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TRAINING GUARANTEE (OUTSTANDING TRAINER) REGULATIONS 1991 NO. 309
EXPLANATORY STATEMENTSTATUTORY RULES 1991 No. 309
Issued by the authority of the Minister for Employment, Education and Training
Training Guarantee (Administration) Act 1990
Training Guarantee (Outstanding Trainer) Regulations
Legislative Authority
1. The Training Guarantee Administration Act 1990 (the Act) and the Training Guarantee Act 1990 provide the legislative authority for the Training Guarantee Scheme, under which, from 1 July 1990, employers with an annual payroll at or above the threshold (currently $214,000) are required to spend a minimum amount on eligible training activities. This amount is the equivalent of 1 per cent of payroll in each of the first two years of the scheme, rising to 1.5 per cent in the third year. Employers who do not achieve this expenditure (ie who have a shortfall) are liable to a training guarantee charge.
2. The Commissioner of Taxation has the general administration of the Act.
3. Section 102 of the Act provides that the Governor-General may make regulations for the purposes of the Act.
Outstanding Trainer Regulations
4. The Act (s18A) provides that the training guarantee charge is not payable by an employer if, under regulations, the employer is taken to be an eligible outstanding trainer. The administering agency for this provision is the Department of Employment, Education and Training.
5. The purpose of this provision is to allow recognition of and to exempt from the provisions of the legislation, employers who can demonstrate a substantial commitment, in both quantitative and qualitative terms, to training. This involves meeting criteria considerably in excess of normal Training Guarantee requirements.
6. The proposed Regulations set out the conditions for the granting of eligible outstanding trainer status to applicant employers. Eligible oustanding trainer status is granted for three years.
7. For employers to qualify for such status, and therefore for exemption from the provisions of the legislation for a period of three years, they must be able to demonstrate in respect of their performance in a full year (known as the "reference year", this is the year preceding the application) that they
• had a training plan which met a number of qualitative criteria relating to aspects such as content, coverage, consultation and evaluation, and
• expended on eligible training activities (as defined in the Act) at least the equivalent of 5 per cent of annual national payroll.
8. Employers are required to demonstrate their performance in respect of these criteria by obtaining certificates of compliance from certain nominated types of bodies.
9. The Regulations also provide that, if outstanding trainers do not maintain the level of training performance set for the initial granting of status, their status (and the exemption) may be revoked.
Details of the proposed Regulations are attached.
10. The proposed Regulations are retrospective to 1 July 1991 to allow exemptions granted during 1991-92 to commence at the beginning of that financial year. The retrospectivity does not offend s48 of the Acts Interpretation Act 1901 as no individual is prejudiced or suffers liabilities.
Commencement
11. The Statutory Rules will take effect from 1 July 1991.
Notes on Regulations
12. Regulation 3 - Interpretation provides a number of definitions required as a result of later Regulations, notably
• the "changes in circumstances" of an employer upon any of which, under Regulation 15, the employer is required to notify the Secretary to the Department,
• that "nominated year" refers to the year in which an application is lodged, and
• that the "required fee" which must accompany applications for eligible outstanding trainer status is $150, indexed automatically for later years by an indexation factor based on average weekly earnings (AWE).
13. Regulation 4 - Training Consultative Committee defines for the purposes of Regulation 8 a second type of body which can provide a certificate of compliance with qualitative requirements as reflected in the applicant employer's training plan. Variations of these training consultative committees have already been provided for (and are operating) under certain industrial awards and are clearly in a position to verify an employer's claims about the achievement of qualitative criteria. Where they already exist or where employers are prepared to establish them for this purpose, it is intended that they be permitted to fulfil a function otherwise restricted to existing registered industry training agents.
14. Regulation 5 provides that employers may apply for outstanding trainer status and outlines the requirements for such an application. The application must be accompanied by certificates of compliance in respect of both qualitative and quantitative criteria (Regulations 8 and 9), a statement from the employer's chief officer (under Regulation 7) and an authorisation which allows the Department to provide information to the Commissioner of Taxation. The application must also be accompanied by the required fee and must be received by the Department in the nominated year.
15. Regulation 6 provides that members of a business group (this is a question of being related, which relies on the test of relatedness in the Companies Act 1981) may elect to be treated as a single employer. Such an election must accompany an application (Regulation 5).
16. Regulation 7 requires that an application for eligible outstanding trainer status must be accompanied by a declaration from the chief officer. The purpose of this provision is to ensure that the chief officer of an applicant organisation is aware of and accepts responsibility for both the application itself and for the organisation's performance during the exemption period. During the exemption period, of course, the organisation will not be subject to audit for Training Guarantee purposes by the Australian Taxation Office (ATO).
17. Regulation 8 deals with the certificate of compliance in respect of the qualitative criteria - the training arrangements which the employer had in place during the reference year.
The Regulation restricts the granting of such a certificate to two types of bodies, either an existing industry training agent (registered under section 91 of the Act) or a training consultative committee as defined in Regulation 4.
The certificate must contain two elements - it must certify that the employer met the requirements of subregulation (2), which deals largely with the employer's training plan and processes; and it must also identify those training programs, actually delivered during the reference year, which meet the criteria of eligibility contained in section 27 of the Act.
This provision recognises that a training plan, while an important element of quality training, is developed prospectively and may, for very sound reasons, be amended or otherwise departed from during the course of any year.
The existence of a training plan containing certain elements is a fundamental qualitative criterion.
The delivery of training which meets at least the same minimal tests of eligibility as are required of all other employers, by the Act, is clearly also a meaningful test for outstanding trainer status.
Subregulation (2) stipulates the criteria which the employer's training plan and his processes must achieve in order to qualify for a certificate of compliance. As well as the discipline of actually developing a plan ((2)(a)), an outstanding trainer would also have given attention to, for example, which sections of the workforce need particular types of training ((2)(b)(i)) and whether appropriate mechanisms were in place to assess the efficacy of specific training (2(b)(iii)).
An outstanding trainer would also be aware of training priorities for groups within his workforce and would take into account the training needs of disadvantaged groups ((2)(c)).
This Regulation recognises that decisions about training and training priorities will be taken in the context of commercial considerations and, for example, those disadvantaged groups will not necessarily be represented on all, or even any, training programs in a given year. It is important, however, that an outstanding trainer can demonstrate that he was aware of the ramifications of such decisions and, indeed, had consulted with his employees before such decisions were taken ((2)(d)).
18. Regulation 9 deals with the other certificate of compliance, relating to expenditure on eligible training activities.
This certificate must be provided by a person with qualifications appropriate for such a task (a "registered company auditor"). The task will involve identifying from the employer's financial records the amounts attributable to eligible training programs actually undertaken in the reference year.
The judgement about whether a training program is eligible will have already been made, by a body expert in training matters, in the context of the previous Regulation (8(1)(c)).
The Act imposes an obligation on all other employers (over the threshold and not otherwise exempt) to spend at least 1 per cent (rising to 1.5 per cent in 1992/93) on eligible training activities. This is intended to represent a minimum rather than an optimum level of expenditure. To qualify as an outstanding trainer, expenditure significantly above this is necessary.
The eligible training expenditure of a successful applicant for outstanding trainer status must be at least the equivalent of 5% of the annual national payroll of the employer in the reference year.
19. Regulation 10 requires the applicant employer to authorise the Department to inform the Commissioner of Taxation of applications for, the granting or the revocation of outstanding trainer status.
The Commissioner has the responsibility for ensuring compliance with the Act, which involves, among other things, undertaking audits of selected employers. The granting of eligible outstanding trainer status exempts employers from this process. It is fundamental, therefore, that the Commissioner be able to identify exempt employers to ensure that they are excluded from his audit strategy.
20. Regulation 11 describes those persons within the Senior Executive Service of the Department to whom the Minister may delegate the power to make decisions or to revoke a decision about eligible outstanding trainer status.
21. Regulation 13 provides that a successful application for outstanding trainer status, regardless of when within the nominated year the application is lodged, will effectively be backdated to (ie the exemption from the provisions of the legislation will begin on) the first day of the nominated year (1 July). The exemption period will then comprise the nominated year and the next two years.
22. Regulation 14 allows the decision maker to make public a list of successful applicants for outstanding trainer status. Part of the rationale for the outstanding trainer initiative was to provide recognition for these high achievers but it was also intended that their existence would be publicised as an example to other employers.
23. Regulation 15 requires an employer to notify the Department if any of the circumstances (detailed in Regulation 3-Interpretation) change.
This Regulation, in conjunction with Regulation 7, places an onus of responsibility on the chief officer of an organisation neither to seek to obtain nor to retain outstanding trainer status if the organisation is not achieving the criteria on which the status is dependent.
The Regulation also ensures that the Minister and Department have access to reliable information about organisations to which they have awarded such status.
24. Regulation 16 allows the minister or his delegate (decision maker) to seek information from an employer indicating why outstanding trainer status should be maintained.
The purpose of this provision is to allow the minister or the decision maker to obtain sufficient information on which to make an informed decision, and to allow an employer to state his case before a decision is taken which may be deleterious to him.
The decision maker may seek the employer's statement after receiving a notification under Regulation 15, or of his/her own motion.
The employer's reply must be made not-later than 30 days after the request. A penalty is prescribed for an offence against this last provision.
25. Regulation 17 deals with the revocation of decisions to grant eligible outstanding trainer status.
There are a number of scenarios which may arise and they are, of necessity, detailed and dealt with separately in this Regulation.
If, for example, an employer notifies a change in circumstances which is significant enough on its face to warrant revocation of status, this Regulation provides that the decision maker may choose to act on the notification (17(4)) and must do so not later than 30 days after receipt of the notification.
If, alternatively, the decision maker receives a Regulation 15 notification and decides to seek more information (under Regulation 16) before making a decision about status, the Regulation provides that a decision must be made not later than 30 days after receipt of a reply or 35 days (in the case of non-receipt of a reply) after the expiry of time allowed.
If the decision maker of his own motion asks an employer for information (under Regulation 16) the time limitations on a revocation decision apply, as above.
Subregulation 17(6) allows the decision maker a discretion in relation to when a revocation will take effect. In some circumstances the administrative inconvenience (to, among others, the ATO) of applying a revocation for a part of a financial year may outweigh the desirability of applying the revocation immediately. In such cases the decision maker may express the revocation from a later date - for example, 1 July next occurring.
Subregulation 17(7) provides that reasons for a revocation must be provided, in the first instance, along with the written notification of such revocation.
26. Regulation 18 provides for appeals to the Administrative Appeals Tribunal (AAT) against three types of decisions.
Subregulation 18(2) ensures that employers in receipt of notifications under Regulations 12 or 17 (about the decisions referred to in (8(1)) are aware of their rights under the AAT Act.