Development of apprenticeships and dismissal

It is said that apprenticeships in the UK can be traced back to medieval craft guilds in the Middle Ages. Originally an apprentice was the child of upper-class parents. The child was often a boy of about 9-years old who was sent to live with a journeyman and his family. A journeyman was a tradesman who was a master of his craft. The child he taught was said to have been 'indentured' to the journeyman. The development of what is now called a 'Traditional Apprenticeship' stemmed from this relationship.

Many tradesmen travelled from place to place to carry out their trades. For example, a mason might travel many miles from his home to the site where a Cathedral was being built and stay there while this was going on. The term 'journeyman' may have come from the fact that many tradesmen journeyed like this to find work.

The Middle Ages

By the 15th century, apprenticeships were generally seen as an acceptable way to learn a craft. At that time, there was no implied right to wages. The master had a right to 'reasonably' chastise his apprentice, but an attempt to exercise that right today could invite an action for assault (R v Josephson (1914) 110 LT 512).

The relationship between the journeyman and apprentice was described by Charles More as follows:

Indentures were drawn up, binding Servant to Master and vice versa; in which the master personally taught the apprentice; took responsibility for the latter's moral welfare; and gave him board and lodgings.' (Skills and the English Working Class, Croom Helm, 1980, page 41).

In England, the first apprenticeship system of training was introduced in 1562 and 1563 by the Statute of Artificers. The 1563 Statute included conditions that are similar to the minimum standards of apprenticeships today. Under the provisions of that Statute, masters were to have no more than three apprentices, and apprenticeships were to last for seven years.

The Statute was repealed after 250 years and replaced by the Wages, etc., of Artificers, etc. Act of 1813. At the time, it was said that the popularity of apprenticeships had waned in the early 19th century, partly due to conditions in factories and the perceived exploitation of young apprentices. After the introduction of that Act, the rights of apprentices were reduced, and it was no longer possible to prosecute anyone who practised a trade without having served a seven-year apprenticeship.

Tripartite agreement

The agreement under which the apprentice was taught by the master came to be known as a tripartite agreement. A tripartite agreement is much like a contract and was between three parties; in former times, this was the master, the parents and the child.

A tripartite agreement later resulted in providing apprentices with crucial rights which are still relevant today.

The significance of a tripartite agreement is that such agreements can only be terminated with the agreement of two of the parties. If the agreement is terminated early by one party, for example, by the master, this may amount to an unfair or wrongful dismissal for which damages may be sought. Those damages can be extensive and amount to the apprentice being awarded wages up until when the agreement may have legally finished, plus an additional award of wages that the apprentice would have earned once the apprenticeship had finished, see Dunk v George Waller & Son Ltd [1970] 2 All ER 630, [1970] 2 QB 163, CA and Wallace v CA Roofing Services Ltd [1996] IRLR 435, QBD below.

The 20th century

Apprenticeships remained popular in the professions and spread to industries such as engineering, shipbuilding, plumbing, electrical work, printing etc. This growth continued after both World Wars, and by the 1960s, a third of boys were leaving school to become apprentices.

For most of the 20th century, there were no significant reforms, and employers criticised the system as restrictive, too focussed on the time served by apprentices and unresponsive to the needs of industry. In 1968 the Royal Commission on Trade Unions and Employers' Associations reported:

… apprenticeship is a farce and provides less training than a properly constituted course lasting only a few months … The fact that a man has completed an apprenticeship does not, therefore of itself, guarantee that he has acquired any particular level of skills or that he has passed any form of test of ability.

The Commission, which is more commonly known as the Donovan Commission (because it was chaired by Lord Donovan), led to the formation of the Industrial Tribunal (now known as the Employment Tribunal) and employment law as we know it today.

Although the origins of the Employment Tribunal can be traced back to the Industrial Training Act 1964 (which established Appeal Tribunals to hear disputes about liability to pay Industrial Training Levies), the Appeal Tribunal was given additional powers as a result of the Donovan Commission Report to hear many different types of employment disputes. Most of the cases that are heard by the Employment Tribunal today are about unfair dismissal, which to some extent has helped to shape the way employment law is today. As a result, the current system of unfair dismissal law can trace its origins back to the Donovan Commission Report.

Modern times

A new type of apprenticeship called a "Modern Apprenticeship" was announced in 1993 and rolled out over the following two years. Modern apprenticeships were open to anyone under the age of 25. Apprentices were classed as 'employees' and were to be paid wages. There would be a written agreement between employers and apprentices. There would no longer be an emphasis on how long an apprenticeship lasted; the focus instead was on what qualifications an apprentice received. Modern apprentices were required to work towards an NVQ level 3 qualification, equivalent to A-levels.

Shortly afterwards, National Traineeships were introduced, which were equivalent to GCSEs. These were intended as a progression route into apprenticeships for those young people who were not ready to enter into an apprenticeship agreement.

Although there was no longer an emphasis on the length of apprenticeships, they generally lasted for four to five years. Regardless of the number of years, an apprenticeship agreement is the equivalent of a limited-term contract (sometimes called a fixed-term contract). In effect, a contract that ends on a particular date or on the completion of a specific task (such as learning a trade).

The expiry of a limited-term contract is a dismissal in law (section 95(1)(b) of the Employment Rights Act 1996). Once the fixed-term has expired, and unless specifically stated in the apprenticeship agreement (or elsewhere), the agreement comes to an end, and the apprentice may be fairly dismissed (section 98(1)(b) of the Employment Rights Act 1996).

If the agreement is terminated early, this may amount to an unfair or wrongful dismissal (section 94(1) of the Employment Rights Act 1996). Moreover, this may also amount to a breach of contract; Wallace v CA Roofing Services Ltd [1996] IRLR 435, QBD see below.

In the context of a Modern Apprenticeship, there was a change from who was involved in the tripartite agreement. In a Traditional Apprenticeship, this had been the master, the parents and the child. In a Modern Apprenticeship, the parties to the agreement changed to the employer, the training provider (such as a college) and the apprentice or trainee.

This is crucial because an apprenticeship or traineeship agreement can only be terminated on the expiry of the fixed-term (once the apprentice or trainee has learned a trade) or with the agreement of two parties to the agreement. For example, this is often the employer with the agreement of the training provider (although the employer and apprentice or trainee can agree to terminate the agreement).

The Modern Apprenticeship system continued to evolve with National Traineeships becoming 'Foundation Modern Apprenticeships' and Modern Apprenticeships becoming 'Advanced Modern Apprenticeships.' In the early 2000s, national frameworks were introduced, defining the minimum standards required for each apprenticeship.

Apprenticeships for all

In 2004, Advanced Modern Apprenticeships became 'Advanced Apprenticeships' and Foundation Modern Apprenticeships became simply 'Apprenticeships.' (these would later be renamed to 'Intermediate Apprenticeships'). At the same time, the upper age limit of 25 was removed, and pre-apprenticeships were introduced for people not ready to enter a full apprenticeship. Young apprenticeships were also introduced for 14 to 16-year-olds still at school.

After the 2010 election, Higher Apprenticeships were introduced (equivalent to foundation degrees or above), and Young Apprenticeships were ended. Financial incentive payments were later introduced for small firms hiring apprentices aged 16 to 24.

Litigation

It may be seen that an apprenticeship agreement differs from a contract of employment. The essential feature of an apprenticeship is that the apprentice 'contracts' to learn a trade (R v Crediton Inhabitants (1831) 2 B & Ad 493; Horan v Hayhoe [1904] 1 KB 288; Wiltshire Police Authority v Wynn [1980] ICR 649, CA). Although the apprentice contracts to serve his master, technically, the relationship is not one of master and servant (Horan v Hayhoe).

Features of practical importance in an apprenticeship agreement includes the limited right of dismissal. Misconduct that would justify the summary dismissal of a servant at common law does not justify the dismissal of an apprentice. However, it seems that an apprentice may be dismissed if the conduct is so bad that it is impossible to teach the apprentice a trade (Newell v Gillingham Corpn [1941] 1 All ER 552; Learoyd v Brook [1891] 1 QB 431).

An apprentice who is wrongfully dismissed before the completion of the apprenticeship may have a claim for enhanced damages by reason of losing prospects as a tradesman on the completion of the apprenticeship. In Dunk v George Waller & Son Ltd [1970] 2 All ER 630, [1970] 2 QB 163, CA, the Court of Appeal held that the purpose of an apprenticeship agreement is for the apprentice to receive training in order to obtain better employment, and if the employer terminates the agreement early and deprives the apprentice of the training, the apprentice is entitled to earnings under the agreement for the remainder of the apprenticeship and damages for future loss of earnings and prospects.

Dunk entered into a four-year apprenticeship under which he agreed to work and obey orders, and the employer agreed to train him as an engineering technician. There was an express clause in the agreement enabling the employer to terminate the agreement if Dunk was guilty of misconduct or disobeyed lawful orders. He seems to have been satisfactory in his practical training but had difficulty passing his Ordinary National Certificate, having to sit Part 1 twice and failing his first attempt at Part 2. The Technical College did not rate his chances of passing at a second attempt very highly. The employer dismissed him on the grounds of an unsatisfactory report from the Technical College. This was wrongful dismissal.

The employer had no right to terminate his contract. He had not been guilty of misconduct. His apprenticeship ought to have continued for the full four years. The court awarded him his apprenticeship wages for the remaining 15 months of the apprenticeship, less his unemployment benefit and some earnings in mitigation. For his future loss, he was awarded £2 a week for two years as it was thought that after two years, those who did not have the benefit of an apprenticeship would have caught up with him wage wise as he was not very able. He also received £20 as the cost of seeking other employment.

Note that if a limited-term contract is a contract that ends on a particular date or the completion of a specific task, then it could be argued that the task is not completed until the apprentice learns the trade, regardless of the length of time it takes to learn that trade or to pass College exams.

In Wallace v CA Roofing Services Ltd [1996] IRLR 435, QBD, an apprentice sheet metal worker, was dismissed for redundancy after 19 months. Wallace sought damages for breach of contract, arguing that the contract was for an 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 is not required to 'work' for the employer but rather to learn a trade. The fact that an employer is facing a redundancy situation does not mean that an apprentice may be made redundant. The basic obligation of the employer is to allow the apprentice access to training. Therefore, it is very difficult to justify dismissing an apprentice on the grounds of redundancy.

In Whitely v Marton Electrical Ltd [2003] IRLR 197, the Employment Appeal Tribunal (EAT), under Recorder Underhill, held that such an arrangement (the contract being one of apprenticeship) was at least analogous to a traditional apprenticeship (the key point being that it was therefore not terminable by ordinary notice, and so an early termination during the anticipated duration of the apprenticeship could result in damages for breach of contract).

Note that the jurisdiction of the Employment Tribunal derives from the Employment Tribunals Act 1996. With one exception, most employment rights have been created by Statute (for example, unfair dismissal rights under the Employment Rights Act 1996, or discrimination rights under the Equality Act 2010) and can only be heard by an Employment Tribunal.

The exception relates to breach of contract claims. Such claims can also be heard at the Sheriff Court or High Court under their powers to hear contractual disputes. However, under the provisions of the Employment Tribunal's Extension of Jurisdiction (Scotland) Order 1994 (SI 1994/1624), breach of contract claims may also be heard by an Employment Tribunal (if the value of the claim does not exceed £25,000 and the claim itself arises from or is outstanding on termination of the contract of employment). This means that if a breach of contract claim exceeds £25,000, it may be better to present the claim to the Sheriff Court or High Court.

Shortly after the Whitely case, another EAT under Wall J held to the contrary in Thorpe v Dul UKEAT/0041/04 and went further and held that it was neither a contract of apprenticeship nor a contract of employment. The matter was reconsidered by the Court of Appeal in Flett v Matheson [2006] EWCA Civ 53, [2006] IRLR 277. Agreeing with Whitely, they held that a modern apprenticeship does satisfy the statutory definition of a 'contract of apprenticeship' given that the employer pays the apprentice and allows time off for study, it is not fatal to the definition that the academic component is actually provided by a third party (the training provider). As in Whitley, the practical effect of Flett is that an apprentice cannot be dismissed merely on notice during the currency of the apprenticeship.

Therefore, it follows that employers will be expected to show clear evidence of a substantial reason for the dismissal of an apprentice. This will also apply to the expiry of a limited-term contract, as the following case demonstrates:

In Primary Fluid Power Ltd v Brislen EAT 0611/04, the EAT upheld an Employment Tribunal's decision that the dismissal of an apprentice three months after the conclusion of his fixed-term apprenticeship was unfair.

On 3 July 2000, Brislen started a three-year apprenticeship with PFP. This required him to work at PFP's premises as well as studying at college. By the time of the end of his apprenticeship in July 2003, he was still engaged on a City and Guilds course and had also started an NVQ Level 3 course. Brislen's statement of terms and conditions of employment was varied on 21 July 2003 and signed by a senior manager to indicate that 'a successful probation/induction has been served.' Brislen was subsequently dismissed on 25 November 2003 because there was no permanent position for him, and he claimed unfair dismissal.

PFP argued that Brislen's employment had terminated at the end of his fixed-term apprenticeship, and this had been prolonged until the end of November when it had learned that the City and Guilds course was completed. Brislen had started on the NVQ Level 3. It argued that the dismissal was, therefore, for some other substantial reason (see section 98(1)(b) of the Employment Rights Act 1996).

The Tribunal held that the contract made it clear that the apprenticeship came to an end in July 2003. There was no evidence to suggest that there was a consensual extension of the apprenticeship to November to take account of the courses Brislen was undertaking. PFP tried to argue that it had a genuine and reasonable belief, albeit a mistaken one, that the fixed-term apprenticeship ended in November. But the EAT noted that PFP had in its possession all the relevant contractual documents, and it could have clarified the position in July but did not do so. The dismissal was unfair.

Summary

It is more difficult to dismiss an apprentice than a typical employee. Continual neglect of duties or failure to participate in training may suffice as a reason for dismissal. Occasional insubordination will not.

If an apprenticeship agreement is broken, the apprentice may be entitled to remuneration and benefits to the end of the agreement and also to damages for the employer's failure to train, which could have a long-term effect on the apprentice's wages and increase the damages.

When an employer undertakes to train the apprentice, save in exceptional circumstances, the apprentice cannot be made redundant. This was amply illustrated in Wallace v C A Roofing Services Ltd [1996] IRLR 435 HC.

The High Court in Wallace held that dismissal for redundancy was not open to the employer and made clear that, in the case of a contract of apprenticeship, the ordinary rules on dismissal are inapplicable, save possibly in the case of closure or a fundamental change in the character of the enterprise.