My Company proposes to appoint a Trainee in it's manufacturing unit for a period of six months or so. The Trainee will be paid a stipend. Do we need to deduct PF, ESIC & PT from the stipend paid to the Trainee? Please clarify with applicable provisions.
From India, Thane
From India, Thane
It would depend on the nature of jobs, which the Trainee is going to perform. If he is doing any manual, skilled, semi-skilled, operational, clerical job, then he may be deemed to be a "workman" and would be entitled to all the benefits.
-S.K. Mittal
Industrial & Labour Lawyer
9319956443
From India, Faridabad
50-S.K. Mittal
Industrial & Labour Lawyer
9319956443
From India, Faridabad
Dear Colleague,
The reply given by our Colleague is very perfect. Further to add, the reading of the definition of "employee " includes apprentice also except the specific exclusion allowed under the said provisions.
Hence if the trainees are going to be engaged in work, then the Social Security measures like PF, ESI will become applicable as they will be construed as employee if it is tested and proved in the subsequent legal proceedings by any authority.
However if the Trainees are engaged under the provisions of Apprentices Act 1961 then to that extent of time period only they need not be covered under provisions of PF/ESI subject to the fact that they are really engaged only for the purpose of Training under the provisions of The Apprentices Act 1961 with due registration of Contract under the control of Apprenticeship Advisor. Other Trainees like engagement attracts the coverage of PF & ESI.
Reproduced the provisions :
Employees Provident Fund & MP Act 1952 :
2(f) “employee” means any person who is employed for wages in any kind of work, manual or
otherwise, in or in connection with the work of [an establishment], and who gets his wages directly
or indirectly from the employer, [and includes any person—
(i) employed by or through a contractor in or in connection with the work of the
establishment;
(ii) engaged as an apprentice, not being an apprentice engaged under the Apprentices Act,
1961 (52 of 1961), or under the standing orders of the establishment;]
Employees State Insurance Act 1948 :
2(9) “ 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 on any work of, or incidental or preliminary to or connected with the 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 or 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 (52 of 1961), [and includes such person engaged as apprentice whose training period is extended to any length of time]
but does not include] — ]
(a) any member of [the Indian] naval, military or air forces ; or
[(b) any person so employed whose wages (excluding remuneration for overtime work) exceed [such wages as may be prescribed by the Central Government] :
Thanks and God bless,
Dr P.Sivakumar Ph.D.,HR
DrSivaglogalhr
Tamil Nadu
From India, Chennai
The reply given by our Colleague is very perfect. Further to add, the reading of the definition of "employee " includes apprentice also except the specific exclusion allowed under the said provisions.
Hence if the trainees are going to be engaged in work, then the Social Security measures like PF, ESI will become applicable as they will be construed as employee if it is tested and proved in the subsequent legal proceedings by any authority.
However if the Trainees are engaged under the provisions of Apprentices Act 1961 then to that extent of time period only they need not be covered under provisions of PF/ESI subject to the fact that they are really engaged only for the purpose of Training under the provisions of The Apprentices Act 1961 with due registration of Contract under the control of Apprenticeship Advisor. Other Trainees like engagement attracts the coverage of PF & ESI.
Reproduced the provisions :
Employees Provident Fund & MP Act 1952 :
2(f) “employee” means any person who is employed for wages in any kind of work, manual or
otherwise, in or in connection with the work of [an establishment], and who gets his wages directly
or indirectly from the employer, [and includes any person—
(i) employed by or through a contractor in or in connection with the work of the
establishment;
(ii) engaged as an apprentice, not being an apprentice engaged under the Apprentices Act,
1961 (52 of 1961), or under the standing orders of the establishment;]
Employees State Insurance Act 1948 :
2(9) “ 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 on any work of, or incidental or preliminary to or connected with the 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 or 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 (52 of 1961), [and includes such person engaged as apprentice whose training period is extended to any length of time]
but does not include] — ]
(a) any member of [the Indian] naval, military or air forces ; or
[(b) any person so employed whose wages (excluding remuneration for overtime work) exceed [such wages as may be prescribed by the Central Government] :
Thanks and God bless,
Dr P.Sivakumar Ph.D.,HR
DrSivaglogalhr
Tamil Nadu
From India, Chennai
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