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Whether an apprentice is considered an "employee" under the Employees State Insurance Act, 1948. Analysis: The case involved the interpretation of whether an apprentice can be classified as an "employee" under the Employees State Insurance Act, 1948. The respondent, a public limited company, had graduate and trade apprentices working at its factory. The apprentices received stipends but no other emoluments apart from daily allowances. The apprenticeship agreement highlighted the training aspect and the apprentice's commitment to serve the company post-training. The company was not legally obligated to offer employment to the apprentice after training. The central question was whether the apprentice could be considered an employee based on the apprenticeship agreement. The Supreme Court analyzed the nature of apprenticeship, emphasizing the primary objective of imparting training rather than establishing an employer-employee relationship. The court referred to legal definitions and historical legislative perspectives on apprenticeship. The Apprentices Act, 1961, defined an "apprentice" as a trainee undergoing apprenticeship training, indicating the absence of an employment element. The court noted that legislative acts explicitly included apprentices in certain definitions, highlighting the deliberate omission of apprentices in the Employees State Insurance Act, 1948. The court concluded that the legislative intent was to recognize apprenticeship as a distinct training arrangement separate from regular employment. Examining the definition of "employee" under section 2(9) of the Employees State Insurance Act, 1948, the court emphasized that an employee must be employed for wages in connection with the work of a factory or establishment. The apprentices, being trainees under a specific scheme for training purposes, were not considered employees as they were not engaged in the company's work in a regular capacity. The apprentices did not receive wages as defined under the Act, and their engagement was solely for training under specified terms and conditions. The court also referenced section 18 of the Apprentices Act, 1961, which categorically distinguished apprentices as trainees, not workers. In conclusion, the Supreme Court dismissed the appeal, ruling that apprentices could not be classified as employees under the Employees State Insurance Act, 1948. The court highlighted the distinct nature of apprenticeship agreements focused on training rather than establishing an employer-employee relationship. The judgment underscored the legislative recognition of apprenticeship as a separate category from regular employment, leading to the rejection of the appellants' claim for charging the company with liability for special contributions under the Act.
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