Simon Fenton, employment lawyer at Thomas Eggar, talks apprenticeships, the benefits they can bring for businesses/employees and what changes are afoot.
Apprenticeships are back in fashion. Young people starting out on the road to gainful employment like them because it allows them to be trained for work without incurring the crippling student loans that most university students incur. You can work and learn and earn. Moreover, most successful apprentices are guaranteed a job at the end of it, at well above the national minimum wage.
Employers like apprenticeships not least because a traditional education does not always make a young person fit for work. There is an acknowledged skills shortage in manufacturing but interestingly the feeling is that businesses are increasingly using apprenticeships to “grow their own” skill sets and are shifting to a “recruiting for attitude, training for skills” approach.
But what exactly is an apprenticeship and how does it differ from a regular contract of employment that also involves a bit of on-the-job training?
The system of apprenticeships was first developed in the middle ages, when a master craftsman could employ young people cheaply, in exchange for food, lodging and training. Apprenticeships today are work-based training programmes, which lead to nationally recognised qualifications.
Apprenticeships are open to all age groups above 16. An apprenticeship will be for a fixed term and/or until a level of qualification is reached. The agreement will usually be in a form common to all apprentices in that trade. Apprentices are entitled to a minimum hourly wage rate. The training element of the apprenticeship is usually fully or partially government funded.
Until the Apprenticeships, Skills, Children and Learning Act 2009 (ASCLA 2009) came into force in 2011, the relationship between apprentices and employers was largely governed by case law. There are now broadly two legal forms of apprenticeship; (1) contracts of apprenticeship and (2) apprenticeship agreements.
Contracts of Apprenticeship
Training is the main purpose of a contract of apprenticeship. Undertaking work for the employer is secondary, and as a result apprentices in these forms of apprenticeships have greater rights on termination of employment, compared to regular employees. The essential differences between an apprentice under an old fashioned ‘contract of apprenticeship’ and regular employee are:
- Fixed Term – an apprenticeship is for a fixed term. If it is 4 years and an employer dismisses an apprentice after, say, 1 year, they could be liable for 3 years loss of wages.
- Misconduct – an employee may be dismissed for an accumulation of small lapses with a series of warnings of increasing seriousness, leading to a Final Written Warning and then dismissal. An apprentice cannot generally be dismissed in this way. Only a matter of gross misconduct or gross incapability will be sufficient to terminate an apprenticeship.
- Redundancy – Apprentices employed under a common law contract of apprenticeship cannot be dismissed by reason of redundancy in the usual way, unless there is a closure of the business or the employer’s business undergoes a fundamental change in its character.
Apprenticeship Agreements (under ASCLA 2009)
Apprentices working under Apprenticeship Agreements have the same rights as regular employees and not greater rights. The idea is to promote apprenticeships and to remove the disincentive to employers of being stuck with an apprentice that they can’t deal with one way or the other.
There is no standard Apprenticeship Agreement, however, if the agreement contains certain conditions, it will qualify as an apprenticeship agreement. These conditions are:
- The apprentice must undertake to work for the employer;
- The agreement must be in the prescribed form, in that it must contain:
a. the basic terms of employment under s.1 Employment Rights Act 1996; and
b. it must include a statement of the skills, trade or occupation which the apprentice is being trained in.
3. The agreement must state that it is governed by the laws of England and Wales;
4. It must state that it is entered in to in connection with a qualifying apprenticeship framework.
Where these conditions are met, an apprentice has the same rights as any other employee, although obviously they will also have the right to be trained. Clearly, this is the recommended model of working with apprentices.
On 1 July 2013 the draft Deregulation Bill was published. One of its aims is to simplify the legislation around apprenticeships. It also introduces the concept of Approved English Apprenticeships, to replace ASCLA apprenticeships although only inEngland(not inWales!)
It is impossible to predict exactly what the law will eventually say about Approved English Apprenticeships because one of the stipulations is that they must comply with “any other conditions specified by the Secretary of State in regulations”. Nevertheless, the aim is to make it easier still to offer apprenticeships.
Assuming it will be passed by Parliament, the new apprenticeships could be in place as early as 2014. If you were to set up an apprenticeship scheme now, you are extremely unlikely to need to amend it in light of these future proposals, because the aim to to simplify the procedures. In other words, if you comply now, you will almost certainly comply in the future too.
Where there is a widely recognised skills shortage in manufacturing, combined with the oft used dictum that ‘people are a business’s greatest asset’, it makes sense to put the effort in to getting the right people on board. You can try to recruit skilled people or you can make them yourself. With apprenticeships, you can develop excellence from within and the time to start is now.