Flett v Matheson [2006] EWCA Civ 53
A modern apprenticeship can also be a common law contract of apprenticeship. Damages for breach can therefore include compensation for wages for the remainder of the term of the apprenticeship, loss of training and loss of status.
Facts: F worked under an individual learning plan (ILP), a combination of on and off the job training, which operated three ways between F, the employer (M) and a Government-sponsored training provider, essentially a modern apprenticeship arrangement. Under the ILP, which was due to run for three and a half years, F was described as an apprentice and it was understood he would qualify as an electrician. F was dismissed without notice and brought various claims, including a claim for breach of the contract of apprenticeship, worth approximately £50,000. F accepted that if he was employed under a simple contract of employment, he would only be entitled to one week’s notice. The employment tribunal therefore had to decide whether F was employed under a contract of employment, a contract of apprenticeship, or neither. It decided he was employed under neither. On F’s appeal to the EAT (we reported the EAT decision in May 2005 Checklist), it held that F was employed under a contract of employment which should be treated as “varied or overlaid by the tripartite trainee arrangements”. He was not, however, employed under a contract of apprenticeship. In coming to this conclusion, the EAT noted that the tripartite agreement was “completely different from the traditional apprenticeship agreement” because responsibility for training by the employer was absent. By contrast, under a traditional contract of apprenticeship, the employer had an obligation to educate and train and secure the required qualification for the apprentice. F appealed to the Court of Appeal.
Decision: The Court of Appeal upheld F’s appeal, holding that the modern apprenticeship is capable of constituting a common law contract of apprenticeship. It was influenced by the fact that, in this case, the word “apprentice” was used in the documents, and the intention of the parties had clearly been to achieve the same purposes as in an old-fashioned apprenticeship contract. The fact that the modern apprenticeship agreement allows much of the training to be provided (and largely funded) by a third party did not mean it did not fall within the common law formulation of a contract of apprenticeship. In a modern environment it would be unrealistic to expect an employer to be able to provide the full training required in order to obtain nationally recognised qualifications. The Court remitted the case to the employment tribunal for further consideration of factual issues that had not been properly explored previously, so it could come to a conclusion on the nature and obligation of M’s obligations to F.
Comment: Flett v Matheson is an important decision for those member companies who take on apprentices under “modern apprenticeship” types of arrangement, ie tri-partite agreements between employer, apprentice and a third party training provider. By holding that such an arrangement can fall within the traditional concept of a common law contract of apprenticeship, the door is open for such apprentices to claim heads of damages which would not otherwise be available to them. These traditional contracts of apprenticeship are for a fixed term and cannot normally be terminated earlier, even where there the employer suffers a downturn in work. In Dunk v George Waller & Sons Ltd [1970] 2 All ER 630, the Court of Appeal held that damages for breach of an apprenticeship should include compensation for loss of wages, loss of training and loss of status. This decision highlights how important it is for member companies thinking of entering contracts of apprenticeship to fully understand the additional obligations they are taking on when engaging apprentices.
Added 6 March 2006