Full Judgment Text
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 1 of 3
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
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 2 of 3
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
http://JUDIS.NIC.IN SUPREME COURT OF INDIA Page 3 of 3
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.