Apprenticeships are big news in employment terms at the moment. A lot of money is being spent on developing them and our own Minister at Stormont, Sir Reg Empey is very keen on them, launching the Apprentice of the Year awards 2010 last month:
http://bit.ly/9513us

At UK level the Government launched National Apprenticeship Week:
http://bit.ly/9zuflI

But what happens in a recession when businesses can no longer afford to carry unskilled labour? Are apprentices vulnerable to redundancy like everyone else or do they have special protection not afforded to the rest of us? And what is the status of modern apprenticeships. We asked Gareth McCay from Tughans to explain.

What is an apprenticeship?
There is a long tradition of Apprenticeships in industry in Northern Ireland. Apprenticeships provide the opportunity to gain job-related skills and qualifications by on the job and off the job training. The traditional common law concept of Apprenticeship is in effect a tri-partite agreement where the primary purpose is to provide training for the apprentice.

In the case of Whitely V Marston Electrical Ltd (2003 IRLR 197) the GB Employment Appeals Tribunal commented that ‘the employer undertakes much wider responsibilities than he would an ordinary employee in return no doubt for perceived advantages which presumably includes a degree of funding.’

Can a contract of apprenticeship be terminated at will?
A contract of Apprenticeship is stated to be for the duration of the training period therefore it is terminable only on conclusion of the training plan and not by prior notice. The contract of Apprenticeship can only be lawfully terminated early where the apprentice is clearly not going to obtain the requisite standard or where the apprentice commits an act of gross misconduct. Even then the employer would have to take into account the inexperience of the apprentice and provide them with guidance and an opportunity to improve. In the event that the Apprenticeship is terminated the apprentice may bring a breach of contract claim for early and wrongful termination of the contract of apprenticeship.

One option open to an employer who wishes to dispense with an apprentice for whatever reason would be to apply to the training provider to have the Apprenticeship transferred to another employer.

My business is experiencing a downturn- can I include apprentices in the redundancy process?
When a business/industry is in a downturn, an employer’s instinct will be to dispense with the apprentices first as it will perceive that apprentices add least value to a business in the short term. An employer who is undertaking a redundancy exercise needs to be alive to the risk attached to apprentices.

In many respects an apprentice will be in a much better position than employees in a redundancy situation. Whilst employees would generally require 12 months service to bring an unfair dismissal claim arising out of a redundancy situation, an apprentice does not require any qualifying period in order to bring a breach of contract claim for early and wrongful termination of a contract of Apprenticeship.

In terms of the practicalities of the redundancy process, the burden to consider alternatives to redundancy may be greater for employers when dealing with apprentices. Whilst in the case of employees, an employer must consider whether there are any suitable alternative roles etc within the organisation they would have to look much wider and to other organisations for the transfer of the Apprenticeship in the case of an apprentice as the employer remains responsible for an apprentice until the transfer of the apprenticeship takes place and the termination of the Apprenticeship must be a final resort.

Furthermore, it may be more costly to make an Apprentice redundant rather than an employee. Whilst an employee will receive redundancy pay an apprentice may bring an action for early and wrongful termination of a contract of Apprenticeship. If the apprentice was successful in such a claim the employer may have to pay compensation for his/her loss of earnings until the apprentice obtains another apprenticeship as was the case in Wallace V CA Roofing Services (1996 IRLR 435). In today’s market place, it could take an apprentice quite some time to find another Apprenticeship and this could mean a sizeable claim against the employer.

Moreover, if the apprentice was unsuccessful in obtaining an alternative Apprenticeship then he could potentially claim for a future loss of earnings based on what they would have earned had they completed the Apprenticeship and become fully qualified. This proposition was established in the case of Dunk V George Waller and Sons Ltd (1970 2 All ER 630) and still applies today. In essence such a claim is for loss of opportunity and could result in a sizeable award.

Do these principles apply to the government's modern apprenticeship scheme?
More recently the Court has looked at the status of employees under a ‘Modern Apprenticeship’ in the case of Fleet V Matheson (2006 EWCA Civ53). In this case Mr Fleet entered into a modern apprenticeship with EAB and a training provider. EAB’s business was transferred to MR Matheson under TUPE and Mr Fleet was dismissed without notice. Mr Fleet brought a claim for breach of contract claiming that based on the principles established in Dunk that his losses were £50,000.

Initially, the Tribunal and EAT found that it was not a contract of Apprenticeship based on the fact that the employer did not undertake the training element and that the contract was not for a fixed duration. However, the Court of Appeal reverted to traditional principles and held that Modern Apprenticeships could be a contract of Apprenticeship.

The Court of Appeal noted that the word ‘apprentice’ was used in the documents relating to Mr Fleet’s employment and considered it irrelevant that some of the training was provided by an outside third party or that no fixed duration was stated in the contract. The Court of Appeal held that the employer was responsible for the apprentice until the apprenticeship could be transferred. Therefore, although to an extent Apprenticeships have evolved from the old master-servant relationship, the law protecting Apprentices has remained constant.

Copyright 2010 Legal-Island and Tughans Solicitors. All rights reserved.