Partner Article

A Reform for the Apprentice?

Following an 11-month review by the Business, Innovation and Skills Committee, a report by MPs has called for urgent changes to the Government’s apprenticeship programme to better focus apprenticeship schemes on current business needs.

Last year, the Government invested £1.2bn in the apprenticeship programme, with 457,200 people starting training as an apprentice, whilst over a million people have commenced apprenticeships since 2010. However, clearer policy on the purpose and effectiveness of apprenticeships is thought to be required, with the aim being to sell the concept of apprenticeship to young people as a realistic alternative to university.

So how do apprenticeships work?

Today’s apprenticeships are work-based training programmes, which in the majority of cases lead to nationally recognised qualifications. Apprenticeships are open to all age groups above 16 and commonly last a fixed term and/or until a level of qualification is reached. Apprentices are entitled to a minimum hourly wage rate, currently £2.65 per hour, whilst the training element of the apprenticeship is usually fully or partially government funded.

Since the Apprenticeships, Skills, Children and Learning Act 2009 (ASCLA 2009) came into force in 2011, there have been two legal forms of apprenticeship –contracts of apprenticeship andapprenticeship agreements.

Thecontract of apprenticeshipis the traditional form of apprenticeship under which training, as opposed to working for the employer, is the primary purpose. Because of this disctinction, apprentices employed under contracts of apprenticeship have enhanced rights compared to ordinary employees, which limit their employer’s ability to terminate the apprenticeship during its fixed term. The employer cannot, for example, dismiss them for redundancy in circumstances where it may legitimately dismiss other employees for redundancy.

Apprenticeship agreements were introduced by ASCLA 2009 with the aim of making apprenticeship more attractive to employers. The legislation went about this by making the apprenticeship agreementa contract of service, i.e. specifically not a contract of apprenticeship, meaning apprentices employed under them can be treated in the same way as ordinary employees. The concept was nevertheless restricted by the requirement that for an apprenticeship agreement to exist, it must be made in writing (in contrast, contracts of apprenticeship may exist orally) and it must satisfy certain conditions specified in ASCLA 2009 and the Apprenticeships (Form of Apprenticeship Agreement) Regulations 2012.

Paul Clark, Employment Law solicitor at Short Richardson & Forth LLP commented, “It will be interesting to see how the changes proposed by the recent MPs report affect the present two forms of apprenticeship and the implications for employers and apprentices entering into them. Perhaps a third form of apprenticeship will result which balances the tension between providing the security which apprentices will expect during their training to make apprenticeship an attractive alternative to higher education, and the workforce flexibility which businesses require during the current economic climate.”

“Employers should take advice when considering apprenticeship, particularly on the terms of any agreement, as in the event of a dispute over the nature of the relationship, the courts will decide which form of apprenticeship is in place. There are also age discrimination and health and safety issues which employers should be aware of. However, with the benefit of advice and the correct arrangement in place, taking on an apprentice may prove to be a rewarding and financially prudent experience which assists both apprentice and employer during and potentially beyond the fixed term.”

This was posted in Bdaily's Members' News section by Paul Clark .