MORNING STAR MEDICAL CENTRE NAZARETH HILL, ADIMALI.P.O., IDUKKI DISTRICT REP. BY ADMINISTRATOR SR. DIVYA, CSN. v THE ASSISTANT PROVIDENT FUND COMMISSIONER SUB REGIONAL OFFICE, EPF ORGANISATION, CHALAKUZHY BUILDING, C.M.S. COLLEGE ROAD, KOTTAYAM-686001

## **IN THE HIGH COURT OF KERALA AT ERNAKULAM** ## **PRESENT** ## **THE HONOURABLE MRS. JUSTICE ANU SIVARAMAN** **TUESDAY, THE 15TH DAY OF OCTOBER 2019 / 23RD ASWINA, 1941** ## **WP(C).No.20952 OF 2012(T)** ## **PETITIONER/S:** **==> picture [95 x 110] intentionally omitted <==** **MORNING STAR MEDICAL CENTRE NAZARETH HILL, ADIMALI.P.O., IDUKKI DISTRICT REP. BY ADMINISTRATOR SR. DIVYA, CSN.** **BY ADVS. SRI.K.T.THOMAS SRI.MATHEW B. KURIAN** ## **RESPONDENT/S:** **==> picture [95 x 83] intentionally omitted <==** **THE ASSISTANT PROVIDENT FUND COMMISSIONER SUB REGIONAL OFFICE, EPF ORGANISATION, CHALAKUZHY BUILDING, C.M.S. COLLEGE ROAD, KOTTAYAM-686001.** **R1 BY SRI.JOY THATTIL ITOOP, SC, EPF ORGANISA** **THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 15.10.2019, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:** **WP(C).No.20952 OF 2012** **2** ## **JUDGMENT** This writ petition is filed by the Management of a Hospital challenging Exts.P2 and P4 orders issued under Section 7B of the Employees Provident Funds and Miscellaneous Provisions Act, 1952. 2. Heard the learned Counsel for the petitioner and the learned Standing Counsel appearing for the Assistant Provident Fund Commissioner. 3. It is submitted by the learned counsel for the petitioner, the petitioner hospital conducts a Nursing Diploma Course under the supervision of Kerala Nurses and Mid-wives Council. It is stated that the duration of the course is 3[1] /2 years followed by stipendary training for one year. It is stated that the Enforcement Officer under the Employees Provident Fund visited the hospital and required the hospital to pay contributions under the **WP(C).No.20952 OF 2012** **3** Act in respect of the trainee nurses as well. 4. It is stated that an enquiry was conducted and the statement showing the names of the trainees on stipend was obtained from the establishment. A hearing was conducted and by Ext.P2 order, it was found that the stipend paid to the trainees is liable to be treated as wages and a total sum of Rs.2,19,377/- was fixed as payable as EPF contribution in respect of 21 trainees. 5. It is submitted that the petitioner submitted a review petition stating that the nurses concerned were only trainee nurses and that the stipend paid to them cannot be treated as remuneration liable for contribution under the Employees Provident Funds and Miscellaneous Provisions Act, 1952 **.** It was contended that the trainees are not employees as defined under Section 2(f)of the EPF Act and that as such, no contribution was liable to be paid. However, by Ext.P4 order, it was held that there were no standing orders as approved by the Labour Officers with regard to **WP(C).No.20952 OF 2012** **4** engagement of trainees in the establishment and therefore, the remuneration paid to trainees for discharging day to day duties in the hosptial cannot be termed as stipend. Taking the above view, the earlier order was confirmed. 6. The learned counsel for the petitioner submits that the issue raised is covered by decisions of the Apex Court in _**Regional Provident Fund Commissioner, Mangalore v. Central Arecanut & COCOA Marketing and Processing Coop.Ltd, Mangalore**_ _**[2006(2)SCC 381]**_ as also the decision of this Court in W.P.(C).No.10644 of 2007. It is submitted that it had been held by the Apex Court that the engagement of trainees and payment of stipend will not make them employees in terms of Section 2(f) of the EPF Act. Referring to the Provisions of the Industrial Employment (Standing Orders) Central Rules, 1946 and the Apprentices Act 1961, the Apex Court held that the model standing orders prescribed under Rule 3(1) of the Industrial Employment (Standing Orders) Central Rules, 1946 would apply in **WP(C).No.20952 OF 2012** **5** cases where there are no certified standing orders and that the persons engaged purely as trainees and being paid stipend could not be treated as employees in terms of the Act. 7. Reliance is also placed on judgment of this Court in **Sivagiri Sreenarayana Medical Mission Hospital v. Regional Provident Fund Commissioner** **[2018(4) KLT 352].** It is submitted that considering the provisions of the Statutes and the precedents on the point, this Court has elaborately considered the issue. This Court found that trainee nurses being engaged in hospitals, which also conduct nursing courses, would not satisfy the definition of "employee" under Section 2(f) of the EPF Act. This Court held that the jural relationship of an employer and employee is absent and the aspect whether "wages" are payable to the employee are to be considered. It was held that merely because the trainee may be assisting qualified nurses and work is extracted incidentally in that process and trainees are being paid stipends or allowances will **WP(C).No.20952 OF 2012** **6** not bring them within the definition of employee as per 2(f) of the Act. The impugned orders were therefore set aside and the amounts, if any, recovered on the basis of the same were directed to be refunded. 8. A counter affidavit is being placed on record by the respondents. It is contended therein that the factual aspects as to the necessity of imparting training as part of the course conducted by the petitioner had not been established before the respondents. It is further contended that in view of the fact that the trainees had been engaged for carrying out day to day work of nurses in the hospital, the situation would be different and that they would be liable to be treated as employees for the purpose of the Act. 9. The decision of the Madras High Court in _**Ramanarayan Mills Ltd, Periyanaickenpalayam,**_ _**Coimbatore, rep. by its Ravishankar, Personal Officer v. Employees Provident Fund Appellate Tribunal, Ministry of Labour & Employment, New Delhi**_ **WP(C).No.20952 OF 2012** **7** _**and Another [2013 (3) MLJ 652]**_ is relied upon to contend that where apprentices work on a regular basis and contribute to production, the remuneration paid to them was liable to be treated as remuneration liable for contribution under the Act. 10. I have considered the contentions in detail. The issue whether the persons engaged for training were engaged as trainees or not does not arise for consideration in this writ petition, in view of the fact that Ext.P2 and P4 orders specifically admit that the nurses concerned were trainee nurses and had been engaged as such. It is also not in dispute that they were being paid only a stipend. The finding in the impugned orders is to be effect that the trainees had also been paid some remuneration and were discharging the day to day affairs of the hospital as were entrusted to them. In Ext.P4, the reasons stated for rejection of the review is that there were no certified standing orders to engage trainees/apprentices in the establishment and that the remuneration paid cannot **WP(C).No.20952 OF 2012** **8** be termed as stipend. 11. Having gone through the decisions relied on by the learned Counsel for the petitioner, I am of the opinion that the issue stands squarely covered by the decisions of the Apex Court in _**Regional Provident Fund Commissioner (supra)**_ as also the decisions of this Court in _**W.P.C.No.10644 of**_ _**2017 and 2018(4) KLT 352.**_ The issue with respect to training the stipend paid to trainees as remuneration has been considered by this Court in **Sivagiri S.N.Medical Mission Hospital (Supra)** . The facts stated in the decision relied on by the learned counsel for the respondent discloses that the apprentices in that case were paid all allowances including bonus and provided facilities like regular employees and were made to do the work of regular employees under the establishment. It was in the above circumstances, that the decision of the Apex Court in **Central Arecanut (Supra)** was distinguished and the Madras High Court held that the apprentices working in the appellant Mill were **WP(C).No.20952 OF 2012** **9** working on regular basis and drawing salary and many facilities like regular employees. The facts of the said case being entirely different, the decision can have no application in the instant case where it is admitted that the employees were trainees and were being paid only a stipend. I am of the opinion that the case on hand is squarely covered by the decision of this Court in _**Sivagiri S.N.Medical Mission Hospital**_ . I find no reason to depart from the reasoning adopted in the said decision. The writ petition is therefore liable to be allowed. This writ petition is allowed, Exts.P2 and P4 orders are set aside, amounts paid pursuant to Ext.P2 and P4, if any, shall be adjusted against payments under the Act due from the petitioner. Sd/- **ANU SIVARAMAN JUDGE** **SMA** **WP(C).No.20952 OF 2012** **10** ## **APPENDIX** ## **' - PETITIONER(S) EXHIBITS :** **EXHIBIT P1 : TRUE COPY OF THE STATEMENT SHOWING THE NAMES OF THE TRAINESS AND THE STIPEND PAID TO THEM FOR THE PERIOD FROM MAY 2010 TO MAY 2011 PRODUCED BEFORE THE RESPONDENT.** - **EXHIBIT P2 : TRUE COPY OF THE ORDER DATED 28.03.2012 ISSUED BY THE RESPONDENT.** - **EXHIBIT P3 : TRUE COPY OF THE REVIEW PETITION FILED BY THE PETITIONER BEFORE THE RESPONDENT.** - **EXHIBIT P4 : TRUE COPY OF ORDER DATED 29.06.2012 ISSUED BY THE RESPONDENT.** - **EXHIBIT P5 : TRUE COPY OF THE LIST OF TRAINESS WITH THE STIPEND PAID TO EACH OF THEM FOR THE PERIOD FROM MAY 2011 TO DECEMBER 2011.** ## **RESPONDENT(S)' EXHIBITS :- NIL** **//TRUE COPY//** **PA TO JUDGE** ## **SMA**