Celebrating and Supporting Apprenticeship Week

Recent Government statistics show continued growth in the volume of apprenticeships in the UK, with an increasing number of organisations seeing the value of apprentices to their business.  For the past few years there have been over 750,000 apprentices officially learning ‘on the job’ across the country at any one time, making a positive contribution while they develop new skills.

The upcoming National Apprenticeship Week is a good moment to review how apprenticeship agreements operate from a legal viewpoint, and what impact the new Employment Rights Act 2025 may have for local employers who provide apprenticeship opportunities.

Apprenticeships can play a vital role in developing a skilled business team, with many employers seeing the value in nurturing new talent through this type of training. However, taking on an apprentice is not the same as hiring other employees, and understanding the apprenticeship framework at the outset is essential to avoiding legal arguments later.

Employment law framework for apprentices

Most modern apprenticeships operate under the Apprenticeships, Skills, Children and Learning Act 2009.  This means that when the correct form of agreement is used, apprentices are treated as employees rather than traditional ‘common‑law’ apprentices. If you need to part company with an apprentice, this distinction can be the difference between an apprentice being dismissed as you would any other employee or the business paying out for the remainder of the term of the apprenticeship agreement, depending on the contract.

A properly drafted approved apprenticeship agreement gives employers the flexibility to manage performance, follow normal disciplinary processes and, if needed, end the employment in the same way as with any other employee. An apprentice engaged under a common‑law contract of apprenticeship is far harder to dismiss early because the purpose of the contract is to focus on training rather than on the actual work being done. In those cases, a dismissal which breaches the terms of the agreement can lead to an employer facing legal action from the ex-apprentice and potentially having to make a significant financial damages payment.

What the Employment Rights Act means for apprenticeships

With the Employment Rights Act coming into force in the coming months, the new ‘qualifying service’ provisions may have an impact on the decision to offer these agreements and the terms where they are offered.

Employers should ensure the contract is in writing, meets the statutory requirements, and reflects the revised eight‑month minimum practical period in force from 1 August 2025. The agreement must also set out the apprenticeship standard being followed and the required off‑the‑job training. Getting this wrong can inadvertently create a common‑law apprenticeship, greatly restricting an employer’s ability to deal with underperformance or disciplinary issues.

Apprenticeships are usually fixed‑term for a period of two years or less. With the new minimum qualifying period of service, many more apprentices will be protected from unfair dismissal at the end of the fixed term. Employers must still have a fair reason and follow a fair process. Redundancy is possible for apprentices employed under statutory apprenticeship agreements, provided the normal process is followed, but far more limited for those under common‑law contracts.

Employers also cannot require apprentices to contribute to the costs of their training, and the move towards the new growth and skills levy from April 2026 will continue to shift how apprenticeship funding operates for businesses.

Incentives for hiring apprentices

An employer who is considering offering an apprenticeship for the first time may be attracted by the cost-effectiveness of taking on someone new in this way.  Potential benefits include:

• There are government grants available, giving employers up to £1,000 for hiring an apprentice who is aged 16-18, or who is 19-25 and has an education, health and care (EHC) plan or care leaver status.
• If you run a smaller business, the government will cover 95% of your apprentice’s training costs.
• If you employ apprentices under the age of 25 who earn less than £967 per week, you will not be required to pay National Insurance contributions for them. This could save you up to £3,000 for each apprentice you take on.
• You can find the most up-to-date government information at Employing an apprentice: Get funding for apprenticeship training - GOV.UK
• Specific pay rates for apprentices (link to National Minimum Wage and National Living Wage rates - GOV.UK)

Apprenticeships can be hugely beneficial, but employers should be conscious of the obligations and potential pitfalls involved when offering apprenticeships. If you are considering taking on an apprentice or reviewing your existing agreements, we can ensure your documentation is compliant, commercially effective, and tailored to the needs of your business.

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This article aims to supply general information, but it is not intended to constitute advice. Every effort is made to ensure that the law referred to is correct at the date of publication and to avoid any statement which may mislead. However, no duty of care is assumed to any person and no liability is accepted for any omission or inaccuracy. Always seek advice specific to your own circumstances. Fraser Dawbarns LLP is always happy to provide such advice.