Benefit Of Gratuity Act Accrues To An Employee Even For His Training Period

In IREL (INDIA) LIMITED vs. P. N. RAGHAVA PANICKER, an appeal was filed before the Kerala High Court against the order of the Controlling Authority and the Appellate Authority under the Payment of Gratuity Act, 1972, ordering payment of gratuity to the 1st Respondent even for the period he had been a trainee in the Appellant company.

The Respondent had claimed gratuity for the 2 year period during which the Appellant Company had employed him as a trainee before converting him to a permanent employee while the Company objected that a trainee is not entitled to gratuity under the Gratuity Act.

Section 2(e) of the Gratuity Act excludes an Apprentice from the definition of an Employee. 

The Controlling Authority had held that the trainee comes under the scope of any person and therefore is an employee. The Authority had not produced any document to prove that the initial appointment of the applicant (1st respondent herein) was as apprentice under the Apprentices Act, 1961 and therefore, he is entitled to get gratuity for the entire period of service including the training period of two years.  The Appellate Authority referring to Employees State Insurance Corporation and another vs. Tata Engineering & Co., Locomotive Co. Ltd and another (AIR 1976 SC 66), observed that apprentice who are undergoing apprenticeship training as trade apprentice with specific contract involving Director under the Apprentices Act are not entitled for gratuity under the Gratuity Act. It was further held that the 1st respondent herein is not a Trade Apprentice Trainee and therefore, there is no exemption to the employer from the liability under the Gratuity Act so far as the 1st respondent is concerned. The Appellate Authority further held that during the training period, the 1st respondent was assigned to various sections and was doing shift duty like other regular employees. The employer had not maintained any separate training Department and the employee was not assigned to any Training Manager.

The High Court agreeing with the various authorities observed that as per the evidence adduced by the 1st respondent/ employee no training was imparted to him during the so called training period in any specified trade nor there was such intention on the part of the employer while engaging him as Helper Trainee. The employee has stated in his affidavit that he was posted in shift duties and that too independently with combination of other trainees/employees as per the requirements of the plant. The employee further stated in his evidence adduced on affidavit before the Controlling Authority that there was no change in the nature of his employment after completion of the training period. His evidence shows that before completion of training and after completion of training, his nature of work was same and he continued to work in same shift allocation. Evidence adduced on affidavit by the opposite party is conspicuously silent on the aspect as to how the employee was being trained during his training period. Who was imparting training to the employee is not stated in the evidence on affidavit by the employer. The employer had admitted in the proof affidavit that the employee was deputed in different sections of the plant during the training period. But the employer has chosen to keep silence on the issue as to how he was being imparted training in those sections. This implies that even during the so called training period, the 1st respondent/ employee was in fact doing regular work of the employer. 

In Regional Provident Fund Commissioner vs. Lord Krishna Bank Ltd, the Hon'ble Division Bench of the Kerala High Court  has observed that the main or predominant object of training is that the person should learn his work during the period of training when such person is engaged as apprentice. The Hon'ble Division Bench has also noted that there can be instances that despite a person undergoing training, he can be an employee. The case in hand is such a case where in the guise of appointing him as a Trainee Helper, the 1st respondent was in fact employed to do all work like regular employee of the petitioner in the so called period of training during which he was not imparted any training by the employer. The 1st respondent was in fact supplementing the work of regular staff as seen from his evidence and therefore, was an employee even during his so called training period.