The Supreme Court has laid down that the teachers are entitled to invoke Payment of Gratuity Act and thereby, the teachers have a right to claim gratuity from his/her employer. Additionally, the Bench comprising of Justice Abhay Manohar Sapre and Justice Indu Malhotra has slapped Rs. 25,000/- on the appellant i.e., Birla Institute of Technology.

However, the same Bench on 7th January, 2019 had observed that a teacher notwithstanding the type of educational institute where he/she is working does not fall within the definition of ‘employee’ under section 2(e) of the Payment of Gratuity Act and therefore, they have no right to claim to invoke the Act for the purposes of claiming gratuity from his/her employer.

On 9th January, the Bench had suo moto listed the appeal and passed order thereby observing that there was a prima facie error in this judgment. The Bench had put a stay on the operation of the judgment and gave directions to the Registry to post the appeal for a rehearing. 

Again the matter was reheard and the Bench recalled its decision of 7th January and reserved the matter for judgment.

It was only after pronouncement of the order in the appeal filed on Thursday, amendment in the definition of the term ‘employee’ under section 2(e) of the Gratuity Act, 1972 by Amending Act No. 47 of 2009 on 31/12/2009 to be applied retrospectively with effect from 03/04/1997 by the Parliament was brought to the notice of the Bench subsequent to the judgment rendered in Ahmadabad Pvt. Primary Teachers Association.  

The Bench also addressed the constitutional validity of the 2009 Amending Act. The amendment has been challenged in the Supreme Court in a writ petition which is still pending. It was consequently observed that the pendency of a writ petition by itself carries no weight age as to the constitutionality of the Amending Act and nor does it have any impact on the right of the teacher in any manner while claiming gratuity amount from the employer.   

The Bench observed that the question of impact on the rights of the parties are considered only when a statute is declared unconstitutional to the constitutional provisions.     


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