Residential builder partnerships with RTOs and group training

What it is

A registered training organisation (RTO) is the provider that delivers the formal training in an Australian Apprenticeship and issues the qualification. A group training organisation (GTO) is the legal employer of the apprentice and places the apprentice with a host residential builder. The two roles are separate. An RTO can be a TAFE, a private provider or in some cases a large employer. A GTO is registered against the National Standards for Group Training Organisations and operates under a training contract that names the host employer.

Residential builders use these two arrangements in different ways. Builders that prefer to employ the apprentice directly engage only an RTO. Builders that want to share the employment risk hire through a GTO and pay an hourly host fee.

What an RTO does for the builder

An RTO delivers the off the job training in line with the training plan attached to the training contract. The RTO assesses competencies, issues statements of attainment as units are completed and issues the qualification at the end. The RTO also provides the trainer who attends site for workplace assessment.

A residential builder should choose an RTO based on:

• Trade scope. Confirm the RTO is registered to deliver the exact Certificate III code, for example CPC30220 in carpentry.
• Delivery model. Block release at TAFE works for established builders. Online plus site assessment can suit builders in regional areas.
• Industry currency. Trainers who recently worked on residential sites assess to current site practice.
• Audit history. ASQA, the national VET regulator, publishes audit outcomes for non TAFE RTOs on the national register.

What a GTO does for the builder

A GTO is the employer of record. It pays the apprentice wages, superannuation and workers compensation, runs the payroll, handles leave and manages the training contract. The host builder pays the GTO a single hourly host fee that covers wages, on costs and the GTO management margin.

GTOs are useful when:

• The builder cannot guarantee continuity of work across the full apprenticeship. The GTO can rotate the apprentice to another host during quiet periods.
• The builder wants to test fit before signing a direct training contract. Many GTOs offer a try before you hire option.
• The builder lacks payroll capacity for an apprentice on top of subcontracted labour.

GTOs that breach the National Standards for Group Training Organisations lose registration and the related funding access, so the builder should confirm the GTO is currently registered before signing the host agreement.

Funded training options

Most apprentice training is publicly funded. The Commonwealth contributes through subsidies paid to the RTO and through wage subsidies paid to the employer in priority occupations. State and territory governments contribute through user choice arrangements, which allow the apprentice and the employer to choose an approved RTO and direct the public subsidy to that provider.

For the residential builder the practical points are:

• Confirm the chosen RTO is on the approved list for the relevant state user choice contract.
• Choose the right qualification before signing the training contract. Changing later usually means lodging a contract variation with the state training authority.
• Track the apprentice progress against the training plan. Stalled progress puts the builder at risk of completing the apprenticeship beyond the funded period.

Choosing between direct and group training

A direct employment model gives the builder full control of the apprentice, full incentive eligibility and a single training partner. The downside is full payroll exposure and full responsibility for finding work for the apprentice across the term.

A group training model spreads risk and reduces administration but adds a margin on the hourly cost and removes some employer side incentive eligibility. The right answer depends on builder size, pipeline visibility and appetite for paperwork.

Common pitfalls

• Signing a host agreement that does not lock in the apprentice for a minimum number of hours per week.
• Selecting an RTO that is not on the state user choice list, which can mean the builder pays full fees instead of a subsidised rate.
• Failing to release the apprentice for off the job training as set out in the training plan.
• Treating GTO supervised apprentices as casual labour, which voids the host agreement and the training contract.