National Apprenticeship week 8-14th February 2021

 

This week is National Apprenticeship week and the Government is using it as an opportunity to celebrate and promote the benefits of apprenticeships, and showcase the resilience of apprentices and employers during the pandemic.

The purpose of the introduction of the Apprenticeship Levy in 2017 was to significantly increase the quantity and quality of apprenticeships in England.

Unfortunately, due to the Covid crisis, the number of apprenticeship starts during the initial lockdown, from 23 March to 31 July 2020 fell by 45.5 percentage points set against the same the previous year.

Apprenticeships provide the ability for many to “earn whilst they learn” developing their practical skills as well as their theoretical knowledge.

It is also a common misconception that only young people can commence an apprenticeship. The UK’s oldest apprentice has been revealed, a 76-year-old, working as a ticket inspector on Govia Thameslink Railway who is undertaking a level 3 supervisor apprenticeship, equivalent to an A-level.

Looking to the future, as we try to return to normality and overcome the unforeseen challenges that the last 12 months have presented, businesses may want to consider whether apprenticeships are appropriate for them at the time when their recruitment processes resume.

 

The Apprenticeship Agreement (from 26th May 2015)

Under the new scheme, an approved English apprenticeship must take place under an approved English apprenticeship agreement.

In order to be an approved English apprenticeship agreement, the agreement must:

  • provide for the apprentice to work for another person for reward in a sector for which ‘an approved apprenticeship standard’ has been published;
  • provide for the apprentice to receive training in order to assist them to achieve the approved apprenticeship standard in the work done under the agreement, and
  • satisfy any other conditions specified in regulations to be made by the Secretary of State.

The Apprenticeships (Miscellaneous Provisions) Regulations 2017 set out conditions in relation to ‘off-the-job’ training (ie training which is not for the sole purpose of performing the relevant work but is received in normal working hours for achieving the relevant apprenticeship standard). The regulations provide that:

  • the agreement must specify the amount of time to be spent on off-the-job training;
  • the employer must agree and specify the practical period (ie the period for which the apprentice is expected to work and receive training under the agreement) which takes into account:

◦ the apprentice’s knowledge and skills

◦ whether the work and training is to be undertaken by the apprentice on a full-time or part-time basis, and

◦ the relevant apprenticeship standard;

  • the practical period must be not less than 12 months (unless the apprentice has been made redundant in the last year of another approved English apprenticeship working towards the same apprenticeship standard, in which case the new agreement can finish on the same day as the old one would have).

 

Termination

A new style apprenticeship agreement operates under the principles of ordinary employment law, and issues regarding status and termination of employment should be addressed under the terms of statute, rather than by reference to the old law of apprenticeship.

On that basis the following principles will apply:

  • normal unfair dismissal principles and the test of reasonableness will apply;
  • the apprenticeship agreement will be a fixed-term contract and, consequently, if the apprentice’s employment is not renewed at the end of the relevant term that will operate as a dismissal;
  • a dismissal at the end of the relevant term will be due to ‘some other substantial reason’, rather than redundancy, as the dismissal is due to the apprenticeship agreement coming to an end without being renewed and the apprentice has not been offered re-engagement by the employer under a different contract of employment.

The Apprenticeship Levy

The apprenticeship levy has been payable since 6 April 2017. It was introduced by Finance Act 2016 (FA 2016), and is intended to ‘significantly increase the quantity and quality of apprenticeships in England’ by creating an apprenticeships fund that each employer can then access to meet its individual needs.

Potentially all employers have to pay the levy, but the levy is offset by an annual levy allowance of £15,000. As the levy is 0.5% of the employer’s annual pay bill, this allowance means only employers whose annual pay bill is £3m or more will have any liability to pay the levy.

The apprenticeship levy is administered by HMRC as part of the real time information (RTI) system. Employers pay the levy via the PAYE system.

Employers must keep any records relevant to the apprenticeship levy for three complete tax years.

The late payment penalty regime applicable to the apprenticeship levy mirrors that applicable to payments due under the construction industry scheme.

The scheme’s success will of course depend on how easily employers an access the funds and whether new apprenticeships are created as promised. The government has assessed and implemented changes to the scheme since its introduction, for example increasing the maximum amount of funds that the employer is able to transfer and increasing the length of time an employer has to spend the levy funds in their apprenticeship levy account to 24 months (from April 2019).

At Spring Budget 2020, the government announced that it will ‘look at how to improve the working of the Apprenticeship Levy, to support large and small employers in meeting the long-term skills needs of the economy’.

Further information can be found at www.apprenticeships.gov.uk.

 

 

 

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