Dear Colleague,
The reply given by our colleague is very accurate. Further to add, the definition of "employee" includes apprentices, except for specific exclusions allowed under the said provisions.
Hence, if the trainees are going to be engaged in work, then social security measures like PF and ESI will become applicable as they will be construed as employees if it is tested and proved in subsequent legal proceedings by any authority.
However, if the trainees are engaged under the provisions of the Apprentices Act 1961, then for that period only, they need not be covered under the provisions of PF/ESI, subject to the fact that they are genuinely engaged only for training under the provisions of The Apprentices Act 1961 with due registration of contract under the control of the Apprenticeship Advisor. Other types of trainee engagement attract the coverage of PF & ESI.
Reproduced Provisions:
Employees Provident Fund & MP Act 1952:
2(f) "employee" means any person who is employed for wages in any kind of work, manual or otherwise, in or in connection with the work of [an establishment], and who gets his wages directly or indirectly from the employer, [and includes any person—
(i) employed by or through a contractor in or in connection with the work of the establishment;
(ii) engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961 (52 of 1961), or under the standing orders of the establishment;]
Employees State Insurance Act 1948:
2(9) "employee" means any person employed for wages in or in connection with the work of a factory or establishment to which this Act applies and—
(i) who is directly employed by the principal employer on any work of, or incidental or preliminary to or connected with the work of, the factory or establishment, whether such work is done by the employee in the factory or establishment or elsewhere; or
(ii) who is employed by or through an immediate employer on the premises of the factory or establishment or under the supervision of the principal employer or his agent on work which is ordinarily part of the work of the factory or establishment or which is preliminary to the work carried on in or incidental to the purpose of the factory or establishment; or
(iii) whose services are temporarily lent or let on hire to the principal employer by the person with whom the person whose services are so lent or let on hire has entered into a contract of service; [and includes any person employed for wages on any work connected with the administration of the factory or establishment or any part, department or branch thereof or with the purchase of raw materials for, or the distribution or sale of the products of, the factory or establishment:
[or any person engaged as an apprentice, not being an apprentice engaged under the Apprentices Act, 1961 (52 of 1961), [and includes such person engaged as apprentice whose training period is extended to any length of time]
but does not include]—
(a) any member of [the Indian] naval, military or air forces; or
[(b) any person so employed whose wages (excluding remuneration for overtime work) exceed [such wages as may be prescribed by the Central Government]:
Thanks and God bless,
Dr. P. Sivakumar Ph.D., HR
DrSivaglogalhr
Tamil Nadu