The Employment Appeal Tribunal in GE Caledonian v. McCandliss recently held that a university sponsorship contract was not a contract of employment.
Mr McCandliss undertook an engineering apprenticeship with GE from August 2002 to August 2006 with no automatic entitlement to permanent employment on completion. In August 2006 Mr McCandliss opted to commence a three-year engineering degree with GE's sponsorship.
The sponsorship contract provided that GE would provide Mr McCandliss with £1,200 per term for the duration of the degree, paid "industrial training" in summer holidays, that Mr McCandliss would offer his services "for continued employment" with GE for 2 years subsequent to his degree and with all other "terms and conditions of employment" applying.
Prior to his final year of study Mr McCandliss informed GE that he was withdrawing from the course for personal reasons and asked if he could return to his "full-time position". GE stated that he did not have a full-time position: Mr McCandliss was initially an apprentice and was currently working placements in the summer holidays. GE gave Mr McCandliss the option of returning to university or accepting an internship contract both of which were refused.
GE therefore treated the sponsorship contract as terminated at Mr McCandliss's request and Mr McCandliss brought a claim against them for unfair dismissal.
The Tribunal initially found for Mr McCandliss on the assumption that GE had conceded that he was dismissed from a continuing contract of employment.
The EAT upheld GE's appeal on the basis that there was no contract of employment and as such the Tribunal did not have jurisdiction. The EAT found that the overarching and primary purpose of the sponsorship contract was to advance Mr McCandliss's training and education and GE were not obliged to offer him permanent employment once his course was completed.
Best Practice
This case, and those like it, are of increasing relevance as apprenticeships and training contracts (as well as ancillary arrangements such as those agreed above) are becoming a more popular means for young workers to obtain training and experience.
The important thing is to ensure contracts are drafted precisely to enshrine the intentions of the parties. The Tribunal will look to the whole relationship between the parties but this job will become easier if the contract is devoid of ambiguous terms and phrases referring for example to the "terms and conditions of employment".
For more information, please contact Richard Hewitt on 0117 314 5320.
This publication is for guidance only. Reliance should not be placed upon it and nor should action be taken, without obtaining advice in respect of the specific circumstances applicable. We will be pleased to provide such advice or assistance.
