India: Apprentices Act, 1961: Further Developments

Last Updated: 26 February 2016
Article by   Trilegal

Over the past year, the Government has taken up several initiatives to promote skill development in the country. In addition to amending The Apprentices Act, 1961, the Government has also brought about amendments to the Apprenticeship Rules, 1992 and launched a National Web Portal for Apprenticeship Training as a part of its drive towards achieving efficient implementation of the law related to apprentices.

The Government has taken up several initiatives to promote skill development in the country with a view to improving the employability of new entrants into the work force and providing them with better job opportunities. In this connection, over the past year, there have been several developments in the law related to apprentices, leading to an increase in the interest and discussions around this topic. The developments are as follows:

(a) The Apprentices Act, 1961 (Apprentices Act) was amended in December 2014 by the Apprentices (Amendment) Act, 2014 (Amendment Act);

(b) Corresponding amendments were also introduced in the Apprenticeship Rules, 1992 (Apprenticeship Rules) in June 2015, by the Apprenticeship (Amendment) Rules, 2015 (Amendment Rules); and

(c) In September 2015, the Government launched the National Web Portal for Apprenticeship Training (National Portal) to facilitate the movement of processes under the Apprentices Act to an online forum. Employers are now required to obtain a registration on the National Portal and also upload data related to number of employees, nature of technical activities etc.

In our previous update, we discussed some changes introduced by the Amendment Act, and the increasingly proactive attitude of the authorities in some regions while implementing the Apprentices Act. In this update, we discuss key changes brought about by the Amendment Rules.


(a) Number of apprentices

An employer falling under the purview of the Apprentices Act, and who has 40 or more employees, is now obligated to appoint between 2.5% to 10% of the average strength of the workforce in the preceding financial year as apprentices for each financial year. Interestingly, contract workers are also included to calculate the strength of the workforce.

Further, establishments are required to disclose the number of apprentices they intend to engage in each quarter.

(b) Engaging apprentices from Scheduled Castes, Scheduled Tribes and Other Backward Classes in designated trades

The requirement to reserve a certain number of places for apprentices from Scheduled Castes, Scheduled Tribes and Other Backward Classes existed even prior to the Amendment Rules. However, the ratio has changed according to Schedule II-A of the Apprenticeship Rules. In some states such as Karnataka and Maharashtra, the ratio has increased, in some states such as Delhi it has remained the same and in others it has even decreased.

Earlier there were no specific guidelines on engaging individuals from Other Backward Classes as apprentices, but the Amendment Rules suggest that this will be in accordance with the norms followed in the relevant state or union territory.

(c) Introduction of optional trades

or to the amendments, employers could only engage apprentices in 'designated trades' which are specifically notified, such as carpentry, data preparation and computer software, programming and systems administrative assistant, etc. Now, in addition to the designated trades, an employer can also engage apprentices in an 'optional trade' i.e. a trade or a field which has not already been 'designated'. For apprentices engaged in an optional trade, the employer has more flexibility to decide the duration of the apprenticeship (subject to certain parameters set out in the Amendment Rules), identify the proposed syllabus for training these apprentices, etc.

(d) Inclusion of non-engineering apprentices and related discrepancies

Prior to the Amendment Act and the Amendment Rules, graduate or technician apprentices only included individuals holding (or undergoing training to hold) a degree or diploma in engineering or technology. The scope has now been expanded to include even non-engineering degree holders and diploma holders.

However, it is relevant to note that, unlike in the case of engineering degree and diploma holders (for whom the Government reimburses the employer for 50% of the minimum stipend), the Government will not contribute towards the stipend for such non-engineering degree holders and diploma holders. Further, there is no clarity yet on the exact qualifications or designated trades for such apprentices.

In light of the increased focus on this legislation, it is important for employers to assess their compliance status, since there may soon be a greater shift towards implementation.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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