Apprenticeship

The four Labour Codes came into force on 21 November 2025 and repealed twenty-nine central statutes between them. The Apprentices Act, 1961 is in none of those lists. It remains a separate, operative statute and has to be read alongside the Codes rather than inside them.

That matters because the Codes refer to it. The definition of employee in the Code on Social Security excludes an apprentice engaged under the Apprentices Act, which is what keeps apprentices outside provident fund and state insurance coverage. The exclusion is drafted by reference to the Act, so it applies to apprentices engaged under it and not to anyone an employer chooses to call an apprentice.

The practical consequence is a fork. An organisation running a genuine apprenticeship under the Act gets a distinct statutory status with its own obligations. An organisation using the word informally has an ordinary employment relationship with the ordinary obligations, and the informality does not reduce them.

• A contract of apprenticeship, in the prescribed form, entered into with the apprentice or their guardian where a minor, and registered with the apprenticeship adviser.
• A stipend at not less than the prescribed rate, which varies by category and by year of training.
• Training in accordance with the prescribed programme, with the prescribed ratio of apprentices, adequate facilities and a qualified person to supervise.
• Hours of work, leave and holidays for apprentices as prescribed, which are not the same as the employer's ordinary policy.
• Records and returns in the prescribed form.
• Obligations on the apprentice too, including to learn conscientiously and to attend as required.

Two of these do most of the work in practice. The registered contract is what brings the engagement inside the Act at all, so an unregistered arrangement is not an apprenticeship for statutory purposes whatever the paperwork calls it. And the stipend floor is prescribed, so paying below it is a breach rather than a negotiation.

Verify the current stipend rates, the prescribed ratios, the registration mechanism and the leave and hours provisions, all of which are set by the Act and its rules and have been amended.

The middle column is the risky one. A trainee who is not under the Act and who does ordinary work under supervision is, in substance, likely to be an employee, with the obligations running from the start of the engagement rather than from the day anyone reclassifies them.

Apprenticeships are used for two reasons: to build a pipeline of trained people, and because the statutory status carries lower cost than employment. The first is what the Act is for. The second is where problems start when it becomes the only reason.

• Engaging people as apprentices to do production or service work with no real training programme is not an apprenticeship, and the absence of a programme is visible on inspection.
• Renewing or extending apprenticeships repeatedly, so the same person remains an apprentice for years, undermines the characterisation.
• Paying the stipend but not registering the contract leaves the employer with the cost and without the statutory status.
• Applying the employer's ordinary leave policy instead of the prescribed provisions.
• Treating apprentices as headcount for one purpose and not for another, inconsistently across statutes.

The honest test is whether the training programme could be described to someone else: what is being taught, by whom, assessed how, leading to what. Where it can, the route is sound. Where it cannot, the engagement is work and should be paid and treated as such.

There is no automatic obligation on the employer to offer employment at the end, and no automatic entitlement on the apprentice to receive it. The Act does not convert an apprenticeship into a job by expiry.

Two points are worth deciding in advance rather than at the end.

• Whether the apprenticeship period counts towards anything if the person is subsequently employed. Continuous service for gratuity, seniority, leave accrual and probation are all separate questions, and the answers should be stated at the point of employment rather than argued later.
• What the selection process is. An apprenticeship that everyone assumes leads to a job, followed by a selection nobody explained, produces exactly the resentment the programme was meant to avoid.

Where an apprentice is taken into employment, the ordinary obligations begin at that point: provident fund and state insurance coverage, minimum wages, the full leave entitlement, and everything else that the apprentice exclusion had kept out.