Apprenticeships are an effective way for businesses to attract new talent, develop skills within their workforce and build for the future. For SMEs in particular, they can provide a cost-effective solution to skills shortages while supporting long-term growth and succession planning.

More than 350,000 people start an apprenticeship every year in the UK, reflecting the increasing role apprenticeships play in helping employers recruit, train and retain skilled employees.

Why employ an apprentice?

Apprenticeships are open to anyone aged 16 or over who is not in full-time education. As a result, they can benefit both school leavers entering the workplace and existing employees looking to develop new skills or retrain in a different role.

For employers, apprenticeships can offer a range of advantages, including:

• Developing talent tailored to business needs
• Addressing skills shortages within the organisation
• Upskilling existing employees
• Improving employee engagement and retention
• Accessing government-funded training and available incentives

For apprentices, they provide an opportunity to gain recognised qualifications, develop practical skills and earn a wage while learning.

What employers need to consider

While apprenticeships offer significant benefits, employers must ensure they comply with a number of legal and regulatory requirements.

Employers should:

• Put the appropriate apprenticeship agreement and employment contract in place
• Pay apprentices at least the applicable National Minimum Wage
• Follow fair and non-discriminatory recruitment processes
• Work with an approved training provider
• Comply with working time, health and safety and safeguarding obligations
• Allow apprentices to complete required training during their contracted working hours

It is important that apprentices are not viewed simply as a source of low-cost labour. A genuine apprenticeship should focus on learning and development, supported by appropriate supervision, mentoring and regular reviews.

Common legal pitfalls

One of the most common mistakes employers make is failing to use the correct type of apprenticeship agreement.

Historically, apprentices were engaged under what is known as a Common Law Apprenticeship. If a Common Law Apprenticeship is terminated early, employers can face significant legal and financial exposure, including claims for breach of contract and loss of future earnings.

To reduce this risk, employers should ensure they use an Approved English Apprenticeship Agreement linked to an approved apprenticeship standard. When drafted correctly, this type of agreement provides greater certainty for both employer and apprentice and enables employers to manage issues such as conduct, capability and redundancy in line with standard employment law principles.

As specific legal requirements apply, taking advice before implementing apprenticeship arrangements can help employers avoid costly mistakes.

Looking ahead

With the qualifying period for unfair dismissal claims expected to reduce from two years to six months from 1 January 2027, employers should carefully consider the implications when managing apprenticeships, particularly where concerns arise regarding performance or continued employment at the end of the programme.

Seeking advice at an early stage can help minimise risk and ensure decisions are handled fairly, consistently and lawfully.

How can we help

Apprenticeships can deliver significant benefits for both employers and employees, but it is important to ensure the correct legal framework is in place from the outset.

Our Employment team advises businesses on all aspects of apprenticeships, including:

• Apprenticeship agreements and contracts
• Recruitment and onboarding
• Performance and capability issues
• Disciplinary matters
• Dismissal and redundancy processes

If you would like advice on employing apprentices or managing an existing apprenticeship arrangement, we’re here to help. Get in touch with our Employment team at Employment@SchofieldSweeney.co.uk.