SUMMARY: The rise in the number of apprentices shows what a great asset they can be but what do you need to learn before your apprentice starts to earn?
Apprenticeships are paid jobs that incorporate on-and off-the-job training leading to nationally recognised qualifications. Apprentices earn as they learn and gain practical skills in the workplace.
Since 2009/2010, the number of apprenticeships has generally been increasing and in the academic year 2013-2014 there were 440,400 apprenticeship starts.
These figures are unlikely to change as the government views apprenticeships as playing an important role in the long term development of the UK’s workforce as well as contributing to enhanced productivity.
From a legal perspective apprentices are employees and as such have the same rights as any other employee. However, in some cases additional rights and obligations may arise and it is important that organisations understand what these are.
Regulating the apprenticeship
It is essential that an appropriate written agreement is in place with an apprentice to govern the working and training arrangements.
There are two main types of agreement:
- a modern “apprenticeship agreement”; and
- a traditional “contract of apprentice”.
There are important differences between these types of agreement, which will also determine what rights the apprentice has, which we explain below.
This is the more modern type of agreement and the one that is most often used today.
For an agreement to constitute an apprenticeship agreement, currently it must.
- be in writing;
- contain the basic terms of employment required to be given to employees;
- include a statement of the skill, trade or occupation for which the apprentice is being trained under the relevant apprenticeship framework;
- state that it is governed by the law of England and Wales;
- state that it is entered into in connection with a qualifying apprenticeship framework,
and the apprentice must undertake to work for the employer.
Reform of apprenticeship agreements
From 26 May 2015, apprenticeship agreements will be replaced with “approved English apprenticeships” in England.
An approved English apprenticeship will take place under an “approved English apprenticeship agreement” or will be an “alternative English apprenticeship” and, in each case, must satisfy certain conditions which will be specified in regulations. It must:
1) provide for an individual to work as an apprentice in a sector for which the Secretary of State has published an approved apprenticeship standard; and
2) provide for the apprentice to receive training in order to assist the apprentice to achieve the approved apprenticeship standard in the work done under the agreement.
It must also satisfy any other conditions set by the Secretary of State. Without exception, all new apprenticeships must last for at least 12 months.
Advantages of apprenticeship agreements
As is currently the case with apprenticeship agreements, approved English apprenticeships will be contracts of service. This means that:
- apprentices under approved English apprenticeships/apprenticeship agreements can be dismissed in the same way as ordinary employees; and
- employers can effectively performance manage under-performing apprentices under these agreements as they would any employee in the business.
However, if the relevant criteria for an approved English apprenticeship (or current apprenticeship agreement) are not met, the individual may be engaged under a common law contract of apprenticeship. This can present an employer with a number of legal issues, which we consider below.
Contracts of apprenticeship
This is the traditional type of agreement, often called the common law contract of apprenticeship, and gives the apprentice greater rights. A common law contract of apprenticeship is different to an apprenticeship agreement or approved English apprenticeship:
- It does not have to be in writing.
This means that if employers do not have a written agreement with an apprentice, it is possible they have inadvertently created a common law contract of apprenticeship.
- It is usually for a fixed term and employers have only a limited right of dismissal before the end of the term.
This means that it is more difficult to dismiss an individual engaged under a common law contract of apprenticeship than a normal employee or an apprentice engaged under an apprenticeship agreement.
If it can be avoided, it is usually advisable for employers not to engage individuals under this type of apprenticeship.
Problems with a contract of apprenticeship
Due to the nature of a contract of apprenticeship employers can often be faced with problems where for some reason they are considering dismissing the apprentice. For example:
- Misconduct in the normal employment context will not be sufficient to justify dismissal, unless the apprentice’s actions are so extreme that the apprentice is effectively unteachable.
- Unless there is a closure of the business or the employer’s business undergoes a fundamental change in its character an apprentice cannot be dismissed by reason of redundancy.
There can therefore be serious consequences if the contract is not lawfully terminated as the apprentice would be entitled to damages for loss of earnings and training for the remainder of the term of the apprenticeship; damages would take into account any impact on future earnings.
This means that the damages which could be claimed by an apprentice whose common law contract of apprenticeship is terminated could be significantly greater than any compensation claimed by an apprentice under an apprenticeship agreement.
What should employers do?
Before recruiting an apprentice, employers should consider whether they can provide the apprentice with work under an apprenticeship agreement or approved English apprenticeship. In advance of the individual commencing their apprenticeship, the employer should provide the relevant written agreement to the apprentice and ensure that it has been returned signed before the start date.
If employers already engage certain individuals as apprentices, they should check what type of agreement they are engaged under – we can advise employers on this in the case of uncertainty.
For more details about apprenticeships please contact:
+44 (0) 808 172 93 22
This update is for general guidance only and does not constitute definitive advice.