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HMRC internal manual

National Minimum Wage Manual

Status: Other contracts - Contract of Apprenticeship

There is no statutory definition of what is meant by a contract of apprenticeship. An apprentice is defined in the Oxford English Dictionary as being:

“one who is bound by legal agreement to serve an employer for a period of years, with a view to learn some handicraft, trade etc., in which the employer is reciprocally bound to instruct him.”

However, there are several precedents which help us to understand what is meant by a contract of apprenticeship, e.g.

  • A contract of apprenticeship, under which the apprentice is employed, exists where the apprentice contracts to be taught a trade or calling. (Wiltshire Police Authority v Wynn [1980] ICR 649)
  • The apprentice undertakes to serve their “master” for that purpose and the “master” undertakes to teach the apprentice and to maintain them or pay their wages. (R v Laindon Inhabitants (1799) 8 Term Rep 379)
  • A company (or other corporate body) may take an apprentice. An apprenticeship agreement must be for an agreed fixed period. Apprenticeship agreements must be in writing or else they cannot be enforced. (Kirkby v Taylor [1910] 1 KB 529)
  • An oral contract of apprenticeship, although legally valid, is unenforceable unless and until acted upon. However, for national minimum wage purposes, section 54(2) of the National Minimum Wage Act 1998 allows for an oral or an implied contract of apprenticeship. This was viewed at the Court of Appeal as, “ . . . we infer that Parliament intended a relatively unlegalistic view to be taken of what modern apprenticeship entails. In our judgment Parliament probably intended to cover contracts of apprenticeship strictly so called and also relationships equivalent thereto, which would be quite as appropriate to learned professions as to skilled trades or crafts.” (Edmonds v Lawson & Others QBNEF1999/1019)
  • The ‘master’ must have responsibility for the training and qualifications of the apprentice. A tripartite agreement, such as a Government arrangement “Apprenticeship”, where an employer offers a person an opportunity to train and qualify at an external body such as a school or college, even if they pay the person whilst at college and allow the college to assess the person at work, is consistent with being a formal contract of apprenticeship. (Flett v Matheson [2006] EWCA Civ 53) (NMWM04130). Although there are arguments concerning whether such an approach confers the same legal rights to Government arrangement “apprentices” as those on formal contracts of apprenticeship it should be noted that such circumstances are always likely to be treated as apprenticeships for minimum wage purposes (NMWM05230).

For minimum wage purposes (NMWM05240), a person engaged under a contract of apprenticeship is a worker and will qualify for the national minimum wage (NMWM03065).