Apprentice Contracts & Agreements. What's The Difference & Ramifications ?

When engaging an apprentice, all businesses are legally required to provide the apprentice with details specific to the apprenticeship role.

Many businesses may simply issue an amended contract of employment calling it an apprentice contract or agreement rather than issuing a formal legally compliant apprentice agreement, and by doing so unwittingly enter into an apprentice contract instead. 

Why does it matter what type of contract my apprentice has ?

It is extremely hard to get out of, or take action, against an apprentice employed under an apprentice contract as they have additional protection and rights, over and above those of a normal employee.

What is a contract of apprenticeship ? 

Apprentice contracts have been around for hundreds of years and have a sole purpose of ensuring an apprentice is trained.

However, such a contractual arrangement makes it extremely difficult for an employer to dismiss an apprentice under this type of arrangement early.

The employer would need clear evidence that the apprentice is simply untrainable or demonstrate serious misconduct has occurred.

As an employer you would not be able to dismiss an apprentice fairly under an apprentice contract for normal reasons such as:

• Poor performance
• Time keeping
• Attendance
• Failure to meet study requirements
• Misconduct
• Redundancy (unless the business is physically closing)
• Etc

Should an apprentice under a contract of apprenticeship be dismissed the employer could/would be liable for:

• Unfair dismissal award
• Cost of training
• Loss of earning for original apprenticeship term (upto 5 years)
• Loss of future earnings

What is an apprentice agreement ?

As of 2011, under the Apprenticeships, Skills, Children and Learning Act 2009, all apprentices should be issued with a formal apprenticeship agreement which has the status of a contract of service.

In essence it means that an apprentice:

• Can be treated the same as any other employee and is only entitled to the statutory protections 
• Can be terminated for poor performance or misconduct with little or no repercussions as long as the business has applied a fair and equitable process in line with its employment policies
• Could be made redundant

Without a formal apprentice agreement in place your apprentice could be deemed to be employed on an apprentice contract and may be leaving your business open to extensive tribunal awards and training costs should the apprentice not perform to the required standard and you decide to part ways.

What if the Apprentice wants to leave early ?

An apprentice irrespective of the circumstances or type of formal engagement they have entered into with an employer, is free to leave or end the apprenticeship at any point. It could be they decide it is not what they want to do or as a result of change in personal circumstances.

However, often a contract of apprenticeship will state that the apprentice is required to pay back some the training costs associated with the apprenticeship. On the other hand, an apprenticeship agreement arrangement will not require the apprentice to pay for any training costs as current legislation stipulates that such agreements provide businesses with funding from the government to cover training costs incurred regardless of whether or not the apprentice completes their apprenticeship.

Ending an apprenticeship early

If you have unwittingly issued your apprentice with a Contract of Apprenticeship, remember it is extremely difficult to do so, and in doing so the businesses would face claims resulting in high financial awards against them.

Before you take action to dismiss an apprentice employed on a formal apprentice agreement earlier than anticipated, it’s always best practice to seek professional advice to ensure you are not about to unwittingly break any laws, by failing to follow a reasonable process. Limiting future legal action being taken against you.