Background
The Apprentices Act, 1961 (The Act), along with the rules framed thereunder, was enacted by the Government of India to regulate and promote the training of apprentices across various industries. The Act plays a critical role in skill development by mandating employer for providing young individuals with hands-on experience in various trades across industries, thereby enhancing their employability. The Ministry of Skill Development and Entrepreneurship (MSDE) serves as the administrative authority responsible for the implementation of the Act. Further, it ensures that apprenticeships are structured, standardized, and beneficial to both apprentices and the industries they support. For employers, it is an opportunity to cultivate a highly skilled workforce while simultaneously ensuring access to a pool of trained individuals capable of meeting industry demands.
This article outlines the scope of the applicability of the Act, schemes enacted by the government and the government's action for enforcement and implementation regarding engagement of apprentices.
Scope and Application of the Act
The Act mandates that an establishment that employs 30 or more workers, including regular and contractual employees, is required to engage apprentices, with the number ranging from 2.5% to 15% of their total workforce. While the smaller establishments with 4-29 employees have the option to engage apprentices, those with fewer than 4 employees are not permitted to do so.
Apprenticeship Schemes:
For the purpose of effective implementation of the provisions of the Act and Rules, the Government of India has implemented the National Apprenticeship Training Scheme (NATS) and the National Apprenticeship Promotion Scheme (NAPS). The NATS implements apprenticeship training for engineering graduates, diploma holders, and general stream graduates, whereas the NAPS is for the rest of the categories of apprentices. These schemes have been formulated as a part of flagship programmes of the Government of India for skilling Indian youth in trade disciplines, offering graduate, diploma students, and vocational certificate holders practical, hands-on on-the-job training (OJT) based on skilling opportunities with a duration ranging from 6 months to 3 years.
The objective of NAPS is to support establishments, especially MSMEs, to engage apprentices under the Act and pay stipends to them as per prescribed rates. The establishments that do not have in-house basic training facilities may set up such facilities outside their premises or engage training partners.
Employer's Obligations
Employers in India should adhere to a variety of obligations to ensure the success of apprenticeship training programs. Some of them are mentioned below:
- Enrolment into scheme by registering their establishments on the government portal.
- Identification of apprentices and register their contracts on the portal.
- Setting up provisions to provide structured and high-quality on-the-job training for apprentices, under the supervision of qualified training person.
- Payment of Stipend depending to apprentices as per the prescribed rates.
- Compliance with working hours, safety standards, and welfare provisions for apprentices.
Penalties for Non-Compliance:
Non-engagement of apprentices as per the Act may attract a penalty amounting to INR 500 per shortfall of apprentice per month for the first three months, and INR 1000 per shortfall of apprentice per month thereafter. Additionally, employers who fail to adhere to other provisions of the Act, such as not furnishing the required returns, neglecting to maintain proper records, or breaching the terms and conditions outlined in the apprenticeship contract, may face separate monetary penalties.
Increasing Enforcement
There has been a growing emphasis on enforcing compliance with the Act in recent years. Establishments that fail to engage apprentices or do not comply with the provisions of the Act are being issued Show-Cause Notices by the authorities. This is a clear signal that the government is taking proactive steps to ensure that businesses meet their obligations to foster skill development. Employers who ignore or neglect these regulations may face legal action, therefore, it is crucial for establishments to understand and implement the requirements of the Act, not only to avoid penalties but also to contribute positively to the nation's workforce development.
Conclusion
While the Act was enacted in 1961, compliance with the provisions of the Act has been neglected over a period of time by the establishments, and the government did not pay serious attention to its enforcement as well. However, recent developments such as the enactment of apprenticeship schemes and issuance of show-cause notices show the proactive intentions of the government for enforcement of the provisions of the Act.
That said, the establishment having 30 or more persons employed by it ensures the engagement of apprentices and provides them with necessary training. It is not only to safeguard the employers from facing any penal action, but they have also gained access to a pool of trained individuals.
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.
