What you should consider before taking on an Apprentice?

Apprentice special

Contracts of apprenticeship are governed by common law principles, generally for a fixed term, and cannot be terminated early except for in cases of extreme misconduct. They can be created orally, and even without the use of terminology such as “apprentice” or “apprenticeship”. The defining feature is that training is the main purpose of the arrangement.

Apprenticeship agreements (sometimes known as Modern Apprenticeships) must comply with an “apprenticeship framework” published by the Government and incorporate a training element, generally through an external training provider. Unlike under a common law apprenticeship, with a contract of apprenticeship or ‘Apprenticeship Agreement’, an apprentice in some cases may be dismissed in the same way as any other employee. In the case of misconduct, considering the nature of the agreement, it would have to be demonstrated that the continuing misconduct was more significant than would normally be required for an ordinary employee.

The Apprenticeship Agreement

The agreement should be based on an employment contract (Contract of Service) with the following provisos included:

  • Relevant framework and level the apprentice is working towards
  • Relevant hourly rate for their age
  • Must be more than 16 hours per week
  • Start date
  • Estimated completion date
  • Provisions about unsatisfactory college attendance and performance

Generally, apprentices are still governed by the employee staff handbook and HR policies of the company (except for redundancies).

Please note that the Learning Agreement or Training Agreement provided by the training provider; and is signed and agreed between the training provider; the apprentice and the employer (and sometimes by the guardian), does not replace the Apprenticeship Agreement (i.e. the Contract of Service).

Termination of an Apprentice Agreement / Contract on completion

Generally, an apprenticeship is considered complete with a defined end date or end event, such as completion of the required NVQ. This should be clearly set out in the Apprenticeship Agreement.

If their employment is not renewed after this date or event, they will be treated as having been dismissed. However, because apprentices have the same employment rights as other employees in terms of dismissal under the Employment Rights Act 1996, the apprentice would be entitled to receive a written reason for dismissal and be given their contractual or statutory notice (which ever applies).

The dismissal would be for ‘some other substantial reason’ (SOSR), that is, that an Apprenticeship is a once-in-a lifetime agreement and that the term of the apprenticeship had been completed.

Apprentices and redundancy

An apprenticeship contract cannot be terminated because of redundancy unless the employer’s business closes or fundamentally changes its character. It cannot simply be that the need for apprentices in the business has reduced, as with ordinary employees. If you are faced with the possibility of making apprentices redundant – please contact us first for further advice.

Termination of an Apprentice Agreement / gross misconduct and continued misconduct

As a Contract of Apprenticeship is for the period agreed and achieving the stated objectives set out in the agreement, (as separate to a ‘fixed term’ contract), it cannot lawfully be terminated before the expiry of those terms. This means you cannot simply terminate it because the apprentice is not up to scratch or has a conduct problem, such as poor timekeeping.

However, a Contract of Apprenticeship can be brought to an end either by a frustration of contract or a repudiatory act. An example of the former would be where you completely close down your business. The latter would include acts of gross misconduct and continual neglect of duties or serious incapacitation to the extent that it’s become impossible for you to teach the apprentice (having followed a fair dismissal procedure). It is important to note that there is a much higher threshold for performance and conduct issues than applies in a normal Contract of Employment.  You will be expected to manage performance and absence problems in a manner which results in the apprentice achieving the required standards.

It is vital that you go through a proper disciplinary procedure when dealing with problems and have sufficient evidence that any eventual dismissal is justified. This will include a proper investigation and an opportunity for the apprentice to appeal. Fair grounds might also include a legal reason that the apprentice can no longer work – for example, if driving is a core part of their job and they lose their driving licence.

If you do dismiss an apprentice before the expiry of the fixed term, they may claim damages not only for loss of earnings for the remainder of the fixed term but also a sum in respect of the value of their loss of future prospects as a qualified person.

Subsequently, you could put express clauses into the Apprenticeship Contract which permit you to terminate it early in certain circumstances, such as disciplinary reasons or continual failure of exams.  Although there’s no case law on their enforceability, it’s worth putting these types of clauses in – if nothing else they might well deter an apprentice from taking action.

Summary:

Although The Apprenticeships (Form of Apprenticeship Agreement) Regulations 2012 came into effect to bring ‘Apprenticeship Agreements’ closer in line with normal employment contracts, there still remains a significant difference.

The objective of the agreement between the employer and the apprentice is that the apprentice will receive on-the-job experience and mentoring from his employer; in conjunction with the training provided by the Learning Provider. The agreement is complete when the learning framework has been accomplished; and the relevant qualification has been granted. The impact on the apprentice due to dismissal prior to the successful completion of the apprenticeship due to loss of future earnings can be significant.

Subsequently the onus on the employer to ensure that the apprentice has every possible opportunity to complete the apprenticeship will always be paramount.