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HMRC internal manual

National Minimum Wage Manual

Entitlement to national minimum wage: contract of apprenticeship

Relevant legislation

The legislation that applies to this page is as follows:

* National Minimum Wage Act 1998, section 54(2), 54(3)
* National Minimum Wage Regulations 2015, regulation 5(1)



There is no statutory definition of what is meant by a contract of apprenticeship. However, there are several precedents which help us to understand what is meant by a contract of apprenticeship (NMWM04070).

Contracts of apprenticeship are usually written, but can be oral and may not even be formally expressed but simply implied. Generally, the contract will specify:

  • what training is to be provided;
  • the level of the training;
  • the length of the apprenticeship; and
  • the rate of pay.

In cases of doubt it is necessary to investigate the nature of the contract and what happens in practice.

The difference between a “contract of apprenticeship” and a “contract of employment” is:

  • the main purpose of a contract of apprenticeship is to learn/teach the skills required to practice a trade;
  • the main purpose of a contract of employment is the undertaking of work.

Therefore, the NMW Officer will have to form an opinion on the status (NMWM04000) regarding the overall purpose of the contract. Is it to equip the worker to learn a trade? Or is it for the worker to perform work for the employer, with any necessary on the job training? There may well be elements of both but it is the primary purpose that matters.

If a worker has joined an employer primarily to learn a trade it is likely that a ‘contract of apprenticeship’ will exist.

However, if a ‘contract of apprenticeship’ exists but the actual working practices differ, resulting in the worker not being able to learn a skill then it is possible that the written contract has been amended or varied by what happens in practice. In these circumstances the worker may not be an apprentice and may be entitled to the national minimum wage in the normal way.

It is perhaps unsurprising that the circumstances created by Government arrangement apprenticeship programmes (NMWM05235) can sometimes be considered by courts as creating a contract of apprenticeship.

There are no hard and fast rules that amount to a contract being either one of apprenticeship or employment. It is necessary to look at all the circumstances and use judgement. In the event of a dispute about whether a contract is a “contract of apprenticeship”, a court or tribunal could ultimately decide.