Over the last 20 years the value of apprenticeships to business has seen a growth in understanding and government promotion. More people than ever are being encouraged towards on-the-job training resulting in benefits for both individuals and businesses.
Although hiring an apprentice is a potentially attractive option – often coming hand-in-hand with government funding for businesses – there are a number of regulatory and employment pitfalls that employers need to take into account.
The problem is the law on this area goes back centuries and, as a result, some elements of common law remain, alongside the more modern, current legislation. Why is this important? Because it can have an impact on the contract you have with your apprentice and what happens if you experience problems with them down the line. If they are engaged under a modern, statutory ‘apprentice agreement’ then this is a contract of service. They would be dismissed in the same way as any other employee, with the same rights. If, however, they were considered to be a common law apprentice then they would be entitled to far greater protection, as well as having the potential to claim a great deal more compensation in a dispute.
What you need to know
- Contracts of apprenticeship are governed by common law principles. This means they are generally for a fixed term, are defined by the purpose of training, cannot be terminated early (except for extreme misconduct) and can be created orally (even without using the term ‘apprentice’ or ‘apprenticeship’.
- An apprenticeship agreement, however, is a modern structure and contract.
- These need to comply with the terms of one of the government apprenticeship frameworks (which will change to standards by 2020). This is linked to the provision of funding and sets out what employers and training organisations need to deliver to qualify.
- Broadly speaking a modern agreement will also need to meet the requirements set out by the Apprenticeships, Skills, Children and Learning Act 2009. The Deregulation Bill of 2015/2017/2019 did propose some of the technical requirements of the ASCLA (in England only) but given that this has been derailed by Brexit… we have to keep on working to the ASCLA until we hear more!
- If the requirements of the ASCLA are not met then, by default, the agreement will be a common law apprenticeship.
- In particular, this has a bearing on how you can dismiss an apprentice. A modern apprenticeship agreement includes provision for the apprentice to be dismissed in the same way as any other employee.
Understanding the ASCLA
Don’t worry. Although the ASCLA sets out clear conditions that need to be met (if the agreement is to be considered an ‘apprenticeship agreement’ rather than a common law apprenticeship) they are relatively simple to follow. To make life easier, for enlightenHR clients, we’ve also drafted a contract specifically for apprentices that meet these requirements, and we’ll be advising all of our clients to use that format going forward.
Put simply, except in the case of employees of the Crown Parliament or military personnel, the agreement must:
- be in writing
- state that it is governed by the law of England and Wales
- place an obligation on the apprentice to work for the employer
- set out the basic terms and conditions of employment required by s.1 of the Employment Rights Act 1996 – these include the employment start date (and end date, if it is for a fixed term), rate of remuneration and hours of work
- state the skill, trade or occupation for which the apprentice is being trained
- state that it is entered into in connection with a qualifying apprenticeship framework (except in the case of “approved English apprenticeships”) – you can find more information about these here.
You might also wish to state expressly that the agreement is intended to create a contract of service (under the ASCLA), and is not a contract of apprenticeship under common law.
What employment rights will apprentices have?
- You might want to think about age discrimination. It might be tempting to place age limits on applicants but you need to remember that the law relating to age discrimination still applies. Are the terms offered consistent with other employees of similar status and length of service?
- Your apprentice will enjoy many of the statutory rights applicable to employees but there are some exceptions. Apprentices are not entitled to protection against discrimination under the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002. Those under the age of 19, or in the first year of their apprenticeship, are also, currently, entitled to a lower level of minimum wage protection than other workers.
- When the arrangement is terminated by the employer (or at the end of a fixed term) there is the potential for an unfair dismissal claim, under the Employment Rights Act 1996.
- For dismissal to take place legally, with a common law agreement, the misconduct must be so severe that it is considered impossible to carry on teaching the apprentice. Under the ASCLA, however, an apprenticeship agreement will generally be treated like any other employment contract, and an apprentice can be lawfully dismissed according to the principles that would apply to an ordinary employee.
If you would like more advice about taking on (or dismissing) apprentices – or if you’d like to use our apprenticeship agreements – please contact Alison on 01803 469466.
