Apprenticeships : Understanding your responsibility

Jamie Oliver, Henry Ford and Vincent van Gogh are all famous apprentices and it is safe to say that they have excelled within their particular fields. They are, however, not the only success stories, as recent research shows that one in five businesses currently has former apprentices working at senior and board level positions.

Harnessing the enthusiasm of a young person and training them through an apprenticeship can be very rewarding. The govenment funding available for businesses wishing to take on apprentices is an added incentive. It is perhaps no surprise that the National Apprenticeship Service has reported that advertised apprenticeship vacanies in England rose by a quarter last year.

Whilst the financial incentives and the prospect of giving a young person an opportunity are appealing, it is important that employers understand their responsibilities towards apprentices. Particular regard must be given to the written terms of an apprenticeship agreement. It is important that employers are aware of the difference between a contract of apprenticeship and an apprenticeship agreement.

Contract of Apprenticeship or Apprenticeship Agreement?

Training is the primary purpose of a contract of apprenticeship and carrying out work for an employer is secondary. Because of this, apprentices employed under a contract of apprenticeship have enhanced rights on termination and employers owe them greater obligations. This makes terminating a contract of apprenticeship more complicated.

An employer has less scope for dismissing an apprentice employed under a contract of apprenticeship than an ordinary employee. Misconduct in the normal context will not be sufficient and an employer would most likely have to demonstrate that the apprentice’s actions are so extreme that the apprentice is effectively unable to be trained. In addition, not renewing a contract of apprenticeship amounts to a dismissal and an employer will be expected to demonstrate a potential fair reason for dismissing the apprentice.

If a contract of apprenticeship is terminated early, the apprentice could be entitled to damages for the loss of earnings and loss of training during the remainder of the apprenticeship. There is also a risk of damages for diminution of future prospects.

Terminating an apprenticeship agreement is much more straight-forward as it is a contract of service and the normal principles of breach of contract and unfair dismissal claims apply. As a result, employers can effectively performance manage under-performing apprentices or discipline an apprentice for misconduct if appropriate. Also, at the expiry of a fixed-term apprenticeship agreement (and if the employer does not continue to employ the apprentice) this is likely to constitute a dismissal for some other substantial reason, a potentially fair reason.

It is therefore important that employers document the contractual basis of an apprenticeship from the outset as unwittingly entering into a contract of apprenticeship could cause difficulty in dismissing an apprentice should the need arise.

Employers should also note that an apprenticeship agreement must be in the prescribed form under the Apprenticeships, Skills, Children and Learning Act 2009 and the Apprenticeship (Form of Apprenticeship Agreement) Regulations 2012 in order to qualify for government funding.

Other issues to consider

As with any employee, there are further employment issues to consider in addition to the contractual terms. These include:

• The recruitment process – most apprentices will be young and will have little or no previous work experience and a formal recruitment process may be inappropriate;
• Age discrimination – government funding for apprentices training is tiered according to age. The highest amount of funding is available for younger apprentices. However, it is still risky to put an upper age limit on applicants for their schemes on the basis of funding eligibility as this could indirectly discriminate against older applicants unless the employer can show that the limit is objectively justified;
• Fixed-term apprenticeships – apprenticeships are usually for a fixed term between one to four years. However, apprentices are excluded from protection under the Fixed-Term Employees (Prevention of Less Favourable Treatment) Regulations 2002;
• National minimum wage – the apprenticeship rate is currently at £2.68 per hour and will increase to £2.73 on 1 October 2014;
• Working time –apprentices between the age of 16 and 18 have additional rights in relation as young workers in relation to working hours and rest breaks; and
• Sickness and families – apprentices are entitled to statutory maternity, paternity, adoption and sick pay.

There is a fair amount for employers with apprentices to consider in addition to the training and supervision requirements. We would be happy to help steer you through the legal aspects of employing apprentices to ensure that you get the most value out of your apprenticeship scheme.

For further information, please contact Roisin Patton, associate in the employment team at Square One Law LLP on 0843 224 7936.