Fair Work in modern and graduate apprenticeships

Executive Summary

Introduction and aims

This research was commissioned by The Scottish Government to explore opportunities to embed Fair Work First principles in the Modern and Graduate Apprenticeship offer in Scotland. Following the adoption of the Fair Work Framework, The Scottish Government has developed the Fair Work First approach that asks employers who deliver procured public services in Scotland, or who receive Scottish Government grant funding, to adopt fair working practices, specifically: appropriate channels for effective voice, such as trade union recognition; investment in workforce development; no inappropriate use of zero hours contracts; action to tackle the gender pay gap and create a more diverse and inclusive workplace; and payment of the real Living Wage.

The aim of this research was to explore the opportunities to embed Fair Work First in the offer of the modern and graduate apprenticeship programmes (MAs and GAs). The research objectives were to consider whether the Fair Work First criteria require adaptation in order to be applied to MAs and GAs; to formulate initial recommendations to support the implementation of the Fair Work First criteria; and to identify potential approaches to ensuring that apprenticeships remain an attractive offer following implementation of the Fair Work First criteria. The research objectives were revised in July 2020 to include the collection of data on the impact of the pandemic on the progress of apprenticeships.

To address these objectives, the research focused on the following:

• investigating employer, apprentices and wider stakeholders' views on the most appropriate mechanism for embedding and evidencing Fair Work First in the apprentice role/offer and in workplaces;
• the role of incentives and barriers for employers' engagement with apprenticeships, and how employers might respond if funding was subject to greater conditionality in the form of Fair Work First;
• identifying what forms of advice and support could be made available to employers to enhance the provision of Fair Work First; and
• the views of stakeholders and employers on a programme that guarantees apprenticeships to those facing difficulties entering the labour market, including the care-experienced or those with disabilities.

Methods and analysis

A flexible qualitative methodological design was adopted based on an informed deliberative approach. Research participants included key stakeholders, employers and apprentices who were provided with relevant pre-interview information about fair work and Fair Work First. Following a revision of methods in response to the COVID-19 pandemic, semi-structured depth interviews were conducted by telephone/online with ten key stakeholders, eighteen employers and twenty Graduate and Modern Apprentices, covering local labour markets in Glasgow, Perth and Inverness.

A thematic analytical approach was adopted, guided by the research objectives and the extant literature on apprenticeships and conditionality in public funding, alongside researcher knowledge of the skills, learning and fair work landscape.

The impact of the Covid-19 pandemic on Apprenticeships

Many research participants perceived that the pandemic had negatively affected the uptake of new apprenticeships and the placement and progress of existing apprenticeships, and there was much uncertainty among participants about what will happen to apprentice jobs and workplaces after the end of the Coronavirus Job Retention Scheme (CJRS).

Apprentices report delays in their progress and completion of their training due to the shift to online homeworking and learning; off-the-job training providers shifting to virtual learning environments; and ongoing difficulties associated with conducting practical and/or observational on-the-job assessments.

Although employers highlighted disruptions to their recruitment of apprenticeships in 2020, many anticipated returning to 'normal' in 2021 and beyond. There was broad recognition that policy initiatives such as CJRS, PACE and Adopt an Apprentice have helped employers respond to the challenges they have faced in 2020 and into 2021.

Awareness of fair work and Fair Work First

Key stakeholders and employers had greater awareness of fair work than apprentices. This knowledge spanned the existence and work of the Fair Work Convention, including of the Fair Work Framework; the requirement that training providers promote fair work with apprentice employers; and the requirement to deliver fair work in public sector procurement.

Public sector and large employers were more aware of and better understood fair work than small and medium sized employers (SME), or micro employers.

There were moderate levels of awareness among SME employers, but little to no awareness of fair work among GAs and MAs.

Stakeholders and larger employers reported uncertainty about alignment between fair work and other policy initiatives, and its links to other employment and apprenticeship policies, and few research participants were aware of the detail of the Fair Work First criteria. This raises the potential for enhancing communications with employers, workers and other stakeholders on the fair work agenda to raise awareness of its importance and benefits.

Views on Fair Work First

Stakeholders, employers and apprentices are largely supportive of most of the Fair Work First criteria. There is a general recognition that the different elements of Fair Work First are what good employers should be doing and consistent with current practices of good employers. Some employers recognised the elements of Fair Work First in their own employment standards, policies, procedures and structures. Apprentices are very positive and supportive of the Fair Work First criteria as reflecting good workplace standards.

Fair Work First and the Real Living Wage (RLW)

Apprentices supported the payment of the RLW. Stakeholders and employers raised issues about the 'affordability' of the RLW because it represents a significant uplift to the current age-related training rates. Concerns were voiced that the RLW would impact negatively on differential pay rates in organisations; employers' use of younger people; and the numbers of available apprenticeship and training opportunities, particularly if existing age-related pay rates were removed. Certain sectors including hospitality and childcare were identified as facing particular challenges in paying the RLW.

Departure from paying the RLW, however, is inconsistent with the stated objectives of The Scottish Government in launching Fair Work First. This creates a challenging tension. Policy on apprentices' pay (for example, the National Minimum Wage Apprenticeship Rate) acknowledges that training rates of pay are not equivalent to rates for the relevant job because of the training, administration and supervision costs employers might incur.

Addressing this tension requires better insight into the real value and costs to employers of apprenticeships in specific sectoral and organisational contexts. Variable pay rates that differentiate training time and wider job performance might be one way of addressing employer concerns over affordability while also supporting a commitment to fair work for apprentices. This approach is taken in some collectively bargained agreements on apprentice pay rates. Generating this insight requires more focussed discussions with employers and relevant unions, a detailed economic assessment of the RLW impact; and potentially greater support given to employers in very specific contexts.

Current Scottish Government guidance on Fair Work First implementation highlights the possibility of some flexibility in how the RLW criterion of Fair Work First might apply to employers. While guidance promotes payment of the RLW to apprentices throughout their apprenticeship and urges that this should not limit pay rates, the guidance also suggests that employers on a journey towards paying the RLW can be exhibiting good practice.

Benefits of apprenticeships and likely impact of Fair Work First

Apprentices identified a range of benefits arising from their employment, study and training, and could see clearly the potential benefits of Fair Work First in setting minimum standards for employers that offer reassurance and counter negative associations that some young people have about apprenticeships. Apprentices saw Fair Work First as having the potential to bring more people into positive engagement with apprenticeships.

Mechanisms for embedding Fair Work First

There was little specificity on how best to embed FWF within the apprentice role/offer other than from trade union stakeholders who highlighted the role of embedding Fair Work First criteria in collective bargaining agreements as these apply to firms, sectors and across apprentice frameworks. Stakeholders and employers were more likely to focus on embedding Fair Work First among employers through dialogue and persuasion, that is, through generating greater awareness of fair work, identifying potential benefits to employers, and in so doing extending its influence and embedding it in existing workplace practices. A possible role for embedding Fair Work First in the Young Person's Guarantee was raised.

Incentivising the adoption of Fair Work First

Stakeholders and employers recognised that public financial support for apprenticeships shouldhave conditions attached that apply to employers. Any concerns focussed on what the specific conditions would be, how these would be applied and the consequences for employers of failing to meet or deliver on Fair Work First conditions. The majority view was that the greater the level and depth of conditionality, the more employers would opt-out of taking on an apprentice, particularly SME employers. Most research participants supported a 'light-touch' approach with time for employers to adapt and an emphasis on the potential benefits of fair work to the employer.

Guaranteed apprenticeships

Most stakeholders and employers emphasised that the overarching principle in recruitment practice was finding the 'right person' for an apprenticeship that matched their skills, abilities, capabilities and interests. While broadly supportive in principle of guaranteed apprenticeships for those facing labour market disadvantage, some employers emphasised practical challenges in relation to people with disabilities in understanding individual capabilities, the scale of workplace adaptations required and the availability of specialist support to employers, about which there did not appear to be widespread knowledge.

Advice and support on fair work and Fair Work First for employers

Stakeholders and employers made a number of suggestions about forms of advice and support required to enhance the provision of fair work and Fair Work First (some of which have been addressed in current Scottish Government guidance on Fair Work First). These included: the definition, visibility and place of fair work in Scottish Government policy agendas; the need for strong, independent, advocacy of fair work to raise awareness and the benefits for employers, focussing specifically on channels that engage with SME employers; working with Skills Development Scotland to reach SME apprentice employers in different sectors; and the need for clarity about what is required and expected of employers to meet the Fair Work First conditions.

Recommendations

A consideration of the evidence leads us to make the following recommendations:

Recommendation 1: public bodies and agencies should increase efforts to champion fair work in apprenticeships.

Recommendation 2: relevant stakeholders, including the Fair Work Convention, should target the provision of information on fair work and Fair Work First specifically on SME employers and apprentices/young people.

Recommendation 3: development of specific Fair Work Guidance and best practice examples as these apply to apprenticeships.

Recommendation 4: identify challenge areas for paying the RLW to apprentices, develop/build upon existing collaborative structures to address challenges and highlight and disseminate good practice around the RLW.

Recommendation 5: develop a robust evaluation of the implementation of Fair Work First as early as possible and use this insight/learning on an ongoing basis to support further adoption/implementation.

Recommendation 6: develop 'light touch' but effective reporting and monitoring requirements to support Fair Work First and utilise workplace representation to support reporting and monitoring where present.

Recommendation 7: explore the lessons from flexible working arrangements operationalised during the COVID-19 public health restrictions to improve intelligence on the feasibility of guaranteed apprenticeships.

Recommendation 8: enhance joint employer/union activity around the governance of apprenticeships/Frameworks with specific emphasis on the delivery of the Fair Work First criteria.