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HMRC internal manual

National Minimum Wage Manual

Status: Example of court consideration: 1

Flett v Matheson [2006] EWCA Civ 53

In Flett v Matheson, the court found that modern apprentice agreements can be a common law contract of apprenticeship, enabling the apprentice to claim damages for lost wages and lost opportunities if a contract is terminated early

The worker aged 17, entered into a tripartite agreement with his employers, electrical contractors, and a training provider to work as an apprentice for the employers for a period of 42 months while receiving wages from them and studying under the employers and the training provider, pursuant to “advanced modern apprenticeship arrangements”, to qualify as an electrician. The employers dismissed the applicant summarily after less than a year.

The case progressed to the Employment Appeal Tribunal who stated in its judgment that the agreement was within the definition, a contract of service but not a formal contract of apprenticeship.

However, the Court of Appeal found that since the agreement required the applicant to work for the employer as an apprentice while earning wages from them and training for a period of considerable length with their support to qualify as an electrician, the agreement had the essential features of a contract of apprenticeship. Therefore, under the agreement he could not dismiss the apprentice within the period of training save in cases of incapability. As the full details of the arrangement had not been sufficiently explored, the matter was returned to the employment tribunal for further consideration of the evidence.

In its judgment, the Court of Appeal referred to the National Minimum Wage Regulations stating that;

“Because it includes references to a contract of apprenticeship, it is necessary also to refer to Regulation 12 of the National Minimum Wage Regulations 1999 (SI 1999/584) (“the 1999 Regulations”). It is headed: “Workers who do not qualify for the national minimal wage”. It provides, insofar as is material:

(2) A worker who - (b) is employed under a contract of apprenticeship or, in accordance with paragraph (3), is to be treated as employed under a contract of apprenticeship … does not qualify for the national minimum wage in respect of work done for his employer under that contract.

(3) A person is to be treated for the purposes of paragraph (2)(b) as a worker who is employed under a contract of apprenticeship if, and only if, he is -

(a) a worker within the meaning given by Section 54(3) of the Act; and

(b) engaged - (i) in England or Wales, under the Government arrangements known… as National Traineeships, Modern Apprenticeships, Foundation Modern Apprenticeships or Advance Modern Apprenticeships”.

The wording of Regulation 12(3)(b)(i) has been amended by SI 2004/1930 but not so as to affect the outcome of the present case, in my view. It may be argued that the need for a deeming provision in relation to Modern Apprenticeships demonstrates that an arrangement such as the present would not otherwise be a contract of apprenticeship. I doubt that. The deeming provision prevents any doubt as to whether, for the purpose is of the 1999 Regulations, the Modern Apprenticeship is a contract of apprenticeship. It does not in my view require all Modern Apprenticeships to be construed as something other than contracts of apprenticeship. If, as appears to be the case, the appellant was receiving less than the national minimum wage, it points to the agreement being one of apprenticeship.”