What Is An Apprenticeship Agreement?

Hiring an apprentice can be a great investment for your business, and is also extremely helpful for your apprentice. This means they can receive the right training while also helping out your business, and being compensated for this. 

However, taking on an apprentice is an important decision to make and comes with several responsibilities. So, it’s important to have an Apprenticeship Agreement in place to ensure that you’re covering all your bases when taking on an apprentice.

Who Is An Apprentice?

Before we go into the details of the Agreement, let’s go through who is actually considered an apprentice. 

An apprentice in New Zealand is anyone who combines their studies and work to obtain a trade qualification – this could be a hairdresser, chef or tradesperson. It covers a range of industries, but they all require a formal training agreement with an Industry Training Organisation (ITO) and regularly undertake training through a Registered Training Organisation (RTO).

An RTO might include a Polytechnic or an Industry Training Organisation, such as a private training establishment. 

What Is The Difference Between An Apprentice And A Trainee?

It is also important to distinguish between an apprentice and a trainee. 

Trainees are similar to apprentices, however traineeships cover a larger range of occupations, whereas an apprenticeship is generally for a skilled trade. Traineeships are also usually for a much shorter period of time (between 6 months to 2 years), whereas apprenticeships last for much longer (up to 4 years).

The New Zealand government has written more about apprenticeships and traineeships here. 

What Is An Apprenticeship Agreement?

An Apprenticeship Agreement is a document which formalises an agreement between your business and an apprentice in New Zealand. This agreement will establish your obligations to provide training to the apprentice and the qualification that the apprentice is working towards. 

What Should The Agreement Include?

The agreement will also include other important aspects of your agreement, including liability provisions, 

• Apprentices are entitled to the Employment Relations Act and Holidays Act in the same way as any other employee e.g. annual leave, sick leave
• Employer’s obligations around the required training for the apprentice to receive their qualification e.g. paying apprentice wages 

How Can The Agreement Be Terminated?

An Apprenticeship Agreement can only be cancelled in either of the following ways:

1. Mutual consent
2. If one party applies for cancellation to the New Zealand Qualifications Authority (NZQA) or the relevant ITO (after considering the circumstances)

This is why it’s essential that your agreement is registered with the relevant training authority. If not, termination of the agreement can become complex. 

Other Requirements

All apprentices in New Zealand must be employed under an appropriate industrial arrangement. Employers are required by law to have a copy of the relevant employment agreement or collective agreement on file in the workplace. Apprentices usually receive special pay rates while they complete their qualification. 

This includes payment for all hours spent working at your business and in formal training. Apprentice wages are set out in the employment agreement or collective agreement that applies to your business. It can vary based on the length of the apprenticeship, how much training the apprentice has completed, and if the employee is a school-based or adult apprentice. 

For help with pay rates, you can visit https://www.employment.govt.nz/hours-and-wages/pay/pay-rates-for-apprentices-and-trainees/ or your industry association.

Example Grant is working towards completing an apprenticeship for hairdressing, and is currently working at Amy’s salon.  He is completing his training with an ITO. Amy has an Apprenticeship Agreement drafted for Grant, and ensures that her obligations to him are outlined (for example, he is subject to all of the Employment Relations Act and Holidays Act provisions).  It also outlines his hours of work, his pay rates (including those hours spent in training) and leave entitlements.  Amy also ensures that this Agreement is registered with the New Zealand Qualifications Authority (NZQA), so in case the Agreement is to be terminated and mutual consent isn’t an option, this can be done with them.

How Do I Get An Apprenticeship Agreement?

Taking on an apprentice is a great idea for your business as it benefits both you and the apprentice. However, it’s crucial that you have the right Apprenticeship Agreement in place that covers all the relevant details and is registered with the right authoritative body. 

If you would like a consultation on your options going forward, you can reach us at 0800 002 184 or [email protected] for a free, no-obligations chat.

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