Apprenticeship is not employment where training is the dominant purpose and stipend is paid instead of wages under ESI law.

A bona fide apprentice whose dominant role is to receive training, and who is paid a stipend rather than wages, is not an "employee" under section 2(9) of the Employees' State Insurance Act, 1948. The decisive test is the real nature of the arrangement: if the purpose is to impart trade training for a fixed period, with no obligation on the employer to retain the trainee after completion, the relationship remains one of apprenticeship and not employment. Disciplinary conditions or periodic payments do not by themselves change that character. The Act therefore does not apply to such apprentices.

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Issues: Whether an apprentice under the company's apprenticeship scheme is an "employee" within the meaning of section 2(9) of the Employees' State Insurance Act, 1948, so as to attract liability under the Act.

Analysis: The decisive factor in apprenticeship is the dominant object of the arrangement. Where the primary purpose is to impart training and the trainee's role is to learn a trade or craft, the relationship is one of apprenticeship and not regular employment. Payment of stipend or daily allowance, and the existence of disciplinary conditions, do not by themselves convert the apprentice into an employee. The definition of "employee" under the Employees' State Insurance Act, 1948 requires employment for wages in or in connection with the work of a factory or establishment. On the terms of the agreement, the apprentices were trainees for a fixed period, the employer was under no obligation to engage them after training, and the amounts paid to them were stipends rather than wages. The statutory scheme also showed that where the legislature intended to include apprentices, it did so expressly, as in the Industrial Disputes Act, 1947, while the Employees' State Insurance Act, 1948 did not expressly include them.

Conclusion: An apprentice under the scheme was not an "employee" within section 2(9) of the Employees' State Insurance Act, 1948 and the Act did not apply to such apprentices.

Ratio Decidendi: A person engaged under a bona fide contract of apprenticeship, whose dominant role is to receive training and who is paid a stipend rather than wages for employment, is a trainee and not an employee for the purpose of the Employees' State Insurance Act, 1948.

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