The judgment established the distinction between trainees and employees, emphasizing the purpose of training, the nature of the relationship between the trainees and the employer, and the criteria for determining 'employment' and 'wages' under the relevant provisions of the Employees Provident Fund Act and Scheme.

1. The Regional Provident Fund Commissioner and the Union of India appealed against the decision of our learned brother George Vadakkel, J. quashing Ext. P6 proceedings passed by the first respondent in the Original Petition, the Regional Provident Fund Commissioner and holding that the respondents are not entitled to proceed as stated in Ext. P6 to prosecute the Bank or to recover the amount as stated therein. The petitioner is a Banking company, the Lord Krishna Bank Limited which had a scheme of selecting trainees with a view to give them training in the business of banking so that they may be equipped for livelihood. The usual period of training is six months subject to extension or curtailment at the discretion of the management. The Provident Fund Commissioner seems to have felt that coverage under the Employees' Provident Fund Act was extended to these trainees also and accordingly Ext. P6 order was passed under Para 26B of the Employees Provident Fund Scheme, 1952 deciding that the trainees in the petitioner Bank were entitled to become members of the Employees Provident-Fund Scheme. The General Manager of the Bank was directed to enrol the said trainees in the Scheme. The Bank had disputed the claim for coverage of these employees on the ground that they were not employees of the Bank. Infact an affidavit was filed before the Commissioner stating details as to the nature of relationship between the Bank and the trainees evidently to assist the Provident Fund Commissioner in coming to a right decision. Ext. P5 is the copy of such affidavit. That referred to the 14 persons mentioned in the letter of the Commissioner and it explained the stand of the Bank that they were not persons employed by the Batik to do any work in or in connection with the work of the Bank. They, according to the Bank, were only trainees learning the work in the Bank for their edification and to equip them for eking out a livelihood. It was the case of the Bank that even after the training there was no obligation on the Bank to employ those found fit for employment. There was said to be no relationship of master and servant between the Bank and the trainees. No doubt, as per Ext. P1 the trainees were to be paid stipend. But the Commissioner was told that the stipend paid to each of them was not wages or remuneration but only in the nature of a scholarship allowance to help him to defray his living expenses during the period of his training. Though such detailed job description of the trainees was given there was no reference to it in the order, Ext. P6. Nevertheless the first respondent proceeded to treat the trainees as employees mentioning that the trainees are not included in the definition of apprentices and thus are not excluded employees. It is this order of the first respondent that was challenged in Original Petition. The learned Single Judge has upheld the challenge finding that on the averments in the petition and the case of the respondents it has not been shown that they are liable to be covered.

2. It is contended by learned counsel Shri Abdul Azeez that the term "employee" has to be understood in a wider sense so as to extend the coverage under the Act and that there is no justification to hold that the trainees who are employed in connection with the work of the Bank do not fall within the purview of the Employees Provident Fund Scheme.

3. The definition of "employee" in the Employees-Provident Funds and Miscellaneous Provisions Act, 1952 (in short, the Act) reads thus:

"2. Definition- In this Act, unless the context otherwise requires

(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 employed by or through a contractor in or in connection with the work of the establishment."

In this context we may refer to a definition in Clause.2 (f)