Dismissing an apprentice early could result in a significant claim for damages

Given how many businesses are struggling to retain staff we revisit the guidance relating to dismissing apprentices, based on a landmark tribunal case from November 2018 (Kinnear v Marley Eternit Ltd t/a Marley Contract Services).

 

Mr Kinnear was employed by Marley as an apprentice roof tiler on a four-year fixed term contract, ending in November 2018. In June 2016 the claimant was informed that he was being made redundant due to a downturn in work and was given a week’s notice. He raised a breach of contract claim in relation to the early termination of his contract.

The tribunal found that the claimant was employed on a contract of apprenticeship and “as such was entitled to be trained by the respondent company and employed by them until the apprenticeship finished. In this case that would be until November 2018.”

 

The tribunal considered the length of time left on his apprenticeship, his continuing loss (due to a general lack of available apprenticeships it was unlikely he would be able to complete his apprenticeship) and the steps the claimant had taken to mitigate his loss. He was awarded £25,000 – the maximum award for breach of contract claims in the employment tribunal.

Depending on the type of contract an apprentice is engaged on, it may be very difficult to dismiss before the apprenticeship has ended. 

 

In Scotland most apprentices work under a contract of apprenticeship. If it is a ‘true’ contract of apprenticeship it can only be terminated in limited situations, including:

 

  • Misconduct that is so serious that the apprentice is unteachable;
  • Illness that is so severe that it prevents the apprentice from learning the trade; or
  • Business closure or a fundamental change in the nature of the business. ‘Ordinary’ redundancy because of a downturn in trade, like in Kinnear v Marley Eternit, would not be enough to justify terminating a contract of apprenticeship early.

 

If a contract of apprenticeship is terminated early for another reason (for example, poor performance) the apprentice may be able to claim compensation, which could include:

  • Wages for the remainder of the contract of apprenticeship;
  • Loss of training; and
  • Loss of status/ reduction in future employment prospects.

 

A contract of apprenticeship does not need to be in a particular form or to contain specific provisions. It can be created even without the use of terminology such as ‘apprentice’ or ‘apprenticeship’. The defining features are that it is for a fixed term and that training is the main purpose of the arrangement.  Remember too that if the contract does not suggest that training is the main purpose of the arrangement and it is not a “true” apprenticeship the employer is bound by national minimum wage provisions and cannot pay the worker as an “apprentice”. So the contractual provisions must be carefully thought out. 

 

In England and Wales, most apprentices are engaged under an apprenticeship agreement, which must be in a prescribed form and satisfy certain conditions which vary depending on the specific type of agreement.

 

An apprenticeship agreement can contain a clause setting out circumstances in which the agreement may be terminated early, for example, in cases of poor performance or redundancy. This reduces the risk of a breach of contract claim in the event of early termination.

 

All apprentices are treated as “employees” under the Employment Rights Act 1996 so they benefit from the same statutory protections as ‘ordinary’ employees. If an apprentice’s contract (whether a contract of apprenticeship or apprenticeship agreement) is not renewed at the end of the apprenticeship, the apprentice will be considered to have been dismissed, usually by reason of ‘some other substantial reason’. Depending on their length of service and how the dismissal is handled, that could give rise to an unfair dismissal claim.

 

This can be very difficult to navigate and we recommend seeking advice prior to terminating an apprentice contract.

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