Are We Right to Exclude Trainees from EPF Despite Having Certified Standing Orders?

In our establishment, there are 55 employees, out of which 20 are Permanent, 15 are on Contract, 10 are on Probation, and 10 are Trainees. The trainees are directly appointed for one year on a stipend of Rs. 8000/- per month. All other categories are receiving minimum wages. The establishment has certified standing orders from the Authority of the Labour Department, Government of Kerala. Except for the trainees, all eligible employees are enrolled in EPF (Employee's Provident Fund).

My question: As the establishment has certified Standing Orders, is our decision not to enroll Trainees in EPF correct?

Understanding the Role of Standing Orders and Provident Fund

While the Standing Orders define with sufficient precision the terms and conditions of employment in a specified industrial establishment in a specific business, the Employees' Provident Fund Scheme is a statutory provision governing every establishment. Its objective is to create a corpus for protective care in the future, upon superannuation or cessation of employment, providing for some subsistence measures.

Carefully reading and understanding the PF & Miscellaneous Provisions Act, 1952, along with amendments, will clear the picture and dilemma.

Kritarth Team wishes safe working.

March 4, 2019

Supreme Court Judgment on Provident Fund Applicability for Trainees

Please find attached a copy of the Supreme Court judgment on the non-applicability of Provident Fund (PF) for Trainees or Apprentices appointed in accordance with the certified Standing Orders of the Company. The Hon'ble Supreme Court has further ruled that even in the absence of certified Standing Orders, Model Standing Orders will automatically apply to the establishments. Trainees or Apprentices appointed under the Model Standing Orders are also exempted from the coverage of PF.

Regards, N. Nataraajhan
Sakthi Management Services
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