Apprentices- The Risks if it doesn’t work out

Apprentices- The Risks if it doesn’t work out

April 3, 2016

Apprentices are very popular in Early Years and we see no reason why their popularity will wane, given the current cost pressures many settings are under.

Over the past 20 years, successive governments have sought to encourage businesses to establish apprenticeship schemes, and entice individuals to take up the opportunity for certified on-the-job training.

A well-run apprenticeship scheme should benefit both parties. In principle apprenticeship schemes are largely based on the long established agreement that the employer provides training, while the apprentice agrees to work for less pay than a fully trained employee.

However, there are a number of employment law aspects that employers need to consider.

Legal framework

The regulation of apprenticeships goes back a very long time – perhaps as far back as the early 13th century, where apprentices were explicitly referred to in early laws of the City of London, which excluded them from certain privileges.

It is therefore unsurprising that a common law concept remains alongside the current legislative regime (governed by the Apprenticeships, Skills, Children and Learning Act 2009 (ASCLA)).

The distinction between common law and statutory apprenticeship concepts has a key practical significance.

An individual engaged under a statutory “Apprentice Agreement” will be treated as being engaged under a contract of service (employee) and therefore may generally be dismissed in the same manner as an ordinary employee, a common law apprenticeship will not.

Action ***If you have apprentice contracts in place now, please take a look and see whether they have Apprentice Agreements contained within them.***

We stress this because a common law apprentice has far greater protection and the potential to claim much larger compensation.

There are two different types of apprenticeship, and the distinction can have a major effect on the relationship between employer and apprentice.

Contracts of apprenticeship are governed by common law principles, are generally for a fixed term, and cannot be terminated early except for in cases of extreme misconduct.

Apprenticeship agreements must comply with an “apprenticeship framework” published by the Government and incorporate a training element, generally through an external training provider. Government funding is available to cover part of the cost of this training and, unlike under a common law contract of apprenticeship, an apprentice can be dismissed in the same way as any other employee.

It is also generally useful to include certain provisions that may be inconsistent with a common law apprenticeship, in order to reduce the risk of such an arrangement being deemed to exist.

While a mere label is never conclusive as to employment status, it would be prudent to state expressly that the agreement is intended to create a contract of service and not a contract of apprenticeship.

A provision allowing the employer to terminate the agreement immediately following the individual’s gross misconduct or, otherwise, after a period of notice would also be inconsistent with a common law apprenticeship (as illustrated in the case of HMRC v Jones and others (t/a Holmescales Riding Centre)). Clearly, such provisions would also create greater flexibility for the employer.

A risk of age discrimination

The risk of age discrimination may be particularly relevant to employers dealing with apprentices.

While it may be tempting to place age limits on applicants, this could directly discriminate against older applicants, unless the employer can show that the limit is objectively justified.

Employers should also consider whether or not the terms offered to apprentices are consistent with other employees of similar status and length of service.

Apprentices as a group are likely to be younger than the rest of the workforce, so any difference in terms would generally need to be objectively justified to avoid a risk of indirect age discrimination.

Statutory rights of apprentices during employment

In particular, apprentices are not entitled to protection against discrimination under the Fixed-term Employees (Prevention of Less Favourable Treatment) Regulations 2002, and those who are under the age of 19, or in the first year of their apprenticeship, are currently entitled to a lower level of minimum wage protection than other workers.

Dismissing an apprentice

Where the arrangement is terminated by the employer, or terminates automatically at the end of a fixed term, there will be a dismissal for the purposes of the Employment Rights Act 1996 and therefore the potential for an unfair dismissal claim exists.

Under the ASCLA, an apprenticeship agreement will generally be treated like any other employment contract, and an apprentice can be lawfully dismissed according to the principles that would apply to an ordinary employee.

The usual statutory and common law protections (e.g. unfair dismissal, wrongful dismissal and discrimination protection) apply.

However, it would be open to an apprentice, and in my opinion an apprentice’s parents, to argue that a higher standard is required of an employer to dismiss an apprentice fairly. As the unfair dismissal test under the Employment Rights Act 1996 requires consideration of all the circumstances, it is easy to see how a sympathetic employment tribunal may be persuaded to hold an employer to a higher standard in the case of an apprentice.

Everything considered, be careful out there, it’s a minefield!

For help with your apprentice contracts call us on 01527 909436 or email

More apprentice info is available at

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