Changes to transition TasTAFE into a government business, which was a key recommendation of the PESRAC report, handed down by former Premier Peter Gutwein last year, comes into effect on July 1.

TasTAFE chief executive Grant Dreher said the changes were an exciting time in the evolution of Tasmania's only public vocational education provider as it strives to become more competitive in a tight market.

However, union opponents of the change have started crisis talks with TasTAFE staff in what they say is a "dark time" for vocational education in Tasmania as discussion escalated on the eve of the changes being enacted.

A major change is that TasTAFE staff will be transferred from the Tasmanian State Service to a new TasTAFE enterprise agreement. Mr Dreher said this change, while the most significant for staff, would allow for greater recruitment flexibility.

"The flexibility we will have as TasTAFE staff will mean that we are able to tailor packages for future industries, which is a key component of the move," he said.

Mr Dreher said the State Service Act, while a great vehicle for the State Service, was not designed for a training provider like TasTAFE and did not suit its future needs.

Recruitment has been a challenge for TasTAFE for several years, due to a complex combination of factors including funding and the state of the industry.

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TasTAFE is jointly funded by state and federal governments, however vocational education has suffered nationally from a decline in federal funding skills agreements.

During budget estimates, Mr Dreher revealed recruitment was a particular challenge for industries and trades that were experiencing a boom in Tasmania.

Those included the construction trades and plumbing, along with health, such as nursing and aged care. A recruitment drive to recruit 100 more TasTAFE teachers to the sector had so far only delivered about 15 new teachers, with many of them still under the teachers under supervision mechanism.

Teachers under supervision allows TasTAFE to recruit teachers from industry who have not fulfilled their teaching certificates and allow them to be supervised.

Crisis talks have begun between TasTAFE, staff and the Australian Education Union, with the union calling the changes a "dark time" for Tasmanian education.

AEU Tasmania TAFE division vice president and TAFE business teacher Damian Von Samorzewski slammed the government's "ill-advised privatisation" of the organisation, saying the transition would lead to the loss of staff entitlements and pay cuts.

He said Wednesday's AEU meeting served to inform union members following a lack of government consultation over the transition.

"Staff were not consulted through any changes, despite this being a legal obligation in current industrial arrangements," he said.

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"This is a requirement the TasTAFE chair and Minister have continually ignored over the past six months, yet we've all been kept in the dark so this transition can be waved through with little scrutiny."

The education union has described the changes as akin to "privatisation" since the release of the PESRAC report in 2020, but now are describing it as a "Jetstar model".

However, Mr Dreher dismissed the suggestion moving TasTAFE into a government business would lead to privatisation and said it had no plans to do so.

"This is not a privatisation path. We are still owned by the government," he said.

Mr Dreher said the changes would allow TasTAFE greater flexibility, and while for most people they immediately thought of workforce flexibility, it wasn't just about that.

"We are an industry-facing organisation....this is about giving us organisational flexibility. The State Service works well for the State Service but we are market facing and vocational education is a highly competitive market," he said.

There are at least 80 private registered training operators in Tasmania and TasTAFE needs to compete with all of them to get a slice of the student market with modern training and skills that will suit ever-changing industries.

Mr Von Samorzewski said staff were not consulted on how the changes would affect them, and said key policies and procedures were still not in place.

He said protections against employee terminations and industrial actions banned outside bargaining periods and the code of conduct policy were not final.

"We're now seeing it play out that TasTAFE staff will indeed be worse off under this shift despite parliamentary promises and pledges from the TasTAFE CEO for better outcomes," Mr Von Samorzewski said.

"Already we're seeing lots of subtle changes being made to distance TasTAFE from government, allowing the Minister to be arm's length from adverse business decisions.

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"Staff morale is at an all-time low and as the government struggles to fill its promised 100 new teacher pledge, many existing teachers are looking at these incoming drastic changes and considering their futures at TasTAFE."

Mr Von Samorzewski said under the move, new TasTAFE teachers would be paid up to 30 per cent less on average than existing teachers, while new administration employees look set to receive 14 per cent less than current staff.

Mr Dreher said there were three enterprise agreements in place, one for teachers, another for professional corporate staff and another for facilities staff.

During the transition there will be two overarching agreements to cover the changes - one for existing staff and one for new staff, which will be based on Fair Work contracts.

This will be in place until such time as all staff can be migrated onto one enterprise bargaining agreement. Mr Dreher did not confirm pay grades for teachers, however, he said the new structure would be seeking to increase the number of teaching contact hours, with remuneration attached to that.

"Under the State Service teaching hours are capped at 19 hours per week and under Fair Work there is no cap; but we would not be scrapping the cap," he said.

"We would be looking to increase contact hours to about 24 or 25 hours."

Education and Skills Minister Roger Jaensch said the TasTAFE changes were "a key plank" in the government's plan to train the workforce of the future.

"Under the new model, TasTAFE remains a publicly owned, not-for-profit government business that will deliver more choice for learners, better pay for skilled teachers, and more flexible training hours aligned to business and industry," he said.

"No teacher has had their pay cut, and no teacher or staff member will be worse off under the new structure from 1 July this year.

"TasTAFE employees will transition with the same terms and conditions as set out in industrial awards and agreements as 'copied state instruments' under the Fair Work Act 2009 framework."

Students will understand the full vision of the organisation when it releases its five-year strategic plan in August. However, Mr Dreher said the changes would ultimately give students a better experience and a more modern training package.

"One thing we are working on is the virtual campus, which will allow us to deliver some of the training online," Mr Dreher said.

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Vocational education and training however, is very practical-based learning and Mr Dreher said the virtual campus was meant to help enhance the theoretical components of the training.

"We won't be moving to fully online courses, but a virtual campus will allow people to do their training at a time that suits them."

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