The Apprentices Act, 1961 (Act) has evolved over the last 63 years since it was enacted, introducing several amendments to pave the way for compliance with the law.

Prior to 2014, the Act did not include provisions for optional trades. As a result, it was commonly believed that only industries with designated trades were obligated to engage apprentices.

The 2014 amendment emphasised the promotion of apprenticeships in service-related trades in addition to the traditional focus on manufacturing trades. The introduction of ‘optional trades’ allowed industries to customize courses according to their sector-specific requirements and preferences.

Pivotal elements

Several pivotal elements within the revamped legal framework governing apprenticeships as it stands today are as follows:

* Enrolment on the apprenticeship portal is obligatory once the Act becomes applicable to an establishment. Establishments operating in four or more States have the option to get central registration. Employers have the choice to register either with NATS (for graduate apprentices and designated trades) or NAPS (for undergraduate student apprentices and optional trades).

* Establishments that engage 30 or more workers, including contractual staff, are mandated to engage apprentices, constituting between 2.5 and 15 per cent of the total workforce, encompassing contractual staff, within a financial year.

* Apprentices can be engaged in designated or optional trades. Designated trades are specified by the Central government. Where the activities undertaken at the establishment are not covered in any of the designated trades, the apprentices can be engaged in an optional trade by the employer. Therefore, an employer will need to examine if its activities fall within the ambit of any of the entries provided in the list of ‘designated trades’. If not, the company can engage apprentices in optional trade, as per the Act.

* Establishments can tie-up with third-party aggregators which have the capability to aid in: (a) choosing and recruiting apprentices through the apprenticeship portal; (b) creating a curriculum for the apprenticeship program; and (c) completing all required filings and documentation as per the Act.

* Training must align with the designated/optional trade course curriculum for apprenticeship training as determined by the employer. The employer is responsible for ensuring the availability of adequate infrastructure and qualified trainers to deliver apprenticeship training in accordance with the adopted course curriculum. On-the-job training can be conducted remotely and outsourced to a TPA or external service provider.

Despite reforms to the apprenticeship framework, there remains a misconception that the Act is applicable to only manufacturing industries or organisations falling under the designated trades.

The intricacy of the apprenticeship system, shortage of qualified teachers and trainers, inadequate infrastructure amongst other factors contribute to the less than optimal compliance with the Act.

This has necessitated regulatory authorities to issue notices seeking adherence to the Act’s requirements. That being said, authorities are primarily focused on ensuring the engagement of apprentices while giving industries the flexibility to decide their manner of compliance.

Now, industries have the power to not only decide the number of apprentices required (subject to minimum threshold requirements) but also determine the duration, curriculum, assessment, and certification processes.

Companies can choose to effectively comply with the Act in a manner that (a) is not burdensome, and (b) help them bridge the skill gaps within the organisation. These efforts will unite apprentices, the government, and employers and advance the objectives of ‘Skill India’ in a business friendly environment.

Ramchandani, Partner & Head of Employment, Labour & Benefits; and Gupta, Senior Associate and Shardul Amarchand Mangaldas & Co