Employees State Insurance Corporation vs Tata Engineering And Locomotive Company LTD.

Judicial Analysis Court Copy Headnote Facts Arguments Court observation

1975 Supreme(SC) 401

SUPREME COURT OF INDIA
A. ALAGIRISWAMI, P.K. GOSWAMI AND N.L. UNTWALIA JJ.
The Employee s State Insurance Corporation and another, Appellants
Versus
The Tata Engineering and Co., Locomotive Co. Ltd. and another, Respondents.
Civil Appeal No. 2113 of 1969
Decided on 8-10-1975.
Advocates appeared
Mr. G.L. Sanghi, Sr. Advocate, (M/s. S.P. Nayar and Girish Chandra, Advocate with him), for Appellants Mr. M.C. Bhandare, SR. Advocate, (M/S. O.C. Mathur and D.N. Misra, Advocates of M/s, J.B. Dadachanji Co., Advocates with him), for Respondents.

Advocates:
D.N.Mishra, G.L.SANGHI, GIRISH CHANDRA, M.C.BHANDARE, O.C.MATHUR, S.P.NAIR

Headnote:
Apprentices Act, 1961 – Section 18 – Constitution of India,1950 – Article 133 (1) (a) and (b) – Employees State Insurance Act, 1948 – Certificate - Deed of apprenticeship - Which it refused to interfere with the order of the Industrial Tribunal passed – respondent is a public limited company having its registered office at Bombay and its factory at 67 Jamshedpur in the State of Bihar – Act is applicable to the company s factory – Besides regular employees in the company, there are two sets of apprentices, namely, graduate apprentices for a period of two years and trade apprentices for the duration of three years – Graduate apprentices receive stipend of in the first year during the second year – Trade apprentices receive stipend at the rate of per diem during the first, second and third year of the apprenticeship respectively – No other emoluments except the daily allowance or the monthly stipends are paid by the company to the apprentices – Apprenticeship is signed by three parties, namely, the apprentice, his surety and the company and it contains the terms and conditions of apprenticeship – From the said terms and conditions which are common for both sets of apprentices except for the quantum of stipends and the duration, it appears that the company agree to provide the apprentice a combined theoretical and practical training in its factory for the respective period above mentioned and the apprentice also binds himself to serve the company for the purpose of the said training for the said period – Clause (7) of the agreement provides that if the apprentice successfully passes the examination after training he will be considered for absorption as skilled worker although the company is under no legal obligation to offer him employment – There are other conditions in the agreement with regard to matters of discipline during the apprenticeship – Held, Who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment or elsewhere – It is clear that in order to be an employee a person must be employed for wages in the work of factory or establishment or in connection with the work of a factory or establishment – Means all remuneration paid or payable in cash to an employee, if the terms of the contract of employment, express or implied, were fulfilled and includes any payment to an employee in respect of any period of authorised leave, lockout, strike which is not illegal or layoff and other additional remuneration, if any, paid at intervals not exceeding two months, but does not include – From the terms of the agreement it is clear that apprentices are mere trainees for a particular period for a distinct purpose and the employer is not bound to employ them in their works after the period of training is over – During the apprenticeship they cannot be said to be employed in the work of the company or in connection with the work of the company – That would have been so if they were employed in a regular way by the company – On the other hand the purpose of the engagement under the particular scheme is only to offer training under certain terms and conditions – Besides, the apprentices are not given wages within the meaning of that term under the Act – If they were regular employees under the Act, they would have been entitled to additional remuneration such as daily allowance and other allowances, which are available to the regular employees – Court are, therefore, unable to hold that the apprentice is an employee within the meaning of Section 2 (9) of the Act – Appeal dismissed.

JUDGMENT

P. K. GOSWAMI, J.:— Is an apprentice an "employee" under the Employees State Insurance Act, 1948? That is the question raised in this appeal by certificate under Article 133 (1) (a) and (b) of the Constitution from the judgment of the Patna High Court by which it refused to interfere with the order of the Industrial Tribunal passed under Section 73B of the Employees State Insurance Act, 1948 (briefly the Act).

2. The respondent is a public limited company having its registered office at Bombay and its factory at 67 Jamshedpur in the State of Bihar. The Act is applicable to the company s factory. Besides regular employees in the company, there are two sets of apprentices, namely, graduate apprentices for a period of two years and trade apprentices for the duration of three years. The graduate apprentices receive stipend of Rs. 250.00 per month in the first year and Rs. 300.00 per month during the second year. The trade apprentices receive stipend at the rate of Rupees 2.00 Rs.2.50 and Rs.3,00 per diem during the first, second and third year of the apprenticeship respectively. No other emoluments except the daily allowance or the monthly stipends are paid by the company to the apprentices. A deed of apprenticeship is signed by three parties, namely, the apprentice, his surety and the company and it contains the terms and conditions of apprenticeship. From the said terms and conditions which are common for both sets of apprentices except for the quantum of stipends and the duration, it appears that the company agree to provide the apprentice a combined theoretical and practical training in its factory for the respective period above mentioned and the apprentice also binds himself to serve the company for the purpose of the said training for the said period. Clause (7) of the agreement provides that if the apprentice successfully passes the examination after training he will be considered for absorption as skilled worker although the company is under no legal obligation to offer him employment. There are other conditions in the agreement with regard to matters of discipline during the apprenticeship.

3. Our attention was particularly drawn to the following provisions in the agreement:

"12 In consideration of the company having agreed to give the Apprentice training in its works (Automobile Division) and to pay the apprentice the aforesaid daily allowance or stipend, the apprentice and the surety as the father or guardian of the apprentice jointly and severally covenant with the company as follows:-

(i) That the apprentice will during the whole of the said term of three years of training diligently and faithfully serve the company and to the utmost power and skill attend to the company s business at such places and times as the company or its representatives shall direct.

x x x x x

(v) The apprentice shall immediately on the satisfactory completion of his training for the full term of three years serve the company for a period of five years, if so required by the company on such conditions as the company may offer having regard to his personal qualifications or acquirements and complying with the Rules and Regulations as are contained in the Works Standing Orders of the company."

Without citing all the terms and conditions of the agreement, it is apparent that an apprentice is not in the regular employment of the company.

4. It is, however, submitted on behalf of the appellants that the words "serve the company" in clause 12 (i) which are repeated in clause (v), introduce a relationship of master and servant thus constituting apprentice an employee as ordinarily understood. We attach no special significance to the use of the words "serve the company " in the above clauses.

5. The word apprentice is not defined in the Act, nor is it specifically referred to in the definition of employee by either inclusion or exclusion. We are unable to hold that in ordinary acceptation of the term apprentice a relationship of master and serv

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