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MILS Case Study: Apprenticeship AgreementsBack

“I’ve always employed apprentices using our standard contract of employment that I use for all of my employees.  I’ve heard it is very difficult to legally terminate an apprenticeship.  I’m thinking of employing a new apprentice and I’ve heard that in England & Wales there are these apprenticeship agreements that potentially make it much more straightforward to terminate an apprenticeship.  Is that true?

In short yes, in England and Wales where the Apprentice Skills Children and Learning Act (ASCLA) 2009 applies you can guarantee if they are on a certain type of contract (apprenticeship agreement) you can terminate and there should be no risk in law that they are apprentices rather than employees.

The point of distinction is that apprentices potentially cannot be terminated in the same way as employees can e.g. an apprentice cannot be terminated on the grounds of redundancy failing short of closure or fundamental change in the character of the employer’s enterprise.  Furthermore, an apprentice may only be dismissed for conduct if his conduct is so bad that it is impossible to teach him the trade.  The risk being that apprentices can pursue claims for breach of contract in the County Court or Sheriff Court for tens of thousands of pounds based on the argument that the apprenticeship could not be terminated, as the employer terminated and hence damages are payable for the remainder of the apprenticeship term.  Potentially claims can also include future loss if the apprentice argues that they couldn’t continue in their trade.

If the individual is employed under an ASCLA Apprenticeship Agreement they have the status of an employee rather than apprentice and can therefore potentially be lawfully dismissed for capability, conduct, non-attendance at college and poor college work etc.

The Apprenticeship Agreement that you would use in England (and separately there is another for use in Wales) would not ordinarily therefore be used for apprentices in Scotland and a different Agreement would need to be in place for them as ASCLA does not apply in Scotland. It will be important therefore that for a Scottish apprentice the contractual documents support an argument that you can bring an apprenticeship to an end early and not face the kind of claims in the Court for breach of contract.  You would therefore want very clear express terms about the circumstances in which the apprenticeship can be ended which could essentially set out that certain matters of capability, conduct, non-attendance at college, poor college work etc could apply and be signed by all the parties (including the training provider).  It would still be the case that for best practice a series of warnings is followed to mirror the usual disciplinary process for employees.  Unfortunately for Scottish employers even with these clear express terms it remains arguable that the individual is employed as an apprentice rather than an employee such that Scottish employers face greater uncertainty in this area.

The RMI members section contains template documents (including Apprenticeship Agreements) however if in doubt it is always recommended that you use the advice line and take employment law advice when either recruiting or terminating apprentices.

Michael Simpson, Solicitor, Motor Industry Legal Services

Motor Industry Legal Services (MILS Solicitors) provides fully comprehensive legal advice and representation to UK motor retailers for one annual fee. It is the only law firm in the UK which specialises in motor law and motor trade law. MILS currently advises over 1,000 individual businesses within the sector as well as the Retail Motor Industry Federation (RMI) and its members.

 

Posted by Sue Robinson on 18/05/2018