A recent case in the Inverness Employment Tribunal (ET) has highlighted one of the main risks in recruiting apprentices in Scotland, namely that early termination of the apprenticeship can give rise to a breach of contract claim.
In Kinnear v Marley Eternit Ltd, Mr Kinnear was employed as an apprentice roofer for a fixed period of four years, with his contract due to end in November 2018. However, due to a downturn in business, his employer terminated his employment in June 2016, 122 weeks earlier than specified in the contract. An appeal against his dismissal was rejected and so he claimed breach of contract.
The ET found that Mr Kinnear was an apprentice and as a result should have been allowed to continue working until his apprenticeship was complete. As his apprenticeship had been terminated early, the ET found that his former employer had breached the contract of apprenticeship.
The ET noted that Mr Kinnear’s apprenticeship had been tailored to a particular brand of roofing products. That, as well as a general lack of available apprenticeships, meant that it was unlikely that Mr Kinnear would be able to complete his apprenticeship.
Therefore, when assessing compensation, the ET took into account Mr Kinnear’s loss in relation to the contract being terminated 122 weeks early as well as his future losses from not being able to qualify as a tradesman and earn a higher salary.
Overall, the ET awarded Mr Kinnear £25,000. It is worth noting that that was the maximum compensation that the ET could award. Had there been no cap on compensation, Mr Kinnear would most likely have been awarded significantly more for his future losses.
If this case had been heard south of the border, it may have had a different outcome. That is because there is legislation applicable to England and Wales that allows apprentices to be treated like other employees, including in relation to early termination of employment. However, there is no similar Scottish law.
In Scotland, an apprenticeship can generally be terminated only where the apprentice is ‘untrainable’, which is a high threshold to meet. Apprentices are therefore more or less protected from issues such as redundancy or a downturn in work.
As seen in this case, ending a Scottish apprenticeship early can result in a finding of breach of contract. Furthermore, an ET will take into account what the apprentice could have earned had they qualified when assessing compensation.
With the introduction of the government’s apprenticeship levy from April 2017, more employers may consider taking on an apprentice, and doing so is certainly being encouraged. However, unless Scotland’s statutory regime is amended to reflect the situation in England and Wales, employers north of the border should bear in mind that it will generally be safer to let an apprenticeship run its course rather than consider terminating it early.
On that basis, employers are encouraged to consider what their workforce needs might be in the next two, three of four years as well as now when employing an apprentice.
If you have any questions on any of the issues raised in the above article, or are considering taking on an apprentice and would like further advice, please contact Seanpaul McCahill.