# [1976] 2 S.C.R. 199

- **Citation:** [1976] 2 S.C.R. 199
- **Court:** Supreme Court of India
- **Decided:** 1975-10-08
- **Bench:** A. Alagiriswami, P. K. Goswami, N. L. Untwalia
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/1976-2-s-c-r-199-6706
- **Pages:** 6

## Headnote

Employees State Insurance Act, 1948-Sec. 2(9)-An apprentice whether
an employee.
The appellant contended before the Industrial Tribunal. that the apprentices
to which the Employees Sta\e Insurance Act, 1948
a~phes.
The factory
employs besides regular employees, two sets of apprentices. Gradua~e appren•
tices for a period of two years and Trade apprentices for the durat10n of
3
years.
The graduate apprentices receive stipend of Rs. 250 /- per month for
the first year and Rs. 300 /- per month during the se~nd year. pie
tr~de
apprentices receive stipend of Rs. 21-. Rs. 2.50 and Rs. 3.00 per diem dunng
the first second and third years of the apprenticeship respectively. No further
emolum~nt is paid to the apprentices.
A deed of apprenticeship is signed by
the company, the apprentice and the surety by which the company
agree_s
to provide ta the apprentice necessary t~ai~ng in its factory .ai;id t?at after the
apprentices successfully pass the exammatton after the trammg 1s completed
they would be considered for. ab"°rption as skilled worker although the Com-1
pany is not _under a legal obl1gat10n to offer them employment. Another term
provides that the apprentices would during the period of apprenticeship diligently and faithfully serve the Company and to the utmost power and skill
attend to the Company's business.
The apprentices- give a bond for serving
the Company for 5 years after their training is successfully completed ..
The appellan~ contended -before the Industrial Tribunal that the apprentices
are employees within the meaning of the Act.
The Tribunal did not accept
the appellant's contention. The High Court rejected the writ petition filed by
the appellant.
On an appeal by certificate under Art. 133(1) (a)
and (b)
of the Constitution it was contended by the appellant that the words "serve
the Company" appearing in the apprenticeship agreement introduce a relation
of master and servant.
A
B
c
D
E
HELD : _ ( 1) _ The word "apprentice" is _not defined in the Act. In ordinary
F
acceptation of the term apprentice a relationship of master and servant is not
established in law. - The dictionary m~aning does not accept such a relationship.
Th€'. heart of the matter or the dormnant object in apprenticeship is the intent
to impart_ OI)- th\) part of ~e employer and to accept on the part of the other
person learmng under certam agreed terms. Such a person remains a learner
and not arr ~mp!oYee. The fact that certain payment is made does not convert
the appre!llice mto a regular employee.
An examination of the provisions
of .the enure a&reement !~ads us to the conclusion that t~e pr,incipal object with
which the parties enter mto the agreement of apprent1cesh1p was offering by
G
the employer an opportunity to learn the trade or craft and the other person
to acquire such knowledge.
[201F, 2020-F]
(2) The Apprentices Act, 1850, defines an apprentice as a person who fa
undergoing apprenticeship training in a designated trade in
pursuance of a
contract of apprenticeship.
Whenever the legislature intends to
include an
apprentice in the definition of a worker it has expressly done so for instance
while defining a worker under s. 2 of the Industrial Disputes Adt 1947.
Th~ H
very next year while passing the Employees State Insurance A~t. 1948 the
Legislature did not choose to Include apprentice while defining the word' employee.
Such a deliberate omission on the part of the Legislature can be only
14-Ll276 SCI/75
A
B
200
SUPREME COURT REPORTS
[ 197 6] 1 S.C.R.
attributed .to the well known concept of apprenticeship which the Legislature
assumed and took note of for the purpose of the Act. The apprentices are not
given the wages as defined by s. 2(22) of the Act.
The apprentices are not
covered within the definition of the emple1yees under s. 2 ( 9) of the Act. They
are not entitled to the daily allowances and other allowances to which the
regular employees are entitled.
The apprentice is, therefore, not an employee
within the meaning of s.

## Text

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EMPLOYEES' STATE INSURANCE
CORPORATION AND ANR.
v .
199
TATA ENGINEERING & CO, LOCOMOTIVE CO. LTD.
AND ANR.
October 8, 1975
[A. ALAGIRISWAMI, P. K. GOSWAMI AND N. L. UNTWALIA, JJ.]
Employees State Insurance Act, 1948-Sec. 2(9)-An apprentice whether
an employee.
The appellant contended before the Industrial Tribunal. that the apprentices
to which the Employees Sta\e Insurance Act, 1948
a~phes.
The factory
employs besides regular employees, two sets of apprentices. Gradua~e appren•
tices for a period of two years and Trade apprentices for the durat10n of
3
years.
The graduate apprentices receive stipend of Rs. 250 /- per month for
the first year and Rs. 300 /- per month during the se~nd year. pie
tr~de
apprentices receive stipend of Rs. 21-. Rs. 2.50 and Rs. 3.00 per diem dunng
the first second and third years of the apprenticeship respectively. No further
emolum~nt is paid to the apprentices.
A deed of apprenticeship is signed by
the company, the apprentice and the surety by which the company
agree_s
to provide ta the apprentice necessary t~ai~ng in its factory .ai;id t?at after the
apprentices successfully pass the exammatton after the trammg 1s completed
they would be considered for. ab"°rption as skilled worker although the Com-1
pany is not _under a legal obl1gat10n to offer them employment. Another term
provides that the apprentices would during the period of apprenticeship diligently and faithfully serve the Company and to the utmost power and skill
attend to the Company's business.
The apprentices- give a bond for serving
the Company for 5 years after their training is successfully completed ..
The appellan~ contended -before the Industrial Tribunal that the apprentices
are employees within the meaning of the Act.
The Tribunal did not accept
the appellant's contention. The High Court rejected the writ petition filed by
the appellant.
On an appeal by certificate under Art. 133(1) (a)
and (b)
of the Constitution it was contended by the appellant that the words "serve
the Company" appearing in the apprenticeship agreement introduce a relation
of master and servant.
A
B
c
D
E
HELD : _ ( 1) _ The word "apprentice" is _not defined in the Act. In ordinary
F
acceptation of the term apprentice a relationship of master and servant is not
established in law. - The dictionary m~aning does not accept such a relationship.
Th€'. heart of the matter or the dormnant object in apprenticeship is the intent
to impart_ OI)- th\) part of ~e employer and to accept on the part of the other
person learmng under certam agreed terms. Such a person remains a learner
and not arr ~mp!oYee. The fact that certain payment is made does not convert
the appre!llice mto a regular employee.
An examination of the provisions
of .the enure a&reement !~ads us to the conclusion that t~e pr,incipal object with
which the parties enter mto the agreement of apprent1cesh1p was offering by
G
the employer an opportunity to learn the trade or craft and the other person
to acquire such knowledge.
[201F, 2020-F]
(2) The Apprentices Act, 1850, defines an apprentice as a person who fa
undergoing apprenticeship training in a designated trade in
pursuance of a
contract of apprenticeship.
Whenever the legislature intends to
include an
apprentice in the definition of a worker it has expressly done so for instance
while defining a worker under s. 2 of the Industrial Disputes Adt 1947.
Th~ H
very next year while passing the Employees State Insurance A~t. 1948 the
Legislature did not choose to Include apprentice while defining the word' employee.
Such a deliberate omission on the part of the Legislature can be only
14-Ll276 SCI/75
A
B
200
SUPREME COURT REPORTS
[ 197 6] 1 S.C.R.
attributed .to the well known concept of apprenticeship which the Legislature
assumed and took note of for the purpose of the Act. The apprentices are not
given the wages as defined by s. 2(22) of the Act.
The apprentices are not
covered within the definition of the emple1yees under s. 2 ( 9) of the Act. They
are not entitled to the daily allowances and other allowances to which the
regular employees are entitled.
The apprentice is, therefore, not an employee
within the meaning of s. 2(9) of the Act..
[202G-H, 203-ll'-D, 204-B-C]
CIVIL APPELLATE JURISDICTION: Civil Appeal ::\o. 2113 of 1969.
From the Judgment and Order dated the 3rd May, 1966 of the
Patna High Court at Patna in Misc. J. Case No. 289 of 1964.
G. L. Sanghi, S. P. Nayar and Girish Chandra, for the Appellant.
C
M. C. Bhandare, O. C. Mathur, D. N. Mishra and J. B. Dadachanji
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for respondents.
The Judgment of the Court was delivered by
GosWAMI, J.
Is an apprentice an "emplQyee" under the Employees
State Insurance Act, 1948 ? That is the qu.estion raised in this appeal
by certificate under article 133(1) (a) & (b) of the Constitution from
the judgment of the Patna High Court by which it refused to interfere
with the order of the Industrial Tribunal passed under section 73B ot
the Employees' State Insurance Act, 1948 (briefly the Act).
The respondent is a public limited company having its registered
office at Bombay and its factor,y at Jamshedpur in the State of Bihar.
The Act is
applicable to the company's factory.
Besides regular
employees in the company, there are two sets of apprentices, naqiely,
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 emo!uments except the daily allowance or the monthly stipends
are paid by the company to the apprentices.
A deed of apprenticeship
is signed b1y 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 succe&sfully 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 ia the
agreement with regard to matters of discipline during the apprenttceshiP.
.#
. '
E.S.I.C. v. TATA ENGINEERING co. (Goswami, !.)
201
Our attention was particularly drawn to the following provisions
in the agreement :
"12. In consideration of the company having agreed to giye
the Apprentice training in its Wor~s (Automob1.le
Division)
and to pay the apprentice ~he aforesaid
daily allowance or stipend, the apprentices and ~he
surety as the father or guardian of the
apprentice
jointly and severally covenant with the company as
follows:-
(i) That the apprentice will during the whole of the said
term of three years of training diligently and faithfully
serve the company and to the utmost power and skill
attend to the company's business at such places and
times as the company or its
representatives
shall
direct.
*
*
*
*
*
*
B
c
( v) The apprentice shall immediately on the satisfactory
completion of his training for the full tern:i of three
years serve the company for a period of five years,
D
if so required by the company on such conditions as
the company may offer having regard to his personai
qualifications or acquirements and complying with the
Rules & Regulations as are contained in the Works
Standing Orders of the company".
Without citing all the terms and conditions of the agreement, it is
apparent that an apprentice is not in the regular employment of the · · E
compan,y.
It is, however, submitted on behalf of the appellants that the words
"serve the company" in clause 12(i), which are repeated in clause (v),
introduc.! a relationship of master and servant thus constituting apprentice an employee as ordinarily understood. We attach no special significance to the use of the words "serve the company" in the above clauses.
F
The word 'apprentice' is not defined in the Act, nor is it specifically
referred to in the definition of 'employee' by either inclusion or exclusion. We are unable to hold that in ordinary acceptation of the term
apprentice a relationship of master and servant is established· under
t!re law.
Even etymologically, as a matter of pure English, "tc serve
apprenticeship means to undergo the training of an apprentice"
(Chamber's Dictionary). According to the Shorter Oxford English
Dictionary apprentice is "a learner of a craft; one who is bound by
legal agreement to serve an employer for a period of years, with a
view to learn some handicraft, trade, etc. in which the employer is
reciprocaUy bound to instruct him''.
'
Stroucj) Judicial Dictionary puts it thus :
"In legal acceptation, an apprentice is a person bound to
another for the purpose of learning his Trade, or Calling; the
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202
SUPREME COURT REPORTS
(l<J,76] 2 S.C.R.
contract being of that nature that the master teaches and
the other serves the master with the intention of learning".
While dealing with the nature of the relationship of master and servant
in comparison with other relationships in Halsbury's Laws of England,
Third edition, Volume 25; the following passage appears at para 8 77,
pages 451-452 :
"By a contract of apprenticeship a person is bound to
another for the purpose of learning a trade or calling, the
apprentice undertaking to serve the master for the purpose
of being taught, and the master undertaking to teach the
apprentice. Where teaching on the part of master or learning on the part of the other person is not the primary Lut
only an incidental object, the contract is one of service rather
than of apprenticeship; but, if the right of receiving instruction exists, a contract does not become . one
of
service
because, to some extent, the person 'to whom it refers does
the kind of work, that is done by a servant, or because be
receives pecuniary remuneration for his work."
The heart of the !!latter 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 person remains a learner and is !llot nn
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 by the
employer an opportunity to learn the trade or craft and the other
person to acquire such theoretical or practical knowledge that ma,y be
obtained in the course of the training.
This is the primary feature
that is obvious in the agreement.
Now coming to the legislative history of our country on the subject,
it is interesting to note that more than hundred years back we had
the Apprentices Act, 1850 and its preamble says "For better enabling
children, and especially orphans and poor children brought up by
public charity, to learn trades, crafts and employments, by which, when
they come to full age, they may gain a livelihood ..... ".
Learning
of craft or trade was the essence of the said legislation.
This Act was
repealed by section 38 of the Apprentices Act, 1961. The object of
1961 Act is fo provide for the regulation and control of training of
Apprentices in trades and for matters connected therewith.
By the
definition clause under this Act, namely, ·section 2 (a) " 'apprentice'
means a person who is undergoing apprenticeship training in a designated trade in pursuance of a contract of apprenticeship". It is,
therefore, inherent in the word 'apprentice' that there is no element
of employment as such in a trade or industry but only an adequate
•
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I+
E.S.I.C. v.. TATA ENGINEERING co. (Goswami, J.)
203
well-guarded provision for training to enable the trainee after comple-
.tion 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 pur_pose of comprehending the content of term ..
Again we find that where the legislature intends to include apprentice in the definition of a worker it has expressly done so.
For example, the Industrial Disputes Act, 194 7, which is a piece of beneficial
labour welfare legislation of considerable amplitude defines 'workmen'
under section 2(s) of that Act and includes apprentice in express
terms.
It is significant that although the legislature was aware of this
.definition under section 2(s) under the Industrial Disputes Act, 1947,
the very following year while passing the Employees' State Insurance
Act, 1948, it did not choose to include apprentice while defining the
word 'employee' under section 2(9) of the Employees' State Insurance
Act, 1948. Such a deliberate omission on the part of the legislature can
be only attributed to the well-known concept of apprenticeship which
.the legislature assumed and took μote of for the purpose of the Act.
This is not to say that if the legisYature intended it could not have
enlarged the definition of the word 'employee' even to include the
'.apprentice' but the legislature did not choose .to do so.
Even then the question is whether such an apprentice is an employ('e
·within the meaning of .the term under section 2(9) of the Act. If the
answer is yes, he will be governed by the Act and the appellants' claim
for charging the company with liability for payment of special contri-
'bution under Chapter VA of the Act in respect of the apprentice will be
justified.
We may; therefore, turn to the definition of 'employee' under section .
. 2(~) of the Act. So far as is material, section 2(9) reads 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
in 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 ..... "
It is clear that in order to be an employee a person must be employ-
·ed for wages in the work of a factory or establishment or in connection
with the work of a factory or establishment. Wages is defined under
section 2(22) and
"means all remuneration paid or payable in cash to an
employee, if the terms of the contract of employment, express
or implied, were fulfilled and included any payment to an emA
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ployee in respect of any period of authorised leave, lockout,.
H
strike which is not illegal or layoff and other additional remuneration,' if any, paid at intervals not exceeding two months,
but does not include . ...... "
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204
SUPREME COURT REPORTS
(1976] 2 S.C.R.
From the terms of the agreement it is clear that apprentices are more
trainees for a particular period or a distinct purpose and th(: employer
is not bound to employ them in their works after the period of training
is over. During the apprenticeship they cannot be said to be employed
in the work of the company or in connection with the work of the company.
That would have been so if they were employed in a regular
way by the company. On the other hand the purpose of the engagement
under the particular scheme is only to offer training under certain terms
and conditions.
Besides, the apprentices are not given wages within
the meaning of that term under the Act. If they 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 the
Act.
Incidentally we may note that section 18 of the Apprentices Act,.
1961, provides that-_
"save as otherwise provided in this Act,, every apprentice
undergoing apprenticeship training in a designated trade in an
D
establishment shall be a trainee and not a worker ...... "
E
The concept of apprenticeship is, therefore, fairly known and has
now been clearly recognised in thy 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 thait they are
employed in the w~rk of the company or in connection with its work
for wages within the meaning of section 2(9) of the Act. The appeal,
therefore, fails and is dismissed. There will be, however, no order as
to costs.
P.H.P;
Appeal dismissed.
•
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