Inquiry Into Skills Shortages in the Rail Industry

D09/0201430

VICTORIAN PARLIAMENTARY COMMITTEE INQUIRY INTO SKILLS SHORTAGES IN THE RAIL INDUSTRY

INDUSTRY AND COMMUNITY PLANNING DIRECTORATE

DEPARTMENT OF EDUCATION AND TRAINING (WA)

The Western Australian Rail Industry

OVERVIEW

The state of Western Australia comprises a large geographic area which is serviced by multiple rail sub-systems.

Generally speaking these are:  5,100km of standard, narrow and dual gauge network in the south west of Western Australia between Geraldton, Kalgoorlie and Albany operated by WestNet. The network caters for both freight and passenger services.

 The Electrified Urban Passenger network operating between Joondalup and Mandurah and Midland to the east is managed and maintained the Network and Infrastructure Division of the Public Transport Authority (the Authority).

 The interstate standard gauge line from Kalgoorlie to Adelaide is owned by the Australian Rail Track Corporation.

 The rail lines in the Pilbara are privately owned and are built, managed and maintained by the mining companies. These include those tracks under the ownership of BHP, Rio Tinto and its affiliates and Fortescue Metals Group.

Rail operators The Government owned Public Transport Authority has two rail operating units, Transperth and TransWA.

 Transperth operates the electrified urban rail passenger network in the Perth metropolitan area and extending to Mandurah.  TransWA operates three rail passenger services to regional centres, in addition to its regional coach services.

Australian Railroad Group (ARG) is the primary bulk haulage rail operator in southwest of WA, transporting freight to the ports of Geraldton, Fremantle, Kwinana, Bunbury, Albany and Esperance.

South Spur Rail Services provides short haul bulk freight transportation (concentrates, mining and agricultural produce), work trains (track laying, ballast trains, sleeper trains), hook and pull and shunting operations and port services (port shuttles).

There are some small tourist rail operators that also utilise the state’s network.

There are also a number of national rail companies that operate interstate services into WA:  Great Southern Rail operates the twice weekly Indian Pacific passenger train between Sydney and East Perth.  Pacific National provides inter-modal rail freight service between their Kewdale Freight Terminal and the eastern seaboard. SCT Logistics operates between Kewdale (WA) and Melbourne and Parkes (VIC).

Skill shortages in the rail industry Consultation with industry advisory groups has confirmed the Department of Education and Training’s Western Australian State Training Profile (2009-2011) identification of skilled labour shortages which pertain to the rail industry.

Occupations identified as in shortage include:  Signal technicians: in short supply and there are a shortage of workers with the necessary qualifications. Total numbers are less than 100 for all employment of this type in WA.

 Shunters.

 Train drivers, although new entrants show strong interest in this occupation as a career choice.

 Electrical distribution trades workers: there is a state-wide shortage not just specific to the rail sector. However, the rail sector application of these skills is very different to those required by the electricity network. Public transport has flagged a problem getting rail-skilled tradespeople.

 Qualified managers and supervisors are undersupplied. Employers indicated much of this is satisfied through on-the-job training and recognition of leadership within the ranks.

There is a lack of staff with higher vocational education and training skills amongst rail workers, particularly in some of the more regional and remote areas of the state.

Composition of the WA rail industry by occupation Please see attachment 1 for a break-down of rail industry by employment occupations, based on the Australian Bureau of Statistics ANZSIC (2006) classification.

RESPONSE TO THE INQUIRY’S TERMS OF REFERENCE

1. Factors influencing recruitment and retention.

 Training Supply  Work Practices and Industry Characteristics  Macro-Economic Environment  Career Perceptions  Government Policy  Crowding of Industries in WA

Training supply Signals technician training differs across Australian railways as there is no standardisation due to different equipment in use. As a result, training is mostly informal and specific to the owner’s railway infrastructure and systems. It is generally delivered on site where the technicians are under supervision until competent.

2 The UEE07 Electrotechnology Training Package Qualification “UEE41207 Certificate IV in Electrical – Rail Signalling” is not utilised by WA industry to qualify signals technicians as there is no RTO in WA with scope to deliver this qualification.

There is a lack of training provided post-trade for electrical/electronic training specific to rail transport industries. Electricians are already in general shortage across the state.

Currently there is a lack of rail-specific courses available in freight business which results in the majority of training being done on the job. This puts extra strain on the business in regards to both time and cost and creates a delay in getting employees to a level where they become functional and effective to the business.

Industry advises there is only one registered training organisation (RTO) with scope to deliver qualifications from the UET06 ESI Transmission Distribution and Rail Training Package. This organisation does not deliver in the rail sector. Therefore access to training opportunities is limited and has become a costly exercise for the Authority as the only employer of individuals needing these skills relevant to electric rail.

Work practices and industry characteristics The length of a project is a factor that influences recruitment and retention. Often the project contracts create breaks of a number of months in-between, or overlapping, projects. This is considered inherent in much of the industry. Industry advice notes chop-and-change practices mean new employees are frequently hired at the start of new projects and these need intense training to meet OHS regulations and the employer’s work standards.

Specialised workers are often flown into a remote/regional project as locals are not qualified or not skilled. This presents a new set of retention problems as many high- end and professional workers do not have any interest in traveling from their metropolitan homes.

Large companies are able to attract and retain staff by utilizing the company “brand”. They can offer incentives such as continuity of work, career opportunities, longevity of employment, company stability and in-house training opportunities.

Industry considers mandated entry-level medical testing requirements stringent. At the unskilled, lower skilled level the work tends to be very physically strenuous and demanding. This may not apply to the same extent for skilled hands whose roles involve less physical labour.

Macro-economic environment The uncertainty of how the economy will move complicates workforce planning, according to industry groups. However, the economic downturn has also resulted in an increased stability of the workforce as workers try to maintain job security. Industry expects alternative work opportunities to decline over time.

Employers have also identified increases in the number of applicants for available positions:

 Freight - Fifty percent reduction (from 16 to 8) in the number of trainees in the next uptake because of the down-turn.

 Mining – Shedding of some operational positions as well as training back office positions and reduction in recruitment except for key operational positions. Stakeholders noted that a reduction in the level of non-critical training is happening but operational training is mostly unaffected. Comment was also made on a reduction in the attrition rate due to employee concerns about future employment prospects

 Public Transport - The regular drain of urban passenger train drivers to the mining industry has virtually stopped.

The Authority has Transit Officers and Special Transit Officers related to the rail industry. In the past they had problems keeping their staff due in part to the quality and training given to the recruits and leakage to the Federal and State police forces. At the beginning of the year, the Authority carried out their normal recruitment campaign and received approximately 900 applications. This number of applicants has increased dramatically from last year. Currently the Authority doesn’t have any issues with recruitment.

Career perceptions Lack interest in employment has historically been an industry wide problem for rail. However, occupations such as train driver tend to be more attractive to young people than others. Government policy The across the board cuts (3%) in government spending have meant that non-critical operational positions are not being replaced in the Authority. Stakeholders also identify trainees, a traditional way of bringing workers into the organisation, now not being employed.

Like the rest of the transport and logistics industry, training in the rail sector has been primarily driven by regulatory compliance. This has placed an emphasis on the short courses to meet immediate needs. Since the introduction of the rail training package there has been a steady increase in the amount of training leading to qualifications.

Crowding of industries in Western Australia The same skills are in strong demand in many places. The multiple claims have until recently been resolved in favour of the energy and resources industry sector’s capacity to pay. The industry has had a significant problem with the poaching of skilled workers. The lucrative mining sector has offered rail workers high pay rates and good working conditions, which the passenger and freight sectors in the South West of Western Australia have not been able to compete with.

To some extent the freight and passenger sectors have become the de facto recruitment and entry level training ground for the industry, say representatives. In turn, the freight and passenger sectors have looked interstate and overseas to find skilled workers. This substitution and sourcing of labour can bring retention problems when employees move and do not make long-term settlement decisions.

4 2. Demographic profile of the workforce and the outlook for future retirement and loss of skills.

The economic downturn means the short-term outlook is for a slowing in the rate of retirements and some relative stabilisation of the workforce. The longer term outlook is for continued ageing of the workforce and loss of the skills base due to retirement. See the following table for more detail.

The current workforce as defined by the ANZSIC codes 20061, subdivision 47 Rail Transport, is estimated to stand at around 4,000 persons in Western Australia, for the four-quarter average to February 2009.

In the next 10 years many of the following occupations are expecting higher retirement rates:  drivers  within trades and engineering  rail specialists and professionals such as train services and train management

Industry is concerned that employees in these occupations will leave the business, taking their knowledge and skills with them.

Table 1*: Western Australian Rail Industry Employment by Occupation, August 2006 15 - 20 - 25 - 35 - 45 - 55 - 65 Total 19 24 34 44 54 64 + age 149412 Railway Station Manager - - - - 4 - - 4 149413 Transport Company Manager - - 5 10 15 10 3 43 233311 Electrical Engineer - - 11 9 10 - 3 33 341111 Electrician (General) 3 11 46 48 55 18 - 181 442217 Security Officer 3 - - 4 4 - - 11 451799 Travel Attendants, nec ------3 3 712917 Railway Signal Operator 3 4 8 6 14 8 - 43 712918 Train Controller - - 3 6 23 8 - 40 721914 Railway Track Plant Operator - 3 3 5 3 - - 14 731311 Train Driver 7 8 54 178 196 105 8 556 821611 Railway Track Worker 3 16 29 25 42 21 3 139 899917 Railways Assistant - - - 3 5 - - 8 Total 19 42 159 294 371 170 20 1075 Source: ABS, Population census 2006 * Totals between 2006 and 2009 differ.

In table 1 the age profile of the rail workforce is shown. Out of a total of 1075 in year 2006, 561 persons (52%) were over 45 years of age.

Employment projections Estimates for the rail industry in Western Australia (as defined by ANZSIC 1993, sub group 620), indicate that employment projections over an 8 year period from 2006/2007 – 2015/2016 show that employment will grow by an annual average rate of 7.5%. This is well above the all-industry average for Western Australia of 2.1%.

1 Australian and New Zealand Statistical Industrial Classification

5 The estimated net replacement rate for occupations related to the rail industry indicate lower replacement rates than for all occupations in Western Australia2.

The rail industry in Western Australia comprises of different sectors which differ in characteristics. Circumstances, then, can differ. The most significant groups are:

 Public transport - a survey of public sector rail workers has shown that people who have previously indicated that they would retire in the next 4-5 years have extended their retirement timeframes because of the reduction in the value of their superannuation.

 Mining – mining has had a more stable workforce than that in other sectors of the rail industry because of favourable pay and conditions. Where there is movement it is usually between the mining companies. These can normally be replaced through employment of skilled workers or internal training. Like the passenger and freight sectors of the industry, the mining sector is experiencing a reduction in the attrition rate due to economic conditions.

 Freight – there is a very limited pool of individuals with rail experience due to the lack of training provided in the industry in prior years. In addition, the quality of candidates with rail experience is often below the required level. Competition for these workers is expected to ease.

 Building and construction - there is an ageing workforce at the higher skills level and future requirements are usually addressed as they arise. No new skill sets are anticipated.

3. Implications of the Victorian Industry and Manufacturing Statement commitment in relation to local content.

No submissions. The Western Australian jurisdiction is not subject to this regulation.

4. Whether there is any need for increased training opportunities at university and trade levels and, if so, how industry can stimulate student/user demand.

Industry advice raised the following concerns for training in the industry:

 The most appropriate method for the delivery of operational and entry level training is primarily through on-the-job training with some off-the-job or off-site training for generic skills.

 Currently qualifications are not rail-specific. There is adequate tertiary level training available for the industry however there is an ongoing need for management training for skilled rail employees to be available.

2 Source: Centre for Economics, Employment and Training, Monash University, annual average 2007- 08 to 2012-13

6 Training opportunities The UEE07 Electrotechnology Training Package Qualification UEE41207 Certificate IV in Electrical – Rail Signalling is not utilised by Western Australian industry to qualify signals technicians as there is no RTO in this State with scope to deliver this qualification. Industry suggests this is needed.

Electrical distribution trades workers, in shortage, have skills that are very different to those required by the electricity network. Could some course be offered to align the trade to rail?

There is only one RTO with scope to deliver qualifications from the UET06 ESI Transmission Distribution and Rail Training Package and this organisation does not deliver in the rail sector. Industry says the demand is there. Access to training opportunities is limited and has become a costly exercise for the Authority as the only employer of individuals needing these skills.

At the professional level, staff tend to have an engineering qualification but rail infrastructure is a specialised area of civil engineering and there not a lot of people with such skill. This may be a training supply consideration.

Project managers are either engineers (in one company) or have higher level vocational education qualifications. Supervisory qualifications only partly meet the specific needs of the company, requiring a mix of external and internally developed training. There may be a need for formal professional development training as employers promote from within.

Non-training and other recommendations Industry sources state that there needs to be a better alignment of projects to give more continuity of work as an incentive to invest in training. Industry also commented on how contracted projects make workforce planning and the retention of staff between contracts a systemic challenge for employers.

Signals technician training differs across Australian railways. There is no standardisation due the use of different equipment. Training is mostly informal and specific to the owner’s railway infrastructure and systems. It is generally delivered on site where the technicians are under supervision until competent. If the rail systems were to be harmonised there would be more prospect of formal training supply for the role.

The company brand and the benefits of employment with a large company and associated benefits, offering ongoing staff development and a career path offered as an incentive to get and keep workers, was raised.

Although the provision of for training and pathways of opportunity is very important, it will not in itself solve the issues of skills and labour shortages. There needs to be a concerted effort to promote the opportunities in the industry through the school system as well as to potential mature aged students.

The rail industry as a whole needs to have a more proactive approach to attracting, recruiting and training its workforce, says industry. Industry considers the nature of rail does not encourage this longer-term thinking.

7 Acknowledgement

The Department of Education and Training acknowledges the advice and information received from the following Western Australian Training Councils in the preparation of this submission:

Construction Industry Training Council

Electrical, Utilities and Public Administration Council Inc

Financial, Administrative & Professional Services Training Council Incorporated

Logistics Training Council

DISCLAIMER

The information in this report may include views or recommendations of third parties, which do not necessarily reflect the views of the Department or the State of Western Australia or indicate its commitment to a particular course of action.

The Western Australian Government is committed to quality service to its customers and makes every attempt to ensure accuracy, currency and reliability of the data contained in this report. However, changes in the circumstances after the time of publication may impact on the quality of this information. Confirmation of this information may be sought form originating bodies or department providing the information.

8 Attachment 1

The Western Australian Rail Industry Component Occupations

T&L ANZSIC Codes 471 RAIL FREIGHT TRANSPORT 472 RAIL PASSENGER TRANSPORT 3109 OTHER HEAVY & CIVIL ENGINEERING CONSTRUCTION 529 OTHER TRANSPORT SERVICES

T&L Occupations 712918 TRAIN CONTROLLER 712917 RAILWAY SIGNAL OPERATOR Railway Shunter, Railway Yard Assistant 731311 TRAIN DRIVER 149412 RAILWAY STATION MANAGER 149413 TRANSPORT COMPANY MANAGER 899917 RAILWAYS ASSISTANT 451799 TRAVEL ATTENDANTS NEC

Joint Coverage 821611 RAILWAY TRACK WORKER 721914 RAILWAY TRACK PLANT OPERATOR

Other Rail Occupations 442217 SECURITY OFFICER 341111 ELECTRICIAN (GENERAL) Railway Signal Electrician 233311 ELECTRICAL ENGINEER Railway Signal Engineer