Malabar Medical College Hospital and Research Centre vs Regional Provident Fund Commissioner

# **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** **THE HONOURABLE MR. JUSTICE A.M.BADAR** **THURSDAY, THE 04TH DAY OF FEBRUARY 2021 / 15TH MAGHA,1942** ## **OP(LC).No.2 OF 2021** ## **PETITIONER:** **MALABAR MEDICAL COLLEGE HOSPITAL AND RESEARCH CENTRE MODAKALUR P. O., KOZHIKODE - 673323, REP. BY ITS CHAIRMAN MR. V. ANIL KUMAR.** **BY ADVS. SRI.V.B.HARI NARAYANAN SMT.RUBY P.PAULOSE SMT.SALIHA BEEVI P.A SMT.GAYATHRY.J** ## **RESPONDENT:** **THE REGIONAL PROVIDENT FUND COMMISSIONER EMPLOYEES PROVIDENT FUND ORGANISATION, REGIONAL OFFICE, ERANHIPALAM P. O., KOZHIKODE - 673 006.** ## **OTHER PRESENT:** ## **SRI.ABRAHAM P MEACHINKARA, SC.** **THIS OP (LABOUR COURT) HAVING COME UP FOR ADMISSION ON 04.02.2021, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** O.P(LC) No.2/2021 2 ## **JUDGMENT** ## **Dated this the 4[th] day of February 2021** By this original petition, the petitioner challenges Ext.P3 order passed by the Central Government Industrial Tribunal-cum-Labour Court, Ernakulam. 2. It was reported to the authority appointed for determination of money dues from the employer under the Employees' Provident Funds & Miscellaneous Provisions Act, 1952 (EPF Act, for short) that the petitioner-establishment has defaulted in payment of various dues under the EPF Act. Irregularities such as evading wages for the period from August 2016 to July 2017 so also not enrolling 196 employees under the EPF Act and nonpayment of their contribution were also reported. That is how the authority under Section 7A of the EPF Act issued summons to the petitioner-establishment for determination of money dues from the petitioner-establishment under the EPF Act. Accordingly, enquiry came to be conducted and during the course of enquiry, it was pointed out the following facts: a) Out of 196 non enrolled employees mentioned by the Provident Fund Department, the petitionerestablishment has allotted UAN to 65 of them from O.P(LC) No.2/2021 3 01.10.2015 onwards. - b) Out of the balance 131 employees, 3 were stated to be ex-Government employees and 1 as excluded employee. - c) The balance 127 persons were stated to be trainees as detailed in the Annexure out of which 26 have already left their hospital. 3. After due enquiry, the authority under Section 7A of the EPF Act was pleased to hold that there should be clear training scheme for persons engaged as apprentice or trainee under the certified standing orders. The authority also found that during the course of hearing the matter under Section 7A of the EPF Act, the petitioner-establishment has allotted UAN to 65 employees out of 196 employees claimed to be trainees by them. With this the authority concluded that the establishment failed to enroll 196 employees to the membership of the Fund for various spells for the period from August 2011 to July 2017 and all those 196 persons were in fact employees as defined by Section 2(f) of the EPF Act. Accordingly the dues came to be determined. 4. The petitioner assailed the order passed under Section 7A of the EPF Act by filing an appeal and by the impugned order at O.P(LC) No.2/2021 4 Ext.P3, the said appeal came to be dismissed by the learned Presiding Officer of the Central Government Industrial Tribunalcum-Labour Court, Ernakulam. 5. Heard both sides. Learned counsel for the petitioner argued that the petitioner establishment is running a hospital and it is covered by the provisions of the Industrial Employment (Standing Orders) Act, 1946. It is argued that there is no requirement of framing of any training scheme as per the provisions of the said Act and the persons who are held to be employees were in fact trainees working with the petitionerestablishment. It is also argued that both the authorities below gave erroneous finding that hospitals are not covered by the Industrial Employment (Standing Orders) Act. Learned counsel for the petitioner relied on the judgment of the Hon'ble Supreme Court in the matter of _**Regional Provident Fund Commissioner** vs._ _**M/s.Central Arecanut and Coco Marketing & Processing Cooperative Ltd., Mangalore**_ reported in (2006) 2 SCC 381 and in _**Sivagiri Sree Narayana Medical Mission Hospital** vs._ _**Regional Provident Fund Commissioner**_ reported in 2018 (4) KLT 352. Learned counsel relying on these judgments argued that unless and until standing orders are final, certified model standing O.P(LC) No.2/2021 5 orders shall hold the field. Those model standing orders are applicable to the petitioner-establishment and therefore, the petitioner-establishment can engage trainees or apprentice. The alleged employees as stated by the authorities under the EPF Act were in fact apprentice and by the impugned order, the learned Tribunal committed grave error to hold that provisions of the Industrial Employment (Standing Orders) Act, 1946 are not applicable to the hospital. 6. As against this, learned Standing Counsel appearing for the respondent drew my attention to the finding of fact recorded by the learned Tribunal in paragraph 5 of the impugned order and argued that the learned Tribunal has clearly recorded a finding that security staff and trained nurses are kept as trainees for years together. 7. I have considered the submissions so advanced and perused the materials placed before me. The term 'employee' is defined by Section 2(f) of the EPF Act and it reads thus: “(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 O.P(LC) No.2/2021 6 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”. 8. A bare perusal of the above definition makes it clear that 'apprentice' engaged under the Apprentices Act, 1961 or under the standing orders of the establishment cannot be termed as 'employees' under the EPF Act. It is also clear that in the absence of certified standing orders, model standing orders framed under the Industrial Employment (Standing Orders) Act, 1946 hold the field and the model standing orders also contain the provision for engagement of probationer or trainee. However, the burden for establishing the fact that the persons stated to be employees by the Provident Fund organisation are in fact apprentice, lies on the establishment because that is a fact especially within the knowledge of the establishment which engages such persons. 9. In the case in hand, it is seen from the order of the authority under Section 7A of the EPF Act that no evidence was adduced by the petitioner-establishment to demonstrate that O.P(LC) No.2/2021 7 persons mentioned in the report were in fact apprentice and not employees. On this backdrop, the relevant observations recorded by the Tribunal in paragraph 5 while deciding the appeal need to be quoted and those read thus: “This is a typical case wherein the test given by the Hon'ble High Court of Kerala is required to be applied. From the Annexure 1 document produced by the appellant, it is seen that the terms of conditions of engagement as trainees would be borne out from the orders issued to them for training. As already pointed out it was upto the appellant to produce those documents before the respondent at the time of hearing. It is seen from Annexure 2 produced by the appellant that security staffs are also kept as trainees and it is also stated that some of the trainees are kept for years together. From Annexure 4, it is seen that out of 161 trainees 65 trainees already been enrolled under the PF and some of the trainees are engaged as trainees for more than 4 years duration. These documents produced by the appellant themselves would clearly show that there is no clear training scheme for the appellant and even security guards are kept as trainees for years together. As already pointed out qualified nurses cannot be kept as trainees as already decided by the Hon'ble High Court of Kerala. Hence it is clear that the claim of the appellant that these trainees are apprentices under model standing orders cannot be accepted”. O.P(LC) No.2/2021 8 In the light of this discussion, it cannot be said that the impugned order of the Appellate Tribunal is either perverse or illegal. The same is based on record which depicts that no evidence was adduced by the establishment to demonstrate that the persons named in the report were in fact apprentice and not the employee of the petitioner-establishment. In the result, this original petition fails and the same is dismissed. **Sd/-** ## **A.M.BADAR** **JUDGE** **smp** O.P(LC) No.2/2021 9 ## **APPENDIX** ## **PETITIONER'S EXHIBITS:** **EXHIBIT P1 A COPY OF THE APPEAL MEMORANDUM TOGETHER WITH ANNEXURES IN APPEAL NO.333/2018.** **EXHIBIT P2 A COPY OF THE COUNTER AFFIDAVIT FILED BY THE RESPONDENT IN APPEAL NO.333/2018. EXHIBIT P3 A COPY OF THE ORDER DATED 23.10.2020 IN APPEAL NO.333/2018 OF CGIT, ERNAKULAM.** RESPONDENTS' EXHIBITS: NIL. True Copy P.S to Judge smp