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
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.
HIGHLIGHTS OF 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
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
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
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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On 31 December 2015 the President gave his assent to certain amendments to the Payment of Bonus Act, 1965. The amendments have increased the wage threshold for determining applicability of the Act from INR 10,000 to INR 21,000 per month.
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