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Apprenticeships Guide for Employers: Loch Associates Group

16 January 2020

Apprenticeships are work-based training programmes, open to everyone aged 16 and above. 

The practical work which apprentices undertake over the course of the programme is structured to provide them with opportunities to acquire the necessary skills to achieve recognised qualifications.

What factors should employers consider when setting up an apprenticeship?

Employers wishing to hire apprentices should be aware that their management of the apprenticeship must meet certain conditions:

  • Regular recruitment principles apply. All the normal principles of recruitment apply to apprenticeships; for example, employers must comply with all aspects of discrimination law.
  • There can be no age limit on apprenticeship schemes. This can be viewed as direct discrimination against older applicants.
  • The terms of employment must be agreed at the outset. Factors like the duration of the apprenticeship, working hours and wage should be confirmed before employment begins.
  • Apprentices are entitled to the National Minimum WageThis is an hourly rate of pay.
  • Health and Safety. Particular care must be taken to safeguard the wellbeing of apprentices, including devising special rules for those under 18.

What are the different types of apprenticeship?

There are two principal types of contract associated with apprenticeships in England; the original ‘common law’ contracts of apprenticeship — formerly the only type available — and apprenticeship agreements, which were introduced in 2009 as part of the Apprenticeships, Skills, Children and Learning Act 2009.

Contract of apprenticeship is a traditional method if apprenticeship outside of Government schemes — is provides an apprentice with enhanced rights and protections, including:

  • Entitlement to enhanced damages on termination;
  • Greater protection from performance related dismissals, should issues arise during the apprenticeship;
  • Greater protection from dismissal for reasons of redundancy.

Apprenticeship agreements do not offer apprentices the enhanced rights outlined above. Instead, they are designed to be more flexible, to encourage employers to take on apprentices, with Government funding also available. Employers offering apprenticeship agreements should be aware of:

  • Statutory regimes. Best practices for coordinating apprenticeships vary between industries, and employers are recommended to find out whether improved standards have been published in the relevant sector.
  • Alternative English Apprenticeships. These are a particular type of apprenticeship which can be offered to apprentices who reach an industry-specific required standard.

What are the employment conditions of an apprenticeship agreement?

A programme must meet certain criteria to qualify as an apprenticeship, including:

  • Minimum duration and hours. Training must last at last 12 months, with at least 30 hours work per week.
  • Fixed learning objectives. An approved apprenticeship standard must be reached, and/or a framework for learning followed by apprentices.
  • Learning opportunities. The work offered to apprentices must include opportunities to gain all necessary knowledge and skills to pass the assessment.

It is important to note that, although it is helpful in certain industries, there is no legal requirement to provide mentors.

How are apprenticeship agreements funded?

As of 2017, apprenticeship funding is subject to the following policies:

The apprenticeship levy. Large employers with a pay bill of more than £3 million are subject to this tax. Since its introduction, levy-paying employers must not ask an apprentice to contribute financially to their training, even if their employment is terminated early.

A co-investment rate for employers with a pay bill of less than £3 million. Employers who do not pay the apprenticeship levy can share the cost of the training and assessing of apprentices with the Government. As of 01 April 2019, employers subject to co-investment pay 5% of the cost of the apprenticeship and the rest is Government subsidised.

The National Apprenticeship Service. This is a service for which levy-paying employers are eligible, which streamlines processes like the management of apprentices, the reception of levy funds and the payments to training providers.

What is the status of apprenticeship agreements?

Those working under an apprenticeship agreement have employment status and are largely treated the same as other employees, save for training requirements. Apprentices are therefore entitled to the statutory protections granted to employees, from the outset of their apprenticeship.

In addition to their rights, apprentices working under an apprenticeship agreement (as opposed to contracts of apprenticeship) are subject to the same requirements as regular employees, in terms of meeting certain performance standards as required by the role. Employers may, therefore, dismiss them if they do not perform to the standard expected, or owing to redundancy, like any other employee.

What do employers considering terminating an apprenticeship need to know?

The options available to employers wishing to terminate an apprenticeship differ depending on whether the programme is subject to a traditional contract of apprenticeship, or a statutory apprenticeship agreement (see above).

  • Traditional contracts of apprenticeship do not usually allow for dismissal before the end of the fixed term of the contract, the employer has less flexibility and the employee greater rights. An employer will find that their options for dismissal, for example, due to poor performance, are limited.

● Apprenticeship agreements allow employers to dismiss apprentices in the same way as regular employees, i.e. they have greater control and flexibility to do so when things aren’t working out. However, normal principles for breach of contract, discrimination and unfair dismissal apply.

How can Loch Law help?

We recommend that employers review their arrangements and consider switching to apprenticeship agreements if they have been using traditional contracts of apprenticeship in the past. We also recommend that employers who many never have had apprentices at all consider the benefits of the scheme. Apprenticeship agreements offer employers greater flexibility, assistance with training, and attract Government funding. Ultimately they help with introducing new talent to industries, invariably for the benefit of all.

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