Employment Law SOS: Taking on apprentices

We recommend that you always write down the terms of any agreement you have with staff. Historically, apprenticeship agreements have been for a fixed period of time, sometimes several years. If the agreement is terminated early by the employer the payments for breach of contract may include compensation – not just for loss of wages to the end of the contract, but also for the loss of the training opportunity and loss of status. The Apprenticeships, Skills, Children and Learning Act 2009 allows a prescribed form of apprenticeship agreement to be treated as a contract of service. In other words, for legal purposes, an apprentice will be treated as an employee regardless of the common law and any previous case law. However, if the apprenticeship is a contract of service, it is likely the apprentice will be entitled to the age-related national minimum wage and not the (considerably lower) apprenticeship rate. Employers can now choose to offer either:

• a fixed-term apprenticeship that allows them to pay the apprenticeship rate, but risk a more expensive breach of contract claim if they were to terminate the agreement before the end
• a contract of service apprenticeship, which, although it allows the employer to terminate the agreement early, will incur higher wage rates.