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MILS HR UPDATE – EMPLOYING APPRENTICESBack

MILSLogo2Many employers recruit apprentices to enable them to avoid skill shortages in traditionally skilled occupations. An apprenticeship is a work based training programme which leads to nationally recognised qualifications. It permits the apprentice to attend day release training whilst combining attending the workplace and working alongside experienced employees/workers. It can either be for a fixed term period or until a level of qualification is reached. Since 1st October 2010 apprentices have been entitled to a national minimum wage rate.

In 2011 the Apprenticeships, Skills Children and Learning Act 2009 (ASCLA 2009) came into force which provides broadly two legal forms of apprenticeship; a contract of apprenticeship and an apprenticeship agreement. The apprentice will be an employee under both forms of apprenticeship but the employer will have certain additionally responsibilities for an apprentice employed under a contract of apprenticeship; the main reason being in relation to terminating the apprenticeship. Note this Act does not apply to Scotland and Northern Ireland so Scottish employers should seek further advice on this issue.

Prior to the introduction of ASCLA 2009, the status of an apprenticeship was governed by case law, with the Court of Appeal finding a modern apprenticeship could still constitute a common law contract of apprenticeship as long as it satisfied traditional criteria relating to the duration of the contract and the employer’s obligations under it. This made it particularly difficult for employers to terminate the apprenticeship prior to the expiry of the term of contract/reaching the required qualification.

Contract of Apprenticeship

With this form of apprenticeship the primary purpose is training and providing work for the employer is secondary. This provides apprentices with enhanced rights on termination of their employment compared to ordinary employees. With this form of apprenticeship an employer cannot easily dismiss an apprentice on the same grounds that they can dismiss an ordinary employee and therefore the employer could not terminate for say conduct or capability reasons as they would with a misbehaved or underperforming ordinary employee. It remains arguable in law that if there are clear express terms in the contract that allow termination in certain circumstances, then the employer can still rely on these terms, but the wording needs to be very clear and the legal position is still somewhat uncertain. Employers therefore have to let the contract of apprenticeship run its course unless an exceptional situation occurs such as a complete closure of the business resulting in redundancies for all employees.

Apprenticeship Agreement

This form of apprenticeship is governed by ASCLA 2009 and therefore seeks to balance the needs of the apprentice with the needs of the employer. Within this framework an apprentice has normal Employment Law rights as the contract is deemed to be a contract of service rather than a contract of apprenticeship. However, the agreement must satisfy certain conditions under ASCLA 2009 and be in a prescribed form.

There are four conditions required to qualify as an apprenticeship agreement which are:

  1. The apprentice must undertake to work for the employer;
  2. The agreement must be in the prescribed form, notably it must contain the basic terms of employment required to be given to the employees under Section 1 of the Employment Rights Act 1996. It must also include a statement of the skill, trade or occupation for which the apprentice is being trained under the relevant apprenticeship framework;
  3. The agreement must state that it is governed by the law of England and Wales (as the legislation does not extend to Scotland and Northern Ireland);
  4. The agreement must state that it is entered into in connection with a qualifying apprenticeship framework.

Employers will still need to take care when dismissing apprentices under this type of apprenticeship where those apprentices have acquired sufficient continuous service for Employment Law rights. Once the apprentice has acquired two years’ employment then the employer will need to be able to demonstrate both a fair reason to dismiss and that dismissal was reasonable in the circumstances to avoid the risk of an unfair dismissal claim. Employers should still take care in relation to avoiding any discriminatory behaviour, notably age discrimination due to apprentices normally being younger employees.

Developments

Note that the Government has for some time been proposing to overhaul apprenticeships and this may alter the position set out above. It follows that, if you are looking to employ an apprentice, further advice may be needed.

The government has recently published the Enterprise Bill which includes protecting the “apprentice” brand by (amongst other things) making it a criminal offence to offer an apprenticeship course or training if it is not a statutory apprenticeship.

Andrew Macmillan, Solicitor, Motor Industry Legal Services

Posted by Sue Robinson on 06/11/2015