AT LEAST one fifth of the 25,000 apprentices assisted by the National Apprentice Employment Network are out of work and are likely "the tip of the iceberg", industry figures have warned.
Figures provided by the Network, which represents Group Training Organisations (GTOs) around the country, show that 5000 apprentices or trainees have been "handed back" or had their training suspended by their host employer.
NAEN's chief executive officer, Dianne Dayhew, said this meant the youth were in hibernation, many on JobKeeper allowances.
"If a host employer can't afford to provide opportunities, apprentices are are handed back to the GTO, who does their best to find them another job. A part of the process is suspending their training contract, but we try and find a new opportunity and ... place them with another host," she said.
Some trainees had had their apprenticeships cancelled, others were handed back, meaning they had not been suspended or cancelled, and GTOs were trying to find ways to keep them in their contract, for example, training off-the-job.
"If you add all those figures together, the displaced proportion of our apprentice and trainee network is 20 per cent - young people who need a new opportunity and could be lost, affecting the future skills capacity of our nation," Ms Dayhew said.
Ms Dayhew said that the fact that the number of apprentices whose training had been cancelled was not larger meant the JobKeeper and federal SAT (Support Apprentices and Trainees) initiatives were succeeding.
However, she said if an apprentice's host employer could access JobKeeper for their staff, but the apprentice's GTO could not, the host employer could use the JobKeeper incentive for their own staff but not the apprentice, placing them at risk.
"What will happen when JobKeeper ends is the massive concern, we have people in hibernation but will the jobs be there once that is over?" she asked.
Encouraging young people to pivot in their careers was difficult when there are more qualified candidates willing to take a pay cut simply to get work.
"The market is different to what they entered when they began their apprenticeship ... and they haven't experienced an economy like this in their lifetime, so what is about to hit them is a challenge," Ms Dayhew said.
"The real concern that we have is the fact apprenticeships and traineeships are vital to the skills capability of the nation and also help to maintain industry standards.
"Many are mentored by SMEs then go off and set up their own SME, so if they fall out of the picture there will be less SMEs in the future - it's like a domino effect."
In September, 2019, there were 272,580 apprentices and trainees across the country, the National Centre for Vocational Education and Research says.
Jason Sultana, executive officer of the Apprentice Employment Network NSW & ACT, which represents 28 GTOs, said the largest number of handbacks had been in hospitality, automotive and building industry.
Prior to COVID-19, the NSW/ACT network had more than 7000 apprentices and trainees employed. Since COVID-19 it has recorded more than 800 handbacks and 700-plus suspensions. More than 650 are now without a host employer, more than 500 have been put "on hold", and more than 150 have started with a new host.
Hunter Valley Training Company chief executive Sharon Smith said a survey of 250 of the group's host employers found that, if not for JobKeeper and SAT, 30 apprentices in the Hunter were at risk of being handed back and 196 across NSW.
"We appear to have weathered the first COVID-19 wave, most of our employers with the support of JobKeeper and SAT have retained their apprentices and trainees because they have work for them to do, but what we are hearing anecdotally is that their capacity to keep them may change when JobKeeper is removed," she said.
Ms Smith said the official government statistics on the cancellation of apprenticeships were "really the tip of the iceberg" because of the lag between when apprenticeships were ended by employers and the time of official reporting.
"GTOs in NSW have been reporting [cancellations] each week to our State Apprentice Employment Network (AEN) Association to assist government but not all direct employers may have been as diligent," she said.
Ms Smith said HVTC was reminding employers amid tough times that there were a range of options, including converting apprentices to part-time arrangements.
"Rather than handing them back and cancelling their apprenticeship we are trying to suggest reduced hours, or leaving them on suspension which is a holding pattern - we can retain their employment with us and then put them back with the employer when work picks up again," she said.
Noting the Prime Minister's belief that the "unresponsive" training system needs an overhaul, Ms Smith said more flexibility and less red tape was a start.
"Apprenticeships as such are not all about training - it's a job, firstly, it's on the job training, so the biggest barrier for them is there haven't been more jobs available," she said.
"There must be a pipeline of work and certainty for employers. You can have a world-class training system but an apprentice needs to be linked to employment."
HunterNet chief executive officer Tony Cade said the pandemic was worse than the 2012/2013 downturn, which led to a skills crisis.
He said HunterNet's group training organisation had been handed back 15 per cent of its apprentices and trainees in the past month.
"These are hard-working individuals who just want to work and it makes no sense to hand back semi-skilled or final year young people when we are paying for [their wages] in anticipation of government support," he said.
HunterNet kept youth "on the books" at a significant cost before JobKeeper, which did not cover costs like workers' compensation and annual leave.
"The [Hunter youth jobless] statistics will look much worse in May," Mr Cade said. "What do we about practical/theoretical training for those displaced apprentices/trainees that we still have on our payroll - but due to no fault of their own - can not continue to pursue their vocations currently?"