Case Brief: U.P. State Electricity Board vs. Shri Shiv Mohan Singh & Anr.

INTRODUCTION

The Supreme Court of India ruled on the case of “U.P. State Electricity Board v. Shri Shiv Mohan Singh & Anr. in 2004, which is a significant ruling regarding the legal status of apprentices employed under the Apprentices Act, 1961. This series of appeals primarily addressed the contentious issue of whether apprentices recruited under the 1961 Act are eligible to claim the status of ‘workmen’ under the Industrial Disputes Act, 1947, or the U.P. Industrial Disputes Act, 1947”. Consequently, it examined whether industrial adjudicatory bodies like Labour Courts or Industrial Tribunals can consider disputes involving such apprentices.

An important area examined was the impact of failing to register an apprenticeship contract as mandated by “Section 4(4) of the Apprentices Act, 1961”, and whether such a failure alters the status of an apprentice to that of a workman or renders the contract void. The ruling investigates the initial aims and intentions behind the Apprentices Act of 1961, distinguishing it from general labor laws and clarifying the nature of the employer-apprentice relationship as one fundamentally based on instruction rather than employment. The Court’s ruling significantly affects apprentices’ rights and remedies, as well as employers’ obligations under the Apprentices Act.

FACTS

This case involves a significant number of civil appeals that the Supreme Court has heard together. In most of these cases, the primary appellant is the U.P. State Electricity Board, while the respondents include parties such as Shri Shiv Mohan Singh and others. These appeals originated from judgments and orders issued by the Allahabad High Court. The factual background to these appeals concerns individuals who had undergone apprenticeship training with the U.P. State Electricity Board or other employers. These individuals were designated for their roles in accordance with the Apprentices Act of 1961. The main purpose of the Act was to engage and train apprentices so as to generate skilled manpower for industrial development. According to the Act, apprentices are defined as individuals who are undergoing apprenticeship training as part of a contractual agreement for apprenticeship. The training involves a course that individuals complete in any industry or organization based on specified terms and conditions. It is necessary to establish an apprenticeship contract between the person (or their guardian) and the employer.

As per “Section 4(4) of the Apprentices Act, 1961, every apprenticeship contract made under Section 4(1) “shall be sent by the employer to the Apprenticeship Adviser for registration within such time as may be prescribed”. After fulfilling the duration of their apprenticeship training as stipulated in their contracts and the Act, these apprentices were not offered permanent positions by their employers, including the U.P. State Electricity Board”.

Subsequently, these individuals initiated legal proceedings, primarily as industrial disputes, claiming they were ‘workmen’ by status. They sought remedies under the U.P. Industrial Disputes Act, 1947, or the Industrial Disputes Act, 1947, for unlawful termination or lack of employment following their training. The primary factual issue brought up in these disputes was the failure of employers to comply with specific requirements of the Apprentices Act, 1961, particularly the obligation to register apprenticeship agreements with the Apprenticeship Adviser. After rulings by Labour Courts, Industrial Tribunals, and the High Court in certain cases filed by apprentices seeking workman status, the cases ultimately reached the Supreme Court.

ISSUE RAISED

• How does the legal status of an apprentice under the Apprentices Act, 1961 compare to that of a ‘workman’ under the Industrial Disputes Act, 1947 and the U.P. Industrial Disputes Act, 1947? 
• Does a relationship akin to master-servant or employer-employee exist between an employer and an apprentice being trained under the Apprentices Act, 1961? 
• What are the consequences of failing to register an apprenticeship contract as per “Section 4(4) of the Apprentices Act, 1961”? Does this failure render the contract void or change the apprentice’s status to that of a workman?
• Do the Labour Courts or Industrial Tribunals established by the Industrial Disputes Acts have the authority to hear disputes related to apprentices appointed under the Apprentices Act, 1961?

PETITIONER’S ARGUMENTS

The “U.P. State Electricity Board and others argued that individuals appointed under the Apprentices Act, 1961, are trainees and do not qualify as ‘workmen’ according to the Industrial Disputes Acts. Their submission was that the Apprentices Act, 1961, constitutes a comprehensive code in itself, governing the relationship and conditions of apprenticeship training. Citing Section 18(b) of the 1961 Act, which explicitly states that an apprentice is not to be considered a worker, they asserted that the Act clearly excludes apprentices from the ‘workman’ category under standard labour legislation. The appellants maintained their argument that, according to Section 22 of the Apprentices Act, 1961”, there is no obligation for the employer to offer employment to the apprentice upon completion of training, except in cases where there is an apprenticeship agreement that explicitly states otherwise.

Regarding the non-registration of the apprenticeship contract, employers argued that while “Section 4(4) mandates registration, it is merely a ministerial/administrative action for record-keeping purposes. Therefore, they claimed that failing to comply does not invalidate the contract or alter the fundamental nature of the relationship from trainee to workman. They contended that under Section 20 of the 1961 Act”, any disputes concerning apprentices fall exclusively under the jurisdiction of the Apprenticeship Adviser, rather than industrial forums.

RESPONDENT’S ARGUMENTS

The respondents, primarily former apprentices, contended that they should be classified as ‘workmen’ under the Industrial Disputes Acts, particularly given that they had received training and were seeking regular employment. They contended that apprentices are included under “the Industrial Disputes Act, 1947 (Section 2(s)) and the U.P. Industrial Disputes Act, 1947 (Section 2(z)), and therefore, disputes involving them fall within the jurisdiction of Labour Courts and Industrial Tribunals. A key element of their argument was the employers’ failure to adhere to the requirements of the Apprentices Act, 1961, particularly with regard to the registration of apprenticeship contracts as required by Section 4(4)”.

The respondents argued that the employer’s failure to register them or other violations invalidated their apprenticeship contracts, or alternatively, changed their status to that of ordinary workers, thus granting them rights under the Industrial Disputes Acts, including the right to raise industrial disputes regarding non-employment. They argued that the ‘inclusive’ definition of workman under the ID Act is broad enough to include them, irrespective of the Apprentices Act, or that any shortcomings of the Apprentices Act should not disadvantage apprentices and should lead to their classification as workmen.

JUDGEMENT

In a comprehensive ruling, the Supreme Court upheld the employers’ appeals and rejected those of the apprentices, stating unequivocally that apprentices hired under the Apprentices Act of 1961 do not qualify as ‘workmen’ under the Industrial Disputes Acts, thus affirming that Labour Courts and Industrial Tribunals lack jurisdiction over disputes involving them. The Court emphasized that the Apprentices Act, 1961, is a special law designed exclusively to regulate apprentices’ training and serves as a standalone code. It pointed to Section 18(b) of the 1961 Act, which explicitly defines an apprentice as a trainee rather than an employee. The Court clarified that while the term ‘workman’ under the Industrial Disputes Acts includes “an apprentice,” it does not cover apprentices under the 1961 Act; the special Act is prioritized over the general Acts (Industrial Disputes Acts). Regarding the non-registration of the apprenticeship contract as per Section 4(4) of the 1961 Act, the Court determined that the term “shall” in this section is to be understood as directory rather than mandatory in relation to the Act’s purpose. The absence of registration does not make the contract illegal or change the incumbent’s status from apprentice to workman. The Court reasoned that it would be against the interests of the apprentices to treat non-registration as obligatory and to render the contract void. While penalties for non-compliance are proposed, the apprentice’s status as a trainee remains unchanged. The Court reiterated that employers are not legally bound to provide employment after training unless there is a contractual agreement to do so. Under Section 20, the Apprenticeship Adviser should resolve conflicts.

CONCLUSION 

The Supreme Court’s ruling in the case of U.P. State Electricity Board vs. Shri Shiv Mohan Singh & Anr. represents a significant milestone, firmly establishing that apprentices have a distinct legal status under the Apprentices Act, 1961, separate from that of workmen under general labor laws like the Industrial Disputes Acts. The Court’s judgment clarified that the Apprentices Act, 1961, is a special law designed specifically for training purposes. Its provisions, like Section 18(b), which states that an apprentice is not considered an employee, take precedence over the general definitions found in the Industrial Disputes Acts. It follows that apprentices in training under the 1961 Act do not have the rights and remedies available to ordinary workmen under the Industrial Disputes Acts, and adjudicatory forums in industry cannot resolve disputes arising from their apprenticeship.

A key aspect of the judgment was the interpretation of whether the requirement to register contracts under Section 4(4) of the Apprentices Act, 1961, is directory or mandatory. The Court stated that the requirement is directory rather than mandatory, meaning that failure to register the contract does not render it invalid nor alter the apprentice’s status to that of a workman. This interpretation prevents employers from using non-registration as a shield against their responsibilities under the Apprentices Act, while also protecting against the automatic conversion of apprenticeships into workman’s status due to simple administrative failures.

The Court reiterated that unless an agreement explicitly states otherwise, the employer is not obligated to provide employment after successful training completion. This once again supports the Act’s apprenticeship training-focused orientation. Disputes between apprentices and employers ought to be resolved using the method specified in Section 20 of the Apprentices Act, which involves the Apprenticeship Adviser. This comprehensive ruling clarifies the legal framework governing apprentices: their involvement is aimed at skill acquisition through training rather than integration into the general workforce, and any grievances should be handled according to the specific provisions of the Apprentices Act of 1961.