Employment Exchange refers to an office of the central or state government, which collects and furnishes information on the prospective employers, available vacancies and job seekers, thereby facilitating jobseekers to find a suitable job and for industry to find the suitable manpower.
Central Employment Exchange means any Employment Exchange established by the Government of India, (Ministry of Labour and Employment); Others set up by state governments are called local employment exchanges.
A definition of the term is given in Section 2(d) of the Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959 as mentioned below:
Employment Exchange means any office or place established and maintained by the Government for the collection and furnishing of information, either by the keeping of registers or otherwise, respecting---
(i) Persons who seek to engage employees.
(ii) Persons who seek employment, and
(iii) Vacancies to which persons seeking employment, may be appointed;
Job seekers register themselves with the Employment Exchanges and get notified as soon as any vacancy matches their desired profile.
The main activities of the employment exchanges are registration and placement of job seekers, and to some extent career counselling and vocational guidance particularly for the under-privileged sections of the society, and collection of employment market information. Some of the State Governments arrange disbursement of unemployment allowance to certain specific categories of job seekers out of their own resources through the employment exchanges registered with them.
Governments in many countries (eg. Malaysia, Australia, UK) are known to provide for such employment related services, also as a means of collecting statistics on unemployment related matters and distributing unemployment benefits. They are known by different names such as Labour Exchange, Employment Agency etc.
For instance, in UK, its Department for Work and Pensions runs an online platform called Jobcentre Plus for its working-age support service across United Kingdom.
JobActive is the Australian Government’s employment service to help Australians into work and help employers find the right staff for their business.
JobBank is the Canadian version of employment exchanges.
The International Labour Organisation’s ILO Convention 88 (which refers to the Employment Service Convention, 1948) mandates the Governments to maintain a free Employment Service.
Legal Background of Employment Exchanges in India
The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959 was enacted to provide for compulsory notification of vacancies to the Employment Exchanges and for rendition of returns by the employers (regarding both employment and vacancies). Failure to comply would meet with penalties (though the amount is not much as per the present day standards). The said Act came into force with effect from 1 May, 1960. This was enacted on the recommendations of the Training and Employment Services Organisation Committee set up by the Government of India in 1952. The relevant Rules were notified on 26 April 1960.
The Act applies to all establishments in the public sector and such establishments in the private sector which are engaged in non-agricultural activities and employing 25 or more workers.
The Act requires that an employer in every establishment in public sector and relevant firms in the private sector in that state or area shall, before filling up any vacancy for any employment in that establishment, notify that vacancy to the employment exchanges. However, it does not impose any obligation upon any employer to recruit any person through the employment exchange to fill any vacancy merely because that vacancy has been notified by the exchanges.
However, vacancies for the following types of employments need not be notified, --
- Agriculture employment (including horticulture) in any private sector establishment other than employment as farm machinery operatives;
- Employment in domestic service;
- Employment where the total duration is less than three months;
- Employment for unskilled office work;
- Employment connected with the staff of Parliament.
- Vacancies which are proposed to be filled through promotion or by absorption of surplus staff of any branch or department of the same establishment or on the basis of result of any examination conducted or interview held by, or on the recommendation of, any independent agency, such as the Union or a State Public Service Commission and the like;
- Employment which carries remuneration below a threshold.
In addition to the vacancy notification, the employers are required to render quarterly employment return (ER-I) and biennial occupational return (ER-II) in the prescribed forms (as laid down in the Rules).
- ER-I is used for collection of employment information from establishments in Public and Private Sectors at quarterly intervals. It seeks information about
- the total number of persons (men and women separately) on the pay rolls of the establishments on the last working day of the two consecutive quarters,
- the number of vacancies occurred during the quarter, number notified to the Exchange, number filled through the Employment Exchange and other sources and number not notified to the Exchange with reason thereof, and
- the number of vacancies remaining un-filled at the end of the quarter, due to shortage of suitable applicants.
- ER-II is used to collect information about the total number of persons employed as on 30th September classified by occupations (men & women separately) and forecast about the number of vacancies in each occupation. Returns are collected in alternate years for Public Sector and Private Sector
Administration of Employment Exchanges
In the Ministry of Labour, Directorate General of Employment and Training(DGET) operates a National Employment Service (NES) which is entrusted with the matters of Employment Exchanges.
But, day-to-day administration of employment Exchanges rests with the State / Union Territories governments. Generally, Department of Employment & Training or Department of Labour is involved with the administration of Employment Exchanges at the state level. DGET carries out periodic programme of evaluation of policies, procedures and working practices of Employment Exchanges in the States with a view to assessing and advising the State Governments on the progressive development of the service and to ensure that National Policies, Standards and Procedures are effectively implemented.
Links to local employment exchanges under some of the state Governments / Union territories are given below:
Data on Employment Exchanges
National Employment Service (NES) operates through a net work of employment exchanges. The total number of Employment Exchanges functioning at the end of October, 2014 is 978 as compared to 18 in 1951. This includes 75 University Employment Information and Guidance Bureaux, 14 Professional and Executive Employment Exchanges, 40 Special Employment Exchanges for the Physically Handicapped and 1 special Employment Exchanges for Plantation Labour. In July 2015, NES has been integrated into the National Career Service.
NES collects data through Employment Exchange Statistical Returns, each return covering a specific field of activity. As a part of Employment Market Information Programme, data are collected from the Organised Sector (all public sector establishments and all non-agricultural private sector establishments with 10 or more workers) on employment, vacancies, occupational and educational pattern of employees, etc. in ER-I and ER-II returns prescribed under the Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959 and Rules framed thereunder. The establishments employing 10-24 workers in private sector are covered on voluntary basis.
DGET publications are listed here.
The Employment Exchanges prepare Area Employment Market Reviews to indicate employment situation in the organised sector within the district. The State Directors of Employment also prepare State level Employment Reviews showing employment situation prevailing at the State level. At the national level, Employment Reviews are prepared annually by the Directorate General of Employment and Training projecting the overall picture of employment in the organised sector in different States/UTs.
Detailed information on Employment exchanges and the number of job seekers can be seen from the Annual Reports of Ministry of Labour. Year-wise registration, placement, vacancies notified, submissions made and Live Register for the period 2006 to 2013, for each category of job seekers (women, physically handicapped, Scheduled Castes / tribes etc) are given in the Annual Report.
Data on employment and unemployment may be obtained from the Ministry of Labour.
Digital Employment Exchange
A Digital Employment Exchange was launched for the Industry on 15 June 2015 by the Ministry of Micro, Small and Medium Enterprises. This facility will enable industrial units to find suitable manpower and job seekers to find suitable jobs. Thus, they are conceptually similar to the traditional Employment Exchange but cater to mainly the micro and small and medium scale enterprises which generally employ less than 25 people.
Traditional Employment Exchanges and the new digital exchange come under two different administrative Ministries. Digital Employment exchange is mostly a voluntary initiative and is not bound by the 1959 Act. i.e., it is not mandatory for companies to notify their vacancies on to this platform.
Employment Exchanges (Compulsory Notification of Vacancies) Amendment Bill, 2013
The Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959 was enacted about five decades back and with the passage of time some of its provisions have become redundant and require deletion/modification to bring it in consonance with the present day scenario. The States are also experiencing difficulties in implementation of the Act and a number of suggestions were received from them from time to time for amendment to the provisions of the Act.
Hence, the Employment Exchanges (Compulsory Notification of Vacancies) Amendment Bill, 2013 was introduced on 22/04/2013 in Rajya Sabha (upper chamber of the Parliament) which is still pending for approval. The major changes suggested are as follows:
- Changing the title of the Act from Employment Exchanges (Compulsory Notification of Vacancies) Act, 1959 to Employment Guidance and Promotion Centres (Compulsory Notification of Vacancies) Act, 1959.
- Employment Exchanges will be renamed as “Employment Guidance and Promotion Centres” as focus is also on Vocational Guidance and Career Counseling besides registration, placement etc. Accordingly, the definition of employment exchange is proposed to be modified with a specific insertion of that objective, as follows:
"employment guidance and promotion centre" means any office or place established and maintained by the appropriate Government for the collection and furnishing of information, either by the keeping of registers or through electronic medium or otherwise, relating to—
(i) persons who seek to engage employees;
(ii) persons who seek employment;
(iii) vacancies to which persons seeking employment may be appointed; and
(iv) persons who seek vocational guidance and career counselling or guidance to start self-employment;’;
- The definitions of employee and employer are proposed to be broadbased to include contract labour who has worked for more than 240 days in a year.
- Establishments in the private sector which are engaged in non-agricultural activities and employing 10 or more workers will now be covered under the Act instead of the criteria 25 or more. But those enterprises with 25 or more employees will only be mandated to compulsorily notify the vacancies.
- In the existing Act, the vacancies relating to Plantation Sector are exempted from notification. (Presently, information of Plantation Sector is collected on voluntary basis.) It is proposed to include Plantation establishments owned and managed by a company but exclude those owned and managed by individuals. It is proposed to apply the provisions of the Act to the plantations owned and managed by an individual on voluntary basis.
- It is proposed to notify vacancies relating to unskilled office work and also vacancies relating to plantation sector.
- Notification of the vacancies relating to State Legislatures will be exempted to bring them at par with Parliament.
- It casts an obligation on the establishments to furnish the information relating to selection against the vacancies notified under the Act within 30 days; presently, the provision for intimation of results within 15 days is included in the Rules and not in the Act.
- It proposes to ensure better coverage and proper implementation of the Act by making penalty provisions more stringent including an additional provision of imprisonment and raising the amount of fine for the first offence which may extend to Rs.5000, for any second offence with fine which may extend to Rs. 10,000 and for any subsequent offence with fine which may extend to Rs. 10,000, or with simple imprisonment which may extend to one month, or with both; (It is being experienced that most of the employers do not inform the Employment Exchanges about the result of the selection made by them against the notified vacancies despite repeated follow-ups by the Employment Exchanges. The Live Register for the unemployed gets inflated on this account. In order to get a better picture of unemployment in the country, the provision is now being made in the Act itself.)
- However, if non- notification of vacancy or non filing of return is by any employer of an establishment in private sector which employs less than 25 people, then, he shall be punishable after consecutive two defaults with fine which may extend to Rs 5000 and for every subsequent default with fine which may extend to Rs. 5000 for each such default.
These amendments were criticised by the industry groups as being onerous on them, particularly the Small and medium scale industries.
The amendments proposed to the Act were deliberated by the Parliamentary Standing Committee on Labour which recommended that the Act be comprehensively amended to make the functioning of Employment Exchanges more relevant to the needs of society. This recommendation is under the examination of Ministry of Labour.
National Career Service (NCS)
The Ministry of Labour and Employment on 20 July 2015 launched the National Career Service (NCS) Project by transforming the processes in the network of Employment Exchanges. The 978 Employment Exchanges including the 75 University Employment Information and Guidance Bureaux are now transformed into career centers. In fact, the hitherto existing web based National Employment Service comprising of a network of 978 Employment Exchanges is now transformed into National Career Service (NCS) by leveraging information technology to improve the delivery of services. In many states, the previous system still required job seekers to physically visit the Employment Exchanges for registration, verify their records and wait for opportunities to come. Similarly, the employers had to visit Employment Exchanges for posting job vacancies and obtaining a list of eligible candidates with little flexibility. The NCS portal provides a nation-wide online platform for jobseekers and employers for job matching in a dynamic, efficient and responsive manner.
All registrations are Aadhaar (unique biometric id issued to the citizens by Unique Identification Authority of India) based, with national portability. Data of jobseekers already registered with state /local employment exchanges are made available on the NCS portal which they can activate using their Aadhaar details. Similarly, Establishments having Labour Identification Number (LIN) are on the NCS portal so that they can post their vacancies. All existing 978 employment exchanges have been given user IDs and passwords for activating their accounts. Several states (Andhra Pradesh, Gujarat, Jharkhand, Madhya Pradesh, Manipur, Telangana) having employment exchange data in a database have integrated those with the NCS portal. Remaining states having manual systems can directly log on for new registrations.
The NCS portal provides job matching services in a transparent and user friendly manner. The NCS project envisages setting up of Model Career Centres (MCCs) in order to efficiently connect the youth with job opportunities with the help of technology and assisted by guidance. These facilities along with career counselling content will be delivered by the portal through multiple channels like career centers, mobile devices, etc. The project is expected to meet the varied demands and requirements of the youth for information on education, employment and training and is supported by a multi lingual call center. The portal also expects to make available information on local service providers to house hold and other consumers for services like driving, plumbing, carpentry, etc
The Career Centres, supported by a national portal and a knowledge-rich career content repository, would demonstrate the efficacy of good employment services in terms of local demand supply assessment, career counselling, job matching etc. The Career Centres would focus on career education through career counselling.
Such a National Career Service exists in United Kingdom too.
- Annual Report of Ministry of Labour 2014-15
- PIB release of Ministry of Micro Small and Medium Enterprises dated 15 June 2015
- PIB Release of Ministry of Labour and Employment dated 20 July 2015
- Relevant Act, Rules and Amendment Bill