THE HON’BLE SRI JUSTICE C.V.RAMULU C.M.A.No.699 of 2005 ORAL JUDGMENT: This Civil Miscellaneous Appeal under Section 82 of Employees State Insurance Act is directed against the order made in E.I. Case No.63 of 2001 dated 30.12.2004 on the file of the learned Chairman, Employees Insurance Court-cum-Industrial Tribunal-I, Hyderabad. The only question that falls for consideration in this case is whether the Trainees of Respondent firm can be said to be covered under Employees State Insurance Act as defined under Section 2(a) read with Rule 22 or not ? It appears, the respondent firm filed a petition under Section 75(1)(g) of ESI Act seeking a declaration that the Trainees of the firm are not covered by the said Act. It was the case of the firm that as per the Standing Orders of the Factory, the Trainee as defined under Standing Order No.4(a)(vi), enables the firm to provide such training and such trainees are not regular employees of the factory and after their training they will go to the open market for securing jobs and during training period they will be paid fixed stipend to meet their pocket expenses. Thus, there is no employer and employee relationship between the Firm and the trainees. Therefore, firm need not pay contribution as far as trainees are concerned. The ESI Corporation filed a counter stating that the ‘employee’ is defined under the Act and accordingly the ‘Trainee’ is an employee and the firm is liable to pay contribution for the trainee also. After considering the arguments advanced by both the parties and after looking into the oral as well as documentary evidence, the Tribunal below while allowing the appeal, held as under: “Point No.1: Whether the trainees of the petitioner are its employees? Section 2(9) defines ‘employee’, as follows: ‘Employee’ means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and – (i) who is directly employed by the principal employer or any work of, the factory or establishment whether such work is done by the employee in the factory or establishment or elsewhere; or (ii) who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment; or (iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service; and includes any person employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch thereof with the purchase of raw materials for, or the distribution or sale of the products of, the factory or establishment or any person engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961, or under the standing orders of the establishment; but does not include – a) any member of the Indian Naval, Military or Air Forces; or b) by any person so employed whose wages (excluding remuneration for overtime work) exceed such wages as may be prescribed by the Central Government a month: Provided that an employee whose wages (excluding remuneration for overtime work) exceed such wages as may be prescribed by the Central Government a month at any time after (and not before) the beginning of the contribution period, shall continue to be an employee until the end of that period; The plain reading of the same discloses that an employee means any person employed for wages in or in connection with the factory. ‘ W a g e ’ defined under Oxford – Encyclopedic Dictionary (PIP-ZYM 3) as: ‘Wage’ as amount paid periodically, esp. for work or service of employee (usu.Pl.); requital, reward (usu.Pl.); (pl., econ.) that part of total production of community which is the reward of all forms of labour (as dist. From remuneration received by capital); ‘Trainee’ is defined under Oxford – Encyclopedic Dictionary (PIP-ZYM 3) as : ‘Trainee’ as one who is being trained (for an occupation) ‘Apprentice’ defined under Oxford – Encyclopedic Dictionary (AAC-FLO 1) as: ‘Apprentice’ means learner of a craft, bound to serve, and entitled to instruction from his employer for a specified term. Further, ‘wage’ is different from Stipend ‘a person getting stipend during training can never be treated as an employee getting wages’. Thus, for an employee there should be a regular appointment order and the employee must be appointed for performing a particular work and in return he should receive the wages and a trainee who works for a limited period can never be treated as an employee. Thus, Section 2(9) proviso clearly says that any person engaged as an apprentice or any person engaged on the standing order of the establishment are not employees. If the management is extracting the work of a regular employee from an apprentice or a trainee then he can be treated as an employee there is no such evidence in this case. The corporation did not produce any evidence that trainees attended to the petitioner are employed for wages. Admittedly the standing orders provide for training and certain sum is paid as stipend and that payment is not conditioned by any assurance of an employer after the completion of the training period. Thus, on the facts and circumstances of this case, I hold that there is no employer and employee relationship between the trainees and the petitioner but it is only a relationship of master and student and not master and servant. Therefore, I hold that the trainees of the petitioner are not employees. Thus, this point is answered accordingly”. The Tribunal further held that since the Trainees are not regular employees of the respondent firm, respondent need not pay any contribution. Aggrieved by the said order, the present CMA is filed. The learned counsel for appellant drawn the attention of the Court to the inclusive provision of Section 2(9) of the ESI Act and stated that ‘employee’ includes any person employed for ‘wages’ on any work connected with the administration of the factory or establishment or any part, department or branch thereof, or any person engaged as an apprentice, not being an apprentice engaged under the Apprentices Act 1961 or under the standing orders of the establishment must be treated as employees of the respondent firm and they are employed for wages, therefore they are covered under the Act. There is no necessity of going into all the details. As per the certified Standing Orders of the factory, the term ‘Trainee’ is defined in Standing Order No.4(a)(vi) which enables the firm to provide such training and such trainees are not regular employees of the factory and after their training they will go to the open market to secure their own jobs and during training period they will be paid fixed stipend to meet their pocket expenses and it is not mandatory but to encourage the trainees. In the explanatory portion of the order, the word ‘Trainee’ and ‘Apprentice’ were separately defined. ‘Trainee’ means as one who is being trained (for an occupation) and ‘Apprentice’ means learner of a craft, bound to serve and entitled to instruction from, his employer for a specified term. From the above it is clear that ‘Apprentice’ is different from that of ‘Trainee’ and the Trainees may or may not be paid allowances during the period of training and further they have no right of employment. They are only paid stipend and not wages. In this regard, the learned counsel appearing for respondent also relied on the judgment in EMPLOYEES’ STATE INSURANCE CORPORATION, HYDERABAD v. ANDHRA PRABHA PVT. LTD., ,VIJAYANAGAR[1], wherein this Court while referring to the statutory provisions and the decision on the point, observed that the Employees’ Insurance Court as well as the single Judge of the High Court concurrently negatived the claim of the appellant-Corporation and held that the employees (in question) were not drawing any wages and they were only appointed as apprentices. It declined to interfere with the said findings of fact. Stipend paid to the trainees could not answer the definition of wages as per Sec. 2(22) of the ESI Act. In view of the above, I am of the opinion that the Trainees appointed under the standing orders of the establishment cannot be treated as employees of the firm and they are engaged for wages. As noticed above, the trainees are paid fixed stipend, therefore they have no right whatsoever for claiming employment. In view of the above discussion and in view of the Division Bench judgment of this Court (supra), the impugned order cannot be said to be either arbitrary or illegal calling interference of this Court under Section 82 of E.S.I. Act. The C.M.A. is devoid of merits and liable to be dismissed. Accordingly, the C.M.A. is dismissed. No order as to costs. ______________ C.V.RAMULU, J Date: 8.7.2010 DA THE HON’BLE SRI JUSTICE C.V.RAMULU C.M.A.No.699 of 2005 8.7.2010 IN THE HIGH COURT OF JUDICATURE OF ANDHRA PRADESH AT HYDERABAD THE HON’BLE SRI JUSTICE C.V.RAMULU C.M.A.No.699 of 2005 Date: 8th July, 2010 Between: The Employees State Insurance Corporation, Regional Office, Hyderabad, rep. by its Joint Director. .. Appellant And M/s Krishna Engineering Works, Enikepadu, Vijayawada, Krishna district, represented by its Partner. .. Respondent [1] 2000-II LLJ 709