What section 7 does
Governs expiry, early termination, compensation and re-engagement consequences.
Connected instrument: Rules 6, 7D and 8
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.
7. Termination of apprenticeship contract.—(1) The contract of apprenticeship shall terminate on
the expiry of the period of apprenticeship training.
(2) Either party to a contract of apprenticeship may make an application to the Apprenticeship
Adviser for the termination of the contract, and when such application is made, shall send by post a copy
thereof to the other party to the contract.
(3) After considering the contents of the application and the objections, if any, filed by the other
party, the Apprenticeship Adviser may, by order in writing, terminate the contract if he is satisfied that the
parties to the contract or any of them have or has failed to carry out the terms and conditions of the
contract and that it is desirable in the interests of the parties or any of them to terminate the same:
Provided that where a contract is terminated—
(a) for failure on the part of the employer to carry out the terms and conditions of the contract, the
employer shall pay to the apprentice such compensation as may be prescribed;
(b) for such failure on the part of the apprentice, the apprentice or his guardian shall refund to the
employer as cost of training such amount as may be determined by the Apprenticeship Adviser.
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[(4) Notwithstanding anything contained in any other provision of this Act, where a contract of
apprenticeship has been terminated by the Apprenticeship Adviser before the expiry of the period of
apprenticeship training and a new contract of apprenticeship is being entered into with a new employer,
the Apprenticeship Adviser may, if he is satisfied that the contract of apprenticeship with the previous
employer could not be completed because of any lapse on the part of the previous employer, permit the
period of apprenticeship training already undergone by the apprentice with his previous employer to be
included in the period of apprenticeship training to be undertaken with the new employer.]
STATE AMENDMENTS
Maharashtra
Amendment of section 7 of 52 of 1961.—In section 7 of the principal Act, in sub-section (3), for the
existing proviso, the following proviso shall be substituted, namely:—
“Provided that, where a contract is terminated—
(a) for failure on the part of the employer to carry out the terms and conditions of the contract, the
employer shall pay to the apprentice one month’s stipend for which he is entitled as a compensation;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.