Case: Employees' State Insurance Corporation And Anr Vs. Tata Engineering &amp; Co. Locomotive Co.Ltd. And Anr

The respondent is a public limited company having its registered office at Bombay and its factory at Jamshedpur in t he State of Bihar. The Act is applicable to the companys factory. Besides regular employees in the company, there are two sets of apprentices, namely, graduate apprentices for a period of two years and trade apprentices for the duration of three years. The graduate apprentices receive stipend of Rs. 250.00 per month in the first year and Rs. 300.00 per month during the second year. The trade apprentices receive stipend at the rate of Rs. 2.00, Rs. 2.50 and Rs. 3.00 per diem during the first, second and third year of the apprenticeship respectively. No other emoluments except the daily allowance or the monthly stipends are paid by the company to the apprentices. A deed of apprenticeship is signed by three parties, namely, the apprentice, his surety and the company and it contains the terms and conditions of apprenticeship From the said terms and conditions which are common for both sets of apprentices except for the quantum of stipends and the duration, it appears that the company agrees to provide the apprentice a combined theoretical and practical training in its factory for the respective period above mentioned and the apprentice also binds himself to serve the company for the purpose of the said training for the said period. Clause (7) of the agreement provides that if the apprentice successfully passes the examination after training he will be considered for absorption as skilled worker although the company is under no legal obligation to offer him employment. There are other conditions in the agreement with regard to matters of discipline during the apprenticeship.

Court's reasoning:
Without citing all the terms and conditions of the agreement, it is apparent that an apprentice is not in the regular employment of theattach no special significance to the use of the words "serve the company" in the aboveheart of the matter in apprenticeship is, therefore, the dominant object and intent to impart on the part of the employer and to accept on the part of the other person learning under certain agreed terms. That certain payment is made during the apprenticeship, by whatever name called, and that the apprentice has to be under certain rules of discipline do not convert the apprentice to a regular employee under the employer. Such a per son remains a learner and is not an employee. An examination of the provisions of the entire agreement leads us to the conclusion that the principal object with which the parties enter into an agreement of apprenticeship was offering b y the employer an opportunity to learn the trade or craft and the other person to acquire such theoretical or practical knowledge that may be obtained in the course of the training. This is the primary feature that is obvious in theis, therefore, inherent in the word apprentice that there is no element of employment as such in a trade or industry but only an adequate well-guarded provision for training to enable the trainee after completion of his course to be suitably absorbed in earning employment as a regular worker. The fact that a trainee may have been absorbed in the company where he is undergoing the training, is not relevant for the purpose of comprehending the content ofis clear that in order to be an employee a person must be employed for wages in the work of a factory or establishment or in connection with the work of a factory orthey were regular employees under the Act, they would have been entitled to additional remuneration such as daily allowance and other allowances which are available to the regular employees. We are, therefore, unable to hold that the apprentice is an employee within the meaning of section 2 (9) of theconcept of apprenticeship is, therefore, fairly known and has now been clearly recognised in the Apprentices Act. Apart from that, as we have noticed earlier, the terms and conditions under which these apprentices are engaged or not give any scope for holding that they are employed in the work of the company or in connection with its work for wages within the meaning of section 2(9) of the Act.