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. By Peter Schofield
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.
