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ESI Act and "Trainees"

S. Krishnamoorthy Started The Discussion:

Friends,
This is purely hypothetical. In many ITES/BPO companies, "trainees" are inducted for a specific period. They are given theoretical and practical training during this period. They are also paid "stipend" or "training allowance" for the days of training. No other benefits are extended to them. In companies where approved "Standing Orders" are in force, these "trainees" are not included as "employees". In the absence of any employer-employee relationship, can ESI subscription be recovered from them? If they object to the recovery can the company refrain from recovering the subscription? The Supreme Court in one of its judgement on the applicability of EPF for trainees, has very clearly given its verdict that the "trainees" are NOT employees and hence the Act would not be applicable to the trainees.
I seek the views of experts.
S. Krishnamoorthy

malikjs - Contributing Member
dear
yes, trainees are not employee and they are getting stipend and ESI&PF not to be deducted from their salary.
now come to the main point,these BPOS AND some other company are saving ESI &PF on the name of trainees.please note by giving designation of trainee they can not be considered trainee.the persons appointed through provisions of certified standing order or apprentice act will only be considered trainee
otherwise not.
tks
js malik

irudayamarockiam - Contributing Member
Dear all,
I agree with Mr.JS.Malik.
In the first instance, it must be known to all that coverage and compliance under ESI & EPF are not under the choice of the either Employer or Employee or both. Its is a statutory obligation of both the parties for ensuring social security / welfare mesures of the emplyees.

As regards the coverage of Apprentices or trainees, Mr. Malik has adeqately explained. What is important is not the nomenclature but the requirement of the law.
A.Irudayam
Advocate and HR consultant.

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