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CASE NO.: Appeal (civil)  978 of 2000

PETITIONER: The Regional Provident Fund Commissioner,Mangalore

RESPONDENT: M/s Central Aercanut & Coca Marketing and Processing Co-op Ltd., Mangalore

DATE OF JUDGMENT: 30/01/2006

BENCH: ARIJIT PASAYAT & R.V. RAVEENDRAN

JUDGMENT: J U D G M E N T

ARIJIT PASAYAT, J.  

        Challenge in this appeal is to the judgment of a Division  Bench of the Karnataka High Court affirming the judgment of  the learned Single Judge.  Both the learned Single Judge and  the Division Bench held that 45 persons who were selected as  trainees were not covered by Employees Provident Fund &  Misc. Provisions Act, 1952 (in short the ’Act’) as they cannot  be called as "employees" as defined under Section 2(f) of the  Act.   

       Background facts in a nutshell are as follows:

       The respondent invited applications from the intending  applicants for undergoing training at its Chocolate Factory,  Puttur on a stipend of Rs.600/- per month which may be  increased to Rs.800/- per month after six months.  It was also  provided that the successful candidates may be considered for  regular posting in the factory. By its resolution dated  21.1.1990 after interviewing 270 applicants, 45 persons were  selected.  By a combined order dated 3.2.1990, Managing  Director notified the 45 persons who were selected. It was  clearly indicated therein that the training in the factory does  not entitle any trainee to claim right of appointment after  completion of training period.  It was also stipulated that if any  trainee leaves the factory within one year, he was required to  refund the amount received by him as stipend.  Notice was  issued by the appellant purportedly under Section 7-A of the  Act in respect of the said 45 trainees. By order dated  15.5.1991 the appellant held that the trainees were employees  for the purpose of the Act and the respondent is liable to pay  the quantified amount.   

Writ application was filed by the respondent questioning  the determination.  A learned Single Judge with reference to  various provisions of Industrial Employment (Standing Orders)  Act, 1946 (in short ’Standing Orders Act’) and The Apprentices  Act, 1961 (in short the ’Apprentices Act’) held that the demand  was unsustainable.  A writ appeal was filed before the Division  Bench which as noticed above dismissed the same.

In support of the appeal Mr. Harish Chandra, learned  senior counsel submitted that both the learned Single Judge  and the Division Bench have failed to notice the true import of  Section 2(f) and have erroneously held that the 45 trainees  were not covered by the Act.  It was also submitted that the  Act is a beneficial legislation and a wider meaning has to be

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given to the expression ’employee’.

In response, learned counsel for the respondent  supported the judgments of the learned Single Judge and the  Division Bench.   

Undisputedly, the respondents are trainees. The question  as rightly noted by the Division Bench is whether an  apprentice can be deemed to be an employee within the  meaning of Section 2(f) of the Act in the case at hand.   

For this purpose it is necessary to take note of the  definition of ’employee’ as given in Section 2(f) of the Act.  It  reads as under:

"Section 2 (f) ’employee’ means any person who  is employed for wages in any kind of work,  manual or otherwise, in or in connection with  the work of an establishment and who gets his  wages directly or indirectly from the employer,  and includes any person \026

(i)     employed by or through a contractor in or  in connection with the work of the  establishment. (ii)    Engaged as an apprentice, not being an  apprentice engaged under the  Apprentices Act, 1961 (52 of 1961) or  under the Standing Orders of the  establishment."

       Section 12-A of the Standing Orders Act, inter-alia  provides as follows:  

"12A. Temporary application of model standing  orders. \026 (1) Notwithstanding anything  contained in Sections 3 to 12, for the period  commencing on the date on which this Act  becomes applicable to an industrial  establishment and ending with the date on  which the standing orders as finally certified  under this Act come into operation under  Section 7 in that establishment, the prescribed  model standing orders shall be deemed to be  adopted in that establishment, and the  provisions of section 9, sub-section (2) of  section 13 and section 13-A shall apply to  such model standing orders as they apply to  the standing orders so certified.    (2)     Nothing contained in sub-section (1) shall  apply to an industrial establishment in respect  of which the appropriate Government is the  Government of the State of Gujarat or the  Government of the State of Maharashtra."                                                                         From a bare reading of Section 12-A it is manifestly clear  that until the Standing Orders are finally certified and come  into operation, the prescribed model standing orders shall be  deemed to be adopted in the concerned establishment. The  Model Standing Orders prescribed under Rule 3(1) of the  Industrial Employment (Standing Orders) Central Rules, 1946  (in short the ’Central Rules’) are contained in Schedule I to the

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said Rules. Standing Order No.2 thereof classified workmen as  follows:  1)  Permanent   2)     Probationers  3)     badlis  4)     temporary  5)     casual  6)     apprentices.

’Apprentice’ is defined in clause (g) of Standing Order No.2 as  follows:

"An ’apprentice’ is a learner who is paid an  allowance during the period of his training."

The Apprentices Act defines an ’apprentice’ as follows:

"2(aa): ’apprentice’ means a person who is  undergoing apprenticeship training in  pursuance of a contract of apprenticeship."

       In the present case, admittedly the Standing Orders were  not at the relevant point of time certified.  Therefore, in terms  of Section 12-A of the Standing Orders Act, the Model  Standing Orders are deemed to be applicable.  Section 2(f) of  the Act defines an employee to include an apprentice, but at  the same time makes an exclusion in the case of an apprentice  engaged under the Apprentices Act or under the Standing  Orders.  Under the Model Standing Orders an apprentice is  described as a learner who is paid allowance during the period  of training.   

       In the case at hand, trainees were paid stipend during  the period of training. They had no right to employment, nor  any obligation to accept any employment, if offered by the  employer. Therefore, the trainees were ’apprentices’ engaged  under the ’Standing Orders’ of the establishment.    

       Above being the position, it cannot be said that the  concerned 45 trainees were employee in terms of Section 2(f) of  the Act.  In other words, an apprentice engaged under the  Apprentices Act or under the Standing Orders is excluded  from the definition of an ’employee’ as per Section 2(f) of the  Act.   

       That being so, the view of the learned Single Judge as  affirmed by the Division Bench of the High Court cannot be  faulted.

       The appeal fails and is dismissed. No costs.