Are your apprenticeships traditional or modern?

Employers need to be aware that in a traditional apprenticeship, apprentices
have significant additional rights not available to a company’s employees

With a contract of apprenticeship, apprentices
have significant additional rights not available to employees. The contract
usually runs for a specified period or until the apprentice reaches a certain
standard. A contract of apprenticeship can, in my view, expressly permit the
employer to terminate the contract early in certain circumstances.

If it does not, however, the employer can terminate the contract early only
where the apprentice has been guilty of serious misconduct; or has become so
seriously incapacitated that it is impossible for the employer to teach them;
or where the business has closed or fundamentally changed in nature, again
making it impossible to train the apprentice. Ordinary redundancy because of a
downturn in trade, or dismissal for poor performance, would be a breach of
contract unless expressly provided for in the contract.

If an apprentice’s contract is terminated in breach of contract, they are
entitled to compensation reflecting lost wages for the remainder of the
apprenticeship and the value of lost training and the reduction in their future
employment prospects. This compensation could be substantial, which makes
contracts of apprenticeship a potentially significant burden for employers.

But not all ‘apprentices’ are apprentices. Some may be ordinary employees or
trainees. Trainees who are not apprentices and are working with a company to
acquire skills and experience rather than to produce productive work are not
employees. They have fewer rights than employees, let alone apprentices.

In Thorpe v Dul, Dul entered into an agreement with an employer and with the
Leicestershire TEC, headed Modern Apprenticeship Agreement (MAA), which was due
to last three years.

He was employed for nearly two years when a new owner terminated the
arrangement with a week’s notice. Dul brought a claim for unfair and wrongful
dismissal. The tribunal took the view that Dul had a contract of apprenticeship
and awarded him damages for losses to the end of the apprenticeship and for the
reduction in his prospects.

The EAT found that the MAA in this case was not a contract of apprenticeship
in the traditional sense. In a contract of apprenticeship, the ‘master’
undertakes to educate and train the apprentice in the skills needed to practice
a skilled trade, and the apprentice binds himself to serve and work for the
master and comply with all reasonable directions.

However, the modern apprenticeship is simply a marketing term for a training
scheme providing ‘on-the-job’ experience, with funding from the Learning and
Skills Council (LSC).

If Dul was not an apprentice, was he at least an employee who could claim
unfair dismissal?

The EAT remitted this issue to the tribunal, where the answer will depend on
issues such as whether there was a separate contract of employment, whether the
elements of control and mutuality of obligation were present and whether there
was any feature of the relationship that was inconsistent with employment. Dul
might simply, however, have been a trainee with no right to claim.

However, it does now seem that a relationship founded solely on a tripartite
MAA supplied by the TEC or the LSC will not, of itself, normally give rise to a
contract of apprenticeship or perhaps even a contract of employment.

An apprentice, then, may have greater or less protection against dismissal
than an employee depending on their contract.

At present, all that can be done to inject some certainty is to take advice
and have a properly drawn-up agreement with the apprentice – one that
explicitly creates an employment relationship that can be terminated for
redundancy or other good cause.

By Peter Schofield, Head of legal affairs, EEF

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