IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 18.10.2011 CORAM THE HONOURABLE MR.JUSTICE K.CHANDRU W.P.NO.22958 of 2009 and M.P.No.1 of 2009 Frontier Lifeline Pvt. Ltd., R-30C, Ambattur Industrial Estate Road, Chennai-600 101 rep by its Finance Controller. .. Petitioner Vs. The Regional Provident Fund Commissioner-II, Employees Provident Fund Organisation, Sub Regional Office, Ambattur, R-40A 1, TNHB Shopping-cum-Office Complex, Mogappair Road, Mogappair (East), Chennai-600 037. .. Respondent This writ petition is preferred under Article 226 of the Constitution of India praying for the issue of a writ of mandamus to direct the respondent to decide the question whether the trainees fall within the meaning of employees under Section 2(f) of the EPF Act and wh4ther the payment of Conveyance Allowance and Washing Allowance will fall within the wages in terms of Section 2 (b) under the EPF Act in the first instance. For Petitioner : Mr.V.Karthik for M/s.T.S.Gopalan & Co. For Respondent : Mr.K.Ramu - - - - ORDER The petitioner has filed the present writ petition seeking for a direction to the respondent to decide the question whether the trainees fall within the meaning of employees under Section 2 (f) of the EPF Act and whether the payment of conveyance allowance and washing allowance will fall within the wages in terms of Section 2(b) of the EPF Act and thereafter to decide the further issue. https://hcservices.ecourts.gov.in/hcservices/ 2.In the present case, the writ petition was yet to be admitted and only notice of motion was ordered. Pending notice of motion, an interim injunction was granted only for a period of two weeks. 3.It is seen from the records that the respondent on getting information had directed the petitioner to remit the dues and to submit the returns in respect of 64 eligible employees who were working in their Cardio Vascular Centre at Parumala, Kerala State. The Regional Provident Fund Commissioner at Ambattur as per para 26B of the EPF Scheme has to examine the matter after giving a reasonable opportunity. Therefore, the petitioner was directed to appear in respect of the said enquiry. The petitioner sent a reply dated 15.9.2009 stating that out of 64 employees referred to in the notice, 38 are Nurse trainees and the remaining 26 are non covered employees engaged as casuals. In respect of these 26 employees, they had expressed their readiness to cover them. In respect of wages, it was stated that the washing allowance and conveyance allowance will not cover within the meaning of Section 2(b). 4.Thereafter, a further notice was sent on 15.9.2009 informing the petitioner management that their Enforcement Officers had visited the establishment and they had collected details of trainees in respect of various months. The petitioner sent a further letter dated 29.10.2009 stating that the Commissioner should immediately decide whether the trainees are employees within the meaning of Section 2(b). The Regional Provident Fund Commissioner sent a further notice dated 30.10.2009 directing them to produce all records to ascertain the true nature of employment as well as whether certain components of salary paid will constitute wages within the meaning of Section 2(b) of the EPF Act. Instead of reply to the same, the present writ petition came to be filed seeking for a direction to decide certain issues as preliminary issues. 5.The question as to whether the apprentice (trainee) is covered by the provisions of the EPF Act came to be considered by the Supreme Court vide its judgment in Regional Provident Fund Commissioner, Mangalore v. Central Arecanut & Coca Marketing And Processing Coop. Ltd., Mangalore reported in (2006) 2 SCC 381 and in paragraphs 9 to 14, it was observed as follows: 9.From a bare reading of Section 12-A it is manifestly clear that until the Standing Orders are finally certified and come into operation, the prescribed model standing orders shall be deemed to be adopted in the establishment concerned. The model standing orders prescribed under Rule 3(1) of the Industrial Employment (Standing Orders) Central Rules, 1946 (in short “the Central Rules”) are contained in Schedule I to the said Rules. Standing Order 2 thereof classified workmen as follows: “2. (a)(1) permanent, (2) probationers, https://hcservices.ecourts.gov.in/hcservices/ (3) badlis, (4) temporary, (5)casual, (6)apprentices.” (7) 10.“Apprentice” is defined in clause (g) of Standing Order 2 as follows: “2. (g) an ‘apprentice’ is a learner who is paid an allowance during the period of his training.” 11.The Apprentices Act defines an “apprentice” as follows: “2. (aa) ‘apprentice’ means a person who is undergoing apprenticeship training in pursuance of a contract of apprenticeship;” 12.In the present case, admittedly the Standing Orders were not at the relevant point of time certified. Therefore, in terms of Section 12-A of the Standing Orders Act, the model standing orders are deemed to be applicable. Section 2(f) of the Act defines an employee to include an apprentice, but at the same time makes an exclusion in the case of an apprentice engaged under the Apprentices Act or under the Standing Orders. Under the model standing orders an apprentice is described as a learner who is paid allowance during the period of training. 13.In the case at hand, trainees were paid stipend during the period of training. They had no right to employment, nor any obligation to accept any employment, if offered by the employer. Therefore, the trainees were “apprentices” engaged under the “Standing Orders” of the establishment. 14.Above being the position, it cannot be said that the 45 trainees concerned were employees in terms of Section 2(f) of the Act. In other words, an apprentice engaged under the Apprentices Act or under the Standing Orders is excluded from the definition of an “employee” as per Section 2(f) of the Act. 6.But, whether in respect of the petitioner's hospital, the nurses engaged as trainees are not under the provisions of the Apprentices Act, it is for the management to establish that they are having Standing Orders which provide for engagement of apprentices. Therefore, it is the factual issue which the petitioner will have to cooperate with the respondent to ascertain the same. Even in case where the Standing Orders permitting the engagement of apprentices and whether such apprentices are engaged to defeat the purpose of regularization of workmen and whether the term of appointment under which they were engaged is sham and https://hcservices.ecourts.gov.in/hcservices/ nominal, can be gone into by the authority under Section 7A of the EPF Act as held by this court in Management of Reynolds Pens India Pvt. Ltd. Vs. The R.P.F.C.-II and another reported in 2011 Writ L.R. 549 and in paragraphs 32 and 33 this court had observed as follows: 32.The said judgment of the Supreme Court was quoted and followed by the Bombay High Court in Gosalia Shipping Pvt. Ltd., Goa and another Vs. Regional Provident Fund Commissioner, Goa and another reported in 1997-II-LLJ 38 (Bom). In paragraph 11, the Bombay High Court had observed as follows: "11....This Judgment of the Apex Court should conclude the matter. Therefore any settlement and the Award between the parties cannot be binding on an Authority under the Act who can arrive at a conclusion based on all materials available including settlements if any produced before him." 33.The question as to the authority under Section 7A can go into the question as to whether certain items can come within the term "basic wags" and he can lift the veil to determine the issue has also been considered by the Supreme Court in Rajasthan Prem Krishan Goods Transport Co. Vs. Regional Provident Fund Commissioner reported in (1996) 9 SCC 454. The Supreme court in paragraph 6 of its judgment had observed as follows: "6....Now, this finding is essentially one of fact or on legitimate inferences drawn from facts. Nothing could be suggested on behalf of the appellant as to why could the Regional Provident Fund Commissioner not pierce the veil and read between the lines within the outwardliness of the two apparents. No legal bar could be pointed out by the learned counsel as to why the views of the Regional Provident Fund Commissioner, as affirmed by the Central Government, be overturned." 7.Merely because, certain remunerations such as conveyance allowance and washing allowance are described differently, they will not be covered by the term “basic wage” under the EPF Act is also an issue which will have to be decided on factual findings and that the power of the authority to decide such matters has already been considered by this court in Reynolds Pens India Pvt. Ltd. (cited supra). Ultimately, when the authority decides the matter under para 26B, this court cannot give any direction that certain issues will have to be decided first as preliminary issues and thereafter the other issues will have to be gone into on the merits of the matter. The proceedings under para 26B is summary in nature and it is not for this court to give any such direction to the authority to decide a particular issue as preliminary issue. https://hcservices.ecourts.gov.in/hcservices/ Therefore, there is no case made out to entertain the writ petition. Accordingly, the writ petition will stand dismissed. No costs. Consequently connected miscellaneous petition stands closed. sd/- Assistant Registrar True Copy/- Sub Assistant Registrar vvk To The Regional Provident Fund Commissioner-II, Employees Provident Fund Organisation, Sub Regional Office, Ambattur, R-40A 1, TNHB Shopping-cum-Office Complex, Mogappair Road, Mogappair (East), Chennai-600 037. +1 CC to Mr.T.S.Gopalan Advocate Sr 63448 +1 CC to M/s.V.J.Latha Advocate Sr 63981 ORDER IN W.P.NO.22958 of 2009 SSK – CO KV – 03/11/2011 https://hcservices.ecourts.gov.in/hcservices/