Dris proposal for national licensing of the plumbing and gasfitting occupations

1.11Impact on consumer outcomes

Under the options considered in this Decision RIS for national licensing, it is proposed that a number of current requirements for licensing be removed or changed. Several of these requirements have the potential to impact on outcomes for consumers and should be considered in this context. These are:

proposed removal of experience requirements

proposed removal of the licensing of apprentices

proposed changes to endorsements

proposed changes to licence types

proposed changes to qualification requirements (i.e. changes to Certificate IV unit requirements).

This section provides an assessment of the potential impact of such changes on the outcomes for safety and consumer protection.

Potential safety impacts

Attachment D of this RIS provides a detailed analysis of the risks associated with gasfitting work. This research indicates that in the five years between 1997–98 and 2001–02, there was an average of two fatal gas-related incidents in Australia per year. This compares to 36 incidents per year in the United Kingdom, 426 in the United States, 26 in Canada and 1.6 in New Zealand. Note that this data is limited, as it only accounts for gasfitting (that is, it does not include plumbing incidents) and is ten years out of date. The key consideration for this analysis is whether any of the proposed changes in licensing arrangements would alter safety outcomes for consumers (the focus of the analysis here as it has the greatest potential impact on consumers).

The impact on consumer safety outcomes (and potentially public safety outcomes) from the proposed changes is unknown for the plumbing and gasfitting industry. The first three proposed changes that could potentially impact on consumer outcomes listed above (that is, changes to experience requirements, the licensing of apprentices and proposed changes to endorsements) have been deemed to be unnecessary regulatory requirements by a majority of the steering committee and are expected to have a neutral impact on consumer safety outcomes. There are strong views from industry concerning the two tier option, however. This option reduces qualification requirements, and is not considered by industry to provide the skills required to adequately perform critical plumbing and gasfitting functions, leading to increased risk for consumers and licensees. Over 60 per cent of those responding to a specific question as to whether the two tier system would create additional risk indicated that they did not believe it would, even though many of these respondents supported the three tier model, however the question and responses were insufficiently detailed. The potential outcomes from the proposed qualification requirements and changes to licence types under the national licensing options are discussed below.

Three tier options with Certificate IV units

There are differing views on the potential level of risk associated with the practices of persons working in the plumbing and gasfitting industry. Currently, existing Certificate IV units are deemed by the Interim Advisory Committee to be part of the minimum competencies necessary for a licence holder to safely perform work unsupervised and sign off on the technical compliance of plumbing and gasfitting work. In addition, the IAC considers that the current risk levels are unacceptably high and warrant an increase in the number of required Certificate IV units as proposed under three tier, sub-option 1. To reflect these views, two sub-options are being considered that differ in the number of Certificate IV units required.

As outlined above, Australia appears to perform relatively well in relation to gas safety outcomes. While this analysis focuses on gasfitting, it is important to note that plumbing work also carries potential safety risks for the general public.

Evidence was not received of the specific risks mitigated by each additional Certificate IV unit however the Taskforce has undertaken this mapping and the result is provided at Table D.4 in Attachment D. This Decision RIS also provides a comparative quantitative analysis of the potential risk mitigated by the two sub-options.

Two tier option

There are differing views on the potential level of risk associated with the practices of persons working in the plumbing and gasfitting industry. A majority of the steering committee questioned whether there are current risks that demand extra Certificate IV units. Further, they did not consider that the Certificate IV units currently required for a licence should be maintained, although they did canvass the need for additional endorsements to cover more specialised work not covered by the Certificate III.

The requirement to be supervised if someone has not undertaken additional training (over and above the Certificate III) is inconsistent with the licensing requirements for the electrical and refrigeration and air-conditioning occupations. In these industries, there is no supervised licence type and an unsupervised licensee does not require qualifications above a Certificate III level. The steering committee has cited this difference between occupations and believes that it brings into question the necessity of these requirements for the licensing of the plumbing and gasfitting occupations.

The steering committee noted that no evidence had been provided to suggest that the risks inherent in the plumbing and gasfitting industry require mitigation through Certificate IV-level competencies. In particular, no evidence has been cited that the plumbing and gasfitting industry has a higher implicit safety risk than the electrical industry, which is yet to experience any problems from setting a lower minimum competency for (full) licence holders. No further evidence was submitted through the consultation process to demonstrate a higher risk level. However, it should be noted that the level of risk currently presenting relates to the status quo for qualification requirements for both occupations. It would be logical to assume that a decrease in training could lead to an increase in risk however there is no quantitative evidence to suggest that removal of training currently required for plumbers and gasfitters will or will not increase the risks currently encountered.

The need for the Certificate IV units partly depends on the extent to which these risks are being mitigated through other mechanisms. Some of the required Certificate IV units in the three tier, sub-option 1 are business-related competencies. These units have been removed in the Three tier, sub-option 2 proposal. The level of business acumen in the industry is currently regulated by market forces, as the success of an individual’s business relies on their business skills and reputation in the market. In addition, the requirement in most jurisdictions for contractors (licence holders who contract with the public) to hold insurance cover should to some extent mitigate potential risks placed on consumers as a result of poor business behaviour. The removal of insurance as an eligibility requirement will be considered a conduct matter and licence holders will need to comply with the insurance requirements in each jurisdiction in which they work.

Some of the other required units relate to occupational health and safety. These competencies are also addressed through occupational health and safety regulation and associated requirements, and a customised occupational health and safety unit in the Certificate III qualification (CPCPCM2023A Carry out OHS requirements). They do not, however, cover the management of risks in a supervisory capacity, which is the substance of CPCCPM4011A Carry out work-based risk control processes, a generic requirement for all full plumbing and gasfitting licences under the three tier, sub-option 2 (the preferred option).

It should be noted that there is no external inspector of plumbing and gasfitting work, beyond the standard and varied monitoring and compliance procedures carried out by each jurisdiction. A (full) licensee is ultimately responsible for completion and signing off on their own work and therefore needs to possess the skills to do this in a competent manner.

Information that demonstrates the extent of such risk in the plumbing and gasfitting industry is currently limited. Although as outlined above, Australia appears to perform relatively well, it is not clear how this could change if Certificate IV units were removed. Without sufficient information, judgments about risk cannot be soundly made however the research outlined at Table D.4 would suggest that the common scope of work for both licence and registered tradespersons level may be misleading as the skill level and depth of required knowledge vary considerably between the qualification levels in relation to the work undertaken.

Consumer protection impacts

The second area of potential consumer impact is consumer protection. This relates to the extent to which the conduct of licensed persons leads to consumers being misled or defrauded (for instance, through the delivery of substandard work, where an individual or business fails to deliver services that consumers have purchased, or where individuals or businesses experience financial difficulties that impact consumers).

The key areas of reform where consumer protection may potentially be impacted are:

changes in licence period, which may have an influence on compliance and enforcement actions by regulators (to the extent that a change to a shorter or longer term makes it easier or more difficult to monitor the conduct of licence holders)

removal of Certificate IV units that relate to business competencies.

Changes to the licence period would not alter licence requirements, though they would potentially lengthen the time between renewal, and therefore the time period for regulators to receive updated information. That said, across the entire licence period – whatever length, compliance and enforcement would continue to be required – renewal is just one element of the process.

In relation to business competency units, these units may improve the financial and business management skills of licence holders, though this addresses one particular consumer protection risk (financial management of contractors). Contractors undertaking non-licensed work are not currently required to hold business skills before starting up a business; however, under national licensing contractors will be required to meet financial and probity criteria before obtaining a licence. While a number of submissions sought qualification requirements for contractors and/or full licensees, there were often divergent views on whether technical and/or business skills were required and no evidence was provided to indicate that those possessing business skills experienced a lower rate of business failure than those who did not.