Earlier this month the UK celebrated National Apprenticeship Week, a yearly celebration of the positive contributions apprentices make to businesses and the broader UK economy. Each year this is an opportunity for employers to showcase the benefits and skills apprenticeships give to their organisations, and a chance for future apprentices to discover new opportunities for their careers. As apprentices are such an integral part of many workplaces, this blog will explain how apprenticeships work, including choosing and funding apprentices and what their employment benefits are.
Note that this blog only discusses statutory apprentice schemes in England which are funded by the government. Taking on an apprentice outside the government-backed framework will not attract such funding and different rules will apply.
How do apprenticeships work: the basics
An apprentice is a staff member aged 16 or over who is simultaneously working for you as an employee and studying at an educational establishment to gain a specific skill or qualification. Apprenticeships work as follows:
- To take on an apprentice, you’ll need to choose an apprenticeship standard and a provider to deliver training, advertise, and, once you’ve chosen an apprentice, enter into the appropriate training plans and employment agreement. We discuss these steps further below.
- Apprentices are treated as employees under employment law and therefore have the same legal rights as your typical employees. This includes benefits like paid time off, a wage of at least the minimum living wage or national minimum wage (although the rate payable is lower for apprentices who are either within the first 12 months of their employment with you or who are under 19 years of age), protection against unfair dismissal, and more.
If your apprentice is under 25 years old, you won’t need to pay National Insurance contributions on their earnings below £967 per week.
When is it appropriate for my business to take on an apprentice?
You should only consider taking on an apprentice if you are prepared to commit to the development of a very junior member of staff for an extended period of time. Apprenticeships typically last for between one and five years depending on the type of apprenticeship. You must also be comfortable that you have sufficiently experienced staff to support the apprentice’s learning and development.
Apprenticeships can be a cost-effective way for your business to develop the skills of its workforce in a particular area and to build your workforce from the ground up. You will be taking on and developing a junior member of staff which can engender loyalty from them and, once they are trained, can be more cost effective than taking on a fully-fledged employee with that skill set, not least because there is government funding which can help with the costs of training an apprentice.
How do apprenticeships work: the practicalities
For apprenticeships arranged through the government apprenticeship service, you will need to create an online apprenticeship account. You’ll then need to:
- choose an apprenticeship standard that has been approved by the Government, a full list of which is available on the Institute for Apprenticeships’ website. These explain the occupation they relate to (for example, a retail manager or sales worker) and set the outcome (for example, skills or behaviours) that apprentices are expected to achieve. Each apprenticeship standard comes with its own funding band, which is the maximum funding the Government will provide;
- choose the training provider that will deliver the training. These are also listed on the Government’s website. After contacting a provider, you are free to negotiate the cost of training with them. You’ll need to fully fund any amount over the maximum funding band without any government support; and
- give your apprentice an apprenticeship agreement. An apprenticeship agreement is a contract of service and there are certain legal requirements the agreement must comply with to qualify for government funding. For example:
- the agreement must state that the apprentice works for you for reward under an approved apprenticeship standard;
- it must state that the apprentice will receive training in order to assist them to achieve the approved standard, including the amount of time they are to receive off-the-job training; and
- it must specify the practical period of the apprenticeship (which must not usually be shorter than 12 months), and whether the work and training will be undertaken on a full or part-time basis.
If your business’s total wage bill is £3 million or under, the government will fund 95% of your apprentice’s training and assessment costs within the maximum funding band for your apprenticeship standard. See our Q&A for further guidance on government funding of apprenticeships.
Can I dismiss an apprentice?
Yes, but note that apprentices are entitled to the same protections as your other employees when you are trying to end their contracts. These include the right not to be unfairly dismissed by you once they have been continuously employed by you for at least two years.
You could also face a claim for unfair dismissal irrespective of how long the apprentice has been employed by you if, for example, the dismissal is related to whistleblowing, an attempt by the apprentice to insist on some of their legal rights (such as health and safety) or their age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex or sexual orientation.
See Ending contracts with apprentices for more information about the process you must follow to dismiss an apprentice.
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Marion joined Sparqa Legal as a Senior Legal Editor in 2018. She previously worked as a corporate/commercial lawyer for five years at one of New Zealand’s leading law firms, Kensington Swan (now Dentons Kensington Swan), and as an in-house legal consultant for a UK tech company. Marion regularly writes for Sparqa’s blog, contributing across its commercial, IP and health and safety law content.