big careers events in schools. Parents particularly take their children away saying there is no future in automotive; they are closing all of that down. When we get a chance to speak to them we say that as long as there are cars on the road this industry is going to be there and survive. But it is a huge challenge for us to try and get people who are not from the industry to understand the delineation between the manufacturing side of the repair side of the industry. That is a huge issue.

Mrs Yilmaz : That is why we do a lot of work at career events. We find it necessary for us to engage with schools. As I mentioned, we try to engage with over 200 schools. That is predominantly through our field managers and other staff that go to these schools. Again, their primary role is to look after our 500 or so apprentices, not necessarily to go out to schools. We are caught in the middle sometimes. Our job is to try to promote careers, and our employers cannot do that alone because they are small employers, unless they are in a country town. I have one member in Wodonga—a very small businesses in a local community. He engages with the local school and encourages kids to come in and do some work experience. If he does not have a job for them, he will often connect with other employers in the shire to connect them so that they end up in jobs. That is rare, because they are a small business, as I said, they are highly competitive and profit margins are low. All of that impacts on them and they do look to us as the industry association to do it for them.

CHAIR: A careers advisory thing in the school running parallel with the school curriculum—you would support something like that, where someone is able to sit down with these kids and say, 'What do you actually want to do? It's time to start thinking'?

Ms Price : Absolutely, which is what we had through the adviser program. That was only 18 months, and you just get the momentum. It takes so long to form those relationships.

CHAIR: Could you take this on notice? Could you give me a follow-up on what you would like to see?

Ms Price : Sure.

CHAIR: Could you write to the secretariat and tell us how you would like to see that roll out and re-establish?

Ms Price : You will get some—

CHAIR: We have some very serious challenges and we want to make sure. It is about investment. We need to free up some space somewhere over here and re-establish something over there which gives people that opportunity, because at the moment we are seeing people not having any opportunity.

Ms Price : That is right. An industry like ours and others—in building and all of that—we all struggle from media perception of what is going on in the industry, which is sometimes so far removed from reality. Trying to break down those barriers and get those messages across is really challenging.

CHAIR: One of the other things that has been put to us is that, as a government and as a nation and as a parliament, really—because it goes across all sorts of politics—we have this thing in our heads that we want kids to go to university. Everyone has to have a university education and we have to keep pushing this through, which leads us to the 21-year-old who does not want to do university. Would you support a government target on the number of people getting jobs or the number of people actively involved in part-time work—getting themselves sorted out in that space—and that we should have some sort of spoken target in line with what we are trying to do with universities?

Mrs Yilmaz : As long as it is not what may be perceived as a simple or quick fix.

CHAIR: There is no simple or quick fix.

Mrs Yilmaz : People who tender for a lot of the government programs like to tick boxes. It is a numbers game, but we do not want a numbers game; we want real outcomes; we want people to come into our industry. It is a skill shortage area. We cannot get enough good quality people into it. We want people who are correct for our industry and suit our industry to come into the industry and work in our industry, be upskilled and be future leaders in our industry. That is what we would like to see: people with real jobs to fill these vacancies. There are many of them, but there have to be real outcomes, and that is my worry.

CHAIR: Where there is government money there will always be rent seekers. It is our job to make sure of the cracks. You will never get rid of the cracks. It is our job to make sure they are as small as possible. We saw that when TAFE was deregulated. I support all deregulation and that sort of thing, but we have to make sure that where there is a problem we are quick to act and that the people who are paid to act actually act and have the power to act when those sorts of things come through. Be it banking, be it government or be it anywhere, there has not been an industry in which I have worked where there has not been an easy way through. There is always a path of least resistance.

Mr WILLIAMS: I would like to turn quickly to the point you made about skill shortages. I think you address that too your submission. What is the one thing that could help that element? When I met with the MTAA in Adelaide I heard about skill shortages regarding panel beaters and some other areas. I know we will never get it right, but do you think we could do better than we are currently doing so that we can get people into those roles and not have to import workers with skills? What is one thing we could do?

Mrs Yilmaz : I think the winning formula was MAAP, our Mentor/Advisor Apprenticeship Program. The reason is that we were able to get the correct industry careers advice out there. We were tapping in. It gave us the funding to tap into schools and venues where young people congregate, and parents, to give them a clear understanding of what the industry was so that we could manage expectations. We gave them the opportunity to connect with employers who had jobs, and then there was the mentoring program. That mentoring program provided support to the apprentices coming in as well as the employers. We think that is the important mix: it is delivered by industry for industry and it worked. We found an increase in the retention rate, up to 87 per cent. That, for us, is important.

Ms Price : We all know the vocational system is a nightmare to navigate, from finding people, employing them, putting them in training and getting them through the whole system. Most small employers only engage with the system every four years. If things work well, they put one apprentice on at a time. Everything changes so much in that time. With trying to run your business and doing all of the things that you need to do as well as having your head across all of that, there is no way known it could be done without an intermediary. In this day and age it is just impossible.

CHAIR: We are fast running out of time. I want to touch on the unfair dismissal part of your submission. Is the nature of your members very small groups of employers—that sort of thing? Is your perspective that the apprentice is actually part of it and therefore when it is not working out it has a massive impact? Is that the reason you would like unfair dismissal looked at?

Mr Chesterman : No. It is certainly a small business industry. Most of the businesses have fewer than 20 employees. The problem I find with unfair dismissals is—and I have been dealing with them for quite a few years—that there is no such thing as a perfect termination process. Unfortunately, because of the number of procedural steps you have with unfair dismissals, you will always have people picking off. You talk about people picking off things. You will have certain lawyers and consultants picking off the process and taking a small business employer to court or the Fair Work Commission. I went through it only the other day. It was a larger employer; it was a dealership. It was quite clear that there was one of the fee-for-win-only consultants representing the employee, and it was pretty clear when the consultant dropped the claim from 12 weeks to six weeks that he recognised that the employer did not really have much of a case after we had presented our position. I said that we should run it because I thought we had a good case. He said, 'That means I take four mechanics out of a dealership for a day and a half or two days. We'll settle for four weeks,' and that is what we did. That is one of the problems that I have with the unfair dismissal process.

The biggest one I have had, and I have had it for a long time, is that people in small business or big business struggle to understand that you can have a valid termination but it is still harsh, unjust and unreasonable. In other words, you think you win the unfairness case on the basis of it being valid and then you have to pay compensation or reinstatement on the basis that it was harsh, unjust and unreasonable. I have always believed that that term has created the procedural issue for unfair dismissals. It went back to, I think, 1971 with Justice Sheldon in a New South Wales case that was famous for the fact that he introduced the fair-go-all-round concept. Therefore, you looked at how the employer had treated the employee and, equally, how the employee treated the employer and other employees in the business. That went out the door some time ago. That has been really frustrating for me because one of the things I find in all of the cases of unfair dismissals is that there is a reason why an employer is getting exasperated. In our business, it is generally small business. That employer is working alongside that employee and he knows that that employee is upsetting himself and other employees. It is very difficult to then break off, go into your office, write a first written warning and then give it to the employee.

I do not think we have ever said that we disagree with a fair dismissal process or an unfair dismissal process. What we have said is that it has to be realistic. As I say, if you put too many steps in the process, the employer is going to get picked off, and that is where I have a real problem. I think there needs to be a fair-go-all-round principle. In a number of cases that I have dealt with an employee has said, for example, 'Bill Chesterman has just put in his resignation and two others are going to put in their resignations because they just can't work with this guy,' and that to me is a huge issue.

CHAIR: We are out of time, so I thank you very much for your time today. If the committee has any further questions the secretary will write to you. If you would not mind following up that issue for me, I would love to get something in writing from you.

Ms Price : Certainly.

CHAIR: Thank you very much.