IGA News

Be Aware - May 2022

Be Aware - May 2022

29 April 2022

Employing Apprentices

With the end of one academic year and the beginning of another, many within the motor industry will be considering recruiting apprentices to enable them to avoid skill shortages in traditionally skilled occupations. Apprenticeships are common within the motor industry and can be very beneficial for both apprentice and master. However as with all staffing decisions you do need to understand them? in order to ensure they are right for you and your business

What is an apprenticeship?

An apprenticeship is a work-based training programme which leads to nationally recognised qualifications. It usually permits the apprentice to attend day release training whilst combining attending the workplace and working alongside experienced employees/workers. It can either be for a fixed term period or until a level of qualification is reached.

Forms of apprenticeship

In 2011 the Apprenticeships, Skills Children and Learning Act 2009 (ASCLA 2009) came into force in England and Wales which provides broadly two legal forms of apprenticeship;

  • a Contract of Apprenticeship, and
  • an Apprenticeship Agreement.

The apprentice will be an employee under both forms of apprenticeship, but the employer will have certain additional responsibilities for an apprentice employed under a Contract of Apprenticeship, particularly relating to terminating the apprenticeship.

Contract of Apprenticeship

Prior to the introduction of ASCLA 2009, the status of an apprenticeship was governed by case law, with the Court of Appeal finding a modern apprenticeship could still constitute a common law contract of apprenticeship as long as it satisfied traditional criteria relating to the duration of the contract and the employer’s obligations under it.

As a general rule, a Contract of Apprenticeship is the default legal position, and this will exist where you and an apprentice entered into a work-based training programme but no or no ASCLA approved written agreement is entered into.

Under a Contract of Apprenticeship, you are required to employ an apprentice until they have been trained to the agreed level. It is particularly difficult for employers to fairly terminate the apprenticeship prior to reaching the required qualification. Managing apprentices is made more difficult as the court guidance on when a Contract of Apprenticeship can be terminated is limited, ie where it is virtually impossible for an apprentice to complete their apprenticeship.

In the event of a wrongful termination an apprentice may not only have a claim for enhanced damages due to a loss of career prospects but also can bring a case in the County Court for up to 6 years from termination (as opposed to 3 months in an employment tribunal)

Apprenticeship Agreement

A traditional contract of apprenticeship is a contract under which the apprentice is bound to the employer in order to learn a trade, and the employer agrees to teach and instruct him. In an attempt to improve training for employment, the government first introduced a statutory scheme of apprenticeship agreements in 2011 under the Apprenticeships, Skills, Children and Learning Act 2009 ( ASCLA 2009). A simplified scheme was introduced from 26 May 2015, but the old scheme continues to operate under transitional provisions.

This form of apprenticeship seeks to balance the needs of the apprentice with the needs of the employer. Within this framework an apprentice has normal Employment Law rights as the contract is deemed to be a contract of service rather than a contract of apprenticeship. However, the agreement must satisfy certain conditions under ASCLA 2009 and be in a prescribed form.

There are four conditions required to qualify as an apprenticeship agreement which are:

  • The apprentice must undertake to work for the employer;
  • The agreement must be in the prescribed form, notably it must contain the basic terms of employment required to be given to the employees under Section 1 of the Employment Rights Act 1996. It must also include a statement of the skill, trade or occupation for which the apprentice is being trained under the relevant apprenticeship framework;
  • The agreement must state that it is governed by the law of England and Wales (as the legislation does not extend to Scotland and Northern Ireland);
  • The agreement must state that it is entered into in connection with a qualifying apprenticeship framework.

If any agreement is not in the correct format the protections of the ASCLA will not apply. Members of the IGA have access to template agreements on the IGA website, so we would strongly suggest that you use one of the approved formats in addition to any training agreements when taking on an apprentice.

Employers will still need to take care when dismissing apprentices under this type of apprenticeship where those apprentices have acquired sufficient continuous service for Employment Law rights. Once the apprentice has acquired two years’ employment then the employer will need to be able to demonstrate both a fair reason

We would certainly recommend that all apprentices are placed on an apprenticeship agreement.

Note the ASCLA does not apply to Scotland and Northern Ireland.

Training agreements

When employing an apprentice an employer can either arrange training programme themselves or enlist the aid of a third-party service who can assist with funding and arranging college courses. However, it is arranged most colleges will look to enter into a training agreement between the college the employer and the apprentice.

It should be noted that this is designed to govern the training requirements of the apprenticeship. It is not a replacement for an apprenticeship agreement between the employer an apprentice.

Again, IGA members are strongly advised to utilise the template agreements in the IGA website’s Members Area in addition to any training agreements.

Wages

Since 1st October 2010 apprentices have been entitled to a national minimum wage rate. Due to the apprentice’s reduced skill this rate is proportionately lower. The current apprentice rate is £4.81 and applies where the apprentice is under 19 or over 19 and in the first year of their apprenticeship.

It should be noted that as the employer you will be liable for pay whilst the apprentice is at college.

Conclusion

Apprenticeships are a common and useful tool and allow employers to provide training and pass on their knowledge to the next generation. However, you will still need to take care when considering an apprenticeship. How an apprenticeship is set up will determine how easily it is to manage the apprentice, the training and if necessary, any disciplinary actions including dismissal.

We strongly advise that you do not take on any apprentices without a written apprenticeship agreement that complies with the ASCLA requirements. Neither the training agreement between you, the college and the apprentice nor any standard employment contracts are sufficient. Failing to do so will significantly affect your ability to manage the apprentice and prevent you from dismissing them until they are fully trained. The RMI provides standard templates of apprenticeship agreements for England, Northern Ireland, Scotland and Wales for free.

Dismissing an Apprentice

“We have a first-year apprentice employed on our standard contract of employment (rather than an ASCLA compliant apprenticeship agreement for England or Wales). We are thinking of dismissing the apprenticeship as he is lazy. What are the risks to our business if we dismiss here?”

If there is no written apprenticeship agreement, or where there is a written agreement, but it is not an ASCLA compliant apprenticeship agreement (e.g. an approved English apprenticeship agreement), then the individual will have the status of “apprentice” (i.e. working under a contract of apprenticeship) rather than “employee”.

A contract of apprenticeship that is not under an ASCLA compliant agreement, is not terminable for misconduct or poor performance in the same way as an ordinary contract of employment. Similarly, a contract of apprenticeship that is not under an ASCLA compliant agreement cannot be terminated on the grounds of redundancy unless your business closes entirely or undergoes such a fundamental in character that the apprenticeship is impossible.

Someone with the status of “apprentice” that is not under an ASCLA compliant agreement can only be lawfully dismissed if their conduct is so bad that it is virtually impossible for them to complete their apprenticeship.

In this situation, if the employer decided to dismiss the apprentice, then it would be deemed to be a wrongful termination in breach of contract. The apprentice may therefore have a claim for enhanced damages (uncapped) by reason of the loss of their prospects as a tradesman on completion of their apprenticeship (Dunk v George Waller & Son Ltd [1970] 2 All ER 630 and Wallace v CA Roofing Services Ltd [1996] IRLR 435). In the case of Dunk, the Court held that an employer was not entitled to end the apprenticeship when the apprentice failed certain examinations and held that the employer had to pay damages representing not just lost wages but also the prospective loss of skills and enhanced earning capacity.

The case of Wallace concerned an apprentice sheet metal worker who was dismissed for reason of redundancy after 19 months and claimed damages for breach of contract, arguing that the contract was one of apprenticeship and therefore not subject to a redundancy dismissal. This was held to be the case and the matter was remitted for damages to be assessed, presumably on the basis that the contract should have been one for four years. An apprentice in this type of case could therefore be awarded significant damages to reflect both the loss of income for the remainder of their fixed-term contract and the loss of training opportunities and the consequent harm done to their chances of eventually obtaining a good job.

Conclusion

The examples of the case-law highlighted above demonstrates that is vital that RMI members use the RMI template apprenticeship agreements for apprentices in England and Wales otherwise they face the risk of significant compensation claims if the apprentice is deemed to be wrongfully dismissed. The situation is different in Scotland where the ASCLA apprenticeship framework does not apply such that they have the status of “apprentice”.

Abandoned Vehicles

“I have repaired a vehicle and it is ready for collection but all I have is a telephone number and the owner is now not responding. What can I do?”

First things first, your options are limited if you do not have an address as any of the processes will require you to write to the owner. Now is the time to review your processes and re-iterate the point to all staff that no work should be instigated without confirmation of a name and address.

Ok, so how do you get it if you don’t have it?

Stage 1 – obtaining the keepers details

The DVLA can release details of the registered keeper of a vehicle if you can satisfy them that you have a legitimate need for the information. As a company you need to contact the DVLA and request V888/2A. You will be required to confirm your details and provide a quick explanation as to why the information is required. It should be sufficient to confirm brief details of the contract and the fact that you require the information in order to pursue legal proceedings. The fee for this is £2.50 per vehicle and you should receive a response within a few weeks.

More information and an electronic version of the form can be found at https://www.gov.uk/request-information-from-dvla.

Stage 2 - initial contact

Once you have the address you need to send a letter to the owner requesting payment. It is now time to consider whether you will pursue the matter through court or whether you can sell the vehicle under the Tort Interference With Goods Act 1977

Taking the owner to court - If you are owed money for a repair or diagnosis but the owner doesn’t agree then you will have to take the matter to a Judge in order to get a definitive answer. A court is capable of deciding who is right and how much is owed. Once this is decided then the court will be able to seize the vehicle and sell it to settle any debts. However you have to be warned that a court Order only states that money is due, not that the owner has the money to pay. As you will incur court fees on top of any Judgment, this should be considered.

Selling the vehicle - You cannot just sell someone’s property because it is on your premises or because you are owed money. DO NOT apply to the DVLA to become the registered keeper. You are not the legal owner and will become liable for any TAX.

If you have carried out work that increases the value of the vehicle and the owner is in agreement that the money is owed but cannot, or will not come to pay for it, then you have the ability to require the owner to collect the vehicle and pay within 14 days, and if this doesn’t happen you can then sell the vehicle to settle the debt provided you give him 3 months notice. There are a number of requirements to get this right so we would strongly advise you discuss this with us so that we can take you through the steps required.

Stage 3 - The letter

Either way you will need to write to the owner in order to try and resolve the matter amicably. Any letter should clearly establish what it is you want them to do and why it is you believe they are liable. You should include a copy of any invoice as well as a deadline by which to respond. This should be at least 14 days but can be more.

Don’t forget to carefully document all conversations and to evidence all telephone calls, emails and letters for future reference. Also, this advice is general in nature and will need to be tailored to any one particular situation. As an RMI member you have access to the RMI Legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, contact us at any stage for advice and assistance as appropriate.

General Note

Don’t forget, this advice is general in nature and will need to be tailored to any one particular situation. As an RMI member you have access to the RMI Legal advice line, as well as a number of industry experts for your assistance. Should you find yourself in the situation above, contact us on 01788 225 908 at any stage for advice and assistance as appropriate.