Trainees/apprentices engaged under the Standing Orders Act are excluded from the definition of an 'employee' under the Employees Provident Fund and Miscellaneous Provisions Act,1946.

JUDGMENT/ORDER :

V G Arun, J. - The petitioner is a Private Limited Company engaged in the sale of jewellery and allied products. The Company commenced business in the year 2008 and with effect from 5.10.2008 the employees of the establishment are covered under the Employees Provident Fund. According to the petitioner, it had enrolled all eligible employees, except trainees, under the Provident Fund Scheme and had been promptly remitting the contributions with respect to the employees. Soon after commencement of business, the petitioner submitted a Draft Standing Order for certification under the Industrial Employment (Standing Orders) Act,1946 ("the Standing Orders Act" for brevity). After issuing notice to the workmen and inviting objections, the Draft Standing Order was certified, as evident from Ext.P1. While so, in February, 2011, the second respondent initiated action under Section 7A of the Employees Provident Fund and Miscellaneous Provisions Act ('the EPF & MP Act' for short), on the basis of Ext.P2 report submitted by the Enforcement Officer. In Ext.P2 report, the Enforcement Officer had found that the petitioner had not remitted the provident fund contribution with respect to 19 trainees in the establishment, for the period August 2009 to November 2010. In the enquiry conducted by the second respondent, a specific contention was raised on behalf of the petitioner that the apprentices and trainees in establishments covered by the Standing Orders Act are exempted from the purview of the EPF& MP Act. The second respondent proceeded to hold that though the 19 trainees were engaged from August 2009 onwards, the Standing Orders was certified certified only on 23.3.2011, the petitioner was liable to pay contribution for the period of engagement of the trainees up to the period when the Standing Orders came into effect. This period was fixed as August 2009 to November 2010 and the quantum of contribution as Rs.2,56,077/-. Aggrieved by Ext.P3 order, the petitioner preferred an appeal before the first respondent Tribunal. The Tribunal affirmed the findings in Ext.P3 and dismissed the appeal under Ext.P5 order. The writ petition is filed seeking to quash Exts.P3 and P5 orders and for a declaration that the petitioner is not liable to cover the trainees appointed under the Standing Orders nor liable to pay contribution in respect of the trainees engaged in the establishment prior to certification of the Standing Orders, as the Model Standing Orders will apply until the Standing Orders are certified.

2. The learned counsel for the petitioner relied on the relevant provisions of the EPF & MP Act, the Standing Orders Act and the decision of the Honourable Supreme Court in Regional Provident Fund Commissioner, Mangalore v. Central Arecanut and Cocoa Marketing and Processing Co. Ltd, Mangalore, (2006) 2 SCC 381 in support of his challenge against Exts.P3 and P5.

3. The learned Standing Counsel for the EPF Organisation contended that being a beneficial legislation, a restrictive meaning cannot be given to the term 'employee' under Section 2(f) of the EPF & MP Act. It is contended that though termed as 'trainees', the 19 persons found to have been in the engagement of the petitioner were its employees. It is contended that the Commissioner is empowered to make a categorical factual finding as to whether the persons termed as trainees/apprentices are employees engaged for regular work and if so, to insist for payment of provident fund contribution in respect of those employees. According to the learned Standing Counsel, the petitioner was liable to pay provident fund contribution for the period prior to the coming into effect of the Standing Orders and hence, the impugned orders do not warrant interference.

4. Section 2 (f) of the EPF&MP Act defines an 'employee' as 'any person who is employed for wages in any kind of work, manual or otherwise, in or connection with the work of [an establishment], and who gets his wages directly or indirec