What you Need to Know When Taking on an Apprentice

If you’ve been thinking about taking on one or more apprentices as a way to fill skills gaps in a cost effective way, taking advantage of the various apprenticeship grants that are often available, you probably have a selection of questions when it comes to things like their rights, pay and training.

In this article we run through some of the most frequently asked questions about apprentices to help you obtain a clearer picture before you make your decision.

Question: Are Apprentices Entitled to Statutory Pay?

Answer: Yes. There is a special set National Minimum Wage (NMW) for apprentices who are aged between 16 and 18 years or who are over 19 and in their first year of the apprenticeship. Anyone else on an apprenticeship scheme is entitled to the NMW applicable to their age. You can of course set your own pay rates, as long as they meet or exceed the NMW. You must also ensure your apprentices are given at least 30 hours work per week.

Question: Do I have to give the Apprentice a Permanent Position on Completion of their Contract?

Answer: No, there is no legal requirement for you to provide an apprentice with a permanent job. The apprenticeship contract lasts only for the duration of the training, so when this is complete, you are at liberty to not renew it. If you do this, it will be treated as a dismissal and you will need to provide a written reason. The ACAS Dismissal Code will apply, but you will not need to provide a notice period. Further, you will not be required to source alternative employment for the apprentice.

Question: Do Apprenticeships Have to Last a Certain Amount of Time?

Answer: Yes. An apprenticeship must last for a fixed period and this should be agreed at the start and stated in the contract. Apprentices aged between 16 and 18 years are entitled to a contract of at least 12 months. Other apprenticeships will usually last for anything between one and four years and this will depend on the time required to attain the qualifications and skills required for the job.

Question: What Does an Apprenticeship Need to Include?

Answer: There are numerous things that must be included in an apprenticeship. These range from work experience, on the job training and study release so that official qualifications can be attained.  Your goal is for the apprentice to develop knowledge and skills around a qualification and you will need to have a fixed programme in place to enable them to do so. Other requirements include the monitoring, mentoring and support.

Question: How do I Deal with Apprentices in Regard to Employment Law?

Answer: You must treat an apprentice as you would any other employee regarding pay, leave and things like disciplinary matters. Apprentices are fully covered by the Working Time Regulations.

If you are thinking about hiring an apprentice and could use some assistance and advice, talk to your bookkeepers who will be able to answer any further questions you may have and get you ready for your new intake.

Under-Insurance Warning for Businesses

The Building Cost Information Service, part of the Royal Institution of Chartered Surveyors, has announced that close to 80% of UK commercial properties could be underinsured for rebuild costs by as much as 60%. For a property worth £500,000 this would mean a shortfall of £300,000: a very worrying thought.

The problem could stem from the fact that during an economic downturn, business owners tend to assume their properties have remained stagnant in value. So when they renew their policies, they don’t bother to think about increasing the sum insured for rebuilding purposes.

However, it should be noted that the market value of a property is not in question; it is the rebuild costs that need to be considered, and these can vary quite substantially from the value.

Rising Rebuild Costs

Rebuild costs have risen considerably recently, due largely in part to the changes in the Building Regulations that were introduced in 2002 bringing in a range of stipulations that drove construction costs up. These included things like higher levels of fire protection, improved accessibility, energy performance measures and better drainage. Failure to comply with the Regulations is said to have the potential to add 30 per cent to the cost of a build. And then there is the increase in labour and materials costs to add to this. All of this demonstrates the vital importance of reviewing a sum insured for rebuild.

Businesses may also be under-insured for another reason, and that is a lack of risk assessments and professional valuations, again a symptom of cost cutting in the economic downturn. The trouble is, this could be a false economy, especially when you consider the increase in harsh weather events and terrorist threats that could put properties at a greater risk.

Calculating the Rebuild Value

If you think you are able to calculate your own rebuild value, you may wish to think again. There really is a lot to consider, including Building Regulations compliance, local authority planning fees, geological conditions and materials and labour costs. And if your building is older then you may need to include provision for dealing with the likes of asbestos.

Summarising, when you are renewing your buildings insurance, or taking out a new policy, be very careful about the figure you quote as your rebuild cost. The advice is to invest in a professional reinstatement valuation survey to ensure the sum insured is adequate. If you cannot afford to stump up any shortfall yourself, make sure you have sufficient cover.

Preparing for Consumer Rights Act 2015 Changes

As a business you have until 1 October this year to make sure your staff are aware of the rest of the changes being brought in by the Consumer Rights Act 2015.

The Act replaces various laws surrounding business-to-consumer transactions, including the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982. It serves to outline a clearer path for consumers to understand their rights and the solutions available to them should services or goods fail to be fit for purpose.

There will also be clarification on the periods for repair, replacement and refunds on goods and services and the process by which small businesses can take legal action against larger companies that are breaking competition laws.

Statutory Remedies

If a service fails to meet the provisions of a contract, then consumers will have statutory remedies of ‘repeat performance’ and will also be entitled to a price reduction. If as a business you breach your duty to provide services with ‘reasonable skill and care’, or fail to comply with information you have provided to the consumer about the service, then the consumer will be entitled to repeat performance or a price reduction.

If the service is not delivered within a reasonable time, then the consumer will be entitled to a price reduction.

Whilst the consumer now has a statutory right to these remedies in these circumstances, it does not mean they are excluded from seeking alternative remedies, for example damages, provided they do not attempt to double recover for the same loss.

The consumer is now, in effect, in a better position and will benefit from greater clarity on their rights.

Help Available from the Chartered Trading Standards Institute

Chartered Trading Standards Institute chief executive officer Leon Livermore said, “The Chartered Trading Standards Institute and trading standards officers are committed to working with businesses - small, medium, or large - to help them understand complicated legislation that impacts day-to-day operations. In preparation for the implementation of the Consumer Rights Act, CTSI has developed reference tools through its Business Companion website. The site helps business owners understand the Act and new or changing responsibilities specifically related to their business.'

You can access the tools mentioned here: http://www.businesscompanion.info/

In the meantime, if you are unsure of what you need to do to implement the new laws, you could speak to your bookkeepers who will be able to guide you on how the changes will start to take shape for your business.