DISMISSAL - 27.01.2005

Terminating apprentices - the hidden catch

Apprentices have significant additional rights compared with other members of your workforce, particularly when it comes to termination of their employment. What does this mean if you want to dismiss an apprentice?

What’s an apprenticeship contract?

A contract of apprenticeship involves an undertaking on your part to instruct an apprentice a trade or profession over a specified period of time. The main purpose of the contract must be training (as opposed to work), it must be for a fixed term, and signed by both parties.

Modern Apprenticeships too? Modern apprenticeships (under Modern Apprenticeship Agreements) are not usually apprenticeships in the traditional sense but are simply a marketing term for a training scheme providing “on the job” experience with external funding.

Fully protected. An apprenticeship contract falls within the statutory definition of “contract of employment” so apprentices are entitled to the full range of employment rights as other staff.

Protection from dismissal…

As a contract of apprenticeship is for a fixed term, it cannot lawfully be terminated before the expiry of that term. This means you cannot simply terminate it because the apprentice is not up to scratch or has a conduct problem such as poor timekeeping. Even a genuine redundancy situation would not entitle you to dismiss the apprentice, irrespective of length of service. Of course, you should still use your disciplinary procedure but you cannot dismiss him, even if he’s on a final written warning and hasn’t improved!

…except in certain circumstances

However, a contract of apprenticeship can be brought to an end either by some frustrating event or by a repudiatory act. Two examples of the former would be where you completely close down your business or its nature changes to such an extent that you cannot properly teach your apprentice. The latter would include acts of gross misconduct and continual neglect of duties or serious incapacitation to the extent that it’s become impossible for you to teach the apprentice (having followed a fair dismissal procedure).

The risk

If you do dismiss an apprentice before the expiry of the fixed term, he may claim damages not only for loss of earnings for the remainder of the fixed term but also a sum in respect of the value of his loss of future prospects as a qualified person. But there is one tactic you could try to limit your exposure.

To be decided

You could put express clauses into the apprenticeship contract which permit you to terminate it early in certain circumstances, such as for redundancy or disciplinary reasons. Although there’s no case law on their enforceability, it’s worth putting these types of clauses in - if nothing else they might well deter an apprentice from taking action.

Out of time

If the reason for the apprenticeship terminating is simply because the fixed term has come to an end, then these no dismissal provisions do not apply. If the apprentice claimed unfair dismissal (because you’d not retained his services), your defence would be that an apprenticeship is a “once in a lifetime” agreement so there was no need for it to be renewed and no redundancy payment was due.

Apprentices have “extra” rights not to have their contracts terminated early, even if you’ve followed a dismissal procedure. But you could insert clauses that allow you to dismiss early in certain circumstances.

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