VIEWPOINT
HIRING AND FIRING: THE APPRENTICE IS A SERIOUS MATTER
Alec Colson Partner and Head of Employment Law at Luton-headquartered law firm Taylor Walton
WITH THE APPRENTICE’ currently back on our TV screens again, it is likely to spark yet another debate about the benefits of utilising apprentices to help grow a business.
However, despite the
programme’s humorous approach, the laws regulating apprenticeships are often complex and the Lord Sugar approach is certainly far from best practice.
Dependent upon the type of contract that’s been agreed upon, there are major considerations for a business from a legal perspective. An apprenticeship, unlike some other fixed-term contracts, can mean a business is agreeing to long-term commitment which cannot be easily ended – certainly not by leaning across a desk and yelling, “you’re fired” at someone. Apprentices offer businesses the chance to mould talent into the ideal employee, but employers will need to invest a significant amount of time and resource in maximising that potential.
Their first, and perhaps most important commitment, will be to understanding the employment law implications of taking on a trainee so that the relationship can remain a positive one, and not become saddled with contractual wrangling: Apprenticeship agreements are governed by the Apprenticeships, Skills, Children and Learning Act 2009 and are akin to standard employment contracts. They exist usually between the employer, the apprentice, and the training provider, and fulfil certain criteria, including the apprenticeship framework; and details about the skill, trade, or occupation for which the apprentice is being trained. An apprenticeship agreement can be lawfully terminated if needs be, provided the dismissal process is both fair and in accordance with the contract. If
the apprenticeship is fixed-term and the agreement is terminated early, an employer might be liable to pay the salary for the entire term where the– this should be addressed in the contract, unless the contract includes a clause on early termination. Contracts of apprenticeship cover more traditional apprenticeship arrangements, where the primary objective is for the individual to be trained in a skill or profession, rather than simply perform work for the employer.
It is far less straightforward to terminate an apprenticeship contract as it cannot necessarily be ended in the same way as other fixed-term employment contracts. Employers can only normally end a contract in very specific circumstances, such as instances of gross misconduct or the business ceases trading. If the employer chooses to terminate employment for any other purpose, they could well be held liable for any loss of earnings, or possible for training expenses.
Even if an apprentice fails to meet the set standards for performance or behaviour, the business cannot dismiss them before the apprenticeship ends, without risking significant liability. As such, it’s advisable that the process for recruiting apprentices be more thorough than for any other member of staff, given that a probationary period cannot be
March 2022
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utilised in the same way. It is also more difficult for apprentices to establish their discharge is because of redundancy. This is because apprentices don’t qualify for the same rights as standard fixed- term contracted employees when it comes to being treated less favourably than their comparable colleagues.
Funding apprenticeships Apprentices will have the same employment rights as all other employees, although it should be noted that the National Minimum Wage is lower for apprentices aged under 19 (or those 19 and over, but undertaking the first year of their apprenticeship).
Funding is dependent upon the age of the apprentice and is typically paid straight to the training provider, with the employer contributing towards the cost of training in addition to wages and other expenditures.
Whilst the Government scheme offering small businesses £3,000 cash grants to recruit an apprentice ended back in September 2021, those that made the decision to take on an apprentice since October are still able to apply
for an incentive payment of £3,000, which can be spent on anything that might support an organisation’s training costs, whether that be salary, travel or uniform provisions.
To be eligible for these funds, an apprentice must have started their employment at an organisation between 1 October 2021 and 31 January 2022 or commenced their apprenticeship between 1 October 2021 and 31 March 2022. In addition, the UK government introduced the Apprenticeship Levy back in April 2017, the funds from which were designed to fund apprenticeship placements. The levy is payable by all employers who have a wage bill that exceeds £3m per year. Those that meet these criteria are required to pay 0.5% of their payroll each month as a levy tax, which is offset by £15,000 government allowance. Whilst larger organisations can benefit from the scheme, those who have the most to gain are smaller employers with an annual payroll of under £3 million. These businesses are not liable to contribute to the Apprenticeship Levy, but they are entitled to access funds raised by the scheme for up to ten employees, with the government contributing 95% towards training costs.
Clearly, Lord Sugar is well aware of the benefits that a committed apprentice can bring to a business, as 16 successful series of the hit TV show stands testament to. But one thing that you can be sure of is that the rules governing the employment of apprentices will have received a lot of off-screen consideration, long before the opening sequence launches. BMJ
Alec Colson specialises in Employment and Industrial Relations Law, advising commercial and public sector clients on all aspects of employment law at law firm Taylor Walton.
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