In a matter M/s Ari Small Engineering Workshop accepted two apprentice trainees under the scheme for imparting training to artisans from rural areas. The establishment employed only 18 employees in their factory and henc

Section 2(9) of the Employees' State Insurance Act, 1948 defines the term employee which means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and inter alia includes any person engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961. In ESI Corporation v. Tata Engineering and Co., 75 it has been held by the Supreme Court that the word 'apprentice' is not defined in the Employees' State Insurance Act, 1948, nor is it specifically referred to in the definition of 'employee' by either inclusion or exclusion. The heart of the matter of apprenticeship is, therefore, the dominant object and intent to impart on the part of employer and to accept on the part of other person learning under certain agreed terms. That certain payment is made during the of the apprenticeship, by whatever name called, and that the apprentice has to be under rules of discipline do not convert that apprentice to a regular employee under the employer. Thus, the purpose of the apprenticeship is to impart learning to persons on agreed terms for a fixed period. The employer is not bound to keep them in service after the training is over. The purpose is entirely different from that of service. The stipend paid to them does not amount to wages within the meaning of this Act. Thus, they are not employees within the meaning of Section 2(9) of the Employees' State Insurance Act, 1948. Further, it was held that the apprentices under any scheme are exempted from the operation of law relating to labour by virtue of Section 18(b) of the Apprentices Act, 1961. Hence, the apprentices cannot be taken into account for determining the coverage of the establishment under the Employees' State Insurance Act, 1948.