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BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT
S. SRIMATHY, J.
The Regional Provident Fund Commissioner, Madurai - Appellant
Versus
The Presiding Officer, New Delhi & Another - Respondent
W.P. (MD). No. 16955 of 2012 & M.P. (MD). No. 1 of 2012
Decided On : 22-09-2022
Apprenticeship - Employees Provident Fund - Employees Provident Fund Act, 1954 - Section 2(f), Section 6 - The court considered the issue of whether apprentices should be considered as regular employees under the Employees Provident Fund Act. The court analyzed the provisions of the Act and the evidence presented by the parties to determine the status of the apprentices. The court held that the process of appointment of regular employees and apprentices are different and, based on the appreciation of documents, concluded that certain persons, who were sought to be treated as employees, were only apprentices. The court confirmed the order passed by the Tribunal in A.T.A.No.440 (13) 2011, dated 03.02.2012.
Fact of the Case:
The Writ petition was filed to quash the order passed by the first respondent tribunal, which determined the contribution payable for un-enrolled employees shown as apprentices by the establishment covered under the Employees Provident Fund Act, 1954.
Finding of the Court:
The court found that the process of appointment of regular employees and apprentices are different, and based on the evidence presented, concluded that certain persons, who were sought to be treated as employees, were only apprentices.
Issues: The main issue was whether apprentices should be considered as regular employees under the Employees Provident Fund Act.
Ratio Decidendi: The court held that the process of appointment of regular employees and apprentices are different and, based on the appreciation of documents, concluded that certain persons, who were sought to be treated as employees, were only apprentices.
Final Decision: The court confirmed the order passed by the Tribunal in A.T.A.No.440 (13) 2011, dated 03.02.2012. The writ petition was dismissed.
JUDGMENT
(Prayer: Writ Petition filed under Article 226 of the Constitution of India, praying this Court to issue a Writ of Certiorari to call for the records relating to the order in ATA.No.440 (13) 2011 dated 03.02.2012 passed by the first respondent tribunal and quash the same.)
1. This Writ petition had been filed for issuance of writ of Certiorari to quash the order passed in ATA.No.440 (13) 2011 dated 03.02.2012 passed by the first respondent tribunal.
2. The brief facts as stated in the affidavit are that the second respondent is an establishment covered under the provisions of Employees Provident Fund Act, 1954. A surprise inspection was conducted by a squad and the said squad in its report dated 29.06.2010 noticed that the establishment was "under reporting" the number of its employees. Even regular workmen were falsely shown as apprentice. Therefore, summons was issued to the establishment and proper enquiry was held. After giving opportunity to the second respondent, the order dated 06.04.2011 was passed, determining the contribution payable for the un-enrolled employees, who were shown as apprentices. Aggrieved over the same, the establishment preferred the appeal in ATA No.440 (13) 2011 before the first respondent Tribunal and the Tribunal, after considering the claim has passed the impugned order whereby dismissed the claim of the Provident Fund Organization vide impugned order dated 03.02.2012. Aggrieved over the same, the Provident Fund Organization has preferred this petition.
3. The contention of the petitioner is that there are materials on record to demonstrate the "Modus Operandi" of the employer to under report the number of employees by showing them as apprentices in terms of the standing orders. Further the contention of the petitioner is that an apprentice is engaged for a given period so as to gain skills from training. The so called apprentice do not seem to have undergone any regular and fixed period of training, so as to enable them to get the course completion certificate. This would clearly show that the so called apprentices are actually daily rated or casual employees. The second respondent has shown more number of employees engaged in the said Mill, but in the EPF contribution statements, the number of employees were shown is less. The Tribunal has mechanically accepted the defence of the employer and allowed the appeal. Hence the Provident Fund Organization prayed to dismiss the claim of the second respondent and allow this petition.
4. The learned Counsel appearing for the second respondent submitted that the appeal grounds raised before the Tribunal shall be treated as counter filed before the Tribunal. The second respondent submitted that the payment of stipend paid to the apprentices by the second respondent is Rs.10,62,903/- only which was 7.37% of total wages and salaries of Rs.1,44,15,296/- paid to its employees for the period April 2007 to October 2008. The second respondent also submitted that the appellant therein engaged apprentices for the period from April 2007 to October 2008. The number of apprentices may vary in each and every month.
5. The Learned Counsel appearing for the second respondent submitted that the appeal grounds raised before the Tribunal shall be treated as counter filed before the Tribunal. The second respondent submitted that neither the apprentices are employees under Section 2 (f) EPF Act nor stipend paid to them is wage as per the provisions of the said Act. As such the establishment is not liable to remit any contribution as claimed by the PF organisation in respect of stipendiary apprentices. On a perusal of the ratio of apprentices it would be clear that the second respondent engaged the apprentices as per the standing orders and which is below 15% of the total number of employees. Further, the second respondent submitted the copies of the apprenticeship applications, apprenticeship scheme, syllabus and evaluation report for increasing the stipend to the appren
The process of appointment of regular employees and apprentices are different, and the status of individuals as employees or apprentices should be determined based on the evidence presented.
Trainees under certified standing orders are excluded from the definition of 'employee' under the EPF Act unless they perform the same work as regular employees.
The definition of 'employee' under the Employees Provident Fund and Miscellaneous Provisions Act excludes apprentices, affirming the status of trainees as non-employees for related benefits.
The burden of proof lies on the establishment to demonstrate the status of reported persons as employees or apprentices, and a clear training scheme is required for trainees under certified standing ....
The authority must consider jurisdictional issues and provide specific findings on employee count and applicability of the Act when assessing provident fund dues.
The main legal point established in the judgment is the violation of principles of natural justice in the decision-making process and the entitlement of the petitioner to a fresh consideration of the....
The integration of establishments under the Act requires factual findings and interdependence between entities, and valid reasons for passing orders cannot be supplemented after the fact.
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