Also, in his last report at South Metropolitan District School (1886, age 15 years) it states "Returned from situation" Is this a euphemism for something more specific?
It usually means that the type of employment that had been allocated didn’t suit him, or his employer wasn’t satisfied, or they didn’t get on well, or some such reason. It’s a common enough remark in these registers, particularly with girls who’d been sent into domestic service.
Apart from the South Metropolitan School District’s admission/discharge records, there is a separate register which include listings of boys sent out for training, 1858-1902. This is held at LMA ...
SMSD/178 film X020/416Register of enlistment into military bands and lists of boys sent to the training ships Goliath and Exmouth Arranged chronologicallyI don’t think this register is on Ancestry, unless it’s been heavily disguised or merged with another series of SMSD registers (which is possible).
Presumably you've seen his service record in ADM 188? The catalogue entry (and what can be seen of the image) suggests he enlisted in 1890.
http://discovery.nationalarchives.gov.uk/details/r/D6676021ADDED - this service record is on Ancestry, misindexed as
McDernott.