Modern Apprenticeships

In Flett v Matheson a young person working under the Modern Apprenticeship Scheme with a learning provider was summarily dismissed following a TUPE transfer. He submitted a claim to an Employment Tribunal in 2005 for notice pay if he was employed under a contract of employment (£112), or damages of circa £50,000 if he was deemed to be an apprentice operating under a common law apprenticeship.

Under a common law contract of apprenticeship, if the individual is considered to be an apprentice he would be entitled to loss of earnings for the remaining period of his contract which was for 42 months and the losses he would incur as a result of not having completed his training.
 
The Employment Tribunal concluded that there was a contract between the young person and the employer, but it was neither a contract of apprenticeship nor a contract of employment and it dismissed his claim. The EAT held that he was not engaged under a common law contract of apprenticeship but was  employed under a contract of employment, stating "there is little doubt that the appellant was working as an employee, and receiving wages as such" and awarded him one week notice pay.

The EAT focused on the difference between the traditional contract of apprenticeship, which was usually for a fixed period with the training provided directly by the employer, and the modern apprenticeship,  where the training is provided by a third party training provider.

The case was submitted to the Court of Appeal who handed down their decision in February 2006 which overruled the EAT decision and stated that a modern apprenticeship scheme can be a common law contract of apprenticeship when an employer is under such obligations as to provide time off for training and to find another employer to take on the modern apprenticeship if the original employer cannot continue with the arrangement.

The Court of Appeal decision is worrying for those employers who operate Modern Apprenticeships and are thinking of terminating the apprenticeship earlier than its expiry date as the apprentice may be deemed to be a common law apprentice. If so, the 'apprentice' could be awarded damages for the loss of wages and training for the remainder of the fixed term period and damages for loss of his future job prospects. The Court of Appeal has remitted the case back to the Employment Tribunal.