A Labour MP has called for a public inquiry into certain types of graduate training schemes that have been compared to “tied servitude” run by major outsourcing firms. The training schemes can represent a major problem for graduates looking for jobs in the technology sector who have not read the fine print carefully enough, with some graduates facing demands for payouts of up to £21,000 for leaving certain training schemes early.

The popularity of paid graduate trainee schemes with a resultant guaranteed job has rocketed, alongside burgeoning demand for high level apprenticeships – known as degree apprenticeships – which rose nearly 27% to 11,600 the last quarter of 2017. Unfortunately, certain schemes lock in graduate trainees for periods of up to two years, preventing them from seeking work elsewhere, and specify significant fees – theoretically for reclaiming any training costs – for leaving the scheme early.

The Tide However Is Turning

However, the tide is turning against the big business interests responsible for this type of contract, with Frank Field, the Labour MP and chair of the parliamentary work and pensions committee, recently writing to the business secretary, Greg Clark, asking if he would “consider a public inquiry into the extent and consequences” of the practice.

The letter follows a high-profile legal threat against a major outsourcing contractor, which was accused of employing a similar contract, and of providing low-quality, self-guided learning-based training. However, the company changed its policy recently to remove the requirement that graduates pay for training if they leave within two years.

The company told BBC Radio 4’s Money Box programme: “The repayment clauses for training used in 2015 comply with current legislation and are common practice in the industry, however they are no longer used.”

Why Non-Refundable Training Fees are Unacceptable

Nadia McKay, Testing Services Director at Edge Testing Solutions, a firm that runs an award-winning paid graduate trainee scheme which guarantees a job from day one and promotes trainees up the career ladder at the end of two years, said:

“Graduates have it tough today with student loans, high rents and low minimum wage, but being charged over twenty thousand pounds for what is tantamount to non-refundable training fees is certainly unacceptable. Some graduate schemes consist of unpaid training followed by unpaid work experience.

One graduate commented: “Unpaid training is truly horrible. Three months unpaid training followed by three months unpaid waiting for jobs can seriously affect your mental health.”

The campaigning barrister Jolyon Maugham, founder of the Good Law Project, has previously described the schemes as “indentured labour”. On a crowdjustice funding page, he commented: “We intend to issue proceedings in the High Court next week to release those graduates from their bond.”

It has never been more essential for graduates to thoroughly investigate feedback on employers and to read the contract of employment very carefully. It’s important to consider the overall corporate picture too, so consider level of responsibility, opportunities for career progression, and the company’s culture and growth prospects carefully, as they are just as important as salary, training and benefits.

The Challenge for Graduates

McKay summarised the challenge for graduates: “Graduates should look for schemes where there are long-term opportunities, read the small print and not just jump in because they are being offered a job.

“It should be a two-way street, the graduate needs to be a fit for the organisation but equally the company culture needs to fit the trainee.

“Our Edge Academy combines hands on experience with excellent quality classroom-based software testing training at Edge’s UK office locations covering the South, Midlands and North, and was recently awarded Gold Status in the Investors in Young People Award.”

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