SAMBANDAM SPINNING MILLS LIMITED Vs. ASSISTANT DIRECTOR

JUDGEMENT

(1.) The issue involved in the above appeal is whether the finding of the authorities below is correct in law that trainees would come within the definition of an employee under Sec. 2(9) of the Employees Insurance Act, 1948, prior to its amendment on 1/6/2010. In order to appreciate the above contention it is necessary to briefly consider the facts of the case.

(2.) The appellant/company was engaged in the business of manufacturing cotton yarn. The establishment had been brought under the cover of the Employees State Insurance Act, (hereinafter referred to as the ESI Act), from the year 1984. All the eligible employees were covered under the ESI Act, and the appellant/company has been remitting the contributions promptly without any delay.

(3.) While so, on 10/5/2010, a C-18 notice was issued to the appellant calling upon them to show cause as to why a contribution of Rs.33,80,862.00should not be recovered for the contribution for the non-registered employees/casual employees, employees employed through immediate employer in respect of the wages/stipend paid to the trainees/Apprentice and trainee staff for the period 2003-04 and 2004-05. The appellant/company would submit that under Clause 11 of the certified standing orders of the Company which permitted to engage trainees/Apprentice over a period of 3 years, the appellant/ company was also engaging such Apprentice/trainees. The appellant would contend that prior to its amendment in 2010 as per Sec. 2(9) of the ESI Act, had excluded apprentice engaged under the certified standing order of the establishment. Therefore, it is the contention of the appellant that the respondent cannot claim contribution for these trainees.