What Every Employer Needs to Know About Apprenticeships

With the 12^th annual National Apprenticeship Week approaching, Sarah Garner, Solicitor at DAS Law, explains what factors employers and young people need to consider regarding apprenticeship schemes and their legal obligations…

What is an apprenticeship?

An apprenticeship is an agreement between an individual and an employer where work will be provided for the employer in return for training to achieve a skill/qualification. These agreements benefit both parties as it allows employers to cover skill shortages within their business, while the individuals get the chance to develop and hone their skills, usually combined with time off to attend training through a college or training establishment.

An apprentice agreement – often referred to as a ‘modern apprenticeship’ – differs from that of an apprentice contract in that the law treats the apprentice in the same way as an employee under a contract of employment with no additional rights. This allows an employer more flexibility in terms of taking action for poor performance and conduct, and terminating if the relationship becomes untenable or unsatisfactory. An apprentice contract can be difficult and risky to terminate.

What is the relevant law relating to apprenticeships?

S.32 of the Apprenticeships, Skills, Children and Learning Act 2009 (ASCLA) sets out the prescribed format of an apprentice agreement and states that any agreement entered into is under a qualifying apprentice framework. The Apprenticeships (Form of Apprentice Agreement) Regulations which came into force on the 6 April 2012 set out what the agreement should include.  These are:

• That the apprentice agreement is in the prescribed format as set out in section.32 ASCLA;
• That written statement of particulars has been provided to the apprentice as set out in section.1 Employment Relations Act 2009;
• That a contract of employment or letter of engagement is provided as set out in section.1 Employment Rights Act 1996;
• That the agreement sets out the skill, trade or occupation that the apprentice is being trained for.

What should I include in an apprentice agreement?

As well as being set out in the prescribed format under the regulations above, an employer may also want to consider including the following provisions:

• The duration of the agreement and whether the apprentice will be subjected to a probationary period;
• How the apprentice will be monitored and assessed regarding their performance and development;
• The time off that will be provided for attending college and for any examinations;
• Details of notice periods for each party to bring the agreement to an end;
• If the apprentice is under the age of 18, you may wish to have a parent or guardian sign the agreement;
• Details of clawback provisions if you were looking to recover training costs if the apprentice leaves within a specific time period.

Nevertheless, we would recommend that legal advice or the services of a solicitor are obtained if you are considering employing an apprentice. This is due to ensuring that the regulations are complied with, and that the prescribed information is contained. A properly drafted agreement will avoid potential issues being raised during the relationship, and significantly reduce the likelihood of facing an employment tribunal.

What if the agreement is not put in writing?

If the agreement does not comply with the regulations, or can be evidenced in a document, then the default position of the apprentice being employed under a contract of apprenticeship will apply.

A contract of apprenticeship does not need to contain specific provisions or be in a particular form. It is governed by common law and affords an apprentice greater right than that of an employee. These include not being able to terminate for redundancy and it is very difficult to terminate the contract for any other reason.  If a contract of apprenticeship is terminated they can claim to be paid for the entire duration of the fixed term, and also for the loss of employment opportunity if they have not been able to complete their qualification.  This could be a very costly claim for an employer.

What are apprentices entitled to be paid?

Apprentices are entitled to the National Minimum Wage apprentice rate if they’re either aged under 19 or aged 19 or over and in the first year of their apprenticeship.

Apprentices are entitled to the minimum wage for their age if they both are aged 19 or over and have completed the first year of their apprenticeship. National minimum wage rates are usually increased in April each year and can be found at www.gov.uk

Can I restrict the age of applicants for an apprenticeship?

Employers often wish to choose young apprentices as the National Minimum Wage rate for apprentices under 19 years old, or who are in their first year of employment, are significantly lower.  Also, there can be increased funding available for younger apprentices.

However, the risk of choosing younger candidates is the potential indirect discrimination against older applicants. A successful claim for discrimination can be costly to an employer, in that such claims are unlimited in the amount of compensation that a court can award.

What holidays are apprentices entitled to?

Apprentices are entitled to the same holiday entitlement as employees and workers. Under the Working Time Regulations 1998, these are currently 28 days per year including bank holidays or 5.6 weeks.

How many hours can an apprentice work?

Apprentices can start work as young as 16 and apprenticeships are generally for a minimum of 30 hours per week. The Working Time Regulations 1998 state that young workers should not work more than eight hours a day and 40 hours a week and don’t normally work at night. The regulations state that you must have at least 12 hours’ rest between each working day and 48 hours’ rest per working week. There are also stricter rules that apply to children under the age of 16.

For employees over the age of 18, they should not work more than 48 hours per week on average and should have 24 hours rest in a working week.  All employees working over six hours in a day are entitled to a 20 minute rest break during the day.  The regulations prohibit this break being taken before or at the end of their shift.

Can I obtain funding for apprentices?

Employers that have an annual pay bill of more than £3 million, or are connected to other companies or charities for Employment Allowance which in total have an annual pay bill of more than £3 million, have to pay an apprenticeship levy each month from 6 April 2017. The levy is charged at 0.5% of your annual pay bill. If you pay the levy you’ll receive funds to spend on training and assessing your apprentices. The government will then add 10%.

If you do not pay the levy then the government do provide funding to spend on apprentices.  The government will pay 90% and you’ll pay 10% towards the cost of training an apprentice. There are maximum amounts that the government will pay and terms and conditions that need to be met.

You can find more information at www.gov.uk You can also contact the National Apprenticeship Service on 0800 015 0600 for further guidance and information.

Disclaimer: This information is for general guidance regarding rights and responsibilities and is not formal legal advice as no lawyer-client relationship has been created.