AICTE NEEM Facilitator Trainee’s Eligible for Remuneration but Not Employees, Provident Fund Order Determining Amount Due from NEEM Facilitator Stayed by Madras HC
Madras High Court in Rane TRW Steering Systems Pvt Ltd Vs. Ministry of Labour and Employment and 5 Ors — W.P.No.18404 of 2021, passed an interim order staying an impugned order made under Section 7A of the Employees’ Provident Fund and Miscellaneous Provisions Act 1952. The order was concerning the determination of money due from the petitioner – an AICTE NEEM Facilitator under the All-India Council for Technical Education National Employability Enhancement Mission (NEEM) Regulations, 2017.
The single-judge bench of Hon’ble Justice M S Ramesh observed:
Under the AICTE (NEEM) Regulations, 2017, the National Employability Enhancement Mission facilitate is obliged to pay all the trainees a remuneration, which is for the purpose of training and does not constitute employment. As such, the authorities may not be justified in passing this order under Section 7A of the Act.
The petitioner, an authorized NEEM Facilitator of AICTE had challenged the jurisdiction of the authorities in issuing orders under Section 7A of the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952 wherein it was offering training and paying remuneration to trainees under the AICTE NEEM Scheme.
Relying on the AICTE NEEM Regulations, 2017 where the trainee is paid remuneration for the purpose of training and it does not constitute employment the petitioner cited Regulation 15 which reads as follows:
15.1 NEEM Facilitator shall pay all enrolled NEEM trainees a remuneration/stipend which shall be at par with the prescribed minimum wages for unskilled category.
15.2 Remuneration/ Stipend shall be paid as a single consolidated amount and such payment will not attract any statutory deductions or payments applicable to regular employees i.e., PF/ESI etc., since the NEEM contract assures training and does not constitute employment.
Section 7A of the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952 reads as:
7A. Determination of moneys due from employers
(1) The Central Provident Fund Commissioner, any Additional Central Provident Fund Commissioner, any Deputy Provident Fund Commissioner, any Regional Provident Fund Commissioner, or any Assistant Provident Fund Commissioner may, by order,
(a) in a case where a dispute arises regarding the applicability of this Act to an establishment, decide such dispute; and
(b) determine the amount due from any employer under any provision of this Act, the Scheme or the 3[Pension] Scheme or the Insurance Scheme, as the case may be,
and for any of the aforesaid purposes may conduct such inquiry as he may deem necessary;
In the present case where the trainees do not fall under the category of employees, the petitioner challenged the impugned order.
The court studying the facts said:
This aspect requires further deliberation. However, since the petitioner has made out a prima facie case, there shall be an order of interim stay.
Accordingly, the matter has been posted for hearing on 08.10.2021
*EduLegaL will continue to follow up on this case and update the blog.
The objective of the AICTE National Employability Enhancement Mission (NEEM) is to offer on-the-job practical training for enhancing employability. It is offered to persons who have completed their diploma/graduation or post-graduation from any technical or non-technical stream or have discontinued studies after Class 10. The trainee must be between the age of 16 and 40. This training is provided through an authorized NEEM Facilitator registered with AICTE as per regulations prescribed and training is governed by the AICTE NEEM Regulations, 2017.
Vaibhav Karadale | Research Intern | EduLegaL
Swapna Iyer | Legal Editor | EduLegaL