Apprenticeships: What to do if your employer goes bust

What happens to you as an apprentice if your company goes bust? Will all that you’ve learned so far still count?

Can you start where you left off with another company?

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In January this year more than 1000 apprentices lost their jobs with Carillion when the largest employer of construction apprentices collapsed. Happily they’re being rescued by their industry training board – the CITB - who have stepped in to help find new employers to take them on.

“We’ve spoken to roughly 1200 apprentices who’ve been made redundant by Carillion,” says Deborah Madden, regional delivery manager at the CITB (Construction Industry Training Board) which has offered cash incentives to new employers. Some 600 former Carillion apprentices have now found new training posts (at the time of writing) and the CITB is working to find some 500 more apprenticeships for most of those left.

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Being made redundant was devastating at the time, says former engineering apprentice Philippa Dressler-Pearson, who took herself off to the job centre when her company folded in 2015. She’d been on a £10,000 apprenticeship with an engineering firm. She was taken on by another company almost immediately – and went on to complete her training – which took an extra year due to the disruption.

“I picked myself up. My training provider and college were incredible. Being made redundant wasn’t seen by my new company (Southco) as negative,” she says. “They were happy to invest in me.”

She went on to become apprentice of the year, as awarded by the employer led skills group Semta. And it shows that companies do value apprentices, she was taken on to finish her training where she had left off. 

Semta’s chief executive, Ann Watson said. “Without a recognised qualification Philippa may well have struggled to prove her ability and get another job.”

If your company does go bust when you are in the middle of your apprenticeship, you don’t have a firm guarantee of a further post – but your prospects are still healthy, says Matt Butcher, head of employer engagement at Bournemouth and Poole College in Dorset. He’s helped place apprentices when their training provider has gone out of business, and the college frequently helps apprentices made redundant by smaller companies, which tend to be more fragile. While responsibility rests with you as an apprentice to find a new employer, college staff will help you hunt around and continue your training while you look.

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“Apprentices might get distressed, but the best thing is to get in touch straight away with your training provider,” says Mr Butcher. “Don’t just sit at home. We can establish where you are with your apprenticeship to date – you won’t lose credit for the training you’ve already done.”  Further education colleges have good links with local employers, and apprentices in some sectors are particularly in demand. You’ll be effectively out of work – with no pay – until you find another company though. And not all training providers, particularly private firms, have the networks with other employers that further education colleges might have.

An apprenticeship is a three-way agreement between an employer, an apprentice and a training provider – so if a company goes bust, it falls to the training provider to help source another job, says Tom Collins, head of apprenticeships at Croydon College. “The training provider has a duty of care and should help them.” Occasionally – and as with Carillion – it’s the company itself which provides the training – in which case, apprentices are advised to get in touch with another training provider nearby. “The funding for the apprenticeship follows the learner,” he says. “So it’s a straightforward process to change training providers.”