The subject of Apprenticeships is once again firmly on the government's agenda and an area where there has been recent reform with proposals for more to come. We have summarised below the recent changes and proposals, but first here's a reminder as to what apprenticeships are and the different ways further education (FE) colleges can engage apprentices.
Apprenticeships – a summary
Often a useful form of engagement for FE Colleges, an apprenticeship is essentially a form of engagement which offers employment with training. An apprenticeship arrangement is usually for a fixed term and/or until an agreed level of qualification is reached.
Apprenticeships can often enable the FE Colleges that offer them a degree of input into the training of an individual, but with the added benefit of the apprentice's training element of the apprenticeship usually being fully or partially government funded. There are also lower National Minimum Wage rates applicable to apprentices in their first year which makes the economics of the arrangement more attractive.
Forms of engagement
All apprentices are employees. However, since 2009 there have been two ways in which an apprentice can be employed:
1. Under a 'traditional' contract of apprenticeship (Traditional Apprenticeship) or,
2. Under an apprenticeship agreement (which satisfies the requirements under the Apprenticeships, Skills, Children and Learning Act 2009) (Apprenticeship Agreement).
The most important distinction between the two is that a Traditional Apprenticeship is governed not only by employment legislation, (for example, the right to bring an unfair dismissal claim would apply, provided the apprentice has been employed for the requisite length of service), but also by common law principles. The common law principles in this regard dictate that because the primary purpose of a Traditional Apprenticeship is to provide training for the apprentice (doing work for the employer being secondary), apprenticeships involve greater responsibilities for employers than ordinary contracts of employment do. As a result, apprentices under such agreements cannot usually be made redundant and can only be dismissed for misconduct and capability, if express and clear terms in the contract allow this. Even then, the bar is higher than that for dismissing an ordinary employee.
The consequences of prematurely terminating an apprentice's engagement under a Traditional Apprenticeship is that the apprentice could bring a breach of contract claim for which they could be entitled for enhanced damages, including compensation for loss of wages, loss of training and loss of status.
By contrast, apprentices employed under Apprenticeship Agreements do not have the greater rights of the common law Traditional Apprenticeship, merely standard employment rights.
Therefore, since their introduction in 2009, engaging apprentices via an Apprenticeship Agreement has been preferable for the employer. However, to satisfy the definition of an Apprenticeship Agreement, certain prescribed terms must be included and importantly the apprenticeship must be in connection with a 'qualifying apprenticeship framework'.
Approved English Apprenticeship agreements
Following a government review, it was considered that the Apprenticeship Agreement was too prescriptive and inflexible. As a result, on 26 May 2015, a new concept of 'Approved English Apprenticeship Agreements' (AEAAs) was introduced to replace Apprenticeship Agreements in England (subject to transitional provisions). Apprentices employed under an AEAA have the same employment law protection as they would under an Apprenticeship Agreement. However, the form of the AEAA will not be as proscriptive and the requirement for there to be a 'qualifying apprenticeship framework' is being phased out. Instead, we will see the introduction of 'approved apprenticeship standards'.
FE Colleges intending to engage apprentices through an AEAA still need to ensure that the agreement satisfies certain criteria. Therefore, to ensure that the intended form of apprenticeship arrangement applies, and specifically that the Traditional Apprenticeship is avoided, seeking legal advice on the drafting of the agreement would be recommended.
Further proposals for reform
In addition to the recent introduction of AEAAs, the government is also consulting about further changes to apprenticeships. In particular, the possibility of introducing a ban on training providers using the term 'apprenticeship' and 'apprentice' in relation to any training course or training in England, unless it is a government-funded apprenticeship.
The proposal is that misusing the term will be criminal offence, punishable by a penalty fine. Whilst the proposal would not prevent employers from using the term apprentice and apprenticeship in connection with Traditional Apprenticeships, the thinking behind it is that it would address concerns about the dilution of the 'apprenticeship brand' and the application of the term 'apprenticeship' to lower quality courses that do not meet the high standards of statutory apprenticeships, in an effort to make them more attractive to employers or learners.
Charlotte Sloan is an associate at Thomas Eggar, the law firm