We are seeing this become more frequent where our employers are making their apprentices pay back any contribution they have made to the apprenticeship if they change employers/withdraw etc. ie. what they have paid from an invoice for a co-funded apprentice. We have always advised employers they cannot do this, sent on information from the funding rules and referred students to ACAS etc.
The latest funding rules for apprentices who started before 1 May 2017 says:
B5. You must not ask an apprentice to contribute financially to the direct cost of learning. If providers charge an apprentice’s employer, this is up to them. In an apprenticeship standard, the provider must charge the employer for a contribution towards the cost of the apprenticeship.
I have also had conversations with the ESFA service desk who have been shocked that this is happening when I have phoned them and asked for advice on how to deal with this.
One of our employers has emailed me today after she had a conversation with the apprenticeship service who advised her apprentices who started before May 17 CAN be asked to pay back any fees they owe if it’s in a contract of employment.
What are other people’s views on this??May 15, 2018 at 11:22 am #257039
A Provider must not ask an apprentice to contribute financially to the direct cost of learning but the Employer if they have it in an agreement with the Apprentice can enforce it and ask for reimbursement of training costs where the Apprentice has broken the agreement, it may not be a practice we condone but a contract is a contract.
HTHMay 15, 2018 at 11:39 am #257046
Regarding the Apprentice contributing direct to employer:
We know an apprentice (not ours) who has been told by her employer she has to pay £900 towards her training costs (this equates to 10% employer contribution due) and this will be written in to her contract of employment, and is seen by the employer as a deterrent to the apprentice leaving after being trained.
We have advised the apprentice that this is against the employer funding rules p58.4 but looking at what Martin says I’m not not sure??
It worries me that this could become common practice by employers. Is this policed inn any way??
Thanks, from a very worried ProviderMay 16, 2018 at 10:52 am #257309
This is the current Provider rule and this is specific even where the Apprentice has left the programme early.
61.4 not be asked to contribute financially to the direct cost of training, on programme or end-point assessment. This includes both where the individual has completed the programme successfully or left the programme early. Direct costs include any co-investment or additional training and assessment costs above the funding band that the employer has paid directly to the training provider where this is part of the agreed apprenticeship.
I was referring to the situation where the Apprentice breaks the terms of the Apprenticeship agreement with their employer which could result in the employer taking action against them however this point is also covered in the specific Employer rules.
52.4. not be asked to contribute financially to the direct cost of learning or assessment (this includes where an apprentice leaves their programme early – you must not claim training or assessment costs back from ex-apprentices).
HTHMay 16, 2018 at 11:21 am #257328
Thanks for your quick response Martin.
I think the issue here is that employers are asking Apprentices to contribute regardless of the rules and just not telling the Provider.
This instance has only come to light as the niece of a staff member has been informed by her employer she will need to pay the £900.
I just wonder how or who, if at all, is policing this. I worry that if we know of one employer doing this then there could be many more out there. If Providers are unaware of this happening how can it be curbed?May 16, 2018 at 11:41 am #257344
The Apprenticeship funding: rules and guidance for employer version 3:
E58. To use funds in your apprenticeship service account or government-employer co-investment, the individual must:
58.4 not be asked to contribute financially to the direct cost of training, on programme or end-point assessment. This includes both where the individual has completed the programme successfully or left the programme early. Direct costs include any co-investment or additional training and assessment costs above the funding band that you have paid directly to the training provider where this is part of the agreed apprenticeship.
Recovery of funds
E172. We may take action to recover all or part of the government funding from you if we are satisfied that there has been a breach of the funding rules. This includes where claims are made for funding through your apprenticeship service account, government co-investment or additional payments to which you are not entitled.
These are rules the employer agrees to in dealing with the ESFA and the provider.
Martin if the contract states they can do this, then as a provider we shouldn’t be working with them, as doing so you condone the practice. It surely just take 1 ex-learner to complain to the ESFA to trigger them to look into the matter and I don’t want to be the provider associated to these employers when the ESFA start investigating.
They may have a contract with the learner but they also have a contract with us and the ESFA agreeing to the Apprenticeship rules.
The ESFA rule E172 makes it clear that if they think the employer is breaking the rules then they reserve the right to take all 100% of the funding band paid straight from the employer.
Under what situations would you believe a break of the apprenticeship agreement result in the employer being allowed to charge learners leaving penalties?
For example if the employer is a Levy payer and the learner leaves. The employer then charges them a leaving fee, are they not defrauding the HMRC. By effectively releasing money out of the Levy pot?May 16, 2018 at 1:10 pm #257369
Hi Gaynor and Jack,
A training contract can include repayment of the Employers cost of training where you leave within a stipulated time period with a % sliding scale of reimbursement where you leave prior to that but this is only enforceable when signed prior to the training taking place, this can be normal practice for some employers.
The question is can this be enforced where the cost of training is the employer contribution part of Apprenticeship Levy funding and to be honest I do not know the answer.May 16, 2018 at 1:17 pm #257371
Completely agree about defrauding HMRC. We had a levy paying employer try and do this, and we told them that they couldn’t. It’s not their money! Asking the student to “pay back” some money that never belonged to the employer, is tax evasion as far as I’m concerned. Regardless of a contract, that should never be allowed.
I’d say paragraph E58.4 is very clear that they cannot do this even if non-levy. They cannot be asked to contribute to “direct cost of training, on programme or end-point assessment”. “This includes … where the individual has … left the programme early”.
If an employer believes that they have incurred other costs not related to the training and assessment (perhaps recruitment costs), then that’s up to them if they want to impose a penalty for leaving early, but surely that would apply to all employees, and not just apprentices?May 16, 2018 at 1:33 pm #257379
If the employer has investing in say induction training prior to the learner agreeing to an apprenticeship then I would agree that the employer may have rights to costs incurred if agreed prior to the induction in question.
BUT once the word apprentice/apprenticeship is written on any document or contract then you have to be applying the ESFA rules. The term apprentice is not a generic title and refers to a government endorsed programme. You cannot be called an apprentice if you do not adhere to the apprenticeship rules and guidelines.
Also remember that a lot of training an employer offers is counted in the 20% off the job training and therefore forms part of the apprenticeship.May 16, 2018 at 1:39 pm #257381
Case law has ruled that training contracts can be enforced by employers, as I have said it is normal practice under UK law for some Employers and as long as they are only referring to their direct costs (co-investment) then this would not be defrauding HMRC as this does not come from the Levy funding.May 16, 2018 at 1:46 pm #257383
Were those case laws under frameworks?
The rules apply equally to Levy and co-investment.
An employer may have a contract to re-claim cost of the apprenticeship standard if the apprenticeship agreement is broken, but that doesn’t negate rule E172.
If the ESFA find that the employer clawed back the funding from the learner then the ESFA have every right take the funding back off the employer.
The rule E58.4 is there to say the employer can’t have a claw back clause in app agreements and get funding from the apprenticeship levy/co-investment.
It is not in the spirit of the EFSA apprenticeship rules, so I cant see how it would be allowed. The 90/10 split has to be maintained and clawing back funds from the learner is undermining that rule.
It would be nice to have some ESFA feedback on this.May 16, 2018 at 3:12 pm #257405
If you had read my previous post you would have seen that I said:
The question is can this be enforced where the cost of training is the employer contribution part of Apprenticeship Levy funding and to be honest I do not know the answer.
But the reality of the situation is Training contract are common practice for employers when they fund training for employee’s.May 16, 2018 at 3:44 pm #257413
I read your post. I think it is clear that if they are a levy employer, clawing back any of the funding will get the employer in trouble with both the ESFA and the tax office.
I understand that it is common practice for employer to have training contracts, but the Apprenticeship Standards are very clear what is acceptable and what is not, irrespective of the funding contract type.
Nobody is forcing employers to sign up apprenticeships. But if they do then they have to understand the rules which are set out in order to be eligible for funding from the government.
Just because it has been common practice in other programme routes does not mean that it will all be fine under the new levy/co-investment system.May 16, 2018 at 4:02 pm #257418
I have received this back from the service desk –
Thank you for your email.
You are correct, apprentices should not be asked to contribute to the cost of their apprenticeship. This has been the case for many years.
The 16/17 rules are clear:
B5. You must not ask an apprentice to contribute financially to the direct cost of
As are the 15/16 rules:
189. Apprentices cannot be made to contribute financially to the direct cost of
The government’s co-investment is intrinsically linked to the employer’s co-investment; one wouldn’t happen without the other and so both sources are deemed to be apprenticeship funding. It is therefore not in the employers gift to ask for this money back.
I hope this has clarified the situation.
I therefore think we should all be doing everything we can to stop this from happening!!!May 22, 2018 at 10:08 am #258981
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