Apprentices - new developments
No, nothing about Alan Sugar’s show, we promise! We recently reported about the impending change in the rules on apprentices – these have now been brought into effect.
As you may recall, the Apprenticeships, Skills, Children and Learning Act 2009 states that an apprenticeship agreement entered into under the Act has the status of a contract of service and not a contract of apprenticeship. In order to be an apprenticeship agreement under the Act, it must be “in the prescribed form.” We had been waiting to find out what the prescribed form would be.
Finally, the Apprenticeships (Form of Apprenticeship Agreement) Regulations 2012 have come into force (on 6 April 2012) but instead of prescribing a form, they have simply stated that apprenticeship agreements entered into under the Act must contain the basic terms of employment required to be given to employees under section 1 of the Employment Rights Act 1996. This can be in the form of a written statement of particulars of employment, a written contract of employment or a letter of engagement. The agreement is also required to include a statement of the skill, trade or occupation for which the apprentice is being trained under the relevant apprenticeship framework.
There are separate rules for apprentices of the Crown or House of Commons and for the armed forces.
So what does this change mean? Well, it isn’t clear yet whether the Regulations have retrospective effect, or whether they only apply to agreements entered into after 6 April 2012. From that date, if you have an agreement with an apprentice that is in the prescribed form, then that person now works under a contract of service and therefore their contract can be terminated on notice (unlike a traditional apprenticeship).
However, some commentators have pointed out that there is potential for confusion in relation to the National Minimum Wage (NMW). This states that the apprentice rate should be paid to those on a contract of apprenticeship – but if an employer has used the ‘prescribed form’ then the apprentice won't be on a contract of apprenticeship, they will actually be on a contract of service. We expect that this is likely to be interpreted so that apprentices can still be on the apprentice NMW rate even if they are on a contract of service, but this might be something which gets challenged in future.
If you would like to talk through a situation you are dealing with, or if you need advice on any aspect of employment law, please contact any member of the Pure Employment Law team 01243 836840 or firstname.lastname@example.org.