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Apprentices Appointed Under Standing Orders, Not Covered by The ESI Act – Judgement by The Honourable Mrs. Justice N. Mala


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Apprentices Appointed Under Standing Orders, Not Covered by The ESI Act – Judgement by The Honourable Mrs. Justice N. Mala


Sec.18: “Apprentices are trainees and not workers

Save as otherwise provided in the Act, –

(a) every apprentice undergoing apprenticeship training in a designated trade in an establishment shall be a trainee and not a worker; and

(b) the provisions of any law with respect to labour shall not apply to or in relation to such employee.”


Position in the ESIC from 1989:

Sec. 2 (9) of the ESI Act, 1948 says that “employee means …… any person 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”.

Accordingly, all those appointed as Apprentices under the Standing Orders approved by the competent Certifying Authority as per Sec. 4 of the Industrial Establishment (Standing Orders) Act, 1946 were excluded. But, ESIC sees it differently whether the Certifying Authority have really ensured that the Standing Orders are in accordance with the Model Standing Orders. There were cases where the period of training as per the approved Standing Orders was much more than what was permitted as per the Model Standing Orders, both for skilled and unskilled persons. In this, ESIC seeks confirmation from the Certifying Authority how he certified and whether he had, indeed, certified those Standing Orders which were produced before the ESIC authorities. In many cases, the Certifying Authorities chose to keep mum, as they had certified those standing orders in violation of the provisions of the Act concerned. In such cases, the ESIC would not accept those employees as Apprentices. The Certifying Authority cannot approve any Standing Order for any factory or establishment, if those Standing Orders are in deviation of the Model Standing Orders.


Let us examine in the light of the Madurai Bench of Madras High Court

The ESI Corporation is the appellant in the appeal. The respondent is a public limited company registered under the Companies Act. According to the respondent company, it has certified standing orders under which the company engages apprentice employees for the purpose of learning any skilled works which do not exceed three years.  The respondent inspected the petitioner’s concern on 24.07.2008, 25.07.2008 and on 30.07.2008 and found out the omission of contributions under certain heads. The respondent on the basis of the inspection report, dated 30.07.2008 sent a notice in Form C-18, dated 12.08.2008 claiming contribution of Rs.4,62,070/- towards stipend paid to the apprentice claiming that the payment was not stipend but wages.


The stand taken by the Respondent

The learned counsel for the respondent on the other hand submitted that the respondents had marked the standing orders as Exhibit P.1 to P.12. The modification of the standing order shows that the apprentice engaged by the respondent were not employees and therefore, the claim for contribution by the appellant corporation was untenable.


The final verdict of the Honourable Mrs. Justice N. Mala

I am afraid that the contention of the appellants is untenable and is squarely covered by the judgment of the Division Bench of this Court in the case of Regional Provident Fund Commissioner, Employees Provident Fund Organisation, Madurai Vs Employees Provident Funds Appellant Tribunal, New Delhi reported in 2015 LLR 1253, wherein, the Division Bench held that the number of apprentice being more than the regular employee would not be a ground to accept the apprentice as regular employees.


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