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UK HR E-briefing: Apprenticeships - are your contracts fit for purpose?

  • United Kingdom
  • Employment law - HR E-Brief


Last month we outlined the proposals for the new apprenticeship levy due to be introduced from this April (see e-briefing and our levy flowchart).

However, with so much focus upon and Government aspiration attached to the expansion of apprenticeships in the next few years, for new or unwary employers other aspects of apprenticeship, rooted much further back in time, continue to present common pitfalls. In particular, these include:

  • the form of apprenticeship agreements; and
  • apprentices as young persons in the eyes of the law.

1. Apprenticeship agreements1
Whilst the basis of apprenticeships may be well-understood in terms of the principle of work-based training, in later years in England and Wales this has taken statutory form. As a result, there are 3 main forms of apprenticeship contract in the UK:

  • approved English apprenticeship agreements: the principal statutory form of apprenticeship in England;
  • apprenticeship agreements: the statutory form of apprenticeship in Wales (and England where the apprenticeship is undertaken under a Framework); and
  • contracts of apprenticeship (non-statutory).

Both statutory forms of apprenticeship contract are provided by the Apprenticeships, Skills, Children and Learning Act, 2009 (ASCLA) and must satisfy the provisions of that Act.

However, sitting alongside these relatively new statutory forms of apprenticeship are much-older, traditional contracts of apprenticeship which exist outside of legislation and have instead developed over centuries through case-law. These “common law” contracts of apprenticeship have no formal requirements, save for underlying agreement regarding training and work. Apprenticeships which are not approved English apprenticeship agreements or apprenticeship agreements will fall within this category. Importantly, this includes apprenticeships which employers in England and Wales had intended to be statutory apprenticeships but which, for whatever reason, fail to satisfy ASCLA requirements.

  • Approved English apprenticeship agreements and apprenticeship agreements

To ensure contracts to take on apprentices fall within the statutory scope, key elements must be present (in accordance with ASCLA):

For approved English apprenticeship agreements (since 26 May, 2015), these elements are fairly easy to satisfy in that:

  • the apprenticeship must be in a sector in which an approved sector standard applies (a list of these is retained by the Government and is extensive: apprenticeship standards); and
  • the agreement must provide for training with a view to helping the apprentice achieve the applicable approved standard.

Apprentice agreements in Wales (and those in England which continue to be undertaken under a Framework where no approved Government standard has yet been created) are more prescriptive:

  • the apprentice must undertake to do work for the employer; and
  • the agreement must:
    o   relate to a qualifying apprenticeship framework or standard as set by Government and to scoping the work and outcomes;
    o   be in the prescribed form2 (which requires a contract of employment or written statement of terms, along with a statement of the skill, trade or occupation for   which  the apprenticeship is offered);
    o state that it is entered into in connection with a qualifying apprenticeship framework or standard and that the agreement is governed by the law of England and Wales.
  • Contracts of apprenticeship

In contrast to the statutory form of apprenticeship outlined above, the bases on which a contract of apprenticeship can be brought to end prematurely are narrow –more so even than for other employees. For example, due to the nature of the role, a redundancy situation is only likely to be established if the business as a whole ceases. Furthermore, where misconduct might present a concern, in practice, dismissal of a common law apprentice on this ground should only be contemplated where the conduct is so serious the training cannot reasonably continue.

Where justification for early termination is lacking and the apprenticeship is for a specified period or purpose which has not been achieved, the employer will be liable to compensate the apprentice for their loss up until the point at which the apprenticeship would have ended legitimately. This can prove both expensive and contentious but compensation is likely to include not only unpaid earnings for the remaining period of the apprenticeship but also damages for the loss of training and future career prospects.

2. Apprentices as young workers
Another aspect of engaging apprentices which can catch out unwitting employers is specific legal provision applicable where the apprentices are young workers. For example:

  • lower wages; whilst undertaking work-based training programmes pursuant to a recognised apprenticeship Standard or Framework, a lower rate of national minimum wage applies to apprentices under the age of 19 (or those aged 19 and over who are in the first year of their apprenticeship). The current rate applicable is £3.40 per hour (in contrast with the full adult rate of national living wage at £7.20.
  • increased daily breaks; young workers aged 16 to 18 are entitled to a minimum rest break of 30 minutes after 4 ½ hours’ work. In addition, at least 12 hours rest must be provided between working days.
  • shorter working days and weeks; young workers aged 16 to 18 are normally limited to working a maximum 8 hours per day or 40 hours per week and are entitled to 2 days off per week. Work between the hours of 10.00 pm and 6.00 am (or 11pm and 7am if expressly provided for by contract) is also prohibited. A special exemption to these night-working restrictions can apply in certain sectors, such as agriculture and catering, subject to conditions.
  • greater health and safety precautions; legal age limits may apply to the use of potentially hazardous equipment but in any event employers should be extra vigilant of possible risks to younger, inexperienced workers in the workplace and take appropriate steps. Employers’ liability insurance cover should also be checked for inclusion of young workers.
  • protection from disadvantage based on age; employers need to take care not to act upon assumptions of capability or suitability when it comes to engaging or extending opportunity to young workers as this could amount to unlawful age discrimination.

Understanding the above distinctions between statutory and non-statutory apprenticeships and ensuring apprenticeship contracts are in the appropriate form is crucial for employers in terms of achieving flexibility and successful outcomes. With the advent of many more new apprenticeship Standards and increased employer-input into these, opportunities for tailored training should be increasingly accessible. For employers, the key question will be how to make the most of what the significant changes to practice and funding arrangements might offer their staffing and skills needs and how these needs might be best achieved.

1 NB The statutory provisions referred to (under the Apprenticeships, Skills, Children and Learning Act, 2009) and including the applicable rights of termination, do not apply to Scotland or Northern Ireland, which continue to operate under their own forms of apprenticeship contracts. Accordingly references to “approved English apprenticeship agreements” and “apprenticeship agreements” do not apply in these areas.

2 the prescribed form is as provided by the Apprenticeships (Form of Apprenticeship Agreement) Regulations 2012.