Wednesday, 9 March 1994
Seanad Éireann Debate
The purpose of this Bill is to provide for the introduction and collection of a payroll levy from 6 April 1994, in certain sectors of industry to fund the new FÁS apprenticeship system. This new apprenticeship system has been agreed following several years of in depth examination. It is a standards based system which is designed to ensure that apprentices are taught pre-defined skills and knowledge. A national craft certificate which will give recognition, nationally and internationally, to the standards achieved  must be obtained for recognition as a craftworker.
The traditional time-served apprenticeship has served this country well in many respects and the system has produced many skilled craftworkers. However, many others have completed apprenticeships without a proper skills foundation. The system was fragmented and lacked any coherence and a major disadvantage was that no certification of skills or knowledge was required.
When I was Minister for Education I became aware of the inadequacies of the present system and the need to upgrade the skills base of Irish workers to the best international standards. I was, and still am, conscious of the need to have a skilled and mobile workforce capable of matching the skills levels which prevail in the European Union as a whole. This is particularly relevant now in the context of the EU Internal Market where it will be vital that due recognition is given to the skills of the Irish workforce. This is why it is necessary that there is a system of certifying the attainment of skills and knowledge and why, in the case of apprentices, a national craft certificate will be awarded to qualified apprentices.
We dealt with Second Stage of this Bill in the Dáil over several days and Committee Stage was taken in the Select Committee. I heard Senators talking earlier about the need to get Senators involved in the committee system. The Bill then went back to the Dáil for Report Stage. During the debate the issue of equity came to the fore. I am determined to address the problem of access to apprenticeships. This was one of the major points of discussion during the Dáil debate on the Bill.
It has been brought to my attention on many occasions that recruitment to an apprenticeship is often based on who one knows rather than suitability or qualifications for the position. I was glad to have the agreement of Fine Gael and the Progressive Democrats on that point. I intimated at an early stage in the Dáil debate on this Bill that I was——
Mrs. O'Rourke: ——with the inequity in the system of recruitment and I asked the board of FÁS to examine the position with a view to producing solutions. When I had spoken all sides of the House expressed similar concerns and were anxious that something should be done about the matter. I discussed the position with FÁS and I met representatives of IBEC, CIF, SIMI and ICTU at several meetings.
There was general agreement that the current inequities need to be removed from the system. There are, however, sensitivities and complex issues to be taken into account in resolving the problem. We are dealing with contracts of employment between private individuals — employer and apprentice. We are not dealing with the public service. Many of those involved run small operations. It is important that any solution we come up with should not alienate potential employers, particularly at this time as we make the transition from the old to the new apprenticeship system and as we seek to increase the numbers in the system.
Nevertheless, I felt sufficiently strongly about the issue that I contemplated the possibility of bringing in a legislative provision which would give compulsory backing to an equitable recruitment regime. The State would have the right to do this given the investment — £30 million annually between European and national funds — it is making to the training of apprentices.
Mrs. O'Rourke: However, on balance, and in the light of my discussions with employers and employees who feel that the compulsory road would be premature  at this time, I propose to hold off on such an approach for the moment.
I have, however, introduced a new section 4 to the Bill on Report Stage which was approved by the Dáil and which will enable the Minister of the day to make regulations to provide for conditions of recruitment of apprentices. The purpose of such regulations would be to ensure that recruitment is undertaken in a fair and equitable manner. I also propose in subsection (2) that a resolution approved by both Houses will be necessary before the regulation can be introduced. Accordingly, both Houses will later have the opportunity to discuss those regulations and to add to or take from them as they see fit. This is being done in an open fashion. When the regulations are brought forward by the board of FÁS, and it has its statutory remit to carry out its functions, the regulations will go before the Houses of the Oireachtas. It is important to note that.
At this stage it is proposed to develop and operate over a trial period of two years a code of practice to be followed by employers in the recruitment of apprentices. This code has been developed by FÁS and has already been discussed by their board; it is now with the major social partners. I should also mention that the new Programme for Competitiveness and Work commits the social partners to the adoption of this code of practice. Not content with getting it through as we did on Report Stage in the Dáil, I then made sure, with the help of the officials in my Department and in the Department of the Taoiseach and the Central Review Committee, that it should be written into the Programme for Competitiveness and Work. Nobody in sectors with apprenticeships will be allowed escape.
Mrs. O'Rourke: The officials from the Department of Finance who came back on Friday night were glad to confirm that the Commission liked the way we had put forward our programme, the way it was presented and it wants to know how quickly we can get the new scheme in place.
Mrs. O'Rourke: Exactly, we cannot get too fond of levity. I should also mention that the new Programme for Competitiveness and Work commits the social partners to the adoption of the code of practice. The objectives of that code will be to achieve equity through recruitment by open and fair competition; to ensure equal opportunity through filling apprenticeship vacancies on the basis of individual merit, and to promote the use of sound recruitment procedures. Specific measures for achieving these objectives will be outlined in the code.
I recognise there can be a degree of scepticism about the effectiveness of codes of practice. Self-regulating bodies with voluntary codes are fine to a certain extent but legislation is necessary if such bodies do not work. We have allowed a strong voluntary code a limited period and if bodies do not conform further action will be taken. In deference to the concerns expressed we are prepared to give the code a trial period.
I have had a positive reaction from the social partners and I undertook to say so publicly. Both employers and employees came to meet us on this issue. Finally and without wishing to be seen to be wielding  a big stick, the prospect of a compulsory approach remains open if the code is not seen to be effective over the two year trial period. I will be monitoring the position carefully and if I am not convinced it is working we will take the other option.
A new system of apprenticeship is necessary for many reasons. The inadequacies of the “time served” system were first highlighted in the White Paper on manpower policy published in September 1986. A detailed review was subsequently undertaken in 1988 by the apprenticeship review group set up by the FÁS board on the direction of the then Minister for Labour, Deputy Ahern. This group identified the shortcomings of the existing apprenticeship system, the most important of which were that it was not standards based and apprentices could qualify without reaching pre-defined standards; it was too limited in the number of trades designated; employers were not taking sufficient responsibility for training apprentices compared, say, to the German system where employers must provide adequate on the job training and release apprentices for off the job training. Irish employers for the most part were and are not committed to apprenticeship training. The existing system was inflexible. It was incapable of ensuring the apprentices had either an adequate skills base or that skills were updated on an ongoing basis. This was particularly relevant in trades where technology was rapidly changing. It also provided too few opportunities for women, did not facilitate late entry after school-going age and did not reflect the fact that present day apprentices had higher education entry levels than in the past.
The review group published its findings in December 1989 and the process has been going on for even longer than that. The 1986 White Paper was published by the then Minister, Deputy Quinn, in the then coalition Government and his successor Deputy Ahern published the subsequent report. The question of a new apprenticeship system, including the proposals of the review group, was the subject of detailed discussions between the  social partners during the negotiations on the Programme for Economic and Social Progress in late 1990 and early 1991. Agreement was reached on the introduction of a new apprenticeship system.
The new system is to be based on standards and there will be minimum entry requirements. Special provision will be made to encourage female apprentices and such groups as the disadvantaged, the disabled and mature entrants. The system will be modular and provision will be made to determine the duration by the requirements of each trade.
Further discussions were necessary to consider the funding arrangements for off-the-job training and for the appropriate delivery arrangements by the education and training providers, FÁS and the regional technical colleges. Agreements were concluded and the new system commenced on 1 September 1993 for 15 trades. A further ten trades will be brought on stream as soon as possible and as practicable, which we envisage being quite soon; those trades are the remaining ten of the existing trades. The Programme for a Partnership Government recognised the agreement between the social partners and set the objective of building on the scheme.
One main benefit of the new system is that its standards are based on best international practice. The curriculum will include on- and off-the-job training and education. Each apprenticeship will have seven phases, three off-the-job and four on-the-job. This modular structure allows for a certain degree of flexibility. The modular system is increasingly seen worldwide as the best way of delivering education and training.
The integration of the required levels of skill and knowledge in the curricula will lead to more efficient and cost effective delivery arrangements. The raised minimum entry requirements reflect the general increase in the education levels of school leavers. The system can then be adapted to bring in more businesses, apprenticeships and trades.
Structured ongoing assessment will give more valid evidence of attainment during apprenticeship. Modular assessment  makes it easier to update the system if necessary and the new system will be more transparent to users as published minimum standards will form the basis of all assessment.
After the curriculum, the delivery of the curriculum and assessment comes the certification of all proper standards of excellence in any system. The national craft certificate will be a compulsory requirement for craftsperson status as agreed in the Programme for Economic and Social Progress. The new system will have nationally and internationally recognised certification which will provided improved mobility for craftspersons.
A most important need which was impressed on me by teachers, instructors, young people and parents is the need for progression within the apprenticeship system. It is the intention that the training and apprenticeship programmes in the new apprenticeship system should provide for progression to technician and other qualifications for persons able to and interested in pursuing these options.
This will build ladders of opportunity into the apprenticeship system. These have existed in an ad hoc fashion but correct steps are being put in place. Now those who wish and who have the ability will be able to move through different types of third level colleges for certificates, diplomas, degrees and postgraduate qualifications. There should not be a limit to how far people can go.
The new apprenticeship levy in the principal craft sectors of industry will ensure the individual employer will not be directly out of pocket as a result of releasing an apprentice for off the job training or education. That will provide an incentive to employers to conform with the requirements of the apprenticeship curricula.
The purpose of this Bill when first drafted was to provide for a levy to fund the new system and when first presented to me it was intended to be mechanical revenue raising legislation. The officials and I knew that the Bill could not be so restrictive. I could have left the Bill as it stood but I did not want to approach the  matter in that way. That technical aspect remains in the Bill but I realised most parties would want to have a say about the broader issue of apprenticeships, that they would want to discuss how the new system should proceed and what should be done to it. This proved to be the case and I hope I was open to what people had to say, to amendments to the Bill and to a wider review.
I knew it would not be right to confine the scope of the Bill. Officials in the Department and I went to work and accepted many amendments so that the scope of the Bill was greatly enlarged. The system needs funding but it concerns apprenticeships for young people and giving them a proper place.
The discussions within the central review committee of the Programme for Economic and Social Progress led to an agreement between the social partners on funding proposals in respect of four sectors of industry — construction, motor, printing and paper and engineering, excluding electronics — which employ the vast bulk of all registered apprentices. The main provisions of the funding proposals are as follows. Apprentice payments while the apprentice is off the job and a contribution towards any associated travel and accommodation costs are likely to be met from an apprentice fund and matching EU support.
This is only a small amount of the total cost of apprentices which is funded by this country and Europe. The apprentice fund is to be created by the introduction in the four industry sectors of a new employers' apprenticeship levy under which employers will pay 0.25 per cent of payroll to the fund. The new levy should bring in approximately £4 million  in a full year towards the total cost of £30 million in a full year. With the introduction of the new levy the existing levy/grant system in the four sectors will be discontinued. Under existing arrangements companies above certain payroll thresholds in the construction, engineering and motor sectors pay a 1.25 per cent levy, while the paper and printing sector pays 1 per cent. Companies can recoup 80-90 per cent of the costs of approved training programmes depending on the sector involved.
Under the new regime all registered companies in the designated sectors will be subject to the levy of 0.25 per cent, thereby ensuring that all companies which stand to gain from the availability of a skilled workforce will be seen to contribute to the cost of providing that skilled workforce. It is a much neater arrangement and will provide a minimal amount towards the overall cost. The new funding arrangement is aimed at ensuring that there will be no direct costs to the individual employer in those sectors while the apprentice is released for off the job training or education.
The Programme for Competitiveness and Work, which was concluded since Second Stage of the Bill in the other House, makes specific reference to the possibilities of increasing the numbers of apprentices. In particular, it states that employers will be expected to maximise the recruitment of apprentices, that the potential for public sector bodies to contribute to the expansion of apprenticeship will be reviewed, and that the possibility of making it a term of public sector construction contracts that an agreed number of apprentices should be employed on such contracts will be examined by Government in consultation with relevant interests. I specifically requested that the second and third parts of that and the other agreement be included in the section, because there are fine apprenticeship systems in the Army, Aer Lingus, Aer Rianta, Bord na Móna and the ESB. We will have a series of meetings with those bodies to examine how they can be encouraged to expand their apprenticeship systems. It will probably  be down to money, but I want to engage in that process and include the public system to try to get more excellent apprentices.
The Bill is necessary to enable us to provide a mechanism to fund the off the job training of apprentices. The main provisions of the Bill are as follows. Section 2 provides for the imposition of the levy on all employers in sectors which will be designated under section 3. The section also provides that the employer shall not pass on the cost of the levy to the employee. Section 3 gives the Minister power to designate the sectors which will pay the levy. I outlined the agreed sectors earlier. Section 4 enables the Minister to make regulations to provide for an equitable and fair system of recruitment for apprentices. Section 5 provides that the proceeds of the levy shall be used mainly to cover payment of off the job training allowances. Section 6 sets the levy at 0.25 per cent of reckonable earnings. Section 9 provides for the collection of the levy by the Revenue Collector General.
I wish to summarise the main reasons for the introduction of the apprenticeship levy. It is designed to fund off the job training allowances for apprentices in the apprenticeship system. The general features of the new system are as follows. It will be a single and national system. It will be standards based, rather than simply time served. Standards will be based on best international practice. Apprentices will be required to follow a specific course of training and to undergo a series of assessments towards the attainment of required standards. Training and assessment will take place both on and off the job. A national craft certificate, recognised nationally and internationally, will be awarded on successful completion of the apprenticeship. A national craft certificate will be required for one to be recognised as a craftsperson.
All Members of the Oireachtas know from their constituency work how often we meet young people, and perhaps their parents, who say that they cannot get an apprenticeship. The main difficulty is that  they cannot get an employer for the purposes of an apprenticeship. I went to Germany for two days in early January and saw their system, which is considered excellent by many people. I spoke to young people and employers. It is a different market there. Employers, despite their economic circumstances, are still urgently seeking apprentices. However, there is a different historical background to apprenticeships there. Employers value apprentices and the input of young people. They have a strong professional belief that it is part of their job, for the future of their country and their industrial sector, to ensure that young people are properly instructed and learn their trade. Perhaps it is related to medieval crafts and Members will recall the journeypersons of old who went about their business in Europe. They recognised their trades and that was a strong European trend. They also had an industrial revolution, all of which passed us by. This meant that they had mechanisms in place and that employers clearly realised that apprenticeships are necessary, not just in the immediate sense but for the future of their business. This point came through from representatives of trade, employers and young people.
When an apprentice goes to an employer, he or she signs a contract with that employer. This is binding in the German courts. If an employer reneges on it, the employee has redress. If the firm closes or fails, the employer must, by law, place the apprentice in another firm. In turn, if the employee absconds and does not fulfil his or her time, the employer can take the employee and his or her family to court for redress. It is extremely strong and, of course, the Germans love regulations. They are highly regulated in every facet of their lives. This comes from the German personality which succumbs to massive regulation, although I do not think we are partial to that in this country. Our experience shows that this is the case. However, I was impressed. While recognising that we do not have that historical crafts background, nevertheless, we have crafts in a  traditional sense, but not in a utilitarian sense. That is the essential difference. I also recognise that we have a long way to go before we reach that point.
I have tried to use the carrot and stick approach with employers. They read the Dáil and Seanad Official Reports and I urge them not just to think of the immediate future. Firms are in a difficult economic climate, but the recent budget made good changes for employers. I ask them to think not just of the immediate position but of the future of their business and sector. The economic development of the country largely depends on having skilled people with vigour, knowledge, attainments, standards and the will to work in their country. If they go away and come back with additional knowledge, it is all to the good.
Regarding equity, in Germany there are empty apprentice places. No matter how we go about it, there is an intense shortage of places here. We should separate the two issues. Equity in itself will not bring more places, but we hope the extension of the system will do this. However, equity will ensure that those who get places do so on merit. At least people will then have the satisfaction of knowing that the restricted places are given on merit. We all complain from time to time about systems such as the CAO, yet nobody denies that they are fair and just, even though they may be crude, rude, rough and ready.
We are addressing private employers in this instance so it is necessary for constitutional reasons to be careful with the way matters proceed. There is widespread knowledge about the difficulties in getting employers to take on apprentices and the evidence is too strong to ignore that would-be apprentices often get into the system through those whom they know rather than by merit.
I had to undertake a lot of work to have the code of practice considered and I wish to advise those who want to take matters further immediately that there has been a huge leap forward, first, to get recognition of the fact that there was inequity and, second, to have this  inequity addressed by having it processed through a code of practice. If this does not work, then the matter will be taken further.
Mr. Farrelly: I welcome the Minister to the House. She has spent some time addressing the problem of equity and the long term steps that will be taken to deal with this issue. We all realise that heretofore equity was an issue in so far as all those concerned, including ourselves as public representatives, would have known that things were not happening in the presumed manner. Will FÁS be able to deal with this issue effectively under these new proposals? For example, will it be able to deal with the long list of people who apply for schemes at FÁS offices throughout the country but who do not get called? The situation should develop in such a way that people are interviewed and are then short listed for the different jobs and the different types of apprenticeships that are available. That is not the position at present.
The Bill states that the long register in the different offices will be brought to the attention of the employers on request. This is unsatisfactory as it is not intended that FÁS will sponsor apprenticeships under the new scheme. This means that the traditional way for people who do not have a background in a particular trade or skill to attend FÁS and get an opportunity to compete for a place under an apprenticeship scheme is not included in this reform. This is not acceptable, because FÁS should be engaged in the screening and shortlisting of applicants for apprenticeships and should then present a shortlist of suitable people for interview if the employers are to recruit people to apprenticeships.
FÁS would then be the organisation to decide, in real terms, the different apprenticeships which are suitable for its applicants. It would enable it to control the factors referred to by the Minister, such as the 10 per cent intake of women, to which the Minister has committed herself. There is no guarantee that employers, on a random selection, will  meet any quota regarding gender balance and so on. In this respect the recent report by the Commission for the Status of Women makes clear that there should be a time scale in which targets will be achieved step by step, so that in each year performance in this area is measured against a set target. Under this scheme the Government will have no control over the meeting of the targets unless it decides to subsidise employers to discriminate in favour of women. This would add to the cost burden of the scheme for which the taxpayer is already providing substantial sums of money.
I welcome the change of emphasis to the attainment of standards in place of serving time and that there will be specified periods allocated for off the job training, phased throughout the period of apprenticeships. However, I question whether the envisaged period for off the job training of 40 weeks is adequate, because it would not be sufficient that ten weeks per year be allocated to this. An advantage of moving to a system of attainment of standards is that there would not be an obligation on apprentices to serve for a period of four years as their performance would be judged on the attainment of standards.
As the leaving certificate programmes are being reformed to encourage students to take a vocational element in preparation for that examination, it is clear that in the future more young people will leave second level education with much of the prior work completed to equip them to complete apprenticeships quickly and effectively. In this respect may I ask how the Minister proposes to combine the new leaving certificate qualifications for the vocational stream with entry into the apprenticeships?
Mr. Farrelly: I would appreciate a response from the Minister. It is interesting to note that the recent NESC report on education and training illustrated that currently only 20 per cent of our pupils take vocational options compared with 50 to 60 per cent in Denmark and the  Netherlands. This raises a question which we should all address. I recall that when I was finishing school the priority of the majority of sons, as was the case then, whose fathers were working in the local factories was to join apprenticeships——
Mr. Farrelly: ——or a trade in the locality. The reality today is that, unfortunately, one of the main industries in my county, Tara Mines Limited, applies for a small number of apprenticeships and the number of such applications is smaller again at Gypsum Industries Limited. People are not going into training or into the trades, and that is another reason so many people want an on-the-job-list the moment they leave school.
In reforming the apprenticeship scheme we should consider the situation in other countries where more people take vocational modules in their basic training. I appreciate the Minister's aim in proposing to extend apprenticeships to a wider range of trades, but will this unwittingly lead to loading an increasing number of our training occupations into an apprenticeship system which will ultimately be difficult to reform? When the Minister has achieved her targets, will we, perhaps in five years, be attempting to reform the system so that it is flexible and responsive to the needs of the workplace?
A system of certification is desirable so that qualified people can have a standard that will be useful to them in other countries, but it is wrong to reverse training opportunities in a wide range of occupations into a system where the employers control entry. In a few years time this could lead to even more social exclusion as a result of decisions taken now and I ask the Minister to produce the evidence that supports the view that steps being taken now will not create errors which will have to be addressed in the future?
This scheme will be employer led, because unless a person can get an employer to sponsor him or her there is no way that they will be able to avail of the apprenticeship training. We have  been advised that the number of apprentices will be increased, but I cannot see this happening, given that the scheme will be employer led. Also, irrespective of the way we might encourage companies in the interest of skilled entrants, which is of vital importance, companies will not be in a position to give a commitment to guarantee a minimum of three years, allowing for intermittent breaks to attend off the job training at FÁS centres. Regional technical companies will allow this, but I cannot foresee the anticipated boom envisaged by the Minister.
This is a matter of some concern, as I am aware from representations made to me by people over the last 15 years seeking a place. The only positive approach I can make in response to that as a politician, and I would not be fulfilling my duties if I did not take this approach, is to go to an employer to ascertain if there are any vacancies and, if so, to urge that such people may be considered on a trial basis. Over the past five to seven years it has become harder than heretofore. Fewer companies take on apprentices, yet the number of applicants is substantial. At present this is employer led and it remains to be seen whether the changes the Minister is making will improve the situation.
The levy is the core part of this Bill and I worry about that. Although it is not a lot, 0.25 per cent is being added to employer costs. I have friends involved in different businesses who tell me about costs. For example, one often hears about the huge sums of money builders make. A builder building on a green field site must construct roads, drains, etc. and before 1p is available to him and before the houses are built, the total tax, VAT, etc., on every house built is 34 per cent, excluding material costs. These people are interested in taking on apprentices, but when one looks at the extra costs after everything is paid, including wages, taxes and materials, only a small amount of money is left. I am not talking about large builders, but small ones who build  a few houses each year. Another 0.25 per cent will come out of profits.
I recognise Ireland has a problem in that employers unlike those in other countries, have not been willing to make a commitment to training. We have few instruments to encourage people to become involved in training. The levy system plus the apprenticeship is like the levy and grant system available heretofore. I hope we are changing it around for the better. The principle of it was attractive in that people paid the levy and were encouraged to draw down the benefit by recruitment. The principle of this proposal is also attractive and businesses should see the value of taking on apprentices. I encourage them to do so because the cost of having the required number of apprentices would improve the situation.
The Minister referred to moneys available. We are delighted to hear the Minister's little cake is safe and that the money for the apprenticeship scheme will be left intact, despite the debacle regarding the £8 billion. We will have the opportunity to discuss that later today.
Mr. Farrelly: It does not say a lot for those who were supposed to secure the funds. I ask the Minister about a report in a newspaper stating that funds for 11,500 places would be scarce. This related to the placement of people on schemes this year. Will the Minister guarantee that there will not be a shortage of funds in regard to the number of placements?
Mr. Farrelly: The Minister did not give targets in respect of the different programmes. For example, will a target be  set for places available to the multi-skilled? Will the 10 per cent which the Minister spoke about be reached in regard to the position of women on courses?
The Culliton group and the Kerins group compared training here with that in other countries. We do not come up to scratch in that regard. The Minister mentioned Germany, which has a system in place for many years. I had the opportunity to talk to people there on a number of occasions. If we follow the system in that country perhaps we will have a successful new apprenticeship system in the future. Employers and the Government must give a commitment in this regard. I ask that we be given targets and that these should not be reviewed every five years but on a yearly basis. It has taken 20 years to reach this point and the Minister may say five years is not too long to wait. However, it is for those who would like the opportunity to provide a system.
On Report Stage in the Dáil the Minister made some welcome changes to the proposals but there are other areas of apprenticeship which should be considered. For example, we should work in areas of high unemployment. I listened to Mr. Gay Byrne's radio programme this morning. Three mothers were interviewed about their young children aged 13 to 15 who are in prison. They do not have the opportunity to get help or work. I will be bringing forward proposals in the future suggesting how a substantial number of people could be brought into the apprenticeship system through local government. When finalised, I hope the Minister and the Government will consider these proposals favourably.
Although few are being taken, many people are available and looking for apprenticeships. We must look to areas over which we, as politicians, have control — for example, local authorities — to see what we can do to organise systems. Fully trained foremen could be employed instead of being paid to be unemployed and young people could be taken on apprenticeship schemes to build local authority housing. There is no reason why this cannot be done. Trade unions  and the social partners may say it is cheap labour.
Mr. Farrelly: They do not have to be employed after five years when they may look for jobs. They could build local authority housing at less than 20 per cent of what we pay at present. I thought about this on Monday at our council meeting, when the manager informed us we had approvals for 60 new housing starts in County Meath and will build two houses on each of 17 sites. I do not see a problem with this. This proposal would benefit some of the young people talked about on radio programmes who have had no opportunity to start.
Our budget is about £25 million to £27 million a year. When the budget for building houses is added, the amount rises to £40 or £50 million. We should provide places for young people and give them opportunities to acquire skills in trades. We are paying them to stay at home; we should give them an opportunity to work. I will have costs on this in the near future and I hope the powers that be will say this can work. I will put forward this proposal to my local authority. I have no doubt that nationally 3,000 or 4,000 people could be in apprenticeships with people who are fully qualified but are unemployed; they could be employed to ensure people on apprenticeships get proper training. If we are not innovative enough to consider such a development, we will not get anywhere.
Professor Hillery: The objective of the Bill is straightforward; it is to raise the payroll levy to fund the new apprenticeship programme of FÁS. It is intended to pay off-the-job allowances for young apprentices. The Minister has rightly broadened this issue. Apprenticeship is an important feature of a much broader scene. We are a small open economy and live from our exports. We need to be more competitive. Skills and training are of crucial importance. We aim to reach the living standards of our European  partners. We can achieve a certain amount through public policy and expenditure but at the end of the day, the private sector is the engine of growth and offers the key prospect to increased employment, output and productivity. There is a constant need to search for a competitive advantage and this is where skills, crafts and the quality of our workforce come into play. We need to be better and have an edge now that we have to compete internationally. It is the international comparisons which count.
The Minister has been in Germany, one of our EU partners and export markets. He touched on the esteem and recognition which should be given to crafts. We have a problem in that parents and children have a preference for white collar occupation not according the same esteem to craft qualifications. We are preoccupied with white collar employment. The Minister confirmed what I have been hearing for some time — that young people, parents and employers in Germany accord esteem to craft qualifications. There is a long standing attitude and stereotyping among young women and their parents about the type of jobs they should enter.
I welcome the FÁS provision for women plumbers, electricians, brick layers, plasterers and so on. As the Minister said in the Dáil, there is a fair amount of home conditioning in this regard as well as the broader environmental factors. I was delighted to see a young woman carpenter work outside my office in UCD, Blackrock, recently. She was the first woman craftsperson I saw doing such work. This shows we are making some progress but there is a long way to go. There are institutional and attitudinal factors to be overcome.
I welcome the off-the-job training support the levy will provide. By international standards we are well below other countries in terms of such training. This was confirmed in the Roche Tansey study, which was part of the Culliton report. It has taken time for the apprenticeship system to be put in place but the value of this time is that there is now a  consensus in support of it. It has been teased out in full and is leading to a national system with a national certificate based on standards. We all know good crafts people who came out of the “time served” system in the past. The great majority of them never sat final craft exams and do not have evidence, in a recognised or accredited sense, of the level of skill they have achieved. In this day and age qualifications of an accredited and respectable standard are an imperative in finding jobs at home or abroad. The levy applies to certain craft sectors and I am glad other sectors will be added shortly.
I would like to hear figures on the number of apprenticeships. I gather from the Minister's Dáil speech that there are 14, 000 at the moment. The numbers entering the labour market each year, including great numbers of young people, average 23,000 to 25,000. Many people are looking for opportunities in a variety of avenues, including apprenticeships.
When I was chairman of the Oireachtas Joint Committee on Employment over a year ago, FÁS provided evidence to the committee on two occasions. There was some criticism, on a general level, of FÁS. As increased funds became available there was a tendency to add another scheme which was funded by the latest tranche of funds. It seemed to me and others that there was a case for rationalising the range of schemes and courses available to have a more focused approach to the training schemes and, in particular, to value for money. FÁS has a good track record on craft training. This was acknowledged in the Roche Tansey study. Employers in craft based companies when interviewed held FÁS in high regard. It is important that where credit is due it should be acknowledged.
I am glad there will be a structured, on going approach to assessment under the new apprenticeship system. Concrete steps will be assessed at particular stages and the attainment along that continuum will be established. In the UCD faculty of commerce, where I work, we can accord up to 40 per cent of the marks in individual subjects for continuous assessment.  This provides the opportunity not alone for a test of attainment at a particular time, which is the essence of what we are saying, but to counsel and advise students who may not be reaching their potential and encourage and guide them to a better performance at the next testing stage.
The Minister highlighted the important issue of equity. She wants to have a transparent system which will show it is a meritocracy. The practice up to now has been that who one knows is more important than the talents young people possess. It is important to tackle this. I am encouraged by the Minister's concern with fair access to apprenticeships. It is important to have balance. It is one thing to have access but it must be for people with the talent to be placed. We are relying on private sector employers to take on apprentices. They must have a voice but they need to do more in terms of recognising the value of training, even in bottom line terms for their own companies. This is an investment in a human resource as opposed to a cost. That is where the problem arises; there is too much emphasis on the cost of training as opposed to the value and contribution it can make, even in cold economic terms, to bottom line results.
I urge employers to accept the code of practice into which the Minister has put so much work and to address this problem. It is at the discussion stage and it is important to follow through. It is preferable that employers should do this voluntarily than that we would adopt a heavy handed approach to them later.
The Minister aptly described the progression from apprenticeship as ladders of opportunity or a continuum building on existing success. I can envisage a situation under the new system where people who attain craft qualifications would progress, for example, to certificate or diploma level in the regional technical colleges and go on to degree level in the regional technical colleges or universities. In my faculty of commerce, not that I particularly want to plug it, we now have a well established transfer system for certificate holders in business  studies from the regional technical colleges who can get exemption from first year commerce and transfer into second year. I am glad to say that those students who have transferred from the regional technical colleges into second commerce continue to do very well in the B.Comm. degree and go on to do masters degrees if they wish.
There is another dimension to this progression: where public funds are invested in educational institutions, there is a duty on such publicly supported institutions to assist with access and progression and to provide opportunities for those who are relatively disadvantaged. We all know they must reach a particular standard in order to make these transfers which must remain in place.
In the Oireachtas committee, we found that we do not have a skills shortage per se but a skills deficiency. Craftsmen here have a lower level of skill than their counterparts in Europe. To compete internationally we must close the gap if we are to be as good as our competitors and to win much needed exports. The whole thrust of what the Minister said has to do with lifting skill levels to international standards, not only to compete but to cope with the additional pressures of the Single Market. The general view is that we do not have a skills shortage at present but if we do not act now we will have one by the end of the century.
Employers have a particular duty and need to be convinced of the added value of improved skills as a contribution to the output and quality of their production and to view training as an investment in human resources which will benefit results as opposed to being a cost. There is a national contribution in that sense. As the Minister said, there is a vision in Germany that by doing a good job in one's industry one contributes to the national cake.
One of the most important aspects of this Bill is the fact that it is raising the status of the apprentice. I am old enough to remember when an apprenticeship was a sought after and highly valued job. However, in recent years many apprenticeships have slipped badly from the training point of view and quite a number of apprentices felt that, although they were lucky to be in a job, they were being unfairly exploited.
It was essential to put the emphasis on certification. From a national and international point of view, it is essential for people to receive a piece of paper at the end of their training course. Nothing is regarded as relevant now unless one can produce a piece of paper to show that one successfully completed a training course. Many apprentices who were quick witted enough to know that got City and Guilds certification which gave them an edge on the national and international market.
Senator Farrelly referred to fairness in recruitment. While I am sure the Minister has been wise in leaving a two year lead-in time for private employers because it is these, after all, who will take in these apprentices, that will have to be very carefully monitored. As we all know, the most important factor can be who one knows. I can understand, in a way, how this happens because it is a personal thing to take someone into a firm, particularly a small one, and naturally a recommendation from someone one knows or who is already working in the firm is extremely important. On the other hand, it is extremely hard on young people who are from disadvantaged areas, perhaps, with other members of their family unemployed, to manage to get one of these apprenticeships. The Minister will have to be kind but firm in a couple of years time when this legislation is implemented.
With regard to the education system, Senator Farrelly rightly talked about the lack of study of vocational subjects in recent years. I ask the Minister to ask the Minister for Education to have leaflets  prepared in her Department telling parents about these new apprenticeship schemes because many parents will not know they exist or their value. The Minister could begin with the career guidance counsellors in the schools but she will also have to reach parents. In some areas, apprenticeships have got a bad name in that apprentices were used for a number of years and got nothing at the end of it. This urgently needs to be rectified and the Department of Education must contribute.
The quotas for women were mentioned earlier and this was strongly addressed by the Commission on the Status of Women who said that unless women got into areas of employment which were predominantly male we would never see an increase in the income levels for women. There has not been an improvement in this area; the average industrial wage for women is still 70 per cent of that for men. I heard on the radio this morning that the hourly rate for women is only 80 per cent of that for men. A good deal of monitoring will have to be done in this area.
It was not clear to me from the Bill if discrimination against women getting apprenticeships could be taken up with the Employment Equality Agency. I was not sure if these apprenticeships would be covered by the agency and I would like to hear the Minister's views.
Positive policies will have to be implemented to get women into some of the more traditional male areas and I urge the Minister to do this. It would also be a good idea to set targets, such as having women in 10 per cent of apprenticeships in traditionally male areas. There should also be a substantial number of women on the boards monitoring these targets. The target of 40 per cent women on State boards set by the Government has run into difficulties, but it is important that there be a large number of women on the assessment boards. The unions should also be involved to ensure they play their role. To date they have not actively encouraged the promotion of women in traditionally  male areas and I ask the Minister to get them involved.
Another important issue in the involvement of women in any area of employment is the lack of child care facilities. The Minister has always been enthusiastic about the provision of child care. I speak as president of Cherish, which encourages young single mothers to become economically independent. It is essential to get them into courses like this, but if they are to be enormously financially disadvantaged by trying to become economically independent, there is little to urge them to become involved in apprenticeships. The State has to be involved in this area because most of the employment opportunities will be in firms which will be too small to provide child care facilities. Women constantly have to reconcile domestic and work responsibilities. It would also be important in the context of encouraging mature women with families to re-enter the work force and get involved in skilled crafts. There are already many women employed in the printing industry but not in the higher levels. It is important that the Minister consider child care for these women.
I would like to hear more from the Minister on disabled persons. A large effort was made to get disabled persons into mainstream employment and these apprenticeships could be very important. It is difficult, but again we could set a target for the number of apprentices being filled by various disabled groups. The forum for disabled people would be willing to help. As the Minister knows, it has not been difficult to get disabled people involved in employment in the State sector. Many of them have been readily absorbed into the State sector. If they are given counselling and career guidance as to the areas where it would be best to apply, we could make major efforts there.
We should also do something for prisoners. There are training facilities in the prisons at the moment. Printing is one I am almost certain I saw in Mountjoy. I have great admiration for the Governor of Mountjoy Prison, Mr. John Lonergan.  I am sure he would pay the levy if it would help those in prison training programmes to get involved in apprenticeship schemes. The Minister could introduce a system whereby prisoners could start their apprenticeship in printing or another craft in prison and when they are released be placed at third or fourth year level of their apprenticeship in a firm outside. There is little training available in prisons, but this would be a concrete effort to make this training useful. The prisoners could see themselves making progress towards a certificate. If they are able to do courses with the Open University, I hope we could organise it so that they could work towards their apprenticeship as well.
The State and semi-State agencies are in a position to take in trainees and apprentices, for example, in the health boards, the ESB and the local authorities. The Minister should encourage them to be in the vanguard of all improvements because she will be in a better position to monitor them. I warmly welcome the approach the Minister has taken. I would like to see targets set and some form of monitoring of these targets put in place. It is easy for us to establish excellent schemes and in ten years time look at them and find with great disappointment that not as much has been done as one would have hoped or expected. I congratulate the Minister on the Bill.
Mr. Maloney: I welcome the Minister and this Bill. For many years we have heard much about the collection of levies. This is the correct approach to take in the present situation. The Minister mentioned that we are behind other countries in the area of training apprentices. This is the first time we have addressed the situation in other EU countries. The Minister mentioned Germany, for instance. We are starting to recognise that we have lagged behind for many years and for once we are approaching the situation in an organised manner.
I welcome the craft certificate. Politicians receive many representations about the lack of recognition for craftspersons.  People mention to me that their sons have done various courses but that there is no reasonable recognition of the work they have done. When they look for employment they have nothing to show that they have benefited from a training scheme.
One hears much hype about recruitment, but there is a feeling that there is a lack of fair play in certain areas. As the Minister rightly stated, it is sometimes who one knows and not what one knows that matters. We have to work to eliminate this. With regard to the age profile of people looking for jobs, the person approaching 40 or 50 years of age does not want to think they are out of the job market. It can become very depressing for such people and we have to ensure we do not discriminate against these people in the area of recruitment.
The Minister mentioned small operations, which is an area about which I am concerned. I have seen employers take on people from FÁS and other schemes and they have used it as an opportunity to make older workers redundant. This has happened in a number of firms. As a trade unionist I have had to work against it on a number of occasions to ensure that employers do not step out of line. People give 15 or 16 years to a firm and are regarded as being old because they are approaching 45 or 50 years of age and are possibly unable to do the job as quickly as a young person who is in the firm six months. Redundancy is offered to the older person and the young person who started on a scheme is kept on. I hope that type of thing will not happen.
We must seriously examine the compulsory element in this. It is not right that people should say they are not interested and are going to opt out. The State is making a substantial investment of £30 million in the training and apprenticeship scheme and there must be some accountability. I accept that after what could be regarded as a two year trial period, we are going to examine the scheme. We must seriously examine this at the end of the day. I am sure we will learn as we go along but it should not be ruled out.
 Senator Farrelly mentioned local authority housing as an area in which apprenticeship schemes could be utilised. Since house improvement grants were abolished people find it difficult to get the money to improve their homes. When the elderly or the socially disadvantaged applied for these grants they first got an estimate but when the contractor was paid there was not much left to pay for the finishing touches. If that work had been done by somebody in the community — a carpenter or somebody who had served his time in the building trade — it might not have cost so much. This is another area we must examine.
Senator Henry mentioned child minding and creches. There are many people in the public service who bring their children to someone else's house each day to be looked after. There is no revenue in this for the State. We should utilise the services of well trained people, such as nurses and ancillary hospital staff. Maybe a training scheme should be considered because if there were proper creches in each local authority area we could provide permanent employment and we would be collecting taxes which would benefit the State. Child minding is one area where people could be trained to do the job properly.
The disabled is another group for whom more should be done. The Programme for Competitiveness and Work has addressed many issues to help the disabled and other groups get work within the public service. ICTU are doing a great deal of work for the disabled as well under the quota system, and we should do as much as we can to see that these people are given help. Many of them are excellent people who are not able to survive in that kind of a world because of their disability. I welcome the Bill.
Mr. Cotter: I too welcome this Bill. Since the Minister took over this portfolio things have begun to move in the area of apprenticeships and about time. For years we have been waiting for somebody to pull together a system that had failed but nothing was happening. There  was a lot of thought and discussion but nothing was happening. The system of apprenticeships was killed by bureaucracy, and we all recognise that. Companies which traditionally took on apprentices refused to do so because it was too expensive. A huge burden was placed on companies who decided to take on apprentices and in the mid 1980s when the scheme was modernised — it needed to be modernised — companies stopped taking on apprentices. It is now 1994 and this is the first indication we have that something fruitful is going to happen. It is an absolute disgrace that nothing has happened until today.
The Minister set out a programme last year and this Bill will push it one step further. I congratulate the Minister for doing something that should have been done years ago but I have to criticise her predecessors who did nothing in the intervening years. It was plain in 1988 that the system had failed. The small employer who took on one apprentice every year stopped doing so. Bigger employers and the multinational companies who did not have any shortage of money stopped or cut down their involvement in the apprenticeship scheme because of the administration and the administrative costs involved. Because the system failed many families whose children traditionally became apprentices have suffered. Parents harassed employers and paid whatever levies were asked of them if that would secure apprenticeships for their children. Youngsters I know decided to work as apprentices for nothing because they wanted to acquire a qualification. That practice has been going on for too many years, and there was no response from the Department or the Minister for Labour.
In relation to today's Bill we can look back and criticise and the criticism has to be accepted but that does not mean this legislation is a panacea for all those ills. It is not compulsory under this Bill for anyone to take on an apprentice and it should be. If a company is employing four electricians, it should be compelled to take on at least one apprentice electrician;  if it employs four plumbers, it should be compelled to take on one apprentice plumber. We could make a very strong case for compulsion in this area because a company which needs the services of experts of this kind now will need them in the future as well. We have to force them to provide for the needs of the future.
I do not believe the German system is great because the people there have the interests of the country at heart; I do not believe a great sense of nationalism in Germany is bringing about a good apprenticeship system. The management is doing it. The Minister might consider making it compulsory for companies which use qualified people to take on a quota of apprentices to meet their future. We should at least discuss this; maybe we would reach a consensus on it. The system has been a failure for the past seven or eight years so there must be a shortage of qualified people at present and I imagine many companies are employing unsuitable people.
No matter what anybody says about the old apprenticeship scheme, people spent four years learning from somebody who knew their job. There were faults and failings in the scheme which was used by many employers as cheap labour. Small builders used to carry an apprentice because an apprentice, who did not have to leave the job for 15 weeks each year, was useful; an apprentice did a day's work and did not cost a small builder much money.
Small builders stopped taking on apprentices when it became too costly. The Minister has an opportunity now to start a new scheme and I suggest it will function best if she includes an element of compulsion. Now that the levies have been reduced and the cost will be spread across all sectors of industry, the compulsion will not do any damage. Encouragement is not enough. There should be a compulsory element in the scheme.
I look forward to the Minister's response and to a good discussion on this Bill and on the scheme in general over the next couple of weeks. I congratulate the Minister for doing something that  should have been done years ago. She has grasped the nettle and we will support her efforts to produce a good apprenticeship scheme. The country needs it and it is up to us to ensure that the finished product will be a good one.
Mr. Lanigan: I welcome this Bill, which, as other speakers have said, has been a long time in gestation. For many years there have been problems in the industrial area because of a lack of apprenticeships in certain industries and a reluctance by employers to take on apprentices in other industries. Many of the problems in taking on apprentices occurred because there was a downturn in certain industries, particularly in the motor industry with which I am familiar. As a result of that there was no need for training in the short term and, on the other hand, there was no money to subsidise long term training or apprenticeships. In addition, when people took on apprentices they found that if they were not kept on in the bigger firms they went “on their tools” as it was called. They stuck the tools in the boot of the car and did the jobs for which they had been trained, which cost employers a lot of money. A large number of these people have still not been brought in from the black economy. Unless they are, there is no point in suggesting there will be anything but reluctance on behalf of certain trades to take on apprentices. It has been too easy for these people to work without getting into the PAYE/PRSI system and because of that legitimate businesses have suffered immensely. It is very necessary to bring these people into the PAYE/PRSI system as well as providing incentives to take on apprentices to secure the future of certain trades and industries.
When the word “levy” appears in the title of a Bill, people look carefully at it and wonder if this is another imposition on what is considered by business to be the already high cost of taking on people. The less costs you have the better both businesses and apprentices will get on in the long term. There have been criticisms  that this new apprenticeship scheme will be employer-led, as if employers are bad boys and should not be praised. If you do not have employers you cannot have apprentices and, let us be quite straight about it, if you do not have employers who are willing to take on apprentices this Bill is going to fail. People who criticise employers should think twice because without them there would be no need for apprentices in the first place.
It has been stated that in the past there has been an insularity or an incestuous relationship between employers and those they take on, such as friends of friends, sons of friends or daughters of friends. One must be careful before one criticises on that basis, because if you know the background of somebody who is coming to work for you there is a better chance of a good relationship between you and the apprentice or employee. That does not mean that there should not be a relationship between FÁS or the training operator and the employer, but it has to be on a two-way basis. It would be absolutely impossible to run an apprenticeship scheme if an employer was forced to take on an apprentice whom he felt would not fit in. The relationship between apprentices and the master or employer must be nurtured and protected.
I would not like to see people go overboard and suggest that there has to be an absolutely open competition for apprenticeships because it just would not work. First impressions are often best, although that is not always so. In many cases, however, if an employer feels that the person is being imposed on them as an apprentice, the relationship between them could break down and you would end up with a bad apprenticeship scheme for that person. I would like to see if there is some way of marrying the goals of FÁS and the employers to ensure that square pegs will not go into round holes. This is an extremely necessary element.
The changes being made to bring people into apprenticeship schemes which gear them towards technical and practical educational standards are good. In the past long apprenticeships did  nothing for the apprentice in many cases, although there was a certain amount of floor sweeping and cleaning up in the first year which introduced discipline to the training scheme. In the past also much of the training was done on a practical level with the material or job of the day. No forward training was involved and so no skills were learned for the future. Such people were being trained in the technology of the day but received no educational training to transfer to the next phase of technology. It is essential to have a system where technical skills are learned along with the educational skills required to advance to the next phase of technology.
The small number of female apprentices was mentioned. That goes back to the reluctance of parents — not only in regard to apprenticeships but also to semi-skilled or unskilled work — to allow their children to work in a factory. People, especially in rural areas, thought for some reason that factory work was something to be looked down on. This attitude was allied to the social mores of an area rather than the fact that there was anything wrong with factory work. The old image of the Industrial Revolution-style factory with muck and dirt all over the place has changed dramatically and modern industrial units are a pleasure to work in.
We must have more contact with smaller industries. In official circles, particularly in FÁS, small industries are thought of as employing from 50 to 250 people whereas 90 per cent of jobs in this country are provided by companies with ten employees or fewer. The very small employer has to be taken into account. In a sense there was a contradiction in some of the contributions, because people complained about past standards in vocational schools. It must be said that vocational schools did a tremendous job of producing well trained apprentices in the past, in association with the big central training schools. I would like to thank the TUI and the vocational schools for what they have done in the past. I welcome the Bill.
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