HOMEGROWN group training organisation Apprenticeships Group Australia has removed its guarantee on employment for its apprentices.
This guarantee changed after the organisation was forced to stand down more of its apprentices recently, as the local economy continues to languish.
In response to questions from The Express following this latest development, AGA managing director Mark Knox said its revised policy reflected its new position.
“We will be removing the wording around employment guarantee from our literature,” Mr Knox said.
He confirmed 11 apprentices across Gippsland had been suspended in the past week, bringing the current number of suspended apprentices to 28.
However, Mr Knox could not confirm the number of apprentices to be suspended in coming weeks, saying it was “hard to quantify” as there were continual fluctuations in the number of apprentices without a placement from week to week.
“We are working diligently to minimise these numbers,” he said, adding the majority of the apprentices were in construction trades, spread between Latrobe Valley as well as West and East Gippsland.
AGA has been struggling to continue paying its unplaced apprentices, having committed more than $3 million of its cash reserves to paying them.
Mr Knox said under a new policy, effective from 1 July, AGA would pay an apprentice returning from placements due to a genuine shortage of work for up to four weeks.
“This represents a commitment of more than $1 million; above the industry standard for group training organisations,” he said.
“Every affected apprentice has been written to and informed of this, so as to prepare them.”
Mr Knox said the decision to suspend the apprentices was an “extremely difficult but necessary resort” to ensure the financial stability of the whole organisation, but was combined with a broader review of the organisation.
“We will still have almost 1000 apprentices and trainees in placements with employers across Gippsland and Melbourne,” he said.
“We intend to regularly, every six months initially, review this suspension policy to adapt it to current market conditions.
“We see this as a further unfortunate symptom of the economic downturn affecting the Gippsland region.”
When asked how long the suspensions would be in effect for, Mr Knox said each suspension had a three-month time span.
“The suspension would be reviewed after the three months duration, but could possibly be extended,” Mr Knox said.
“We will continue to look for work on their behalf while on suspension.
“We have reengaged 15 apprentices back into the business in placements which we hope will continue in the long term, and are actively working at other ways of assisting our suspended apprentices.”
AGA was still hopeful of receiving part of $300,000 in funds announced by the State Government in April, which promised employers an incentive of $4000 per apprentice hired.
“The funding has not yet been released, although we are hopeful that it is imminent,” Mr Knox said.
State Member for Morwell Russell Northe said he was disappointed by the news, and would continue to advocate for the funding to be released as soon as possible.
“Time has elapsed since the announcement was made, and the sooner the program is live, the better it will be for all,” Mr Northe said.
Meanwhile, Federal Member for Gippsland Darren Chester called on the Federal Government to reallocate the $100 million initially pegged for HRL’s proposed dual-gas fired power station to upgrade the Latrobe Regional Hospital.
“The $65 million upgrade for the hospital would take some pressure off the local construction industry and give young apprentices prospects of retaining jobs,” Mr Chester said.
“The development is shovel-ready; there has been a crisis of confidence in the Latrobe Valley because of the uncertainty with negotiations on the ‘contract for closure’ of power stations… this has contributed to the decline in the construction industry.”