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Apprentices Act, 1961

Section 5: Novation of contract of apprenticeship

Section 5 of the Apprentices Act, 1961 explained with current 2025-26 amendments, employer controls, evidence and connected Rules.

Law Hub L8Data reviewed on 17 July 2026India-first compliance

What section 5 does

Allows transfer of the unexpired training period to another employer with agreement and adviser approval.

Connected instrument: Rule 6

Finin2min practical reading

  • Identify the apprentice category, trade, establishment jurisdiction and applicable portal before applying the provision.
  • Separate statutory apprenticeship from internships, probation, traineeships and ordinary employment.
  • Do not treat scheme reimbursement as a substitute for the employer’s underlying statutory obligations.
  • Preserve the contract, approvals, portal trail and training evidence as one auditable file.

Employer control and evidence pack

  • Executed/registered contract and portal acknowledgement
  • Training plan, attendance/work diary and supervisor records
  • Stipend bank/DBT evidence where relevant
  • Adviser approval, correspondence or order where the section requires it

Statutory text extract

Extracted from the bundled official/consolidated source. For sections amended in 2026, the current overlay above controls over older consolidated wording.

5. Novation of contract of apprenticeship.—Where an employer with whom a contract of
apprenticeship has been entered into, is for any reason unable to fulfil his obligations under the contract
and with the approval of the Apprenticeship Adviser it is agreed between the employer, the apprentice or
his guardian and any other employer that the apprentice shall be engaged as an apprentice under the other
employer for the unexpired portion of the period of apprenticeship training, the agreement, on registration
with the Apprenticeship Adviser, shall be deemed to be the contract of apprenticeship between the
apprentice or his guardian and the other employer, and on and from the date of such registration, the
contract of apprenticeship with the first employer shall terminate and no obligation under that contract
shall be enforceable at the instance of any party to the contract against the other party thereto.
     2

Compliance consequence

Failure should be tested against sections 30, 31 and 31A as in force from 22 June 2026, alongside contract termination/compensation consequences and any portal or scheme action.

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