In a significant ruling on provident fund liability, the Calcutta High Court has upheld an order of the Employees’ Provident Fund Appellate Tribunal (EPFAT), holding that trainee medical representatives engaged by a private company cannot be treated as “employees” under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.
Justice Shampa Dutt (Paul), delivering judgment on February 20, 2026, dismissed a writ petition filed by the Regional Provident Fund Commissioner challenging the Tribunal’s decision.
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Background of the Case
The dispute began in November 2006 when the provident fund authorities received a complaint from a trade union alleging that M/s. Klar Sehen Pvt. Ltd. had denied provident fund benefits to its trainee medical representatives.
Following an inspection, the Regional Provident Fund Commissioner initiated proceedings under Section 7A of the EPF Act. After multiple hearings, an order dated February 6, 2009, concluded that the trainees were not apprentices under the Apprentices Act, 1961, nor under any certified standing orders. They were therefore treated as “employees” under Section 2(f) of the Act.
An amount of ₹18,74,239 was assessed as provident fund dues for the period May 1999 to March 2007. When the company did not deposit the amount, recovery proceedings were initiated, including attachment of its bank account under Section 8F.
The company’s review application under Section 7B was rejected. It then approached the EPF Appellate Tribunal in New Delhi.
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Tribunal’s Findings
On March 24, 2011, the EPF Appellate Tribunal set aside the order of the provident fund authorities.
The Tribunal examined the definition of “employee” under Section 2(f) of the EPF Act, which includes apprentices but excludes those engaged under the Apprentices Act or under the standing orders of the establishment.
Relying on the Supreme Court decision in Regional PF Commissioner vs. M/s. Central Arecanut & Cocoa Marketing and Processing Co-op. Ltd. (2006), the Tribunal observed that trainees who receive a stipend and are engaged for training, without a right to employment, fall within the category of apprentices under model standing orders.
It noted that the enforcement officer’s report described the individuals as “trainees” and there was no clear finding that they were performing duties of regular employees.
The Tribunal held: “The order of the authority cannot be sustained. Hence ordered, the appeal is allowed. The order of the EPF Authority is hereby set aside.”
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Arguments Before the High Court
Before the High Court, the provident fund authorities argued that the company had no certified standing orders. Therefore, according to them, the trainees could not claim exclusion and should be treated as employees under Section 2(f).
They contended that the Tribunal failed to appreciate this aspect and wrongly applied the Supreme Court judgment.
Court’s Observations
Justice Shampa Dutt (Paul) closely examined the Supreme Court ruling cited by the Tribunal. The apex court had clarified that where certified standing orders are absent, model standing orders automatically apply under Section 12A of the Industrial Employment (Standing Orders) Act.
Under the model standing orders, an apprentice is defined as a learner paid an allowance during training.
Quoting from the Supreme Court’s reasoning, the High Court noted that trainees who receive stipends during training and have no right to employment cannot be treated as employees for provident fund purposes.
The Court observed that in the present case, the individuals concerned were described as trainees, and there was no conclusive finding that they performed the work of regular staff.
“In view of the judgment in Coca Marketing (Supra), the impugned order… being in accordance with law, calls for no interference,” the Court held.
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Decision
The High Court dismissed WPA 11596 of 2011 and upheld the EPF Appellate Tribunal’s order dated March 24, 2011. All connected applications were disposed of, and interim orders, if any, stood vacated.
Case Title: Regional Provident Fund Commissioner & Anr. vs. Employees Provident Fund Appellate Tribunal & Ors.
Case No.: WPA 11596 of 2011
Decision Date: 20 February 2026
