Recently, an apprentice served his apprenticeship with a firm, then handed over his notice the day he was qualified! The employer had invested a lot of time and money into training his apprentice, and had just bought a new van for the apprentice to use.  Now the employer is left high and dry, while the apprentice has gone off to another firm.

In this case, the apprentice was employed though an apprentice management company for the duration of his apprenticeship, and was just about to sign a permanent ongoing contract before he handed in his notice. Because the employer had not entered into an employment agreement with the employee, there was very little the employer could do.

What can you do if you are hiring apprentices or investing significant funds into junior staff, to ensure your investment in them is not abused?

We suggest you:

1. Put in place good recruitment practices to help you hire the best apprentices;
2. Ensure you have an employment agreement in place which protects your business;
3. Consider entering into a training cost agreement; and
4. Ensure your employee is attracted to the opportunity at your firm (even if another firm can offer more money).

Recruitment practices

Unfortunately you cannot crystal-ball your future relationship with an apprentice, but there are steps you can take during recruitment to avoid hiring those who have a reputation for leaving employers out of pocket.

As a minimum, ensure you meet with the potential apprentice before you take them on. Ask questions to determine their reliability, attitude, future career goals, and what they hope to achieve from the apprenticeship.

Also be sure to ask for references, and to actually follow up with those references. Ask references how they know the potential apprentice, for how long they’ve known them, and ask about their work ethic and reasons for leaving any former employment. If the reference is a former employer, also ask whether they would re-hire the employee.

Employment agreements

Trainees and apprentices are employees – so you need to have an employment agreement. There are fines for employers who don’t, so make this a priority.

It makes sense that your employment agreement protects you as much as possible, while also providing a fair deal for your apprentice.

To protect your business, consider including clauses which:

1. Protect any trade secrets;
2. Restrain the employee (where appropriate) from entering into competition with you within a reasonable distance and for a reasonable time after ending the employment relationship;
3. Clarify that the employee must return all property if they leave the employer (including tools, vehicles, and phones); and
4. Set out what your expectations are for the end of the apprenticeship period (and discuss this now so that the apprentice has a goal in sight).

If the employee is employed through an arrangement with a third party, ensure your contract with the third party is clear on who assumes the risk of the employment, and what happens if the employee leaves after qualifying.

Training cost agreements

It can be wise to enter into an additional agreement on top of the employment agreement, which spells out what the arrangement is for training fees and costs.

The employer and employee might agree to each fund part of the study costs, or alternatively the employer might agree to pay for the employee’s training subject to conditions.

Conditions could include:

1. That the employee will need to pay back the training costs incurred by the employer if the employee leaves within a certain timeframe;
2. That the employer will contribute more to training fees if performance meets or exceeds a certain level (for example, the employer might agree to pay a higher percentage of the fees if the employee gets good grades or passes all units on the first attempt); or
3. That the employer will provide additional incentives if the employee continues on to work for the employer after the training period (such as use of a van).

Alternatively, the employer might agree to operate a ‘training account’, which is an account run by the employer which the employee regularly contributes to for the express purpose of refunding the employer for training fees.

Be a great place to work

There is more to work than money.  While a competitor may be able to offer a better rate of pay, a genuine interest in your employee’s success goes a long way towards fostering loyalty. So does interesting work, respect from colleagues, and a supportive culture.

Ensure your policies line up with the workplace you want to create, and make sure you take action if standards seem to be slipping.  It is particularly important to follow a proper process when dealing with any workplace issues that arise – such as allegations of bullying or inappropriate behavior – so that staff feel safe and respected in the workplace. This approach will help with retention.