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Apprenticeships have been around since the Middle Ages, originally to enable young workers to learn a trade.

Much more recently, the increase in university admissions has meant that apprenticeships have declined in favour of academic learning.

However as the cost of higher education continues to rise and there is a shortage of workers with practical skills, apprenticeships are now becoming increasingly popular. This benefits both employers and people who can earn while they learn. In a survey published by BIS on 20 August 2013, 72% of employers said that apprenticeships improved their product or service quality and 81% of employers would recommend apprenticeships.

Legally, however, employers need to be aware that different arrangements offer apprentices different rights.

Apprenticeship Contracts vs Apprenticeship Agreements

There are two types of apprenticeship arrangements: ‘Apprenticeship Agreements’ and ‘Apprenticeship Contracts’.

Apprenticeship Contracts have been around for hundreds of years and are governed by case law. If an employer has an agreement with an individual and the main purpose of that agreement is for the individual to be trained by the employer, there will automatically be an Apprenticeship Contract in place. This does not need to be in writing although this is, of course, strongly recommended so that everyone understands the terms. The contract does not even have to state that it is an Apprenticeship Contract as there are no specific requirements for it to be one aside from the fact that it is being used for an employee undertaking training in the organisation.

Apprenticeship Agreements are a much newer concept – their requirements are set out in the Apprenticeships, Skills, Children and Learning Act 2009. But an arrangement, agreement or contract cannot be an ‘Apprenticeship Agreement’ unless it meets specific requirements. For example, it must be made in writing and it must state that it is entered into in connection with a qualifying apprenticeship framework, which is a requirement that is often overlooked.

Employers should be careful. Often employers try to write an Apprenticeship Agreement but use their standard contracts and change the job title or heading to “apprentice”. Whilst this meets the requirement that the agreement needs to be in writing, it fails to include all required clauses – unintentionally creating an Apprenticeship Contract instead.

Why does it matter?

Apprentices who are employed under the newer Apprenticeship Agreement can be treated like ordinary employees and the normal unfair dismissal rules apply. Apprentices who have Apprenticeship Contracts have additional rights and can, for example, only be dismissed fairly for misconduct if they are effectively unteachable. This is because the main purpose of the Apprenticeship Contract is for the apprentice to be trained.

If the apprentice commits misconduct or breaches the Apprenticeship Contract, this does not necessarily mean that the employer can stop training the apprentice. The misconduct has to be so extreme that it means the apprentice can no longer be taught the trade. For example, in one case an apprentice was being taught to be a pawnbroker but repeatedly stole from his employer. The court decided that the contract was for the employer to teach the apprentice how to carry on a pawnbroker’s trade honestly. Therefore, because he stole, it was fair to dismiss him because it was no longer possible to teach him to be an honest pawnbroker.

If the Apprenticeship Contract specifically states that the apprentice will be trained subject to them obeying the reasonable instructions of the employer, dismissal, should it become necessary, is slightly easier. However the level of misconduct would still need to be much higher than an ordinary employee for any dismissal to be deemed fair in the eyes of the law. It is very likely that the apprentice would have to continually disobey instructions rather than commit a one-off offence.

It is also important to note that an Apprenticeship Contract cannot be terminated by reason of redundancy unless the employer’s business closes or fundamentally changes its character. Therefore it cannot simply be that the need for apprentices in the business has reduced, as with ordinary employees.

If employers do dismiss apprentices on Apprenticeship Contracts unfairly, it is likely that the apprentice will be awarded more compensation than employees who are dismissed would be awarded. This is because the additional compensation has to reflect the loss of earnings under the Apprenticeship Contract plus the loss of potential future earnings.

Apprenticeships are proving hugely popular and can be a great option for both employers and trainees. But when problems do arise, knowing how to tackle disciplinary proceedings according to whichever contract or agreement is in place is crucial. This is a tricky area and any mistakes could be costly.

This article was featured in People Managament. 

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